# EDGAR Filing Document

**Accession Number:** 0001811935
**File Stem:** 0001628279-25-000293
**Filing Date:** 2025-6
**Character Count:** 1465927
**Document Hash:** 3e086fcf72095a56c950035c5ac4036e
**Contains OCR:** False
**Source Format:** 

## Filing Content

## Filing Summary
**0001628279-25-000293.hdr.sgml**: 20250822

**ACCESSION NUMBER**: 0001628279-25-000293

**CONFORMED SUBMISSION TYPE**: DRS/A

**PUBLIC DOCUMENT COUNT**: 22

**FILED AS OF DATE**: 20250602

**DATE AS OF CHANGE**: 20250602

**FILER**: 

**COMPANY DATA:**
- **COMPANY CONFORMED NAME:** Pattern Group Inc.
- **CENTRAL INDEX KEY:** 0001811935
- **STANDARD INDUSTRIAL CLASSIFICATION:** RETAIL-CATALOG & MAIL-ORDER HOUSES [5961]
- **ORGANIZATION NAME:** 07 Trade & Services
- **EIN:** 832556861
- **STATE OF INCORPORATION:** DE
- **FISCAL YEAR END:** 1231

**FILING VALUES:**
- **FORM TYPE:** DRS/A
- **SEC ACT:** 1933 Act
- **SEC FILE NUMBER:** 377-07612
- **FILM NUMBER:** 251016025

**BUSINESS ADDRESS:**
- **STREET 1:** 1441 WEST INNOVATION WAY, SUITE 500
- **CITY:** LEHI
- **STATE:** UT
- **ZIP:** 84043
- **BUSINESS PHONE:** 866-765-1355

**MAIL ADDRESS:**
- **STREET 1:** 1441 WEST INNOVATION WAY, SUITE 500
- **CITY:** LEHI
- **STATE:** UT
- **ZIP:** 84043

**FORMER COMPANY:**
- **FORMER CONFORMED NAME:** Covalent Group, Inc.
- **DATE OF NAME CHANGE:** 20200513

**Confidential Treatment Requested by Pattern Group Inc.**

**Pursuant to 17 C.F.R. Section 200.83**

**Confidential draft No. 4 as confidentially submitted to the U.S. Securities and Exchange Commission on June 2, 2025.** 

**This draft registration statement has not been filed publicly with the Securities and Exchange Commission,** 

**and all information herein remains strictly confidential.**

**Registration No. 333-**

**UNITED STATES**

**SECURITIES AND EXCHANGE COMMISSION**

**WASHINGTON, D.C. 20549**

**FORM S-1**

**REGISTRATION STATEMENT**

**UNDER**

**THE SECURITIES ACT OF 1933**

**Pattern Group Inc.**

**(Exact Name of Registrant as Specified in Its Charter)**

---

| | | |
|:---|:---|:---|
| **Delaware** | **5961** | **83-2556861** |
| **(State or Other Jurisdiction of**<br>**Incorporation or Organization)** | **(Primary Standard Industrial**<br>**Classification Code Number)** | **(I.R.S. Employer**<br>**Identification Number)** |

---

**1441 West Innovation Way, Suite 500** 

**Lehi, UT 84043** 

**(866) 765-1355** 

**(Address, Including Zip Code, and Telephone Number, Including**

**Area Code, of Registrant's Principal Executive Offices)**

**David Wright** 

**Chief Executive Officer** 

**Pattern Group Inc.**

**1441 West Innovation Way, Suite 500** 

**Lehi, UT 84043**

**(866) 765-1355**

**(Name, Address, Including Zip Code, and Telephone Number, Including**

**Area Code, of Agent for Service)**

**Copies to:**

---

| | | |
|:---|:---|:---|
| Micheal J. Reagan | Benjamin M. Craven | Tad J. Freese |
| W. Stuart Ogg | General Counsel | Marc D. Jaffe |
| Julia R. White | Pattern Group Inc. | Brent T. Epstein |
| Goodwin Procter LLP | 1441 West Innovation Way, Suite 500 | Latham & Watkins LLP |
| 601 Marshall Street | Lehi, UT 84043<br>(866) 765-1355 | 140 Scott Drive |
| Redwood City, California 94063<br>(650) 752-3100 | Lehi, UT 84043<br>(866) 765-1355 | Menlo Park, California 94025<br>(650) 328-4600 |

---

Approximate date of commencement of proposed sale to the public: As soon as practicable after this registration statement becomes effective.

If any of the securities being registered on this Form are to be offered on a delayed or continuous basis pursuant to Rule 415 under the Securities Act, check the following box: ☐

If this Form is filed to register additional securities for an offering pursuant to Rule 462(b) under the Securities Act, please check the following box and list the Securities Act registration statement number of the earlier effective registration statement for the same offering. ☐

If this Form is a post-effective amendment filed pursuant to Rule 462(c) under the Securities Act, check the following box and list the Securities Act registration statement number of the earlier effective registration statement for the same offering. ☐

If this Form is a post-effective amendment filed pursuant to Rule 462(d) under the Securities Act, check the following box and list the Securities Act registration statement number of the earlier effective registration statement for the same offering. ☐

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, smaller reporting company, or an emerging growth company. See the definitions of "large accelerated filer," "accelerated filer," "smaller reporting company," and "emerging growth company" in Rule 12b-2 of the Exchange Act.

---

| | | | |
|:---|:---|:---|:---|
| Large accelerated filer | ☐ | Accelerated filer | ☐ |
| Non-Accelerated filer | ☒ | Smaller reporting company | ☐ |
| | | Emerging growth company | ☐ |

---

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided to Section 7(a)(2)(B) of the Securities Act. ☐

**The registrant hereby amends this registration statement on such date or dates as may be necessary to delay its effective date until the registrant shall file a further amendment which specifically states that this registration statement shall thereafter become effective in accordance with Section 8(a) of the Securities Act of 1933 or until the registration statement shall become effective on such date as the Commission, acting pursuant to said Section 8(a), may determine.**

------

**Confidential Treatment Requested by Pattern Group Inc.**

**Pursuant to 17 C.F.R. Section 200.83**

**The information in this preliminary prospectus is not complete and may be changed. These securities may not be sold until the registration statement filed with the U.S. Securities and Exchange Commission is effective. This preliminary prospectus is not an offer to sell, nor does it seek an offer to buy these securities in any jurisdiction where the offer or sale is not permitted.**

**Subject to Completion, dated &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; , 2025.**

 **&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Shares**

![patternlogoa.jpg](patternlogoa.jpg)

**Pattern Group Inc.**

**Series A Common Stock**

This is an initial public offering of shares of Series A common stock of Pattern Group Inc. We are offering&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; shares of our Series A common stock and the selling stockholders identified in this prospectus are selling&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; shares of our Series A common stock. We will not receive any proceeds from the sale of shares of Series A common stock to be offered by the selling stockholders.

Prior to this offering, there has been no public market for our Series A common stock. It is currently estimated that the initial public offering price will be between $&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; and $&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; per share. We intend to apply to list our Series A common stock on the Nasdaq Global Select Market under the symbol "PTRN".

Following this offering, we will have two series of common stock: Series A common stock and Series B common stock. The rights of the holders of Series A common stock and Series B common stock are identical, except with respect to voting and conversion rights. Each share of Series A common stock is entitled to one vote. Each share of Series B common stock is entitled to 10 votes and is convertible at any time into one share of Series A common stock. All shares of our capital stock outstanding immediately prior to this offering, including all shares held by our executive officers (other than David Wright and Melanie Alder ("co-founders")), employees and directors (other than our co-founders), and their respective affiliates, will be reclassified into shares of our Series A common stock immediately prior to the consummation of this offering and all shares of capital stock outstanding immediately prior to this offering held by our co-founders will be reclassified into shares of our Series B common stock. Upon the completion of this offering, all shares of Series B common stock will be held by our co-founders, both of whom are current executive officers and directors. Upon completion of this offering, our co-founders will collectively hold approximately&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; % of the voting power of our outstanding capital stock (or&nbsp;&nbsp;&nbsp;&nbsp; % if the underwriters exercise their option to purchase additional shares of our Series A common stock from the selling stockholders in full), which voting power may increase over time, and the holders of our outstanding Series A common stock will hold approximately&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; % of the voting power of our outstanding capital stock (or&nbsp;&nbsp;&nbsp;&nbsp; % if the underwriters exercise their option to purchase additional shares of our Series A common stock from the selling stockholders in full).

Following the completion of this offering, as a result of our co-founders' ownership of our Series B common stock, we will be a "controlled company" under the corporate governance requirements of the Nasdaq Stock Market and may elect not to comply with certain corporate governance standards. See the sections titled "Management—Controlled Company" and "Risk Factors—Risks Related to Our Corporate Structure—We are a "controlled company" under the corporate governance requirements of the Nasdaq Stock Market, and intend to avail ourselves of certain reduced corporate governance requirements" for more information."

**See the section titled "<u>[Risk Factors](#ia4c256ae0345410896f0a45598cf5279_933)</u>" beginning on page <u>[21](#ia4c256ae0345410896f0a45598cf5279_933)</u> to read about factors you should consider before buying our Series A common stock.**

Neither the Securities and Exchange Commission nor any other regulatory body has approved or disapproved of these securities or passed upon the accuracy or adequacy of this prospectus. Any representation to the contrary is a criminal offense.

---

| | | |
|:---|:---|:---|
| | **Per Share** | **Total** |
| Initial public offering price | $ | $ |
| Underwriting discount<sup>(1)</sup> | $ | $ |
| Proceeds, before expenses, to us | $ | $ |
| Proceeds, before expenses, to the selling stockholders | $ | $ |

---

__________________

(1)See the section titled "Underwriting" for additional information regarding compensation payable to the underwriters.

The underwriters have the option to purchase up to an additional&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; and &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; shares of Series A common stock from us and the selling stockholders, respectively, at the initial public offering price, less the underwriting discount, for 30 days after the date of this prospectus.

The underwriters expect to deliver the shares against payment in New York, New York on or about&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; , 2025.

---

| | |
|:---|:---|
| **Goldman Sachs & Co. LLC\*** | **J.P. Morgan\*** |

---

---

| | |
|:---|:---|
| **Evercore ISI** | **Jefferies** |

---

---

| | | | | | |
|:---|:---|:---|:---|:---|:---|
| **Baird** | **BMO Capital Markets** | **KeyBanc Capital Markets** | **Needham & Company** | **Stifel** | **William Blair** |

---

**\*In alphabetical order.** 

**The date of this prospectus is** &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; **, 2025**

------

**Confidential Treatment Requested by Pattern Group Inc.**

**Pursuant to 17 C.F.R. Section 200.83**

**TABLE OF CONTENTS**

**Prospectus**

---

| | |
|:---|:---|
| | **Page** |
| <u>[PROSPECTUS SUMMARY](#ia4c256ae0345410896f0a45598cf5279_930)</u> | <u>[1](#ia4c256ae0345410896f0a45598cf5279_930)</u> |
| <u>[RISK FACTORS](#ia4c256ae0345410896f0a45598cf5279_933)</u> | <u>[21](#ia4c256ae0345410896f0a45598cf5279_933)</u> |
| <u>[SPECIAL NOTE REGARDING FORWARD-LOOKING STATEMENTS](#ia4c256ae0345410896f0a45598cf5279_936)</u> | <u>[61](#ia4c256ae0345410896f0a45598cf5279_936)</u> |
| <u>[INDUSTRY AND MARKET DATA](#ia4c256ae0345410896f0a45598cf5279_1732)</u> | <u>[63](#ia4c256ae0345410896f0a45598cf5279_1732)</u> |
| <u>[USE OF PROCEEDS](#ia4c256ae0345410896f0a45598cf5279_1754)</u> | <u>[65](#ia4c256ae0345410896f0a45598cf5279_1754)</u> |
| <u>[DIVIDEND POLICY](#ia4c256ae0345410896f0a45598cf5279_1776)</u> | <u>[66](#ia4c256ae0345410896f0a45598cf5279_1776)</u> |
| <u>[CAPITALIZATION](#ia4c256ae0345410896f0a45598cf5279_1797)</u> | <u>[67](#ia4c256ae0345410896f0a45598cf5279_1797)</u> |
| <u>[DILUTION](#ia4c256ae0345410896f0a45598cf5279_1820)</u> | <u>[70](#ia4c256ae0345410896f0a45598cf5279_1820)</u> |
| <u>[MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS](#ia4c256ae0345410896f0a45598cf5279_939)</u> | <u>[73](#ia4c256ae0345410896f0a45598cf5279_939)</u> |
| <u>[BUSINESS](#ia4c256ae0345410896f0a45598cf5279_1842)</u> | <u>[92](#ia4c256ae0345410896f0a45598cf5279_1842)</u> |
| <u>[MANAGEMENT](#ia4c256ae0345410896f0a45598cf5279_1864)</u> | <u>[123](#ia4c256ae0345410896f0a45598cf5279_1864)</u> |
| <u>[EXECUTIVE COMPENSATION](#ia4c256ae0345410896f0a45598cf5279_942)</u> | <u>[131](#ia4c256ae0345410896f0a45598cf5279_942)</u> |
| <u>[CERTAIN RELATIONSHIPS AND RELATED PARTY TRANSACTIONS](#ia4c256ae0345410896f0a45598cf5279_948)</u> | <u>[147](#ia4c256ae0345410896f0a45598cf5279_948)</u> |
| <u>[PRINCIPAL](#ia4c256ae0345410896f0a45598cf5279_1887)[AND SELLING](#ia4c256ae0345410896f0a45598cf5279_1887)[STOCKHOLDERS](#ia4c256ae0345410896f0a45598cf5279_1887)</u> | <u>[150](#ia4c256ae0345410896f0a45598cf5279_1887)</u> |
| <u>[DESCRIPTION OF CAPITAL STOCK](#ia4c256ae0345410896f0a45598cf5279_1910)</u> | <u>[152](#ia4c256ae0345410896f0a45598cf5279_1910)</u> |
| <u>[SHARES ELIGIBLE FOR FUTURE SALE](#ia4c256ae0345410896f0a45598cf5279_1933)</u> | <u>[158](#ia4c256ae0345410896f0a45598cf5279_1933)</u> |
| <u>[MATERIAL U.S. FEDERAL INCOME TAX CONSEQUENCES TO NON-U.S. HOLDERS OF OUR SERIES A COMMON STOCK](#ia4c256ae0345410896f0a45598cf5279_1956)</u> | <u>[161](#ia4c256ae0345410896f0a45598cf5279_1956)</u> |
| <u>[UNDERWRITING](#ia4c256ae0345410896f0a45598cf5279_1979)</u> | <u>[166](#ia4c256ae0345410896f0a45598cf5279_1979)</u> |
| <u>[LEGAL MATTERS](#ia4c256ae0345410896f0a45598cf5279_2002)</u> | <u>[171](#ia4c256ae0345410896f0a45598cf5279_2002)</u> |
| <u>[EXPERTS](#ia4c256ae0345410896f0a45598cf5279_2025)</u> | <u>[171](#ia4c256ae0345410896f0a45598cf5279_2025)</u> |
| <u>[WHERE YOU CAN FIND ADDITIONAL INFORMATION](#ia4c256ae0345410896f0a45598cf5279_2049)</u> | <u>[171](#ia4c256ae0345410896f0a45598cf5279_2049)</u> |
| <u>[INDEX TO CONSOLIDATED FINANCIAL STATEMENTS](#ia4c256ae0345410896f0a45598cf5279_88)</u> | <u>[F-](#ia4c256ae0345410896f0a45598cf5279_88)[i](#ia4c256ae0345410896f0a45598cf5279_88)</u> |

---

**Through and including**&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; **, 2025 (the 25**<sup>th</sup> **day after the date of this prospectus), all dealers effecting transactions in these securities, whether or not participating in this offering, may be required to deliver a prospectus. This is in addition to the dealers' obligation to deliver a prospectus when acting as underwriters and with respect to their unsold allotments or subscriptions.**

Neither we, the selling stockholders nor any of the underwriters have authorized anyone to provide any information or make any representations other than those contained in this prospectus or in any free writing prospectus we have prepared. We, the selling stockholders and the underwriters take no responsibility for and can provide no assurance as to the reliability of, any other information that others may give you. We and the selling stockholders are offering to sell, and seeking offers to buy, shares of our Series A common stock only in jurisdictions where offers and sales are permitted. The information contained in this prospectus is accurate only as of the date of this prospectus, regardless of the time of delivery of this prospectus or of any sale of our Series A common stock. Our business, financial condition, results of operations, and prospects may have changed since that date.

For investors outside of the United States: Neither we, the selling stockholders nor any of the underwriters have done anything that would permit this offering or possession or distribution of this prospectus in any jurisdiction where action for that purpose is required, other than in the United States. Persons outside of the United States who come into possession of this prospectus must inform themselves about, and observe any restrictions relating to, the offering of the shares of our Series A common stock and the distribution of this prospectus outside of the United States.

i

------

**Confidential Treatment Requested by Pattern Group Inc.**

**Pursuant to 17 C.F.R. Section 200.83**

**PROSPECTUS SUMMARY**

*This summary highlights selected information that is presented in greater detail elsewhere in this prospectus. This summary does not contain all of the information you should consider before investing in our Series A common stock. You should read this entire prospectus carefully, including the sections titled "Risk Factors" and "Management's Discussion and Analysis of Financial Condition and Results of Operations" and our consolidated financial statements and the related notes included elsewhere in this prospectus, before making an investment decision. Unless the context otherwise requires, the terms "Pattern," the "Company," "we," "us" and "our" in this prospectus refer to Pattern Group Inc., and its consolidated subsidiaries.*

**Overview**

At Pattern, we are on a mission to help brands accelerate profitable growth on global ecommerce marketplaces. Today, our proprietary technology and on-demand experts operate across more than 60 marketplaces to increase product sales to consumers in more than 100 countries. Utilizing more than 44 trillion data points and sophisticated machine learning and artificial intelligence ("AI") models, we strive to optimize and automate key levers of ecommerce growth, including advertising, content creation and management, pricing, forecasting and customer service. The result is a powerful platform that allows brands to navigate the complexity of operating on global ecommerce marketplaces at scale.

***The Ecommerce Opportunity is Massive***

The approximately $4 trillion global ecommerce market is forecasted to grow at a compound annual growth rate ("CAGR") of 9.3% from 2024 to 2028, representing more than $400 billion of annual growth.<sup>1</sup> Consumers are increasingly shopping online and, as a result, U.S. ecommerce sales are expected to grow more than four times as fast as all other U.S. non-ecommerce sales over this span.<sup>2</sup> Not only is global ecommerce expanding, it is also becoming a larger share of retail, increasing from 10% of retail sales in 2016 to a projected 25% by 2028, with each 1% shift from brick-and-mortar to ecommerce representing over $140 billion in retail value.<sup>1</sup> Within global ecommerce, marketplaces<sup>3</sup> commanded 59% of total revenue in 2023 and, in the United States, grew more than twice as fast as direct-to-consumer ("D2C") channels in 2023.<sup>4</sup>

![business1fa.jpg](business1fa.jpg)

\*&nbsp;&nbsp;&nbsp;&nbsp; *Euromonitor International, Retail: Euromonitor from trade sources/national statistics – October 2024.*

<sup>1</sup>&nbsp;&nbsp;&nbsp;&nbsp; *Euromonitor International, Retail: Euromonitor from trade sources/national statistics – October 2024.*

<sup>2</sup>&nbsp;&nbsp;&nbsp;&nbsp; *Factset, Ecommerce Intelligence (ID # FI3550US), for the three years ended December 31, 2023 (Accessed on November 21, 2024); eMarketer, US Ecommerce Forecast 2024: Retail Sales Will Chart a Modest and Steady Course Through Ongoing Headwinds – August 2024, https://content-naf.emarketer.com/us-ecommerce-forecast-2024*.

<sup>3</sup>&nbsp;&nbsp;&nbsp;&nbsp; *Refers to a website or application that connects buyers and sellers to trade goods and services, including but not limited to Amazon, Alibaba, eBay, Etsy, Mercado Libre and Walmart.*

<sup>4</sup>&nbsp;&nbsp;&nbsp;&nbsp; *Euromonitor International, Retail: Euromonitor from trade sources/national statistics – October 2024; Factset, Ecommerce Intelligence (ID # FI3550US), for the three years ended December 31, 2023 (Accessed on November 21, 2024).*

------

**Confidential Treatment Requested by Pattern Group Inc.**

**Pursuant to 17 C.F.R. Section 200.83**

***Ecommerce is Simple for Consumers but Complex for Brands***

For consumers, it is increasingly easy to shop online and have products show up at their doors within days or even hours. For brands, the shift to ecommerce has created new opportunities to grow. However, in making shopping easier for consumers, much of the complexity has shifted to brands. Brick-and-mortar retailers offer finite shelf space, relatively stable pricing and more straightforward advertising and fulfillment processes. Conversely, ecommerce marketplaces leverage algorithms for product discovery and real-time pricing, offer unconstrained shelf space that dynamically updates and necessitates always-on advertising to drive product visibility. The stakes are heightened by the "winner-takes-most" nature of the ecommerce marketplace ecosystem where the top three organic search results on the first page capture over 60% of clicks.<sup>5</sup> Moreover, marketplaces present complex and expensive warehousing, packaging and shipping challenges for brands to meet consumer expectations of same day or next-day delivery. Most brands lack the resources, scale and capabilities needed to grow their ecommerce business profitably on their own. As a result, they stand to benefit from a comprehensive solution.

***Pattern is the Solution***

We have spent more than a decade obsessing over how to make managing ecommerce easier for consumer brands so that they can focus on what they do best: creating products that customers want to buy. Pattern's platform sits as a thin layer between brands, marketplaces and consumers.

![prosummary2a.jpg](prosummary2a.jpg)

*\**&nbsp;&nbsp;&nbsp;&nbsp; *Euromonitor International, Retail: Euromonitor from trade sources/national statistics – October 2024.*

*&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; The diagram above shows Pattern's position in the ecommerce landscape. Pattern is a third-party seller and works with brands to sell their products on global marketplaces to reach consumers worldwide. The flags of nations represented under "Global Consumers" represent the global marketplace of consumers generally.*

Our patented technology and on-demand experts function as the "easy button" for brands as they navigate the complex ecosystem of marketplaces, regions, languages, regulatory environments, technology point-solutions and agencies. We believe that, over time, brands will have an increasingly difficult time managing all of this on their own, and Pattern will become an even more compelling solution to the complexities of scaling and accelerating within global ecommerce.

The marketplaces on which we operate benefit from both the more positive consumer experience we offer, as well as the accelerated consumer sales growth that our platform enables. Given our reputation for positive consumer experience and breadth of product selection, we receive inbound requests from marketplaces interested in working with Pattern as they expand their third-party offerings.

<sup>5</sup>&nbsp;&nbsp;&nbsp;&nbsp; *Search Engine Journal, Amazon's Search Engine Ranking Algorithm: What Marketers Need to Know – August 2018, https://www.searchenginejournal.com/amazon-search-engine-ranking-algorithm-explained/.*

------

**Confidential Treatment Requested by Pattern Group Inc.**

**Pursuant to 17 C.F.R. Section 200.83**

***Our Business Model***

We believe that one of the best ways to monetize our technology and expertise is by purchasing products from our brand partners<sup>6</sup> and selling those products to consumers on global marketplaces. We generate the substantial majority of our revenue from consumer product sales on global ecommerce marketplaces. This model results in a more seamless, low-friction relationship that is familiar to our brand partners and allows Pattern maximum control over the customer experience, including content, pricing, logistics and customer service. In our experience, this business model aligns Pattern's and our brand partners' incentives toward maximizing growth. Importantly, transacting directly with consumers also allows us to accumulate comprehensive marketplace data, perform real-time testing and build more powerful predictive models. As a result of the advantages of our platform and business model, our revenue outpaced the growth of the ecommerce segment by a multiple of approximately &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; x over &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; .

***How We Do What We Do***

As the pioneer of ecommerce acceleration, Pattern defines what it means to be an ecommerce accelerator: a platform that combines proprietary technology and on-demand expertise. Given the complexities that consumer brands face in scaling and accelerating global ecommerce, we have organized our platform around a simple and intuitive formula, which we call the ecommerce equation:

![prosummary3a.jpg](prosummary3a.jpg)

Today, our software, with a combined total of 26 issued patents and patents pending, is supported by approximately 350 software engineers, data scientists and other technology professionals who are dedicated to enhancing and innovating upon our technology to further increase our capabilities. We believe our data and technology provide a competitive advantage and will continue to differentiate our platform from alternative solutions.

We believe ecommerce complexity cannot currently be solved without the right combination of sophisticated technology and on-demand expertise, and that it is unlikely to be solved in the near future by technology alone. We have a team that offers differentiated, comprehensive, on-demand expertise and capabilities across marketplace management, marketing, fulfillment and brand protection on a global basis. Our brand partners trust our industry experts with everything from day-to-day ad campaign management and creative execution to strategic decisions, such as what product categories have the most potential or which global markets to enter. Our operational experts also help brand partners access our worldwide fulfillment network, utilizing our proprietary Warehouse Management System ("WMS") to deliver efficient and scalable volume to marketplaces and, in some cases, directly to consumers across the globe. Leveraging our technology, our in-house industry experts deliver data-driven outcomes efficiently across all aspects of the ecommerce equation. Today, we sell tens of thousands of products from more than 200 brands across different industries and geographies including the Americas, Europe, Australia and Asia. Our current brand partners' industry presence includes health and wellness, beauty and personal care, home and lifestyle, pet, sports and outdoors and consumer electronics.

<sup>6</sup> *We define brand partners as the consumer packaged goods companies with whom we contract.*

------

**Confidential Treatment Requested by Pattern Group Inc.**

**Pursuant to 17 C.F.R. Section 200.83**

***Our Results***

We have developed and maintained, and continue to develop and maintain, strong and long-lasting brand partner relationships. For the year ended December 31, 2024, approximately 87% of our revenue was attributable to brand partners that have been with Pattern for more than twelve months, whom we refer to as existing brand partners. More than 48% of our revenue was attributable to brand partners that have been with Pattern for more than five years. For the year ended December 31, 2024, our Net Revenue Retention Rate ("NRR"), which measures revenue attributable to existing brand partners across comparable periods, was 116%. See the section titled "Management's Discussion and Analysis of Financial Condition and Results of Operations—Key Business Metric and Non-GAAP Financial Measure" for information on how we define and calculate NRR.

We believe that we benefit from a powerful flywheel effect supporting our growth at scale: the more data we collect, the more accurate our insights become and the faster we accelerate brand partners. As our brand partners grow and we attract new brand partners, the more efficient our operations become and the more we can invest in technology. We use our technology and data advantage to identify high-potential new brand partners and leverage a targeted, efficient go-to market approach to bring them onto our platform, further fueling our flywheel. At the same time, our average cost to serve our brand partners globally as a percentage of revenue has decreased over the past two years. As we continue to scale, we expect continued improvement, and we plan to share these savings with our brand partners while we continue to invest in our platform.

In the year ended December 31, 2024, we generated revenue of $1,796 million, which represents a CAGR of 35% over the last two years. During the same period, our net income increased $71 million from ($3) million to $68 million. Our Adjusted EBITDA during 2024 was $101 million, which represents a CAGR of 138% over the last two years.

![prosummary4e.jpg](prosummary4e.jpg)

For the three months ended March 31, 2025, we generated revenue of $540 million, representing an increase of 32% over the three months ended March 31, 2024. During the same period, our net income increased $5 million from $18 million to $23 million. Our Adjusted EBITDA during the three months ended March 31, 2025 was $34 million, representing an increase of 31% over the three months ended March 31, 2024.

Adjusted EBITDA is a non-GAAP financial measure. For additional information about our non-GAAP financial measure, including reconciliations of the non-GAAP financial measure to the most directly comparable financial measure stated in accordance with GAAP, see the section titled below "Management's Discussion and Analysis of Financial Condition and Results of Operations—Key Business Metric and Non-GAAP Financial Measure."

**Challenges that Brands Experience**

Effectively selling across global marketplaces is extremely complex and requires brands to master an array of variables, including traffic generation, demand capture, content optimization, brand consistency, inventory management, marketplace compliance, shipping logistics, post-purchase engagement and international expansion.

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**Confidential Treatment Requested by Pattern Group Inc.**

**Pursuant to 17 C.F.R. Section 200.83**

At Pattern, we believe it is virtually impossible for brands to optimize each variable by themselves. These complexities apply regardless of business model – whether they utilize 3P<sup>7</sup> or 1P<sup>8</sup> selling strategies, brands are required to list and market their own products on the marketplace while considering pricing and inventory levels.

With these complexities and opaque marketplace requirements, brands are presented with five key challenges:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• **Challenge #1: Growing profitably.** Achieving profitable growth online is a significant challenge for many brands, despite the expanding opportunities in ecommerce.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• **Challenge #2: Lack of technology.** Many brands do not have integrated technology capabilities. Using a patchwork of solutions can make it difficult for brands to come up with coherent strategies and coordinated execution, leading to inefficiencies and inconsistencies.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• **Challenge #3: Lack of access to high quality and comprehensive data.** Brands often face significant challenges in capturing high quality and comprehensive ecommerce data, which can limit their ability to optimize strategies, improve customer experiences and drive growth.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• **Challenge #4: Lack of expertise.** Hiring a team that understands the complex ecommerce landscape is extremely difficult and expensive. Without dedicated teams to help integrate the necessary solutions, the technology alone is unlikely to translate into growth and operational efficiency.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• **Challenge #5: Retaining brand value throughout the consumer experience.** It is difficult for brands to position themselves consistently across different marketplaces.

**Our Platform**

Our platform is a combination of our proprietary technology and our on-demand expertise, both of which sit upon our differentiated data set. Our software and global team of industry experts optimize traffic, conversion, price and availability to drive profitable growth for our brand partners.

![business5k.jpg](business5k.jpg)

<sup>7</sup>&nbsp;&nbsp;&nbsp;&nbsp; *Third party selling ("3P") is a business model where an online retailer allows independent vendors to sell their products and services on their platform.*

<sup>8</sup>&nbsp;&nbsp;&nbsp;&nbsp; *First-party selling ("1P") is a business model where a brand sells its products wholesale to a retailer (such as an ecommerce marketplace), that then sells them to consumers.*

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**Confidential Treatment Requested by Pattern Group Inc.**

**Pursuant to 17 C.F.R. Section 200.83**

*&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; The diagram above illustrates the key components of our platform and the subparts that form a multi-faceted ecommerce acceleration value proposition. Our technology stack is illustrated on the right side of the diagram. Users start their journey by logging into the EXP, where they gain access to a myriad of data-driven insights at both the brand and product levels. They can choose from four execution engines (Traffic, Conversion, Price and Availability), each offering various modules to take action to optimize marketplace performance. These optimizations are informed by our proprietary data set, which is analyzed and transformed into actionable insights through our AI computational layer. Additional details of each layer within our platform are depicted on the left side of the diagram.*

**Our Technology**

***EXP Data Layer***

The backbone of Pattern's EXP is formed from its robust and extensive data layer. This layer acts as the central nervous system of the platform, with data points on everything from keyword data to fulfillment rates to market share that are leveraged to inform the rest of the platform's functions. This backbone not only draws on our existing 44 trillion data points, but also collects, stores and structures more than 100 billion new data points each week on average.

***Artificial Intelligence***

The EXP data layer also includes the various machine learning, natural language processing engines and LLMs that train on our wide set of proprietary data. These AI models analyze billions of data points and produce valuable computations, which are then utilized by the rest of the platform. See the section titled "Business—Our Technology—Artificial Intelligence."

***Insights Engine***

The Pattern Insights Engine is the analytical brain of EXP. The Insights Engine compiles the AI-driven computations from the EXP data layer and continuously aggregates them into performance dashboards, scorecards, filter-ready reporting and ongoing notifications. The Insights Engine sits across the execution engines extending to every module of the EXP. This provides up-to-the-minute reporting and signals on hundreds of key processes and metrics, including payments to social influencers, impressions on listings, syndication failure rates for content being pushed to marketplaces, customer lifetime value and much more.

The Insights Engine is leveraged by Pattern experts and brand partners alike to keep a pulse on important trends, issues and opportunities.

***Traffic Engine***

The Pattern EXP Traffic Engine is the execution arm for all activity related to driving digital traffic (i.e., consumer eyeballs) to brands and product listings around the world. One of the highlights of this engine is a patented keyword recommendation module we call Destiny. The goal of Destiny is to increase organic (i.e., non-paid) traffic to a given listing by using machine learning and proprietary data to recommend keywords and keyword phrases on which said listing has mathematical propensity to win better placement. The Pattern EXP Traffic Engine includes many other important modules, which enable recruiting, managing, paying and communicating with social media creators, managing advertising and influencer campaigns on marketplaces and social networks and managing/optimizing advertising spend across every aspect of the demand funnel, to name a few.

***Conversion Engine***

The Pattern EXP Conversion Engine is the execution arm for all efforts aimed at improving the efficacy and conversion rate of a brand's content and listings across dozens of ecommerce and social media platforms, which may include everything from product detail page titles and bullets to product photography, videos, user-generated content and other microsites, landing pages and advertisements. In addition to granular reporting on page views,

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**Confidential Treatment Requested by Pattern Group Inc.**

**Pursuant to 17 C.F.R. Section 200.83**

click share, orders, category ranking and reviews for any given product, the Conversion Engine leverages our data, LLMs and transformer-based neural networks to provide competitive insights comparisons to the digital shelf and make sophisticated content recommendations. This provides actionable value in three primary areas: content management, content optimization and content creation.

***Price Engine***

Pattern's Price Engine includes a wide range of modules related to maintaining brand control on marketplaces. Pattern's Price Engine allows brands to better understand if unauthorized sellers are selling their product, for what price they are selling it and what share of overall sales these sellers are commanding. Within this engine, Pattern also monitors hundreds of websites daily to help brands detect price suppression, price erosion and general price competitiveness.

***Availability Engine***

Pattern's Availability Engine contains a number of modules, including a robust order management system, which provides brands with ongoing visibility into their product inventory pools across marketplaces, as well as detailed information on where their products reside in the pipeline. Other modules in the Availability Engine provide Pattern internal teams with forecasting models and detailed information regarding in-stock rates, which helps brands avoid advertising products that are at imminent risk of going out of stock. This software is critical in helping maintain high in-stock rates for brand partners and keeping Pattern warehouses running efficiently.

**Our On-Demand Expertise**

Unlike companies only providing or selling technology and software to brands, our platform combines our proprietary technology with integrated, on-demand expertise. These in-house experts include experienced brand managers, ad strategists, search engine optimization ("SEO") strategists, art directors, account health specialists, data scientists, former brand and retail executives, customer service specialists and in-stock managers. Our experts leverage our platform and experience across many brands to seek to profitably grow our revenue while executing with our brand partners' specific goals and priorities in mind. We believe our technology is amplified by our team, and this combination will drive greater success than standalone agency models or technology solutions.

**Our Competitive Strengths**

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• **Win-win Partnership Mindset:** We run our business on the philosophy that a brand partner's success and our success are linked. Our business model avoids the "agency mindset," as the incentives of both Pattern and our brand partners are economically aligned towards driving consumer product sales. Acquiring inventory demonstrates our commitment to and belief in our own capabilities while providing a more seamless and low-friction collaboration with our brand partners.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• **Comprehensive Proprietary Technology and Data Sets:** We hold a distinct and growing data advantage gathering massive amounts of real-time data, with more than 44 trillion data points captured since our inception and more than 100 billion new data points added each week on average. Our Insights Engine then continuously aggregates insights from Pattern's EXP, which is comprised of our data and computational layers, into performance dashboards driving all of our modules, producing traffic, conversion, price and availability insights that we use to make data-driven decisions. We provide brand partners with crucial data to safeguard their brand equity online by facilitating consistency across marketplaces and enabling brands to have unified product listing content, fast delivery speeds and quality customer service. Our success and future growth depends on our continued access to comprehensive marketplace data. See the section titled "Risk Factors" for more information.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• **Integrated, On-demand Expertise:** The strength of our platform is amplified by our integrated, on-demand industry experts who offer valuable insights and best practices for succeeding in online channels. Among other things, these experts create a tailored operational strategy, offering expertise to our brand partners, including marketing strategy and implementation, creative development and customer service.

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**Confidential Treatment Requested by Pattern Group Inc.**

**Pursuant to 17 C.F.R. Section 200.83**

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• **Scale:** Every element of our platform benefits from compounding scale, from breadth and diversity of data, to technology investment and on-demand experts, to our global logistics network.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• **First-mover Advantage:** As the first mover, we have built a competitive edge by accumulating a robust data set, entering complex international markets and establishing a track record of seller excellence across global marketplaces, which allows us to offer data-driven insights and comprehensive optimization strategies for our brand partners. Our future success depends on successfully competing against current and future competitors. See the section titled "Risk Factors" for more information.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• **Deep and Long-lasting Brand Partner Relationships:** We have built enduring relationships with our brand partners that we believe surpass most software-only monetization models. For the year ended December 31, 2024, approximately 87% of our revenue was attributable to brand partners that have been with Pattern for more than twelve months, and more than 48% of our revenue was attributable to brand partners that have been with Pattern for more than five years, demonstrating our strong and durable relationships. Our future success depends on our ability to source additional, or strengthen our existing relationships with, brand partners. See the section titled "Risk factors" for more information.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• **Proven Leadership Team:** We believe our talent, expertise and culture are key competitive advantages. Our founder-led, data-obsessed team comprises a diverse range of experts who are highly focused on execution, innovation and continuous improvement. Our future success depends on the continuing efforts of our co-founders and senior management team. See the section titled "Risk Factors" for more information.

**Our Market Opportunity**

Pattern operates within the expansive, approximately $4 trillion global ecommerce market,<sup>9</sup> a sector characterized by its large scale and the increasing number of consumers shopping online. Ecommerce stands as the fastest-growing retail channel worldwide, with projected annual sales volume increases exceeding $400 billion and a projected CAGR of 9.3% from 2024 to 2028.<sup>9</sup> This market is ripe for innovation, as many traditional retailers, having not fully embraced the transition to online, are unable to provide personalized and data-driven shopping experiences.

As of 2024, the global ecommerce sector is estimated to have a penetration rate of 23%.<sup>9</sup> We believe that several of our core categories, including health and wellness and beauty and home goods, are currently under-penetrated. In the United States, ecommerce penetration for similar categories is estimated to range from 20% to 40% as of 2024, whereas more mature ecommerce categories have penetration rates approaching 70%.<sup>10</sup> Looking ahead, our core categories are forecasted to reach penetration rates of 30% to 50% by 2028 in the United States.<sup>10</sup>

As we explore opportunities to expand our presence in global ecommerce marketplaces, we have identified additional retail brands that we believe can potentially benefit from our platform. We estimate that these brands represent a gross merchandise value ("GMV") of approximately $400 billion annually. While there can be no assurance that we will pursue, engage or enter into agreements with any of these brands, we believe there is significant potential to increase our sales through partnerships with new brand partners and to expand our relationships with existing brand partners. We believe we are in the early stages of capturing our market opportunity and hold a distinct competitive advantage through our data-driven approach. Our ability to grow depends on a variety of factors, many of which are beyond our control. See the section titled "Risk Factors" for more information.

**Our Growth Strategies**

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• **Grow with our Existing Brand Partners:** One of our core priorities is retaining and growing our revenue attributable to existing brand partners through continued optimization of the ecommerce equation. We will also continue to grow by expanding our product selection from each brand partner and bringing those products to new marketplaces.

<sup>9</sup>&nbsp;&nbsp;&nbsp;&nbsp; *Euromonitor International, Retail: Euromonitor from trade sources/national statistics – October 2024.* 

<sup>10</sup>&nbsp;&nbsp;&nbsp;&nbsp; *eMarketer, US Ecommerce by Category 2024: A Slowdown in Growth Reshapes the Landscape – February 2024.*

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**Confidential Treatment Requested by Pattern Group Inc.**

**Pursuant to 17 C.F.R. Section 200.83**

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• **Attract New Brand Partners:** We also grow by signing new brand partners to our platform. Using our extensive data, we identify potential brand partners and our sales team efficiently markets to and signs new brand partners.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• **Enhance and Expand our Platform:** Continuing to innovate and expand the breadth and quality of our platform enhances our value to our brand partners, differentiates ourselves in the ecommerce accelerator space and meets evolving market demands.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• **Monetize Incremental Solutions:** Due to the strength of our platform and the unique space we occupy at the intersection of brands and marketplaces, we will continue to evaluate the potential to monetize discrete components of the value chain and to diversify our revenue mix.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• **Continue to Expand into Global Geographies:** One of our competitive strengths lies in our global capabilities, and we believe there is a significant opportunity to increase our revenue by further expanding outside the United States.

**Risk Factors Summary**

Our business is subject to numerous risks and uncertainties that you should consider before investing in our company. These risks are described more fully in the section titled "Risk Factors" immediately following this prospectus summary. These risks include, but are not limited to, the following:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• Our revenue is dependent upon maintaining our relationship with Amazon and other marketplaces and our failure to do so, or any restrictions on our ability to offer brand partners' products on Amazon and other marketplaces, could have an adverse impact on our business, financial condition and results of operations.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• Our technology relies in part on the use of comprehensive marketplace data, and if we lose the ability to use such data, or if such data contain inaccuracies, our business could be adversely affected.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• Operational and performance issues with our technology, whether real or perceived, including a failure to respond to technological changes or to upgrade our technology systems, may adversely affect our business, financial condition and operating results.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• If we are unable to continue to introduce new features or solutions successfully and to make enhancements to existing solutions, our ability to grow and operate our business could be adversely affected.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• We may be unable to source additional, or strengthen our existing relationships with, brand partners, and the loss of any significant brand partners would negatively impact our business.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• Our estimate of the gross merchandise value of potential additional brand partners may prove to be inaccurate.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• Our future success depends on the continuing efforts of our co-founders and senior management team.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• We depend on highly-skilled personnel to grow and operate our business, and if we are unable to hire, retain and motivate our personnel, we may not be able to grow effectively.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• We are highly dependent on the services of David Wright, our Chief Executive Officer and co-founder, and Melanie Alder, our Chief Strategy Officer and co-founder, who are married to each other. The separation or divorce of our co-founders in the future could adversely affect our business.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• If we do not adequately fund our research and development efforts, we may not be able to compete effectively and our business and operating results may be harmed.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• If we are unable to accurately forecast consumer demand, manage our inventory and plan for future expenses, our business, financial condition and results of operations could be adversely affected.

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**Confidential Treatment Requested by Pattern Group Inc.**

**Pursuant to 17 C.F.R. Section 200.83**

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• We have experienced rapid growth in recent periods and our recent growth rates may not be indicative of our future growth.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• If we fail to manage our growth effectively, our business, financial condition and results of operations could be materially and adversely affected.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• We are subject to extensive laws and regulations and we may incur material liabilities or costs related to complying with existing or future laws and regulations, and our failure to comply may result in enforcements, penalties, recalls and other adverse actions.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• Political, economic and financial instability and changes in international trade policies or tariffs and rising political tensions, particularly between the United States and China, could have a material impact on our business, financial condition and results of operations.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• We are a "controlled company" under the corporate governance requirements of the Nasdaq Stock Market, and intend to avail ourselves of certain reduced corporate governance requirements.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• The dual series structure of our common stock and the existing ownership of capital stock by our co-founders and their affiliates have the effect of concentrating voting control with our co-founders and their affiliates for the foreseeable future, which will limit your ability to influence corporate matters.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• The initial public offering price of our Series A common stock may not be indicative of the market price of our Series A common stock after this offering. There has been no prior market for our Series A common stock. An active market may not develop or be sustainable, and investors may be unable to resell their shares at or above the initial public offering price.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• Other factors discussed under "<u>[Risk Factors.](#ia4c256ae0345410896f0a45598cf5279_933)</u>"

If we are unable to adequately address these and other risks we face, our business, results of operations, financial condition and prospects may be harmed, the trading price of our Series A common stock could decline, and you could lose all or part of your investment.

**Channels for Disclosure of Information**

Following the completion of this offering, we intend to announce material information to the public through filings with the Securities and Exchange Commission ("SEC"), the investor relations page on our website, blog posts on our website, press releases, public conference calls, webcasts, our X feed (@patternhq), our Instagram page (@pattern_hq), our YouTube page (@pattern_hq), our Facebook page and our LinkedIn page.

The information disclosed through the foregoing channels could be deemed to be material information. As such, we encourage investors, the media and others to follow the channels listed above and to review the information disclosed through such channels.

Any updates to the list of disclosure channels through which we will announce information will be posted on the investor relations page on our website. Information contained on or accessible through any of the foregoing channels is not incorporated by reference into this prospectus.

**Corporate Information**

We were incorporated in 2018 under the name Covalent Group, Inc. as a Utah corporation and subsequently converted to a Delaware corporation in 2020. Our wholly-owned subsidiary, Pattern Inc., was incorporated in 2013 as a Utah corporation named iServe Products, Inc. In 2019, iServe Products, Inc. changed its name to Pattern Inc., and subsequently in 2019, the stockholders of Pattern Inc. exchanged all of the issued and outstanding shares of Pattern Inc. for shares of Covalent Group, Inc. In November 2024, Covalent Group, Inc. changed its name to Pattern Group Inc. Our principal executive offices are located at 1441 West Innovation Way, Suite 500, Lehi, UT 84043, and our telephone number is (866) 765-1355. Our website address is www.pattern.com. Information contained on or that can be accessed through our website does not constitute part of this prospectus and the inclusion of our website

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**Confidential Treatment Requested by Pattern Group Inc.**

**Pursuant to 17 C.F.R. Section 200.83**

address in this prospectus is an inactive textual reference only. You should not consider information contained on our website to be part of this prospectus or in deciding whether to purchase shares of our Series A common stock.

![prosummary6ba.jpg](prosummary6ba.jpg)

*&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The diagram above depicts our organizational structure. This chart is provided for illustrative purposes only and does not show all of our legal entities. Each direct and indirect subsidiary of the Company is wholly owned. All business is conducted through our wholly-owned subsidiaries.*

"Pattern" is our registered trademark in the United States and other jurisdictions. The Pattern design logo and our other registered or common law trademarks, service marks or trade names appearing in this prospectus are our property. This prospectus includes our trademarks and trade names, including, without limitation, "Pattern", which are our property and are protected under applicable intellectual property laws. Other trademarks and trade names referred to in this prospectus are the property of their respective owners.

**Controlled Company**

After the consummation of the offering, we will be considered a "controlled company" under the corporate governance requirements of the Nasdaq Stock Market ("Nasdaq"), as our co-founders will have more than 50% of the voting power for the election of directors. See the section titled "Principal and Selling Stockholders" for additional information. As a "controlled company," we will not be subject to certain corporate governance requirements, including that: (i) a majority of our board of directors consists of "independent directors," as defined under the corporate governance requirements of Nasdaq; (ii) we have a nominating and corporate governance committee that is composed entirely of independent directors with a written charter addressing the committee's purpose and responsibilities, or if no such committee exists, that our director nominees be selected or recommended by independent directors constituting a majority of the board of director's independent directors in a vote in which only independent directors participate; (iii) we have a compensation committee that is composed entirely of independent directors with a written charter addressing the committee's purpose and responsibilities; and (iv) we perform annual performance evaluations of the nominating and corporate governance and compensation committees. As a result, we may not have a majority of independent directors on our board of directors, an entirely independent nominating and corporate governance committee, an entirely independent compensation committee or perform annual performance evaluations of the nominating and corporate governance and compensation committees unless and until such time as we are required to do so. We expect to have &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; independent directors upon the closing of this offering, all of whom will qualify as independent for audit committee purposes. Following this offering, we intend to utilize certain of these exemptions. We do not expect that the nominating and corporate governance committee will consist entirely of independent directors upon the consummation of the offering.

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**Confidential Treatment Requested by Pattern Group Inc.**

**Pursuant to 17 C.F.R. Section 200.83**

While our co-founders continue to control more than 50% of the voting power of our outstanding common stock, we qualify for, and may rely on, these exemptions. Accordingly, you will not have the same protections afforded to stockholders of companies that are subject to all of the corporate governance requirements of Nasdaq.

In the event we cease to be a "controlled company" and our shares continue to be listed on Nasdaq, we will be required to comply with these corporate governance requirements within the applicable transition periods.

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**Confidential Treatment Requested by Pattern Group Inc.**

**Pursuant to 17 C.F.R. Section 200.83**

**The Offering**

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| | |
|:---|:---|
| Series A common stock offered by us | &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; shares |
| Series A common stock offered by the selling stockholders | &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; shares |
| Series A common stock to be outstanding after this offering | &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; shares (or&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; shares if the underwriters' option to purchase additional shares in this offering is exercised in full) |
| Series B common stock to be outstanding after this offering | &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; shares |
| Option to purchase additional shares of Series A common stock from us | We have granted the underwriters an option, exercisable for 30 days after the date of this prospectus, to purchase up to an additional&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; shares of Series A common stock. |
| Option to purchase additional shares of Series A common stock from the selling stockholders | The selling stockholders have granted the underwriters an option, exercisable for 30 days after the date of this prospectus, to purchase up to an additional&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;shares of Series A common stock. |
| Total Series A common stock and Series B common stock to be outstanding after this offering | &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; shares (or&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; shares if the underwriters' option to purchase additional shares in this offering is exercised in full). |

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**Confidential Treatment Requested by Pattern Group Inc.**

**Pursuant to 17 C.F.R. Section 200.83**

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|:---|:---|
| Use of proceeds | We estimate that the net proceeds from the sale of shares of our Series A common stock that we are selling in this offering will be approximately $&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; million (or approximately $&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; million if the underwriters' option to purchase additional shares is exercised in full), based upon an assumed initial public offering price of $&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; per share, which is the midpoint of the estimated offering price range set forth on the cover page of this prospectus, after deducting estimated underwriting discounts and commissions and estimated offering expenses payable by us. We will not receive any proceeds from the sale of the shares of Series A common stock being offered by the selling stockholders, including upon the sale of shares of Series A common stock by the selling stockholders if the underwriters exercise their option.<br>We currently intend to use the net proceeds of this offering for working capital, other general corporate purposes and to fund our growth strategies discussed in this prospectus. We may also use a portion of the net proceeds to acquire or invest in complementary businesses, products, services, technologies or other assets. We do not, however, have agreements or commitments to enter into any acquisitions or investments at this time. We intend to use a portion of the net proceeds we receive from this offering to satisfy the anticipated tax withholding and remittance obligations related to the settlement in connection with this offering of our outstanding restricted stock units ("RSUs") and a portion of the restricted stock units awarded to our Chief Executive Officer ("CEO") in February 2025 with vesting subject to the satisfaction of certain service-based, liquidity-based and milestone-based requirements ("Milestone RSUs").<br>The principal purposes of this offering are to increase our capitalization, increase our financial flexibility, create a public market for our Series A common stock and enable access to the public equity markets for our stockholders and us.<br>See the section titled "<u>[Use of Proceeds](#ia4c256ae0345410896f0a45598cf5279_1754)</u>" for additional information. |

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**Confidential Treatment Requested by Pattern Group Inc.**

**Pursuant to 17 C.F.R. Section 200.83**

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| Voting rights | We will have two series of common stock: Series A common stock and Series B common stock. <br>Shares of our Series A common stock are entitled to one vote per share.<br>Shares of our Series B common stock are entitled to 10 votes per share.<br>Holders of our Series A common stock and Series B common stock will generally vote together as a single class, unless otherwise required by law or our amended and restated certificate of incorporation that will be in effect on the completion of this offering. The holders of our outstanding Series B common stock will hold approximately **&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;** % of the voting power of our outstanding capital stock (or % if the underwriters exercise their option to purchase additional shares of our Series A common stock from the selling stockholders in full) following the completion of this offering and will have the ability to control the outcome of matters submitted to our stockholders for approval, including the election of our directors and the approval of any change in control transaction. See the sections titled "<u>[Principal](#ia4c256ae0345410896f0a45598cf5279_1887)[and Selling](#ia4c256ae0345410896f0a45598cf5279_1887)[Stockholders](#ia4c256ae0345410896f0a45598cf5279_1887)</u>" and "<u>[Description of Capital Stock](#ia4c256ae0345410896f0a45598cf5279_1910)</u>" for additional information. |
| Concentration of ownership | Upon the completion of this offering, our executive officers and directors, and their affiliates, will beneficially own, in the aggregate, approximately &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; % of our outstanding shares of common stock, representing approximately&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; % of the voting power of our outstanding shares of common stock (or &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; % and &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; %, respectively, if the underwriters exercise their option to purchase additional shares of our Series A common stock from the selling stockholders in full). |
| Risk factors | See the section titled "<u>[Risk Factors](#ia4c256ae0345410896f0a45598cf5279_933)</u>" for a discussion of factors you should carefully consider before deciding to invest in our Series A common stock. |
| Proposed trading symbol | "PTRN" |

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The number of shares of our Series A and Series B common stock that will be outstanding after this offering is based on&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; shares of our Series A common stock and&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; shares of our Series B common stock outstanding as of March 31, 2025, in each case, after giving effect to the Reclassification and the Convertible Preferred Stock Conversion (each as defined below) and excludes:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• 6,638,823 shares of our Series A common stock that are issuable in connection with the settlement of RSUs issued pursuant to our 2019 Equity Incentive Plan (the "2019 Plan") upon the satisfaction of both a service-based condition and a liquidity event condition outstanding as of March 31, 2025, for which the service-based condition was not yet satisfied as of March 31, 2025;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; shares of our Series A common stock that are issuable in connection with the settlement of RSUs upon satisfaction of both a service-based condition and a liquidity event condition that were granted after March 31, 2025;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• 7,554,138 shares of our Series A common stock that are issuable in connection with the settlement of the Milestone RSUs upon satisfaction of certain service-based, liquidity-based and milestone-based requirements;

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**Confidential Treatment Requested by Pattern Group Inc.**

**Pursuant to 17 C.F.R. Section 200.83**

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; shares of our Series A common stock reserved for future issuance under our 2025 Stock Option and Incentive Plan (the "2025 Plan"), which will become effective on the day prior to the effectiveness of the registration statement of which this prospectus forms a part, including &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; new shares and the number of shares (not to exceed &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; shares) (i) that remain available for grant of future awards under the 2019 Plan, at the time the 2025 Plan becomes effective, which shares will cease to be available for issuance under the 2019 Plan at such time, and (ii) any shares underlying awards granted under the 2019 Plan that are forfeited, cancelled, held back, reacquired or are otherwise terminated; and

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; shares of our Series A common stock reserved for future issuance under our 2025 Employee Stock Purchase Plan (the "ESPP") which will become effective on the day prior to the effectiveness of the registration statement of which this prospectus forms a part.

Each of the 2025 Plan and the ESPP provide for annual automatic increases in the number of shares of our Series A common stock reserved thereunder, and the 2025 Plan provides for increases to the number of shares of our Series A common stock that may be granted thereunder based on shares underlying any awards under the 2025 Plan and the 2019 Plan that are forfeited, cancelled or are otherwise terminated, as more fully described in the section titled "Executive Compensation—Employee Benefit and Equity Compensation Plans."

Except as otherwise indicated, all information in this prospectus assumes:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• the filing and effectiveness of our amended and restated certificate of incorporation in Delaware and the adoption of our amended and restated bylaws, each of which will occur immediately prior to the completion of this offering;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• the authorization of our Series A and Series B common stock, the reclassification of our outstanding existing common stock into an equivalent number of shares of our Series A common stock and the reclassification of our outstanding existing Founder Voting Preferred Stock and Founder Non-Voting Preferred Stock into an equivalent number of shares of our Series B common stock, which will occur immediately prior to the completion of this offering (collectively, the "Reclassification");

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• the automatic conversion of all 15,750,477 outstanding shares of our Series A Preferred Stock into an equal number of&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; shares of our Series A common stock, the conversion of which will occur immediately prior to the completion of this offering (the "Series A Preferred Stock Conversion");

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• the automatic conversion of all 13,215,614 outstanding shares of our Series B Preferred Stock into an aggregate of&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; shares of our Series A common stock immediately prior to the completion of this offering, based on the assumed initial public offering price of $&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; per share, which is the midpoint of the estimated offering price range set forth on the cover of this prospectus (the "Series B Preferred Stock Conversion"and, together with the Series A Preferred Stock Conversion, the "Convertible Preferred Stock Conversion"). A $1.00 increase in the initial public offering price would decrease the number of shares of Series A common stock issuable upon the conversion of our Series B Preferred Stock by&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; shares, and a $1.00 decrease in the initial public offering price would increase the number of shares of Series A common stock issuable upon the conversion of our Series B Preferred Stock by&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; shares. For more information on the conversion adjustment provisions applicable to our Series B Preferred Stock, see the section titled "Capitalization—Series B Preferred Stock Conversion";

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• the net issuance of&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; shares of our Series A common stock issuable pursuant to the vesting and settlement of 12,140,354 RSUs (which excludes the Milestone RSUs) for which the service-based condition was satisfied as of March 31, 2025, and for which we expect the liquidity event condition to be satisfied in connection with this offering (based on an assumed&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; % tax withholding rate);

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• the net issuance of&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; shares of our Series A common stock issuable pursuant to the vesting and settlement of 1,259,023 Milestone RSUs for which we expect the milestone-based and liquidity-based conditions to be satisfied in connection with this offering (based on an assumed&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; % tax withholding rate);

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**Confidential Treatment Requested by Pattern Group Inc.**

**Pursuant to 17 C.F.R. Section 200.83**

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• the conversion of shares of Series B common stock into shares of Series A common stock in connection with the sale of shares in this offering by the selling stockholders;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• no exercise by the underwriters of their option to purchase up to an additional&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; or &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; shares of Series A common stock from us or the selling stockholders, respectively, in this offering; and

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• no settlement of other outstanding RSUs subsequent to March 31, 2025.

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**Confidential Treatment Requested by Pattern Group Inc.**

**Pursuant to 17 C.F.R. Section 200.83**

**Summary Consolidated Financial and Other Data**

The following tables summarize our historical consolidated financial and other data for the periods and dates indicated. We derived the summary historical consolidated statements of operations and comprehensive loss data for the years ended December 31, 2022, 2023 and 2024 from our audited consolidated financial statements included elsewhere in this prospectus. The summary consolidated statements of operations data for the three months ended March 31, 2024 and 2025 and the summary consolidated balance sheet data as of March 31, 2025 have been derived from our unaudited interim consolidated financial statements included elsewhere in this prospectus. The unaudited interim consolidated financial statements were prepared on a basis consistent with our audited consolidated financial statements included elsewhere in this prospectus, and, in the opinion of management, reflect all adjustments, consisting only of normal recurring adjustments, that are necessary for the fair statement of such data. Our results for any interim period are not necessarily indicative of the results that may be expected for any other future period. Our historical results are not necessarily indicative of the results that may be expected in the future.

You should read the following summary consolidated financial and other data below in conjunction with the sections titled "Risk Factors," "Capitalization," "Management's Discussion and Analysis of Financial Condition and Results of Operations" and our consolidated financial statements and related notes included elsewhere in this prospectus. The summary consolidated financial data in this section are not intended to replace, and are qualified in their entirety by, the consolidated financial statements and related notes.

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| | | | | | |
|:---|:---|:---|:---|:---|:---|
| | **Year Ended December 31,** | **Year Ended December 31,** | **Year Ended December 31,** | **Three Months Ended March 31,** | **Three Months Ended March 31,** |
| **(in thousands, except per share data)** | **2022** | **2023** | **2024** | **2024** | **2025** |
| **Consolidated Statement of Operations Data:** |  |  |  |  |  |
| Revenues | $990535 | $1366417 | $1796161 | $410672 | $540406 |
| Operating expenses: |  |  |  |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;Cost of goods sold | 561620 | 765203 | 1014812 | 226935 | 304600 |
| &nbsp;&nbsp;&nbsp;&nbsp;Operations, general and administrative | 226662 | 276272 | 338508 | 80686 | 100076 |
| &nbsp;&nbsp;&nbsp;&nbsp;Sales and marketing | 187299 | 257513 | 337672 | 75624 | 100679 |
| &nbsp;&nbsp;&nbsp;&nbsp;Research and development | 10833 | 14644 | 17987 | 4112 | 5643 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Total operating expenses | 986414 | 1313632 | 1708979 | 387357 | 510998 |
| Operating income | 4121 | 52785 | 87182 | 23315 | 29408 |
| Interest income |  | 2882 | 6164 | 1249 | 1559 |
| Interest expense | (502) | (33) | (98) | (23) | (42) |
| Other income (expense), net | (5310) | 707 | (2013) | (819) | (161) |
| Income (loss) before income taxes | (1691) | 56341 | 91235 | 23722 | 30764 |
| Provision for income taxes | 1284 | 15077 | 23379 | 6065 | 7962 |
| &nbsp;&nbsp;&nbsp;&nbsp;Net (loss) income | $(2975) | $41264 | $67856 | $17657 | $22802 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Income allocable to participating Series A Preferred Stock |  | 3441 | 7373 | 1949 | 2720 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Series B Preferred Stock dividend - undeclared | 17992 | 17992 | 17992 | 4474 | 4436 |
| &nbsp;&nbsp;&nbsp;&nbsp;Net (loss) income attributable to common and preferred stockholders | $(20967) | $19831 | $42491 | $11234 | $15646 |
| Net earnings (loss) per share attributable to common and preferred stockholders, basic and diluted<sup>(1)</sup> | $(0.23) | $0.22 | $0.47 | $0.12 | $0.17 |
| Weighted average common and preferred shares used in computing net earnings (loss) per share attributable to common and preferred stockholders, basic and diluted<sup>(1)</sup> | 90644 | 90767 | 90769 | 90773 | 90591 |
| Pro forma net earnings (loss) per share attributable to common and preferred stockholders, basic and diluted (unaudited)<sup>(2)</sup> |  |  |  |  |  |
| Pro forma weighted average common and preferred shares used in computing pro forma net earnings (loss) per share attributable to common and preferred stockholders, basic and diluted (unaudited)<sup>(2)</sup> |  |  |  |  |  |

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------

**Confidential Treatment Requested by Pattern Group Inc.**

**Pursuant to 17 C.F.R. Section 200.83**

__________________

(1)See *Note 2–Summary of Significant Accounting Polices*, in the section titled "Notes to Consolidated Financial Statements" included elsewhere in this prospectus for an explanation of the method used to calculate our basic and diluted net earnings (loss) per share and the weighted average number of shares used in the computation of per share amounts.

(2)The pro forma net earnings (loss) used to calculate pro forma net earnings (loss) per share reflects the cumulative stock-based compensation expense related to (i) RSUs for which the service-based condition was satisfied as of year ended December 31, 2024 and the three months ended March 31, 2025 and (ii) Milestone RSUs for which the milestone event and liquidity event vesting conditions will be satisfied upon completion of this offering. The pro forma weighted-average shares used in computing pro forma net earnings (loss) per share for the year ended December 31, 2024 and three months ended March 31, 205 assumes (i) the net issuance of &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; shares and &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; shares of our Series A common stock pursuant to the vesting and settlement of RSUs for which the service-based condition was satisfied as of December 31, 2024 and March 31, 2025, respectively, and for which the liquidity event vesting condition will be satisfied upon completion of this offering, after withholding shares to satisfy the associated estimated income tax obligations, (ii) the net issuance of 0 shares and &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; shares of our Series A common stock pursuant to the vesting and settlement of Milestone RSUs as of December 31, 2024 and March 31, 2025, respectively, for which the milestone event and liquidity event vesting conditions will be satisfied upon completion of this offering, after withholding shares to satisfy the associated estimated income tax obligations and (iii) the Convertible Preferred Stock Conversion as if the conversion occurred on January 1, 2024 and January 1, 2025, respectively. For the purposes of the pro forma calculation, we assumed the liquidity event and milestone event vesting conditions occurred as of January 1, 2024 and January 1, 2025, respectively.

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| | | | |
|:---|:---|:---|:---|
| | **As of March 31, 2025** | **As of March 31, 2025** | **As of March 31, 2025** |
| **(in thousands)** | **Actual** | **Pro Forma**<sup>(1)</sup> | **Pro Forma, As Adjusted**<sup>(2)</sup> |
| **Consolidated Balance Sheet Data:** | | | |
| Cash and cash equivalents | $218780 |  |  |
| Working capital<sup>(3)</sup> | $322326 |  |  |
| Total assets | $669008 |  |  |
| Total liabilities | $266889 |  |  |
| Total convertible preferred stock | $270601 |  |  |
| Total stockholders' equity | $131518 |  |  |

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__________________

(1)The pro forma column above gives effect to (i) the filing and effectiveness of our amended and restated certificate of incorporation in Delaware and the adoption of our amended and restated bylaws, which will occur immediately prior to the completion of this offering; (ii) the Convertible Preferred Stock Conversion; (iii) the net issuance of&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; shares of our Series A common stock issuable pursuant to the vesting and settlement of RSUs for which the service-based condition was satisfied as of March 31, 2025, and for which the liquidity event condition will be satisfied upon completion of this offering, after withholding an aggregate of &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; shares to satisfy associated estimated income tax obligations (based on an assumed&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; % tax withholding rate); (iv) the net issuance of&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; shares of our Series A common stock issuable pursuant to the vesting and settlement of Milestone RSUs for which the milestone event and liquidity event conditions will be satisfied upon completion of this offering, after withholding an aggregate of &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; shares to satisfy associated estimated income tax obligations (based on an assumed&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; % tax withholding rate); (v) the increase in other accrued liabilities and an equivalent decrease in additional paid-in capital in connection with tax withholding and remittance obligations related to such RSUs and Milestone RSUs, based upon the initial public offering price of $&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; per share, which is the midpoint of the estimated offering price range set forth on the cover page of this prospectus, all of which will occur immediately prior to the completion of this offering, as if such actions had occurred on March 31, 2025; (vi) $&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; million of cumulative share-based compensation expense related to the RSUs for which the service-based condition was satisfied as of March 31, 2025, and for which the liquidity event condition will be satisfied upon completion of this offering; and (vii) $&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; million of cumulative share-based compensation expense related to the Milestone RSUs for which the milestone event and liquidity event conditions will be satisfied upon completion of this offering.

(2)The pro forma as adjusted column above gives further effect to (i) the pro forma adjustments set forth above and (ii) the sale by us of&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; shares of Series A common stock in this offering at an assumed initial public offering price of $&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; per share, which is the midpoint of the price range set forth on the cover page of this prospectus, after deducting estimated underwriting fees and commissions and estimated offering expenses payable by us. This pro forma as adjusted information is illustrative only and will depend on the actual initial public offering price and other terms of this offering determined at pricing. Each $1.00 increase or decrease in the assumed initial public offering price of $&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; per share, which is the midpoint of the price range set forth on the cover page of this prospectus, would increase or decrease the pro forma as adjusted amount of each of cash and cash equivalents, working capital, total assets and total stockholders' deficit by $&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; , assuming that the number of shares offered by us, as set forth on the cover page of this prospectus, remains the same and after deducting the estimated underwriting discounts and commissions and estimated offering expenses payable by us. Each increase or decrease of 1.0 million in the number of shares we are offering would increase or decrease the pro forma as adjusted amount of each of cash and cash equivalents, working capital, total assets and stockholders' deficit by $&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; , assuming no change in the assumed initial public offering price per share and after deducting the estimated underwriting discounts and commissions and estimated offering expenses payable by us.

(3)Working capital is defined as total current assets less total current liabilities. See our consolidated financial statements and the related notes thereto included elsewhere in this prospectus for further details regarding our current assets and current liabilities.

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**Confidential Treatment Requested by Pattern Group Inc.**

**Pursuant to 17 C.F.R. Section 200.83**

**Key Business Metric and Non-GAAP Financial Measure**

In addition to the measures presented in our consolidated financial statements, we use the following key business metric and non-GAAP measure. The following table presents our non-GAAP financial measure, along with the most directly comparable GAAP measure, for each period presented below. In addition to our results determined in accordance with GAAP, we believe that Adjusted EBITDA, a non-GAAP financial measure, is useful in evaluating our operational performance. We believe that the key business metric and non-GAAP financial measure, together with GAAP financial measures, such as revenue and net (loss) income, are useful to assess near-term and long-term performance of our overall business, including identifying trends, formulating financial projections, making strategic decisions, assessing operational efficiencies and monitoring our business.

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| | | | | | |
|:---|:---|:---|:---|:---|:---|
| | **Year Ended December 31,** | **Year Ended December 31,** | **Year Ended December 31,** | **Three Months Ended March 31,** | **Three Months Ended March 31,** |
| **(in thousands, except percentages)** | **2022** | **2023** | **2024** | **2024** | **2025** |
| Net Revenue Retention Rate<sup>(1)</sup> | 107% | 115% | 116% | 115% | 115% |
| Net (loss) income | $(2975) | $41264 | $67856 | $17657 | $22802 |
| Adjusted EBITDA<sup>(2)</sup> | $17727 | $64723 | $100698 | $25962 | $33896 |

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__________________

(1)See in the section titled "Management's Discussion and Analysis of Financial Condition and Results of Operations—Key Business Metric and Non-GAAP Financial Measure" for information on how we define and calculate this key business metric.

(2)Adjusted EBITDA is a non-GAAP financial measure. See the section titled "Management's Discussion and Analysis of Financial Condition and Results of Operations—Key Business Metric and Non-GAAP Financial Measure" for additional information on our non-GAAP financial measure and a reconciliation to the most comparable GAAP measure.

We believe NRR is an key business metric to measure the long-term value of our brand partner relationships. This metric, expressed as a percentage, provides valuable insight into the accelerated growth delivered through our platform, the effectiveness of our brand expansion strategies and our ability to deepen relationships with existing brand partners.

We believe the non-GAAP financial measure presented here is useful to investors in assessing the operating performance of our business without the effect of non-cash items and other items as detailed below and elsewhere in this prospectus. The non-GAAP financial measure should not be considered in isolation or as alternatives to net (loss) income or any other measure of financial performance calculated and prescribed in accordance with GAAP.

Our non-GAAP financial measure may not be comparable to similarly titled measures in other organizations because other organizations may not calculate non-GAAP financial measures in the same manner as we do, thus limiting its usefulness as a comparative measure.

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**Confidential Treatment Requested by Pattern Group Inc.**

**Pursuant to 17 C.F.R. Section 200.83**

**RISK FACTORS**

*Investing in our Series A common stock involves a high degree of risk. You should carefully consider the risks and uncertainties described below, together with all of the other information in this prospectus, before making a decision to invest in our Series A common stock. If any of these risks actually occur, our business, results of operations, financial condition and prospects could be materially adversely affected. In that event, the trading price of our Series A common stock could decline, and you could lose part or all of your investment. Certain statements contained in the risk factors described below are forward-looking statements. See the section titled "Special Note Regarding Forward-Looking Statements" for more information.*

**Risks Related to Our Business**

***Our revenue is dependent upon maintaining our relationship with Amazon and other marketplaces and our failure to do so, or any restrictions on our ability to offer brand partners' products on Amazon and other marketplaces, could have an adverse impact on our business, financial condition and results of operations.***

We depend almost entirely on our relationship with marketplaces for generating revenue and growth. In particular, we depend on our ability to offer products on Amazon. For the year ended December 31, 2024, we derived 94% of our revenue from consumer product sales on Amazon. Amazon accounted for 80% of the total U.S. marketplace retail sales in 2023.<sup>11</sup> In the last three fiscal years, the United States accounted for a substantial majority of our total revenue. Any adverse change in our relationship with Amazon, including restrictions on the ability to offer products, termination of the relationship or disruption of Amazon's business or operations because of litigation, regulatory or other proceedings, could adversely affect our continued growth, financial condition and results of operations.

We also depend on our ability to offer products on other marketplaces, such as Walmart, Target, Tmall, JD, eBay, TikTok Shop, Mercado Libre, Zolando, Kohl's, Kroger, Macy's and others. Marketplaces on which we sell our brand partners' products may materially affect our sales and operating results if we don't timely and adequately resolve account-related issues, including if such marketplaces:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• terminate or suspend our accounts;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• block or delay our shipments;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• block us or our brand partners from listing products;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• implement strategic shifts that impair our ability to sell products on their marketplace, such as imposing restrictions on our ability to sell in instances where the marketplace has a 1P relationship with the brand;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• change their policies, including with respect to remittances and payment terms and timing;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• introduce or enforce restrictions on website scraping;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• change one or more APIs such that they are no longer compatible with our technology; and

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• increase their fees, which in turn could raise product prices for customers, making the marketplace a less attractive distribution channel for our brand partners and/or less profitable for us.

Our relationships with marketplaces are subject to their online terms of use, which are typically "click-through" agreements that we are not able to negotiate with the marketplaces. Generally, our relationships with marketplaces are terminable at will by either party. In addition, the marketplaces on which we sell our brand partners' products also have significant discretion to change their policies, procedures and terms. Any such changes, or other limitations or restrictions on our ability to sell on a marketplace could have a material impact on our business, financial condition and results of operations. In the past, we have experienced account suspensions, changes in payment terms and increases in marketplace fulfillment fees. We cannot guarantee that similar or other issues will

<sup>11</sup> *eMarketer, Marketplace Pulse, Amazon Share of US Retail Sales, 2023, https://www.emarketer.com/chart/266156/amazon-share-of-us-retail-sales-2023-of-total (Accessed on March 12, 2025).*

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**Confidential Treatment Requested by Pattern Group Inc.**

**Pursuant to 17 C.F.R. Section 200.83**

not arise in the future, nor that we will be able to timely and adequately resolve them. The terms of use that govern our relationships with marketplaces generally mandate that we resolve claims through final and binding arbitration. The rules and policies governing these arbitration proceedings may offer significantly limited rights compared to litigation in federal or state courts. Arbitration may not provide us with all the relief we could obtain outside of arbitration.

***Our technology relies in part on the use of comprehensive marketplace data, and if we lose the ability to use such data, or if such data contain inaccuracies, our business could be adversely affected.***

Our technology incorporates statistical models built using a variety of data sets. Our technology relies on a diverse range of data sources, including data collected from our customers, brand partners and, in some cases, website scraping, other data collected from marketplaces and other third parties and self-generated data, including novel data generated through machine learning. This data covers a wide variety of signals across millions of products, keywords, brands, consumer behavioral inputs and more, including search, advertising, fulfillment, content conversion rates, ratings and reviews, social media influencers, likes, shares, clicks and comments. Such data may have restrictions on how it may be used, including, for example, restrictions on the collection, use or other processing of data from certain jurisdictions. If we are unable to access and use data collected from our customers, marketplaces, the internet or other third-party data used in our technology, or if our access to such data is limited, for example, due to new or changing laws, rules or regulations or policies of third parties, including marketplaces, our ability to accurately make forecasts and evaluate consumer behavior could be compromised.

The use of data obtained through scraping exposes us to several risks, including legal and regulatory challenges, such as potential violations of intellectual property rights, terms of service and data privacy laws. There is also an ethical and reputational risk if stakeholders perceive the use of scraped data as exploitative or unfair. Scraped data may be flawed or of inconsistent or poor quality, leading to inaccuracies in outputs. Additionally, we face the risk of operational disruption if we are forced to stop using scraped data due to legal issues or third-party actions, as well as the potential for litigation and liability from data providers or individuals whose data was scraped. Lastly, changes in third-party access restrictions or platform policies, including introduction or enforcement of stricter website scraping policies by marketplaces, could limit our ability to source data, hindering the development and effectiveness of our technology. There is no assurance that such measures will fully eliminate potential adverse impacts on our business.

In addition, if third-party data used to train and improve our technology is inaccurate, or access to such third-party data is limited, prohibited or becomes unavailable to us, our ability to continue to improve our technology would be adversely affected. Although we believe that there are commercially reasonable alternatives available to the third-party data we currently license, this may not always be the case, or it may be difficult or costly to migrate to other third-party data. Our use of additional or alternative third-party data would require us to enter into license agreements with third parties. In addition, integration of the third-party data used in our technology with new third-party data may require significant work and require substantial investment of our time and resources. Any of the foregoing could negatively impact our business, impair our ability to grow our customers and brand partners, subject us to financial liabilities and adversely affect our business, financial condition and results of operations.

***Operational and performance issues with our technology, whether real or perceived, including a failure to respond to technological changes or to upgrade our technology systems, may adversely affect our business, financial condition and operating results.***

We depend upon the sustained and uninterrupted performance of our technology to, among other things, manage our inventory supply, purchase products from brand partners, optimize shipments to marketplaces, collect, process and interpret data, bid on advertising and monitor and optimize listings on marketplaces. If our technology cannot scale to meet demand, if there are errors in our execution of any of these functions on our technology or if we experience outages, then our business may be harmed. We may also face material delays in introducing new products to marketplaces or restocking existing products. If competitors introduce new products or services using new technologies or if new industry standards and practices emerge, our existing proprietary technology and systems may become less effective or obsolete.

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**Confidential Treatment Requested by Pattern Group Inc.**

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Our technology is complex and multifaceted, and operational and performance issues could arise both from the technology itself and from outside factors. Errors, failures, vulnerabilities or bugs have been found in the past, and may be found in the future. Our technology also relies on third-party technology and systems to perform properly, and our technology is often used in connection with computing environments utilizing different operating systems, system management software, equipment and networking configurations, which may cause errors in, or failures of, our technology or such other computing environments. Operational and performance issues with our technology could include the failure of our user interface, outages, errors during upgrades or patches, unanticipated volume overwhelming our databases, server failure or catastrophic events affecting one or more server locations. While we have built redundancies in our systems, full redundancies do not exist. Some failures will shut our technology down completely, others only partially.

Operational and performance issues with our technology could also result in negative publicity, damage to our brand and reputation, loss of or delay in market acceptance of our technology, increased costs or loss of revenue, loss of the ability to access our technology, loss of competitive position or claims by brand partners for losses sustained by them. Alleviating problems resulting from such issues could require significant expenditures of capital and other resources and could cause interruptions, delays or the cessation of our business, any of which may adversely affect our financial condition and operating results.

***If we are unable to continue to introduce new features or solutions successfully and to make enhancements to existing solutions, our ability to grow and operate our business could be adversely affected.***

Our ability to attract new brand partners and increase revenue depends in large part on our ability to enhance and improve our existing solutions and to introduce new features or solutions. To grow our business and be competitive, we must develop solutions, features and functionality that reflect the constantly evolving nature of technology and the needs of potential brand partners and our existing brand partners. The success of these and other enhancements or developments depend on several factors, including their timely introduction and completion, sufficient demand and cost effectiveness. For example, the development of AI and machine learning technologies and products (collectively, "AI Technologies") that replace our combination of specialized expertise and technological tools could harm our business and make our solutions less durable. It is difficult to accurately predict the adoption of new features or solutions, and related shifts in consumer behavior, as well as our recent rapid growth and limited experience in operating our business at its current scale, scope and complexity. Such uncertainty limits our ability to predict our future results of operations and subjects us to a number of challenges, including our ability to plan for and model future growth. If we cannot navigate such uncertainties or are unable to successfully develop new features or solutions or to enhance our existing solutions or otherwise overcome technological challenges and competing technologies to gain market acceptance, then our business and results of operations will be adversely affected.

***We may be unable to source additional, or strengthen our existing relationships with, brand partners, and the loss of any significant brand partners would negatively impact our business.***

We purchase significant amounts of products from our brand partners and there can be no assurance that our current brand partners will maintain or increase these amounts or otherwise be able to accommodate our anticipated growth or continue to supply current quantities at current prices. An inability of our existing brand partners to provide products in a timely or cost-effective manner, including as a result of low inventories or supply chain challenges, could affect our revenue and materially and adversely affect our business, financial condition and results of operations. A variety of factors outside our control, including, failure by brand partners to effectively promote products or manage regulatory changes, negative publicity or damage to our brand partners' reputation, product recalls, deterioration in product quality, changes in consumer preferences or trends, supply chain disruptions experienced by brand partners, availability of better or more affordable alternatives or technological advancements and innovation, could negatively affect our ability to strengthen our existing relationships with brand partners. For the year ended December 31, 2024, the health and wellness category accounted for 63% of our inventory purchases. For the year ended December 31, 2024, two brand partners in the health and wellness category accounted for 17% and 11% of our inventory purchases and contributed significantly to our growth in recent periods. The loss of these or any of our other significant brand partners or any change in pricing structure or volume with brand partners,

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**Confidential Treatment Requested by Pattern Group Inc.**

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including with respect to the health and wellness category, would have a negative impact on our business, financial condition and results of operations.

In order to attract quality brand partners, we must:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• ensure a seamless, consistent and low-friction collaboration model of acquiring inventory from brand partners;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• maintain our unique and scaled data assets;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• provide differentiated insights into producing traffic, conversion, price and availability insights, including by investing in and improving our AI Technologies, that we use to make data-driven decisions;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• provide technology that delivers brand partners a superior return on advertising spend;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• continue to enhance operations and fulfillment capabilities that leverage Pattern's scale to minimize logistics and shipping costs associated with inbounding products to marketplaces;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• attract and retain a team of industry experts across marketing, fulfillment, customer service, brand protection and marketplace management;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• maintain our scale to provide comprehensive solutions across marketing, fulfillment, customer service and marketplace management on a global basis;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• identify and convert existing demand into sales;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• maintain consistent and cohesive brand positioning and customer experience across all ecommerce channels;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• convert one-time customers to repeat customers;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• continue to expand internationally; and

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• provide high-quality customer service.

We continually seek to expand our base of brand partners and to identify new products. If we are unable to identify or enter into agreements with new brand partners or to replace the loss of any of our existing brand partners, we may experience a competitive disadvantage, our business may be disrupted and our business, financial condition and results of operations may be adversely affected. Although we have long-term agreements with certain significant brand partners that do not permit termination for convenience, a substantial portion of our brand partner agreements provide termination for convenience upon 60 days' notice.

We rely on our brand partners' contractual obligations to us, including with respect to reimbursing us for any advertising costs incurred in selling such brand partners' products, performing their obligations with respect to promotions and buybacks, enforcing exclusivity provisions in our contracts, enforcing policies against unauthorized sellers and indemnifying us in connection with product recalls and liabilities. The insolvency of brand partners, including through bankruptcy, has in the past, and may in the future, impact our ability to collect amounts owed to us. We cannot control whether another seller of our brand partners' products sells at a lower price than us or if brand partners fail to maintain a pricing or brand equity strategy across all distribution channels. If customers choose to purchase the product in another distribution channel, this could lead to lost sales revenue for us. Further, brand partners could also reduce their advertising spend at their discretion. In addition, disputes with respect to intellectual property of our brand partners could restrict our ability to list or sell the affected products on marketplaces. Any of the foregoing could materially and adversely affect our business and results of operations.

***Our estimate of the gross merchandise value of potential additional brand partners may prove to be inaccurate.***

Our estimate of the GMV of potential additional brand partners contained in this prospectus is based on industry publications and reports or other publicly available information as well as our management's estimates and

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extrapolations. This estimate is based on the expected merchandise value of all products estimated to be sold by brands that have products offered on marketplaces in 2024 in the geographies where we operate. It involves a number of assumptions and limitations, is subject to significant uncertainty, and you are cautioned not to give it undue weight. While we believe our assumptions and the data underlying our estimate are reasonable, these assumptions may not be correct, and the conditions supporting our assumptions may change at any time, thereby reducing the predictive accuracy of these underlying factors. As a result, our estimate may prove to be incorrect. Further, there can be no assurance that we will pursue, engage or enter into agreements with any of these brands or that we will be able to monetize any or all of the GMV of these brands, which could materially and adversely affect our growth prospects, business and results of operations.

***Our future success depends on the continuing efforts of our co-founders and senior management team.***

Our future success depends on the continuing efforts of our senior management team, including our co-founders, David Wright, our Chief Executive Officer, and Melanie Alder, our Chief Strategy Officer. We rely on the leadership, knowledge and experience that our senior management team provides. They foster our corporate culture, which has been instrumental in our ability to attract and retain new talent. The market for such positions is intensely competitive, which could increase our costs to attract and retain talented individuals. As a result, we may incur significant costs to attract and retain executive officers and other senior management personnel, including significant expenditures related to salaries and benefits and compensation expenses related to equity awards.

Employee turnover, including changes in our management team, could disrupt our business. The loss of one or more of our executive officers or other key employees, especially our co-founders, including due to a leave of absence for medical reasons or otherwise, or the failure by our senior management team to effectively work together or with our employees and lead our company, or our inability to attract and retain highly skilled employees could have an adverse effect on our business, financial condition and operating results. We do not maintain key man life insurance with respect to any executive officer, including our co-founders.

***We depend on highly-skilled personnel to grow and operate our business, and if we are unable to hire, retain and motivate our personnel, we may not be able to grow effectively.***

Our future success will depend, in part, upon our continued ability to identify and hire skilled personnel with the skills and technical knowledge that we require, including software design and programming, marketing, sales, brand management, data science, AI, operations, international commerce and other key personnel and our business plans and growth may depend on hiring a significant number of additional employees. Such efforts will require significant time, expense and attention as there is intense competition for such individuals, and new hires require significant training and time before they achieve full productivity, particularly with new products and brand partners and in new territories. We may lose new employees to our competitors or other companies before we realize the benefit of our investment in recruiting and training them. In addition to hiring new employees, we must continue to focus on developing, motivating and retaining our best employees across the globe, most of whom are at-will employees. If we fail to identify, recruit and integrate strategic personnel hires, our business, financial condition and results of operations could be adversely affected. Further, inflationary pressure may result in employee attrition to the extent our compensation does not keep up with inflation. Additionally, the failure to continue hiring new personnel or the loss of any significant number of our existing key personnel could harm our business, financial condition and results of operations. We may need to invest significant amounts of cash and equity to attract and retain new employees, and we may never realize returns on these investments. If we hire employees from competitors or other companies, their former employers may attempt to assert that these employees or we have breached various legal obligations, resulting in a diversion of our time and resources. In addition, prospective and existing employees often consider the value of the equity awards they receive in connection with their employment. We have a number of current employees who hold equity in our company or whose equity awards are or will become substantially vested upon the completion of this offering. As a result, it may be difficult for us to continue to retain and motivate these employees, and the value of their holdings could affect their decisions about whether or not they continue to work for us. If the perceived value of our equity awards declines or experiences significant volatility (including as valuations of companies comparable to us decline due to overall market trends, inflation and related market effects or otherwise) such that prospective and existing employees believe there is limited upside to the value of our equity awards, it may adversely affect our ability to recruit and retain key employees or result in us granting additional equity awards,

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**Confidential Treatment Requested by Pattern Group Inc.**

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which would result in additional stock-based compensation expense and further dilution to our stockholders. Our ability to attract, retain and motivate employees may be adversely affected by declines in the market price of our Series A common stock. Additionally, we have less experience with recruiting in geographies outside the United States and may face additional challenges in attracting and retaining international employees. If we are not able to effectively add and retain employees, our ability to achieve our strategic objectives will be adversely impacted, and our business and future growth prospects will be harmed.

***We are highly dependent on the services of David Wright, our Chief Executive Officer and co-founder, and Melanie Alder, our Chief Strategy Officer and co-founder, who are married to each other. The separation or divorce of our co-founders in the future could adversely affect our business.***

We are highly dependent on the services of David Wright, our Chief Executive Officer and co-founder, and Melanie Alder, our Chief Strategy Officer and co-founder, who are married to each other. If Mr. Wright or Ms. Alder were to discontinue their service to us due to death, disability or any other reason, or if they were to become separated or divorced or could otherwise not amicably work with each other, we would be significantly disadvantaged. In addition, their work performance may not be satisfactory if they become preoccupied with personal matters. Mr. Wright and Ms. Alder, through their beneficial ownership of all of our Series B common stock, control approximately &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; % of the total combined voting power of our capital stock. If Mr. Wright and Ms. Alder become separated or divorced, and neither one of them individually controls more than 50% of the voting power of our capital stock we could lose our "controlled company" status. Further, their interests may diverge as a result of divorce or separation. In these cases, our business could be materially harmed.

***If we do not adequately fund our research and development efforts, we may not be able to compete effectively and our business and operating results may be harmed.***

To remain competitive, we must continue to enhance the features of our technology. Maintaining adequate research and development personnel and resources to meet the demands of the market is essential. If we are unable to develop our technology due to certain constraints, such as high employee turnover, lack of management ability or a lack of other research and development resources, we may miss market opportunities. Further, many of our competitors expend a considerable amount of funds on their research and development programs, and those that do not may be acquired by larger companies that would allocate greater resources to our competitors' research and development programs. Our failure to maintain adequate research and development resources or to compete effectively with the research and development programs of our competitors could materially adversely affect our business.

Our future success will depend on our ability to improve the function, performance and reliability of our technology. The development of new and upgraded solutions involves a significant amount of time for our research and development team, as it can take our developers months to update, code and test new and upgraded software and integrate them into our technology. The introduction of new and upgraded design features and software also involves a significant amount of marketing spending. We must also manage our existing technology, as we continually test, grow and use our technology to support the distribution of our brand partners' products. Our revenues and competitive position could be materially and adversely affected if we fail to improve our design features or our technology.

***If we are unable to accurately forecast consumer demand, manage our inventory and plan for future expenses, our business, financial condition and results of operations could be adversely affected.***

We base our current and future inventory needs and expense levels on our operating forecasts and estimates of future consumer demand. To ensure adequate inventory supply, we must be able to forecast inventory needs and expenses and place orders sufficiently in advance with our brand partners based on our estimates of future consumer demand for the products we sell. Failure to accurately forecast demand may result in inefficient inventory supply or increased costs. This risk may be exacerbated by the fact that we may not carry a sufficient amount of inventory and may not be able to satisfy short-term demand increases. Accordingly, if we fail to accurately forecast customer demand, we may experience excess inventory levels, a shortage of products available for sale and loss of profits. Inventory levels in excess of customer demand may result in inventory write-downs or write-offs or the sale of

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**Confidential Treatment Requested by Pattern Group Inc.**

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excess inventory at suboptimal prices, which would cause our operating results to suffer. Conversely, if we underestimate customer demand, including as a result of unanticipated growth, our brand partners may not be able to deliver products to meet our requirements, and we may be subject to higher costs in order to secure the necessary production capacity or we may incur increased shipping costs. An inability to meet customer demand and delays in the delivery of our brand partners' products to our customers could result in reputational harm for our brand partners, damage our customer relationships and brand partner relationships, harm our cash flows and prospects for growth and have an adverse effect on our business, financial condition and results of operations.

While we devote significant attention to forecasting efforts, the volume, timing and value of the orders we receive are inherently uncertain. In addition, we cannot be sure growth rates, trends and other key performance metrics are meaningful predictors of future growth. Our business, as well as our ability to forecast demand, is also affected by general global economic and business conditions and the degree of consumer confidence in future economic conditions, and we anticipate that our ability to forecast demand due to these types of factors will be increasingly affected by conditions in international markets.

***We have experienced rapid growth in recent periods and our recent growth rates may not be indicative of our future growth.***

We are not always able to accurately forecast our growth rate. We base our expense levels and investment plans on revenue estimates. A significant portion of our expenses and investments are fixed, and we are not always able to adjust our spending quickly enough if our revenue is less than expected.

Our revenue growth may not be sustainable, and our growth rates may decrease. Our revenue and profitable growth depends on the continued growth of demand for our brand partners' products and our solutions, and our business is affected by, among other things, general economic, business and geopolitical conditions worldwide. A softening of demand, whether caused by a weakening of the United States or global economies, may result in decreased revenue or growth.

Our sales and operating results will also fluctuate for many other reasons, including due to factors described elsewhere in this section and the following:

**Solutions**

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• our ability to collect, process and interpret comprehensive ecommerce and consumer data;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• our ability to attract and retain a global team of industry experts across marketing, fulfillment, customer service, data science, software development, marketplace compliance and marketplace management;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• our ability to maintain the security, reliability and integrity of our technology;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• timing, effectiveness and costs of expansion and upgrades to our software;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• the extent to which use of our technology is affected by spyware, viruses, phishing and other spam emails, denial of service attacks, data theft, computer intrusions, outages and similar events; and

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• our ability to invest in technology and infrastructure, fulfillment and shipping capabilities and other expense categories.

**Brand Partners**

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• our ability to retain and expand our network of brand partners;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• our ability to attract and retain mid-market brand partners;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• our ability to successfully expand our brand partners into new geographies;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• our ability to attract new brand partners in new and existing geographies, segments and verticals;

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&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• our brand partners' discretionary advertising spend allocated to the products we sell;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• our ability to accelerate products effectively, including by maintaining or increasing our margins, so that we are able to attract and retain brand partners without compromising profitability; and

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• our ability to enhance our software-as-a-service ("SaaS") solutions.

**Products, Customers and Marketplaces**

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• changes in consumer trends and preferences;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• the success of our geographic, solutions, product and category expansions;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• our ability to offer products on favorable terms and manage order fulfillment and our inventory;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• variations in the level of returns for the products we sell;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• variations in the mix of products and services we sell;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• a decline in category sales volume or prices of specific products or categories, including with respect to health and wellness;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• our ability to retain and increase sales to existing customers, including with respect to health and wellness products, attract new customers and satisfy customer demands and preferences;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• our ability to maintain service levels and consistent quality;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• changes in usage or adoption rates of the internet, ecommerce, electronic devices and web services, including outside the United States;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• our ability to successfully compete against our current and future competition, including the introduction of competitive ecommerce acceleration, marketplace stores, products, point software solutions, services, price decreases or improvements;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• shifts in consumer trends away from ecommerce to brick-and-mortar; and

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• outcomes of ongoing antitrust investigations and actions initiated against marketplaces.

**Laws and Regulations**

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• adoption and expansion of trade restrictions, the occurrence of a trade war or other restrictive governmental action related to tariffs or trade agreements or policies, including between the United States and China;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• our ability to comply with existing and new applicable laws and regulations, including changing tax rates and tariffs;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• changes in regulations or marketplace policies that restrict the sale of specific categories, including health and wellness; and

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• outcomes of legal proceedings and claims, which may include significant monetary damages or injunctive relief and could have a material adverse impact on our operating results.

**General**

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• our ability to adjust fixed costs in a timely manner to address any unexpected revenue shortfalls, including those arising from weakened global economic conditions and negative consumer confidence regarding future economic conditions;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• our ability to collect amounts owed to us when they become due;

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&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• new and existing technologies or industry trends which restrict online advertising, affect our ability to customize advertising or otherwise optimize our technology;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• our ability to maintain our unique culture of innovation, brand partner obsession and long-term thinking, which has been critical to our growth and success;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• our ability to secure financing, and the terms of any such financing, for our current operations and future growth;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• factors affecting our reputation or brand image (including any actual or perceived inability to achieve our goals or commitments, whether related to brand partners, customers, employees or other topics), and public perceptions regarding social or ethical issues related to our development and use of AI Technologies;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• availability of and increases in the prices of transportation (including fuel), resources such as land, water and energy, commodities like paper, packing supplies, hardware products and technology infrastructure products, including as a result of inflationary pressures; and

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• constrained labor markets, which increase our payroll costs.

***If we fail to manage our growth effectively, our business, financial condition and results of operations could be materially and adversely affected.***

To manage our growth effectively, we must continue to implement our operational plans and strategies, improve and expand our infrastructure of people and information systems and expand, train and manage our employee base. We have rapidly increased employee headcount since our inception to support the growth in our business. To support our continued growth, we must effectively integrate, develop and motivate a large number of new employees. We face significant competition for personnel, including in the Cincinnati, Ohio and Las Vegas, Nevada areas for warehouse labor. We face challenges to find and attract talent in the Lehi, Utah area, where our headquarters are located. In addition, we rely on our talent center in Pune, India to provide scalable technical support. We could face a significant increase in competition and costs to hire technical personnel in India. Failure to manage our hiring needs effectively or successfully integrate our new hires may have a material adverse effect on our business, financial condition and results of operations.

To support our growth, we expect to make significant sales and marketing expenditures to increase our revenue, increase awareness of our brand partners and introduce additional brand partners' products. We expect to incur significant research and development expenses to increase the functionality of our technology. A significant portion of our investments in our sales and marketing and research and development activities will precede the benefits from such investments, and we cannot be sure that we will receive an adequate return on our investments. In the future, we may shift significant resources to SaaS solutions. Brand partners might choose to subscribe to these SaaS solutions instead of using our ecommerce acceleration solution. However, we cannot guarantee that SaaS solutions will generate sufficient revenue and profitability to offset any loss of opportunities from our ecommerce acceleration solution. Consequently, this shift could adversely affect our revenue and growth. You should not consider our revenue growth and levels of profitability in recent periods as indicative of future performance. In future periods, our revenue or profitability could decline or grow more slowly than we expect.

Additionally, the growth of our business places significant demands on our management and other employees. We are required to manage relationships with a growing number of brand partners, customers and other third parties. Our information technology systems and our internal controls and procedures may not be adequate to support future growth of our customer or brand partner base. If we are unable to manage the growth of our organization effectively, our business, financial condition and results of operations may be materially and adversely affected.

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**Confidential Treatment Requested by Pattern Group Inc.**

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***We currently rely on a small number of third-party service providers to host or support a significant portion of our business, and any loss of or interruptions or delays in services from these third parties could impair the delivery of our solutions and harm our business.***

We currently host and support our operations using third-party service providers, including Amazon Web Services. We also rely on a small number of third-party service providers including SaaS platforms to operate critical functions of our business, including payment processing, collection of comprehensive ecommerce and consumer data, data storage services, cloud-based data warehousing and content creation. We do not have control over the operations of the facilities of the hosting providers that we use, and these third-party operations may experience break-ins, computer viruses, denial-of-service or other cyber-attacks, sabotage, acts of vandalism and other misconduct. These facilities may also be vulnerable to damage or interruption from power loss, telecommunications failures, fires, floods, earthquakes, hurricanes, tornadoes and similar events. We have experienced, and expect that in the future we will experience, interruptions, delays and outages in service and availability from time to time due to a variety of factors, including infrastructure changes, website hosting disruptions and capacity constraints. Any such limitation on the capacity of our third-party service providers could impede our ability to onboard new brand partners or expand the products offered to consumers, which could adversely affect our business, financial condition and results of operations. In some instances, we may not be able to identify the cause or causes of these performance problems within a period of time acceptable to our customers. A prolonged service disruption affecting our technology for any of the foregoing reasons would negatively impact our ability to perform critical business functions and could damage our reputation with consumers and brand partners, expose us to liability, cause us to lose brand partners, increase our expenses, negatively impact our ability to manage sales of our brand partners' products and access or save data stored to the cloud, which could otherwise harm our business. We may also incur significant costs for using alternative equipment or taking other actions in preparation for, or in reaction to, events that damage the third-party service providers we use.

Any changes in our hosting providers' service levels may adversely affect our ability to meet the expectations of brand partners and customers. Our systems do not provide complete redundancy of data storage or processing, and as a result, the occurrence of any such event, a decision by our third-party service providers to close their data centers without adequate notice or other unanticipated problems may result in our inability to serve data reliably or require us to migrate our data to either a new on-premise data center or public cloud computing service. This could be time-consuming and costly and may result in the loss of data, any of which could significantly interrupt the provision of our solutions and harm our reputation and brand. We may not be able to easily switch to another public cloud or data center provider in the event of any disruptions or interference to the services we use, and even if we do, other public cloud and data center providers are subject to the same risks. In addition, if we are unable to scale our data storage and computational capacity sufficiently or on commercially reasonable terms, our ability to innovate and introduce new products may be delayed or compromised, which would have an adverse effect on our growth and business.

In addition, we rely on third parties engaged by our brand partners to prevent unauthorized sellers from distributing their products. If these third parties fail to prevent unauthorized selling or are no longer able to provide these services or fail to sufficiently provide these services, it could adversely affect our business.

***We have a history of losses, and we may be unable to sustain profitability or generate profitable growth in the future.***

Although we generated net income in prior periods, including net income of $67.9 million and $41.3 million for the years ended December 31, 2024 and 2023, respectively, we have experienced net losses in prior periods, including a net loss of $3.0 million for the year ended December 31, 2022. We may not maintain profitability in the future. We will need to sustain or increase revenue while managing our costs to sustain or increase profitability.

Our efforts to maintain and increase our profitability may not succeed due to factors such as increased costs due to inaccurate sales forecasting, inaccurate inventory forecasting and impairment charges for write-downs of goodwill, intangible assets, investments and other long-lived assets. As we continue to innovate and expand our solutions, we may initially harm our profitability. In addition, as a public company, we will incur significant legal,

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**Confidential Treatment Requested by Pattern Group Inc.**

**Pursuant to 17 C.F.R. Section 200.83**

accounting and other expenses that we did not incur as a private company. Further, our revenue growth may slow or our revenue may decline for a number of reasons, including those described in these "Risk Factors."

***If we fail to properly develop, invest in and manage AI Technologies used in our solutions, our business, financial condition and results of operations could be materially adversely affected.***

We have incorporated, and expect in the future we will continue to incorporate, AI Technologies into our solutions. We power our solutions with AI Technologies that help us and our brand partners achieve data insights faster. For example, we leverage machine learning algorithms in certain features to aid brand partners in analyzing their product data.

We expect that increased investment will be required in the future to continuously improve our use of AI Technologies. As with many technological innovations, there are significant risks involved in developing, maintaining and deploying AI Technologies and there can be no assurance that the usage of, or our investments in, such AI Technologies will always be beneficial to our solutions or business, including our efficiency or profitability.

We use AI Technologies licensed from third parties to power our technology and our ability to continue to use such technologies at the scale we need may be dependent on access to specific third-party technology. We cannot control the availability or pricing of such third-party AI Technologies, especially in a highly competitive environment, and we may be unable to negotiate favorable economic terms with the applicable providers. If any such third-party AI Technologies become incompatible with our solutions or unavailable for use, or if the providers of such models unfavorably change the terms on which their AI Technologies are offered or terminate their relationship with us, our solutions may become less appealing to our customers and our business could be harmed.

***The use of new and evolving technologies, including AI Technologies, in our business may result in spending material resources and presents risks and challenges that can impact our business including by posing security and other risks to our confidential and/or proprietary information, including personal information, and as a result we may be exposed to reputational harm and liability.***

We may continue to use and integrate AI Technologies into our business processes, and this innovation presents risks and challenges that could affect its adoption, and therefore our business. Uncertainty around new and emerging AI applications such as generative AI content creation may require additional investment in the development of proprietary data sets, machine learning models and systems to test for accuracy, bias and other variables, which are often complex, development of new approaches and processes to provide attribution or remuneration to content creators and building systems that enable creatives to have greater control over the use of their work in the development of AI Technologies, which may be costly and could impact our profit margin if we are unable to monetize such assets. In addition, AI Technologies, including generative AI, may create content that appears correct but is factually inaccurate or flawed or contains copyrighted or other protected material, and if our brand partners or others use this flawed content to their detriment, we may be exposed to brand or reputational harm, competitive harm or legal liability. Developing, testing and deploying AI Technologies may also increase our costs due to the nature of the compute power costs involved in such systems.

If we enable or offer solutions that draw controversy due to perceived or actual negative societal impact, we may experience brand or reputational harm, competitive harm or legal liability. Additionally, we expect to see increasing government and supranational regulation related to AI use and ethics, which may also significantly increase the burden and cost of research, development and compliance in this area. For example, the European Union's Artificial Intelligence Act ("AI Act") — the world's first comprehensive AI law — entered into force in August 2024 and, with some exceptions, will begin to apply as of August 2, 2026. This legislation imposes significant obligations on providers and deployers of high-risk AI systems, and encourages providers and deployers of AI systems to account for European Union ("EU") ethical principles in their development and use of these systems. If we develop or use AI systems that are governed by the AI Act, it may necessitate ensuring higher standards of data quality, transparency and human oversight, as well as adhering to specific and potentially burdensome and costly ethical, accountability and administrative requirements. The rapid evolution of AI will require the application of significant resources to design, develop, test and maintain our solutions to help ensure that AI is implemented in accordance with applicable law and regulation and in a socially responsible manner and to

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**Confidential Treatment Requested by Pattern Group Inc.**

**Pursuant to 17 C.F.R. Section 200.83**

minimize any real or perceived unintended harmful impacts. Our vendors may in turn incorporate AI tools into their offerings, and the providers of these AI tools may not meet existing or rapidly evolving regulatory or industry standards, including with respect to privacy and data security. Further, bad actors around the world use increasingly sophisticated methods, including the use of AI, to engage in illegal activities involving the theft and misuse of confidential, sensitive, proprietary and business and personal information (collectively, "confidential information") and intellectual property. Any of these effects could damage our reputation, result in the loss of valuable property and information, cause us to breach applicable laws and regulations and adversely impact our business.

***Significant changes in marketplace return or refund policies, our ability to recover return or refund reimbursements, brand contractual arrangements or delays in processing returns or refunds could harm our business.***

Typically, marketplaces reimburse us for any loss or damage to products while those products are in marketplace control. We are responsible for the risk associated with customer product returns or refunds. However, most of our brand partners are contractually obligated to reimburse us for any products that customers damage or return, but we are responsible for billing for such reimbursements. Any change in marketplace policies, our ability to bill or recover reimbursement costs or our brand partners' agreements with us regarding these reimbursements could adversely impact our profits. We and our brand partners would be adversely affected by an uptick in customer returns. Additionally, we are dependent on the marketplaces to track and process these reimbursements. Any deficiencies in the marketplaces' ability to process these reimbursements could impact our profits. If product returns or refunds are significant or higher than anticipated and forecasted, our business, financial condition and results of operations could be adversely affected.

***We are subject to product liability claims when people or property are harmed by the products we sell.***

Some of the products we sell expose us to product liability claims relating to personal injury, illness, death or environmental or property damage, including, but not limited to, those that may arise from off-label use, malfunctions, design flaws or manufacturing defects related to our brand partners' products or the use of our brand partners' products with incompatible components or systems. In addition, as we continue to expand our product mix, we may enter or create new markets which may expose us to additional product liability risks. Regardless of the merits or eventual outcome, liability claims may result in decreased demand for our current or future products, injury to our reputation, costs to defend the related litigation, a diversion of management's time and our resources, substantial monetary awards to customers, regulatory investigations, product recalls, withdrawals or labeling, marketing or promotional restrictions, loss of revenue and the inability to sell our current or any future products.

While our agreements with brand partners stipulate that they list us as an additional insured on their insurance policies and indemnify us against all product liability claims, we also maintain our own insurance policies to cover such claims. Additionally, certain marketplaces reimburse our customers for certain product liability claims up to certain limits pursuant to their policies. Failure by third parties to fulfill their contractual obligations regarding insurance coverage and indemnification could lead to legal actions or claims against us, potentially resulting in financial losses. Additionally, we may incur expenses, or be subject to liability, related to the transportation, storage or disposal of our brand partners' products including under any federal, state, local and foreign laws and regulations. Although we maintain liability insurance, we cannot be certain that our coverage will be adequate for liabilities actually incurred or that insurance will continue to be available to us on economically reasonable terms, or at all.

In addition, the Food and Drug Administration ("FDA"), does not pre-approve products or the labeling of certain products we sell, so it has not approved, nor has it reviewed or approved any claims our brand partners make related to our brand partners' products. If the FDA or any other governmental authority were to take issue with any of the ingredients used in our brand partners' products, the claims brand partners make about their products or other aspects of our brand partners' product labeling, such as components of their facts panel, or require that they change or cease making certain claims or otherwise alter marketing strategy, we may be unable to sell our inventory and we could experience a material adverse effect on our business, financial condition, results of operations and cash flows.

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**Confidential Treatment Requested by Pattern Group Inc.**

**Pursuant to 17 C.F.R. Section 200.83**

***The illegal distribution and sale by third parties of counterfeit versions of our brand partners' products or the unauthorized diversion by third parties of our brand partners' products could have an adverse effect on our revenue and a negative impact on our reputation and business.***

Third parties have in the past and may in the future illegally distribute and sell counterfeit versions of our brand partners' products. These counterfeit products may be inferior in terms of quality and other characteristics compared to our original products and the counterfeit products could pose safety risks that our original products would not otherwise present to consumers. Consumers could confuse counterfeit products with brand partners' original products. All of these events, separate or combined, could damage or diminish the image, reputation or value of us and our brand partners and cause customers to refrain from purchasing the products we sell in the future, which could adversely affect our reputation, business, financial condition and results of operations.

***Our business depends on our ability to successfully drive digital traffic to our product listings on marketplaces. We may not be able to maintain and enhance our product listings if we receive unfavorable customer complaints, negative publicity or otherwise fail to live up to customer expectations, which could materially adversely affect our business, results of operations and growth prospects.***

Maintaining and enhancing our product listings is critical in expanding and growing our business. However, consumers perceive our performance not only based on our listing but also based on third parties outside of our control, including brand partners, third-party delivery agents and marketplaces.

Customer complaints or negative publicity about the products we sell, delivery times, data handling and security practices, customer support or marketing strategies, even if not accurate, especially on blogs, social media websites and marketplaces, could rapidly and severely diminish customers' view of our product listings and result in harm to our brand partners and our brand. Third parties have in the past and may in the future disseminate false, deceiving and harmful rhetoric about our business. Customers may also make safety-related claims regarding products sold through marketplaces, which may result in the temporary or permanent removal of product listings from marketplaces. We have from time to time experienced such removals, and such removals may materially impact our financial results depending on the product listing that is removed and length of time that it is removed.

Our inability to accurately predict customer demand or effectively optimize and manage our logistics and customer service operations could lead to either excess or insufficient capacity, increased costs and potential impairment charges, all of which could materially harm our business. As we expand our logistics and customer service capabilities or introduce new products with varying requirements, the complexity of our operations increases, making them more challenging to manage. We cannot guarantee that we will be able to maintain operational efficiency as we scale.

***If we fail to offer high-quality customer support or are unable to achieve or maintain a high level of customer satisfaction, demand for our brand partners' products could suffer.***

We believe that our future revenue growth depends, in part, on our ability to provide customers with quality service that meets or exceeds our customers' evolving needs and expectations, and is conducive to our ability to continue to sell our brand partners' products to customers. The importance of high-quality customer support will increase as we expand our business. We are not always able to provide our customers with this level of service, and our customers occasionally encounter challenges in our customer support, including as a result of human error, outages, errors or bugs in our technology or third-party software. Our ability to provide effective and timely support is largely dependent on our ability to attract and retain skilled employees who can support our customers and are sufficiently knowledgeable about the products and our solutions. As we continue to grow our business and improve our solutions, we will face challenges related to providing quality support at an increased scale. If we do not help our customers quickly resolve issues and provide effective ongoing support or are unable to achieve or maintain a high level of customer satisfaction, we could experience more complaints from customers, brand partners ending their relationship with us, lower than expected repeat purchases, disputes and additional costs or negative publicity, any of which could have an adverse effect on our business, financial condition and results of operations.

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**Confidential Treatment Requested by Pattern Group Inc.**

**Pursuant to 17 C.F.R. Section 200.83**

***We rely on third-party transportation vendors, last mile carriers and marketplaces to ship and deliver our customers' orders.***

We rely on third parties, such as our transportation vendors, last mile carriers and marketplace fulfillment networks, to deliver products to our customers. Shortages of transportation vessels, transportation disruptions or other adverse conditions in the transportation industry due to shortages of pilots and truck drivers, strikes, slowdowns, piracy, terrorism, disruptions in rail service, closures of shipping routes, unavailability of ports and port service for other reasons, increases in fuel prices, adverse weather conditions, human-caused disasters or accidents, local and federal regulations, taxes, license and registration fees, insurance premiums, geopolitical events and security issues, labor or trade disputes or other adverse changes related to such third-party services could increase our costs and disrupt our operations and our ability to deliver products to our customers on the timing they expect or at all. Further, we rely on the business continuity plans of these third parties to maintain operations during such events, but we have limited control over their plans. As a result, we may be unable to prevent delays, cost increases or disruptions caused by reduced availability, capacity constraints or heightened safety measures. We may also experience shipping delays or disruptions due to other carrier-related issues relating to their own internal operational capabilities. The failure of our shipping partners to provide quality customer service when delivering products to us or our customers could negatively impact our business and operating results.

Our success will also depend, in part, on our ability to build and maintain relationships with these vendors and marketplaces on commercially reasonable terms. For example, we rely on marketplaces for fulfillment and delivery of many of our brand partners' products to customers. Our agreements with brand partners generally require our brand partners to cover increases in marketplace fulfillment fees, which marketplaces have previously changed, and can in the future change, in their discretion. If marketplace fulfillment fees materially increase and our brand partners fail to meet their obligation to cover these costs, our margins would be negatively impacted. If we are unable to build and maintain such relationships on commercially reasonable terms, we may need to procure alternatives, which may be time consuming, costly or result in disruptions in our business or increased costs to our brand partners. Even if we are able to build and maintain such relationships, if these third parties are unable to deliver their services on a timely basis, customers and marketplaces could become dissatisfied, which would adversely affect our revenue, reputation and business.

For international operations, in certain countries we rely on third-party logistics and cross-docking partners to collect, sort and prepare for cross-border shipping of brand partners' products. We may generally employ a single provider of cross-docking services in our outbound markets to the extent the number of alternative providers and minimum volume requirements imposed by such providers are relatively low. Our ability to ship products in a timely manner is dependent on our ability to secure third-party logistics and cross-docking services and in the event that we cannot secure them in specific geographies or are unable to secure them at competitive prices or with adequate service reliability and availability, our operations may be adversely affected. Moreover, if a third-party logistics or cross-docking service provider fails to provide the service, our operations will be adversely affected until such time that we are able to shift to an alternative provider.

Any of the foregoing operational disruptions to our transportation vendors, our inability to negotiate competitive rates with such vendors or our inability to switch to alternative vendors could adversely affect our business.

***The variability in our business places increased strain on our operations.***

Demand for the products we sell can fluctuate significantly for many reasons, including as a result of seasonality, holiday season and other peak events, promotions, product launches, advertising spend or unforeseeable events, such as in response to global economic conditions including recessionary fears or rising inflation, natural or human-caused disasters, extreme weather or geopolitical events. Our failure to stock or restock products in sufficient amounts such that we fail to meet customer demand could significantly affect our revenue and our future growth. When we overstock products, we may be required to take significant inventory markdowns or write-offs and incur commitment costs, which could materially reduce profitability. In addition, we may be unable to adequately staff our logistics network and customer service centers during these peak periods and may be unable to meet the seasonal demand. Risks described elsewhere relating to logistics network optimization and inventory are magnified during periods of high demand.

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**Confidential Treatment Requested by Pattern Group Inc.**

**Pursuant to 17 C.F.R. Section 200.83**

We rely on our brand partners to fund the advertising of the products we sell. As a result of fluctuations in marketing budgets in the beginning of the fiscal year or from quarter to quarter, some brand partners may not be able to allocate proper funds to advertising spend which could result in lower sales of the product.

***We may not be able to compete successfully against current and future competitors.***

We face competition in various aspects of our business and we expect such competition to grow in the future. Ecommerce is highly competitive and brands have a number of options to execute their ecommerce strategy. Brands could grow their ecommerce business themselves, marketplaces could directly offer brands' products and existing tools and service providers could focus on implementing an ecommerce acceleration model. Other third-party sellers may secure better terms from our brand partners, adopt more aggressive pricing, undercut retail prices in an effort to increase their market share and devote more resources to technology, infrastructure, fulfillment, advertising and marketing. In addition, other third-party sellers may leverage their distribution networks, or brands could engage in direct sales on marketplaces, allowing them to implement more aggressive pricing strategies and offer more attractive sales terms. This could cause us to lose sales opportunities or force us to sell our inventory at lower prices. The internet facilitates competitive entry and comparison shopping, which enhances the ability of new, smaller or lesser-known businesses to compete against us. As a result, our potential competitors may be able to develop products and services that may be able to respond more quickly and effectively than we can to new or changing opportunities, technologies or regulations. Our business model may not be successful, we may fail to gain or may lose business and we may be required to increase our spending or lower prices to remain competitive. If we cannot compete successfully against current and future competitors, our business, results of operations and financial condition could be negatively impacted.

Competition continues to intensify, including with the development of new business models and the entry of new and well-funded competitors and as our competitors enter into business combinations or alliances and established companies in other market segments expand to become competitive with our business. Further, shifts in consumer trends away from ecommerce to brick-and-mortar could adversely affect our revenue and growth. In addition, new and enhanced technologies, including applications of AI and machine learning, may in the future influence brand partners to choose to develop their own solutions and no longer rely on us for distribution of their products.

***We rely primarily on third-party insurance policies to insure our operations-related risks. If our insurance coverage is insufficient for the needs of our business or our insurance providers are unable to meet their obligations, we may not be able to mitigate the risks facing our business, which could adversely affect our business, financial condition and results of operations.***

We procure third-party insurance policies to cover various operations-related risks, including products liability, cargo liability, workers' compensation, cybersecurity and data breaches, directors' and officers' liability and general professional liability. For certain types of business risk, we may not be able to, or may choose not to, acquire insurance. In addition, we may not obtain enough insurance to adequately mitigate such operations-related risks, and we may have to pay high premiums, co-insurance, self-insured retentions or deductibles for the coverage we do obtain. We rely on a limited number of insurance providers, and should such providers discontinue or increase the cost of coverage, we cannot guarantee that we would be able to secure replacement coverage on reasonable terms or at all. If our insurance carriers change the terms of our policies in a manner not favorable to us, our insurance costs could increase. Further, if the insurance coverage we maintain is not adequate to cover losses that occur, or if we are required to purchase additional insurance for other aspects of our business, we could be liable for significant additional costs. Additionally, if any of our insurance providers becomes insolvent, it would be unable to pay any operations-related claims that we make.

If the amount of one or more operations-related claims were to exceed our applicable aggregate coverage limits, we would bear the excess, in addition to amounts already incurred in connection with deductibles, self-insured retentions, co-insurance, high premiums or otherwise paid by our insurance policy. Insurance providers have raised premiums and deductibles for many businesses and may do so in the future. As a result, our insurance costs and claims expense could increase, or we may decide to raise our deductibles or self-insured retentions when our policies are renewed or replaced. Our business, financial condition and results of operations could be adversely affected if

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**Confidential Treatment Requested by Pattern Group Inc.**

**Pursuant to 17 C.F.R. Section 200.83**

the cost per claim, premiums, the severity of claims or the number of claims significantly exceeds our historical experience and coverage limits, we experience a claim in excess of our coverage limits, our insurance providers fail to pay on our insurance claims, we experience a claim for which coverage is not provided or the severity or number of claims under our deductibles or self-insured retentions differs from historical averages.

We are subject to local laws, rules and regulations relating to insurance coverage which could result in proceedings or actions against us by governmental entities or others. Any failure or perceived failure by us to comply with existing or future local laws, rules and regulations relating to insurance coverage could result in proceedings or actions against us by governmental entities or others. Additionally, anticipated or future local laws, rules and regulations relating to insurance coverage could require additional fees and costs. Compliance with these rules and any related lawsuits, proceedings or actions may subject us to significant penalties and negative publicity, require us to increase our insurance coverage, require us to amend our insurance policy disclosure, increase our costs and disrupt our business.

***Our business suffers when we are unsuccessful in making, integrating and maintaining acquisitions and investments.***

We have acquired and invested in a number of companies and we may in the future acquire or invest in or enter into joint ventures with additional companies. Acquisitions involve numerous risks, any of which could harm our business and negatively affect our financial condition and results of operations, including:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• intense competition for suitable acquisition targets, which could increase prices and adversely affect our ability to consummate deals on favorable or acceptable terms;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• failure or material delay in closing a transaction;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• transaction-related lawsuits or claims;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• difficulties in integrating the technologies, operations, existing contracts and personnel of an acquired company;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• difficulties in retaining key employees or business partners of an acquired company;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• difficulties in retaining vendors, brand partners and customers, as applicable, of an acquired company;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• challenges with integrating the brand identity of an acquired company with our own;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• disruptions to our ongoing business, diversion of resources, increases to our expenses and distraction of our management;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• diversion of financial and management resources from existing operations or alternative acquisition opportunities;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• negative impacts to our financial results as a result of incurring charges or assuming substantial debt or other liabilities, adverse tax consequence or unanticipated accounting treatment, exposure to claims and disputes by stockholders and third parties;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• failure to realize the anticipated benefits or synergies of a transaction;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• failure to identify the problems, liabilities or other shortcomings or challenges of an acquired company or technology, including issues related to intellectual property, regulatory compliance practices, litigation, revenue recognition or other accounting practices or employee or user issues;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• risks that regulatory bodies may enact new laws or promulgate new regulations that are adverse to an acquired company or business;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• risks that regulatory bodies do not approve our acquisitions or business combinations or delay such approvals;

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**Confidential Treatment Requested by Pattern Group Inc.**

**Pursuant to 17 C.F.R. Section 200.83**

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• theft of our trade secrets or confidential information that we share with potential acquisition candidates;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• risk that an acquired company or investment in new services cannibalizes a portion of our existing business; and

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• adverse market reaction to an acquisition.

If we fail to address the foregoing risks or other problems encountered in connection with past or future acquisitions of businesses, new technologies, services and other assets and strategic investments, or if we fail to successfully integrate such acquisitions or investments, our business, financial condition and results of operations could be adversely affected.

***Our results of operations may be adversely affected by changes in foreign currency exchange rates.***

Our operations and customer base are currently concentrated in the United States. Therefore, we currently have limited foreign currency diversification and exposure. However, our foreign currency diversification and exposure may increase as international sales of our brand partners' products increase over time. As a result, our revenue and profits generated by any non-U.S. operations may fluctuate from period to period as a result of changes in foreign currency exchange rates. In addition, we may become subject to exchange control regulations that restrict or prohibit the conversion of our other revenue currencies into U.S. dollars. Any of these factors could decrease the value of revenue and profits we derive from our non-U.S. operations and adversely affect our business.

We may also seek to reduce our exposure to fluctuations in foreign currency exchange rates through the use of hedging arrangements. To the extent that we hedge our foreign currency exchange rate exposure, we forgo the benefits we would otherwise experience if foreign currency exchange rates changed in our favor. There can be no assurances that our hedging or other strategic techniques will mitigate the risks associated with such fluctuations, and our currency exchange rate risk management activities could expose us to substantial losses if such rates change materially from what we expect.

***Our ability to raise capital in the future may be limited, and our failure to raise capital when needed could prevent us from growing.***

In the future, we could be required to raise capital through public or private financing or other arrangements. Such financing may not be available on acceptable terms or at all, and our failure to raise capital when needed could harm our business. We may sell Series A common stock, convertible securities and other equity securities in one or more transactions at prices and in a manner as we may determine from time to time. If we sell any such securities in subsequent transactions, investors in our Series A common stock may be materially diluted. New investors in such subsequent transactions could gain rights, preferences and privileges senior to those of holders of our Series A common stock. Debt financing, if available, may involve restrictive covenants and could reduce our operational flexibility or profitability. If we cannot raise funds on acceptable terms, we may be forced to raise funds on undesirable terms, our business may contract or we may be unable to grow our business or respond to competitive pressures, any of which could have a material adverse effect on our business, financial condition and results of operations.

***Restrictions in our revolving credit facility could adversely affect our operating flexibility.***

Our revolving credit facility provides for non-amortizing revolving loans in the aggregate principal amount of up to $50 million, with the option to increase the aggregate principal amount up to $100 million under certain conditions subject to lender approval. The revolving line of credit bears interest at a variable base rate plus an applicable margin ranging from 0.75% to 2.50% and matures in March 2027. Our revolving credit facility limits our ability to, among other things:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• incur additional debt;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• make certain investments and acquisitions;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• incur certain liens or permit them to exist;

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**Confidential Treatment Requested by Pattern Group Inc.**

**Pursuant to 17 C.F.R. Section 200.83**

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• enter into certain types of transactions with affiliates;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• merge or consolidate with another company; and

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• transfer, sell or otherwise dispose of assets.

We are required to maintain compliance as of the end of each calendar quarter with the following financial covenants: (i) a consolidated fixed charge coverage ratio on a trailing 12-month basis of no less than 1.25 to 1.00; and (ii) a consolidated net leverage ratio on a trailing 12-month basis not greater than 4.00 to 1.00. The provisions of our revolving credit facility may affect our ability to obtain future financing and to pursue attractive business opportunities and our flexibility in planning for, and reacting to, changes in business conditions. As a result, restrictions in our revolving credit facility could adversely affect our business, financial condition and results of operations. In addition, a failure to comply with the provisions of our revolving credit facility could result in a default or an event of default that could enable our lenders to declare the outstanding principal of that debt, together with accrued and unpaid interest, to be immediately due and payable. If the payment of outstanding amounts under our revolving credit facility is accelerated, our assets may be insufficient to repay such amounts in full, and holders of our Series A common stock could experience a partial or total loss of their investment. As of December 31, 2023, we had no outstanding borrowings under the revolving credit facility and were in compliance with the financial covenants thereunder. See the section titled "Management's Discussion and Analysis of Financial Condition and Results of Operations—Liquidity and Capital Resources."

***Our international operations subject us to additional costs and risks that can adversely affect our business, financial condition and operating results.***

Brand partners utilize our platform to power their ecommerce acceleration across more than 100 countries and we have offices across North America, Asia, Australia and Europe. International operations and further expansion subjects us to many challenges associated with supporting a rapidly growing business across a multitude of cultures, customs, monetary, legal and regulatory systems and commercial infrastructures. In certain international markets we have relatively limited operating history, and our ability to manage our business and conduct our operations internationally requires considerable attention and resources.

In addition to risks described elsewhere in this section, our international sales and operations are subject to a number of risks, including:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• local and political conditions;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• restrictive governmental actions (such as trade protection measures, including export duties, quotas, custom duties, tariffs, penalties, sanctions and restrictions around the import and export of certain products, technologies and components). For example, imposition of higher tariffs on goods imported to the United States, including from Mexico, Canada and China, could affect our growth;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• Nationalization and restrictions on foreign ownership, including in China and Germany, could make expansion into those markets more difficult;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• laws and regulations regarding privacy, data use, data protection, data security, data localization, network security, consumer protection, pricing, discounting, product labeling, environmental safety, payments, advertising, labor and competition;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• business licensing or certification requirements, such as for imports, exports, web services and electronic devices;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• restrictions on sales or distribution of certain products or services and uncertainty regarding liability for products, services and content, including uncertainty as a result of less internet-friendly legal systems, local laws, lack of legal precedent and varying rules, regulations and practices regarding the physical and digital distribution of media products and enforcement of intellectual property rights;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• potential complications in enforcing contracts and collections;

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**Confidential Treatment Requested by Pattern Group Inc.**

**Pursuant to 17 C.F.R. Section 200.83**

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• shorter payable and longer receivable cycles and the resultant negative impact on cash flow;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• limitations on the repatriation and investment of funds and foreign currency exchange restrictions;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• difficulties in invoicing and collecting in foreign currencies and associated foreign currency exposure;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• limited fulfillment and technology infrastructure;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• lower levels of use of the internet;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• lower levels of consumer spending and fewer opportunities for growth compared to the United States;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• increased management, travel, infrastructure and legal compliance costs associated with having multiple international operations;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• difficulty in staffing, developing and managing foreign operations as a result of distance, language and cultural differences;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• different employee/employer relationships and the existence of works councils and labor unions;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• varied labor and employment laws, including those relating to termination of employees. For example, stricter laws for foreign employers in India could make it difficult for us to provide scalable technical support;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• compliance with the U.S. Foreign Corrupt Practices Act ("FCPA") and other applicable U.S. and foreign laws prohibiting corrupt payments to government officials and other third parties;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• laws and policies of the United States and other jurisdictions affecting trade, foreign investment, loans and taxes for cross-border transactions;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• increased costs of funding loss-making international subsidiaries;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• increased administrative costs and risks associated with compliance with local laws and regulations, including relating to privacy and data security in China and the EU;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• increased financial accounting and reporting burdens and complexities;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• concerns regarding negative, unstable or changing economic conditions in the countries and regions where we operate;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• administrative difficulties, costs and expenses related to various local languages, cultures and political nuances; and

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• terrorism, wars and geopolitical instability, including the Ukraine war, the Israel-Hamas war and the broader conflict in the Middle East.

**Risks Related to Legal, Regulatory and Compliance**

***We are subject to extensive laws and regulations and we may incur material liabilities or costs related to complying with existing or future laws and regulations, and our failure to comply may result in enforcements, penalties, recalls and other adverse actions.***

We are subject to a broad range of federal, state, local and foreign laws and regulations including those intended to protect public and worker health and safety, natural resources and the environment. Our operations are subject to regulation by various agencies, including the Occupational Safety and Health Administration, the FDA, the Department of Agriculture, the Federal Trade Commission, the Department of Justice, including the Antitrust Division, the European Commission, and other federal, state, local and foreign authorities regarding the processing, packaging, storage, distribution, advertising, labeling and export of our brand partners' products, including food safety standards and pricing and competition. In addition, we and our brand partners are subject to additional

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**Confidential Treatment Requested by Pattern Group Inc.**

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regulatory requirements, including environmental, health and safety laws and regulations administered by the U.S. Environmental Protection Agency, state, local and foreign environmental, health and safety legislative and regulatory authorities and the National Labor Relations Board, covering such areas as discharges and emissions to air and water, the use, management, disposal and remediation of, and human exposure to, hazardous materials and wastes and public and worker health and safety. These laws and regulations also govern our relationships with employees, including minimum wage requirements, overtime, terms and conditions of employment, working conditions and citizenship requirements. Violations of or liability under any of these laws and regulations may result in administrative, civil or criminal fines, penalties or sanctions against us, revocation or modification of applicable permits, licenses or authorizations, environmental, health and safety investigations or remedial activities, voluntary or involuntary product recalls, warning or untitled letters or cease and desist orders against operations that are not in compliance, among other things. Such laws and regulations generally have become more stringent over time and may become more so in the future. Authorities may enact new laws or promulgate new regulations that are adverse to our business, or they may view matters or interpret laws and regulations differently than they have in the past or in a manner adverse to our business. We may incur (directly or indirectly) material costs to comply with current or future laws and regulations or in any required product recalls. Liabilities or costs of compliance with any such laws and regulations could materially and adversely affect our business, financial condition and results of operations. In addition, changes in these laws and regulations could impose significant limitations and require changes to our business, which may increase our compliance expenses, make our business more costly and less efficient to conduct and compromise our growth strategy. As our business matures and we expand geographically and into different product categories, we may become subject to new laws and regulations in new jurisdictions. It is difficult to predict how existing and future laws will be applied to our business as it exists today and may exist in the future.

***Political, economic and financial instability and changes in international trade policies or tariffs, particularly between the United States and China, could have a material impact on our business, financial condition and results of operations.***

Political and economic instability, the financial instability of brand partners, brand partners' ability to meet our standards, labor problems experienced by brand partners, the availability of raw materials, merchandise quality issues, currency exchange rates, transport availability and cost, transport security, inflation and other factors relating to our brand partners are beyond our control and may affect our ability to efficiently obtain products from our brand partners, or to obtain those products at all. For example, in the past our in-stock rates were negatively affected due to increased shipping lead times and delays in importing goods into the United States due to disruptions in global shipping routes and labor strikes affecting ports.

A decrease in the level of imports to and exports from China could have a material impact on our business, financial condition and results of operations. Rising trade and political tensions could reduce levels of trades, investments, technological exchanges and other economic activities between China and other countries, which would have an adverse effect on global economic conditions, the stability of global financial markets and international trade policies. It could also adversely affect the financial and economic conditions in the jurisdictions in which we operate, as well as our global expansion, our financial condition and results of operations.

There is significant uncertainty as to the potential actions of the U.S. government with respect to international trade policy and the impact of tariffs, particularly with respect to trade between the United States and China. The United States has recently announced changes to U.S. trade policy, including increasing tariffs on imports, in some cases significantly, and potentially renegotiating or terminating existing trade agreements. For example, in April 2025, the U.S. government imposed broad new tariffs, including a baseline tariff of 10% on all imports, plus additional country-specific tariffs. The announcement of the tariffs has been followed by announcements of limited exceptions and temporary pauses. There can be no assurance that a broader trade agreement will be successfully negotiated between the United States and China to reduce or eliminate these tariffs. These tariffs, and the related geopolitical uncertainty between the United States and China, may cause decreased demand for the products we sell or increase the cost to us of our brand partners' products, which could have a material impact on our business, financial condition and results of operations. For example, consumers may respond to the imposition of tariffs or threat of tariffs on the products we sell by purchasing alternative products at a lower price. The resulting environment of retaliatory trade or other practices or additional trade restrictions or barriers, if implemented on a broader range of our brand partners' products, could harm our ability to sell brand partner products at prices

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**Confidential Treatment Requested by Pattern Group Inc.**

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consumers are willing to pay, which could have a material impact on our business, financial condition and results of operations. It remains unclear what additional, new or different actions, if any, will be taken by the United States, China or other governments with respect to international trade agreements, the imposition of tariffs on goods imported into the United States, the erection of barriers to trade, tax policy related to international commerce or other trade matters. The imposition of tariffs and trade restrictions as a result of international trade disputes or changes in trade policies could materially impact our sales and profitability. Ongoing international trade disputes and changes in trade policies could also impact economic activity and lead to a general contraction of consumer demand. Future actions or escalations by either the United States or China that affect trade relations could also negatively affect our business and/or that of our brand partners, and we cannot provide any assurances as to whether such actions will occur or the form that they may take.

We also are unable to predict whether any of the countries in which our brand partners' products are currently manufactured or may be manufactured in the future will be subject to trade restrictions imposed by the United States or foreign governments or the likelihood, type or effect of any such restrictions. Any event causing a disruption or delay of imports from suppliers with international manufacturing operations, including the imposition of additional import restrictions, restrictions on the transfer of funds or increased tariffs or quotas could increase the cost or reduce the supply of merchandise available to our customers and materially adversely affect our financial performance as well as our reputation and brand. Furthermore, some or all of our brand partners' foreign operations may be adversely affected by political and financial instability, resulting in the disruption of trade from exporting countries, restrictions on the transfer of funds or other trade disruptions.

***We are subject to anti-corruption, anti-bribery, anti-money laundering and similar laws, and non-compliance with such laws can subject us to criminal or civil liability and harm our business, financial condition and results of operations.***

We are subject to the FCPA, U.S. domestic bribery laws and other anti-money laundering laws in the countries in which we conduct activities. Anti-corruption and anti-bribery laws have been enforced aggressively in recent years and are interpreted broadly to generally prohibit companies, their employees and their third-party intermediaries from authorizing, offering or providing, directly or indirectly, improper payments or benefits to recipients in the public or private sector. As we increase our international sales and business, we may engage with business partners and third-party intermediaries to market our solutions and to obtain necessary permits, licenses and other regulatory approvals. In addition, we or our third-party intermediaries may have direct or indirect interactions with officials and employees of government agencies or state-owned or affiliated entities. We can be held liable for the corrupt or other illegal activities of these third-party intermediaries, our employees, representatives, contractors, partners and agents, even if we do not explicitly authorize such activities. We cannot assure you that all of our employees and agents will not take actions in violation of anti-corruption laws, for which we may be ultimately held responsible, or that we will be able to timely detect such actions. As we increase our international sales and business, our risks under these laws may increase.

Detecting, investigating and resolving actual or alleged violations of anti-corruption laws can require a significant diversion of time, resources and attention from our senior management team. In addition, noncompliance with anti-corruption, anti-bribery or anti-money laundering laws could subject us to whistleblower complaints, investigations, sanctions, settlements, prosecution, enforcement actions, fines, damages, other civil or criminal penalties or injunctions, suspension or debarment from contracting with certain persons, reputation harm, adverse media coverage and other collateral consequences. If any subpoenas or investigations are launched, or governmental or other sanctions are imposed, or if we do not prevail in any possible civil or criminal proceeding, our business, financial condition and results of operations could be harmed. In addition, responding to any action will likely result in a materially significant diversion of management's attention and resources and significant defense costs and other professional fees.

***Government regulation of the internet, mobile devices and ecommerce is evolving, and unfavorable changes could substantially adversely affect our business, financial condition and results of operations.***

We are subject to general business regulations and laws as well as federal and state regulations and laws specifically governing the internet, mobile devices and ecommerce that are constantly evolving. Existing and future

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**Confidential Treatment Requested by Pattern Group Inc.**

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laws and regulations, or changes thereto, may impede the growth of the Internet, mobile devices, ecommerce or other online services, increase the cost of providing online services, require us to change our business practices or raise compliance costs or other costs of doing business. These evolving regulations and laws may cover taxation, tariffs, user privacy, data protection, pricing and commissions, content, copyrights, distribution, social media marketing, advertising practices, mobile, electronic contracts and other communications, consumer protection and the characteristics and quality of our brand partners' products. It is not clear how existing laws governing issues such as property ownership, sales, use and other taxes and personal privacy apply to the internet and ecommerce. In addition, in the future, it is possible that foreign government entities in jurisdictions in which we seek to expand our business may seek to or may even attempt to block access to marketplaces on which we sell or our website. Negative developments regarding trademark law and other property rights may result in our brand partners' inability to maintain adequate enforcement of rights against unauthorized sellers. Any failure, or perceived failure, by us to comply with any of these laws or regulations could result in damage to our reputation and brand, a loss in business and proceedings or actions against us by governmental entities or others, which could adversely affect our business, financial condition and results of operations.

***We and our business partners and service providers may be subject to a variety of privacy and data security laws, regulations and contractual obligations, which may require us to incur substantial compliance costs, and any failure or perceived failure by us to comply with them could expose us to significant fines and other penalties and otherwise harm our business, financial condition and operations.***

In connection with running our business, we receive, store, use and otherwise process information that relates to individuals and/or constitutes "personal data," "personal information," "personally identifiable information," or similar terms under applicable data privacy and security laws (collectively, "personal information"). The legislative and regulatory framework for the collection, use, safeguarding, sharing, transfer and other processing of personal information worldwide is rapidly evolving and is likely to remain uncertain for the foreseeable future. Globally, several jurisdictions, including those in which we operate or collect personal information, have established their own data privacy and security frameworks with which we must comply. For example, in the United States, numerous federal and state laws and regulations, including state data breach notification laws, marketing/advertising laws, and federal and state consumer protection and data privacy and security laws (e.g., Section 5 of the Federal Trade Commission Act and the California Consumer Privacy Act ("CCPA") and similar laws in other states), that govern the collection, use, disclosure and protection of personal information, apply to our operations and the operations of our business partners and service providers.

The CCPA, which went into effect on January 1, 2020, established a comprehensive privacy framework for covered businesses by creating an expanded definition of personal information, and, amongst other requirements, establishing robust data privacy rights for California residents, imposing significant transparency obligations on covered businesses and requiring CCPA-compliant contracts between covered businesses and their service providers. It also provides for civil penalties for violations, and allows for a private right of action for data breaches that is expected to increase data breach litigation. In addition, the California Privacy Rights Act ("CPRA"), which amended the CCPA and became effective January 1, 2023, has imposed additional obligations on companies covered by the legislation. The CPRA significantly modified the CCPA, including by expanding consumers' rights with respect to certain sensitive personal information. The CPRA also created a new state agency that was vested with authority to implement and enforce the CCPA. Many aspects of the CCPA, as amended by the CPRA, and its interpretation remain unclear. As such, its full impact on our business and operations remains uncertain.

Similar laws have taken effect or been passed in numerous other states and proposed in others still. Such legislation adds additional complexity, variation in requirements, restrictions and potential legal risk, requires additional investment of resources in compliance programs, impacts strategies and could result in increased compliance costs and/or changes in business practices and policies. The existence of data privacy and security laws in different states in the country makes our compliance obligations more complex and costly and may increase the likelihood that we may be subject to enforcement actions or otherwise incur liability for noncompliance. These various data privacy and security laws may impact our business activities, including relationships with business partners and ultimately the marketing and distribution of our brand partners' products. State laws are changing rapidly and there is discussion in the U.S. Congress of a new comprehensive federal data privacy law to which we may likely become subject, if enacted.

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**Confidential Treatment Requested by Pattern Group Inc.**

**Pursuant to 17 C.F.R. Section 200.83**

Moreover, laws, regulations and standards covering marketing, advertising and other activities conducted by telephone, email, mobile devices and the internet may be or become applicable to our business, such as the Telephone Consumer Protection Act, the Controlling the Assault of Non-Solicited Pornography and Marketing Act and similar state consumer protection and communication privacy laws, such as California's Invasion of Privacy Act.

In addition, brand partners utilize our platform to power their ecommerce acceleration across more than 100 countries and we must also address privacy and data protection requirements from other jurisdictions outside of the United States. Outside the United States, an increasing number of laws, regulations and industry standards apply to data privacy and security, including the EU's General Data Protection Regulation ("EU GDPR") and the United Kingdom's GDPR ("UK GDPR" and together with the EU GDPR, "GDPR"), which impose strict requirements for processing personal data. Violators of these laws face significant penalties. For example, under the GDPR, companies may face temporary or definitive bans on data processing and other corrective actions; fines of up to 20 million Euros under EU GDPR/17.5 million pounds sterling under the UK GDPR or, in each case, 4% of annual global revenue, whichever is greater; or private litigation related to processing of personal data brought by classes of data subjects or consumer protection organizations authorized at law to represent their interests.

In conducting our business, we may transfer personal information from the EU, the UK and other jurisdictions to the United States or other countries. The GDPR and other laws impose requirements on the transfer of personal information to other countries. In particular, the GDPR has significantly restricted the transfer of personal information to the United States and other countries whose privacy laws it believes are inadequate. Other jurisdictions have adopted or may adopt similarly stringent data localization and cross-border data transfer laws. Although there are currently various mechanisms that may be used to transfer personal information to the United States under the GDPR in compliance with law, such as the EU GDPR's standard contractual clauses, the UK GDPR's International Data Transfer Agreement/Addendum and the EU-U.S. Data Privacy Framework ("Framework") and the UK extension thereto (which allows for transfers to relevant U.S.-based organizations who self-certify compliance and participate in the Framework), these mechanisms are subject to legal challenges, and there is no assurance that we can satisfy or rely on these measures to lawfully transfer personal information to the United States and other third countries.

If there is no lawful manner for us to transfer personal information from various jurisdictions, including the EU and UK, to the United States, or if the requirements for a legally-compliant transfer are too onerous, we could face significant adverse consequences, including increased exposure to regulatory actions, substantial fines and injunctions against processing or transferring personal information, as well as other adverse consequences. In particular we may be unable to import personal data to the United States and other third countries in which we operate, which could significantly and negatively impact our business operations. Additionally, companies that transfer personal information out of the EU and UK to other jurisdictions, particularly to the United States, may be subject to increased scrutiny from regulators, individual litigants and activist groups.

Beyond the United States and Europe, we face challenges of privacy and data protection laws in numerous jurisdictions in which we operate, including China which has a stringent privacy, cyber and data protection regulation. Most notably, the Personal Information Protection Law of China ("PIPL") was adopted on August 20, 2021, and went into effect on November 1, 2021. Similar to the GDPR, the PIPL calls for extraterritorial application, data minimization, data localization and purpose limitation requirements, and obligations to provide certain notices and rights to citizens of China. The PIPL allows for fines of up to 50 million renminbi or 5% of a covered company's revenue in the prior year. In addition, the PIPL has certain requirements that must be met before data can be transferred across border.

In addition to legislative and regulatory frameworks we are subject to governing the processing of personal information, we are also contractually subject to data privacy and security obligations. Moreover, we publish privacy policies, marketing materials and other statements regarding data privacy and security. If we fail to abide by our contractual obligations or these policies, materials or statements are found to be deficient, lacking in transparency, deceptive, unfair or misrepresentative of our practices, we may be subject to investigation, enforcement actions by regulators or other adverse consequences.

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**Confidential Treatment Requested by Pattern Group Inc.**

**Pursuant to 17 C.F.R. Section 200.83**

Legislative and regulatory, contractual and other obligations related to data privacy and security (and data privacy expectations from our business partners and constituencies) are quickly changing, becoming increasingly stringent and creating uncertainty. Additionally, these obligations may be subject to differing applications and interpretations, which may be inconsistent or conflict among jurisdictions. Preparing for and complying with these obligations requires us to devote significant resources. These obligations may necessitate changes to our information technologies, systems and data processing practices and to those of any third parties that process personal data on our behalf.

We may at times fail (or be perceived to have failed) in our efforts to comply with our data privacy and security obligations. Moreover, despite our efforts, our personnel or third parties with whom we work may fail to comply with such obligations, which could negatively impact our business operations and compliance posture. For example, any failure by one of our third-party service providers to comply with applicable law, regulations or contractual obligations could result in adverse effects, including proceedings against us by governmental entities or others.

If we or the third parties with whom we work fail, or are perceived to have failed, to address or comply with applicable data privacy and security obligations, we could face significant consequences, including but not limited to: government enforcement actions (e.g., investigations, fines, penalties, audits, inspections and similar); litigation (including class-action claims) and mass arbitration demands; additional reporting requirements and/or oversight; bans on processing personal data; orders to destroy or not use personal data; and even criminal penalties for company officials. In particular, plaintiffs have become increasingly more active in bringing privacy-related claims against companies, including class-action claims and mass arbitration demands. Some of these claims allow for the recovery of statutory damages on a per violation basis, and, if viable, carry the potential for monumental statutory damages, depending on the volume of data and the number of violations. Any of these events could have a material adverse effect on our reputation, business or financial condition, including but not limited to, loss of brand partners or customers, interruptions or stoppages in our business operations, inability to process personal data or to operate in certain jurisdictions, limited ability to develop or commercialize our solutions, expenditure of time and resources to defend any claim or inquiry, adverse publicity or revision or restructuring of our operations.

***If we or our third-party providers fail to protect confidential information and/or experience data security incidents, breaches or compromises, there may be damage to our brand and reputation, financial penalties and legal liability, which would materially adversely affect our business, results of operations and financial condition.***

We rely on computer systems, hardware, software, technology infrastructure and online sites and networks for both internal and external operations that are critical to our business. We own and manage some of these technology systems, but also rely on third parties for a range of systems and related products and services. We also collect, process, store and transmit large amounts of data, including confidential information.

We face numerous and evolving cybersecurity risks that threaten the confidentiality, integrity and availability of our technology systems and confidential information. Threat actors, including nation-states and nation-state-supported actors now engage, and are expected to continue to engage, in cyber-attacks through diverse attack vectors such as social engineering/phishing, malware (including ransomware), malfeasance by insiders, human or technological error, and as a result of malicious code embedded in open-source software or misconfigurations, bugs or other vulnerabilities in commercial software that is integrated into our (or our suppliers' or service providers') software or solutions. Due to the current geopolitical environment, we and our brand partners are at heightened risk of these attacks, including cyber-attacks that could materially disrupt our systems and operations, supply chain and ability to produce, sell and distribute our brand partners' products. In particular, severe ransomware attacks are becoming increasingly prevalent and can lead to significant interruptions in our operations, loss of confidential data and income, reputational harm and diversion of funds.

We rely upon email and other electronic means of communication to connect with customers. Our brand partners or customers may be targeted by parties using fraudulent spoofing and phishing emails to misappropriate passwords, payment information or other personal information or to introduce viruses through Trojan horse programs or otherwise through our brand partners' or customers' computers, smartphones, tablets or other devices. Spoofing and phishing may damage our brand and increase our costs, and we have experienced incidents related to

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**Confidential Treatment Requested by Pattern Group Inc.**

**Pursuant to 17 C.F.R. Section 200.83**

phishing, though these incidents have not been material to date. Any failure to mitigate the effectiveness of such malicious activity in the future could damage our brand or increase our costs.

We use third-party technology and systems for a variety of reasons, including, without limitation, encryption and authentication technology, employee email and other communication, content delivery to customers, back-office support and other functions. Our ability to monitor these third parties' information security practices is limited, and these third parties may themselves inappropriately access such confidential information or may not have adequate security measures and could experience a security incident that compromises the confidentiality, integrity or availability of the systems they operate for us or the confidential information they process on our behalf, which could harm our reputation or adversely affect our business. While we may be entitled to damages if our third-party service providers fail to satisfy their privacy or security-related obligations to us, we cannot be certain that our applicable contracts with these third parties will adequately limit our data security-related liability to them or be sufficient to allow us to obtain indemnification or recovery from them for data security-related liability that they cause us to incur.

Remote work has become more common and has increased risks to our information technology systems and confidential information as more of our employees utilize network connections, computers and devices outside our premises or network, including working at home, while in transit and in public locations. For example, technologies in our employees' and service providers' homes may not be as robust as in our offices and could cause the networks, information systems, applications and other tools available to employees and service providers to be more limited or less reliable than in our offices. Further, the security systems in place at our employees' and service providers' homes, or other remote work locations, may be less secure than those used in our offices. There is no guarantee that we will not encounter risks associated with employees and service providers accessing company data and systems remotely. Additionally, future or past business transactions (such as acquisitions or integrations) have exposed and may in the future expose us to additional cybersecurity risks and vulnerabilities, as our systems could be negatively affected by vulnerabilities present in acquired or integrated entities' systems and technologies. Furthermore, we may discover security issues that were not found during due diligence of such acquired or integrated entities, and it may be difficult to integrate companies into our information technology environment and security program.

We and certain of our third-party providers have in the past, and may in the future experience cyberattacks and other incidents, and we expect such attacks and incidents to continue in varying degrees. While to date no incidents have had a material impact on our operations or financial results, we cannot guarantee that material incidents will not occur in the future. Cyberattacks are expected to accelerate on a global basis in frequency and magnitude as threat actors are becoming increasingly sophisticated in using techniques and tools, including AI, that circumvent security controls, evade detection and remove forensic evidence. As a result, we may be unable to detect, investigate, remediate or recover from future attacks or incidents or avoid a material adverse impact to our technology systems, data or business. There can also be no assurance that our cybersecurity risk management program and processes, including our policies, controls or procedures, will be fully implemented, complied with or effective.

Any adverse impact to the availability, integrity or confidentiality of our technology systems or confidential information can result in legal claims or proceedings (such as class actions), regulatory investigations and enforcement actions, fines and penalties, negative reputational impacts that cause us to lose existing or future customers, and/or significant incident response, system restoration or remediation and future compliance costs. Any or all of the foregoing could materially adversely affect our business, results of operations and financial condition. Finally, we cannot guarantee that any costs and liabilities incurred in relation to an attack or incident will be covered by our existing insurance policies or that applicable insurance will be available to us in the future on economically reasonable terms or at all.

To the extent we accept debit and credit cards for payment, we are subject to the Payment Card Industry Data Security Standard, issued by the Payment Card Industry Security Standards Council. The Payment Card Industry Data Security Standard contains compliance guidelines with regard to our security surrounding the physical and electronic storage, processing and transmission of cardholder data. If we or our service providers are unable to comply with the security standards established by banks and the payment card industry, we may be subject to fines, restrictions and expulsion from card acceptance programs, which could materially and adversely affect our business.

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**Confidential Treatment Requested by Pattern Group Inc.**

**Pursuant to 17 C.F.R. Section 200.83**

***Failure to adequately maintain and protect our intellectual property and proprietary rights could harm our brand, devalue our proprietary content and adversely affect our ability to compete effectively.***

Our success depends to a significant degree on our ability to secure, maintain, protect and enforce our intellectual property rights in our proprietary technology, know-how and our brand. To protect our rights to our intellectual property, we rely on a combination of patent, trademark, copyright and trade secret laws, domain name registrations, confidentiality agreements and other contractual arrangements with our brand partners, employees, affiliates, strategic partners, marketplaces and others. However, the protective steps we have taken and plan to take may be inadequate to deter infringement, misappropriation, dilution or other violations of our intellectual property rights. We make business decisions about when and where to seek patent protection for a particular technology and when to rely upon copyright or trade secret protection, and the approach we select may ultimately prove to be inadequate. Even in cases where we seek patent protection, there is no assurance that our applications for patents will be granted, and even if they are, that the resulting patents will be of sufficient scope to provide meaningful protection. Further, even if we obtain adequate intellectual property protection, we may be unable to detect the unauthorized use of, or take appropriate steps to enforce, our patents and other intellectual property rights. In addition, we believe that the protection of our trademark rights is an important factor in product recognition, protecting our brand and maintaining goodwill and if we do not adequately protect our rights in our trademarks from infringement, any goodwill that we have developed in those trademarks could be lost or impaired, which could harm our brand and our business. Further, effective patent, trademark, copyright and trade secret protection may not be available to us or in every jurisdiction in which we offer or intend to offer our brand partners' products and our technology. Failure to adequately protect our intellectual property could harm our brand, devalue our proprietary content and adversely affect our ability to compete effectively. Third parties may challenge the validity, enforceability, registration, ownership or scope of our intellectual property rights and defending against any such claims could result in the expenditure of significant financial and managerial resources, which could adversely affect our business, results of operations and financial condition.

Further, a number of aspects of intellectual property protection in the field of AI and machine learning are currently under development, and there is uncertainty and ongoing litigation in different jurisdictions as to the degree and extent of protection warranted for AI and machine learning systems and relevant system input and outputs. The law is also uncertain across jurisdictions regarding the copyright ownership of content that is produced in whole or in part by generative AI tools. If we fail to obtain protection for the intellectual property rights concerning our AI Technologies, or later have our intellectual property rights invalidated or otherwise diminished, our competitors may be able to take advantage of our research and development efforts to develop competing products which could adversely affect our business, reputation and financial condition. Given the long history of development of AI Technologies, other parties may have (or in the future may obtain) patents or other proprietary rights that would prevent, limit or interfere with our ability to make, use or sell our own AI Technologies.

We may use generative AI Technologies, including tools provided by third parties, to develop or assist in the development of our own software. While use of such tools makes our development process more efficient, AI Technologies have sometimes generated content that is "substantially similar" to proprietary or open source code on which the AI tool was trained. If the AI Technologies we use generate code that is too similar to other proprietary code, or to software processes that are protected by patent, we could be subject to intellectual property infringement claims. We may also not be able to anticipate and detect security vulnerabilities in such AI generated software. If our tools generate code that is too similar to open source code, we risk losing protection of our own proprietary code that is commingled with such code. Finally, to the extent we use third-party AI Technologies to develop software, the terms of use of these tools may state that the third-party provider retains rights in the generated code.

If we fail to adequately protect our intellectual property rights, our competitors may gain access to our intellectual property and proprietary technology and develop and commercialize substantially identical solutions or technologies. In addition, defending our intellectual property rights might entail significant expense. Any patents, trademarks, copyrights or other intellectual property rights that we have or may obtain may be challenged or circumvented by others or invalidated or held unenforceable through administrative process, including re-examination, inter partes review, interference and derivation proceedings and equivalent proceedings in foreign jurisdictions (e.g., opposition proceedings) or litigation. Despite our pending U.S. patent applications, there can be no assurance that our patent applications will result in issued patents, or even if issued, that such patents would be of

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**Confidential Treatment Requested by Pattern Group Inc.**

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sufficient scope to provide meaningful protection. Even if we continue to seek patent protection in the future, we may be unable to obtain or maintain patent protection for our technology. In addition, any patents we have or may obtain, or that are licensed to us now or in the future, may not provide us with competitive advantages or may be successfully challenged by third parties. Further, the laws of some foreign countries may not be as protective of intellectual property rights as those in the United States, and mechanisms for enforcement of intellectual property rights may be inadequate. Moreover, policing unauthorized use of our technologies, trade secrets and intellectual property may be difficult, expensive and time-consuming. Despite our precautions, it may be possible for unauthorized third parties to copy our solutions and technology capabilities and use information that we regard as proprietary to create solutions that compete with ours. The value of our trademarks could be diminished if others assert rights in or ownership of our trademarks, or if they use and assert rights in trademarks that are similar to our trademarks. In some cases, litigation or other actions may be necessary to protect or enforce our trademarks and other intellectual property rights. We may be unable to successfully resolve these types of conflicts to our satisfaction.

We enter into confidentiality and invention assignment agreements with our employees and consultants and enter into confidentiality agreements with other third parties, including suppliers and other partners. However, we cannot guarantee that we have entered into such agreements with each party that has or may have had access to our proprietary information, know-how and trade secrets. Moreover, no assurance can be given that these agreements will be effective in controlling access to our proprietary information or the distribution, use, misuse, misappropriation, reverse engineering or disclosure of our proprietary information, know-how and trade secrets. Further, these agreements may not prevent our competitors from independently developing technologies that are substantially equivalent or superior to our solutions and technology capabilities. These agreements may be breached, and we may not have adequate remedies for any such breach.

In order to protect and defend our intellectual property rights, we may be required to spend significant resources to monitor for infringement and to enforce our intellectual property rights. Litigation may be necessary in the future to enforce our intellectual property rights. Litigation brought to protect and enforce our intellectual property rights could be costly, time-consuming and distracting to management and could result in the impairment or loss of portions of our intellectual property. Further, our efforts to enforce our intellectual property rights may be met with defenses, counterclaims and countersuits attacking the validity and enforceability of our intellectual property rights, and if such defenses, counterclaims or countersuits are successful, we could lose valuable intellectual property rights. Our inability to protect our proprietary technology against unauthorized copying or use, as well as any costly litigation or diversion of our management's attention and resources, could delay further sales or the implementation of our solutions and technology capabilities, impair the functionality of our solutions and technology capabilities, delay introductions of new solutions, result in our substituting inferior or more costly technologies into our solutions or injure our reputation.

We may not be able to successfully halt the operations of copycat websites or the infringement or misappropriation of intellectual property rights in Pattern, or elements or functionality embodied therein, including, but not limited to, our digital catalog. However, we may not be able to detect all such activities in a timely manner and, even if we do, we cannot guarantee that our efforts to protect and enforce our intellectual property rights will be successful. Regardless of whether we can successfully enforce our rights against these websites or third parties, any measures that we may take could require us to expend significant financial or other resources.

***We may be subject to intellectual property claims, which are extremely costly to defend, could require us to pay significant damages and could limit our ability to use certain technologies in the future.***

Third parties have from time to time claimed, and may claim in the future, that we have infringed their intellectual property rights. These claims, whether meritorious or not, could be time-consuming, result in considerable litigation costs, result in injunctions against us or the payment of damages by us, require significant amounts of management time or result in the diversion of significant operational resources and expensive changes to our business model, require us to indemnify our brand partners or third-party service providers, materially disrupt the conduct of our business and have a material and adverse effect on us and our brand partners and result in the payment of substantial damages or injunctions against us or require us to enter into costly royalty or licensing agreements, if available. Additionally, there can be no assurance that favorable outcomes will be obtained. Any

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**Confidential Treatment Requested by Pattern Group Inc.**

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payments we are required to make and any injunctions we are required to comply with as a result of such infringement actions could adversely affect our business, financial condition and results of operations. We may need to obtain licenses from, or enter into royalty arrangements with, third parties who allege that we have infringed their rights, but such licenses or arrangements may not be available on terms acceptable to us or at all. In addition, we may be unable to obtain or utilize on terms that are favorable to us, or at all, licenses or other rights with respect to intellectual property we do not own. These risks have been amplified by the increase in third parties whose sole or primary business is to assert such claims. As a result, these claims could materially and adversely affect our business, financial condition and results of operations.

***We may be unable to continue to use the domain names that we use in our business or prevent third parties from acquiring and using domain names that infringe on, are similar to, or otherwise decrease the value of our brand, trademarks or service marks.***

We have registered domain names that we use in, or are related to, our business, most importantly www.pattern.com. If we lose the ability to use a domain name, whether due to trademark claims, failure to renew the applicable registration or any other cause, we may be forced to market our solutions under a new domain name, which could cause us substantial harm or cause us to incur significant expense in order to purchase rights to the domain name in question. We may not be able to obtain preferred domain names outside the United States due to a variety of reasons. In addition, our competitors and others could attempt to capitalize on our brand recognition by using domain names similar to ours. We may be unable to prevent third parties from acquiring and using domain names that infringe on, are similar to, or otherwise decrease the value of our brand or our trademarks, trade names or service marks. Protecting, maintaining and enforcing our rights in our domain names may require litigation, which could result in substantial costs and diversion of resources, which could in turn adversely affect our business, financial condition and results of operations.

***Our technology makes use of open source software components, and a failure to comply with the terms of the underlying open source software licenses could negatively affect our ability to use our technology and subject us to possible litigation.***

Our technology incorporates and is dependent, to a significant extent, upon the use of open source software, and we intend to continue our use of open source software in the future. Such open source software is generally licensed by its authors or other third parties under open source licenses and is typically freely accessible, usable and modifiable. Pursuant to such open source licenses, we may be subject to certain conditions, including requirements, depending on how the licensed software is used or modified, that we offer our proprietary software that incorporates the open source software for little or no cost, that we make available source code for modifications or derivative works we create based upon incorporating or using the open source software and that we license such modifications or derivative works under the terms of the particular open source license. This could enable our competitors to create similar solutions with lower development effort and time and ultimately could result in a loss of our competitive advantage. Further, if an author or other third-party that uses or distributes such open source software were to allege that we had not complied with the conditions of one or more of these licenses, we could be required to incur significant legal expenses defending against such allegations and could be subject to significant damages, enjoined from the use of our technology that contained or are dependent upon the open source software and required to comply with the foregoing conditions, which could disrupt the use of our technology and ultimately the sale of our brand partners' products. Litigation could be costly for us to defend, negatively affect our operating results and financial condition or require us to devote additional research and development resources to change our technology. The terms of many open source licenses to which we are subject have not been interpreted by U.S. or foreign courts, and there is a risk that these licenses could be construed in a way that could impose unanticipated conditions or restrictions on our ability to provide or distribute our technology. As there is little or no legal precedent governing the interpretation of many of the terms of certain of these licenses, the potential impact of these terms on our business is uncertain and may result in unanticipated obligations regarding our technologies. Any requirement that we make available source code for modifications or derivative works we create based upon incorporating or using open source software or that we license such modifications or derivative works under the terms of open source licenses, could be harmful to our business, financial condition or results of operations and could help our competitors develop platforms that are similar to or better than ours. In addition, to the extent that we have failed to comply with our obligations under particular licenses for open source software, we may lose the right to continue to

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**Confidential Treatment Requested by Pattern Group Inc.**

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use and exploit such open source software in connection with our operations, which could disrupt and adversely affect our business.

In addition to risks related to license requirements, usage and distribution of open source software can lead to greater risks than the use of third-party commercial software, as open source licensors generally do not provide support, warranties, indemnification, controls on the origin or development of the software, remedies against the licensors or other contractual provisions regarding infringement claims or the quality of the code. Many of the risks associated with usage of open source software cannot be eliminated and could adversely affect our business.

Although we believe that we have complied with our obligations under the various applicable licenses for open source software, it is possible that we may not be aware of all instances where open source software has been incorporated into our software or used in connection with our solutions or our corresponding obligations under open source licenses. Additionally, even though we have implemented certain tools and policies to monitor the use, compliance and incorporation of open source software into our solutions, we cannot be certain that we have not incorporated open source software in the solutions we offer in a manner that is inconsistent with such tools and policies. To the extent that we are required to disclose the source code of certain of our software developments to third parties, including our competitors, in order to comply with applicable open source license terms, such disclosure could harm our intellectual property position, competitive advantage, results of operations and financial condition. In addition, to the extent that we have failed to comply with our obligations under particular licenses for open source software, we may lose the right to continue to use and exploit such open source software in connection with our operations and solutions, which could disrupt and adversely affect our business.

***As a result of being a public company, we are obligated to develop and maintain proper and effective internal controls over financial reporting, and any failure to maintain the adequacy of these internal controls may adversely affect investor confidence in our company and, as a result, the value of our Series A common stock.***

We are not currently required to comply with the SEC rules that implement Section 404 ("Section 404") of the Sarbanes-Oxley Act of 2002 ("Sarbanes-Oxley Act") and are therefore not required to make a formal assessment of the effectiveness of our internal control over financial reporting for that purpose. As a public company, we will be required to provide an annual management report on the effectiveness of our internal control over financial reporting commencing with our second annual report on Form 10-K. This assessment will need to include disclosure of any material weaknesses identified by our management in our internal control over financial reporting. In addition, our independent registered public accounting firm will be required to attest to the effectiveness of our internal control over financial reporting commencing with our second annual report on Form 10-K. We are required to disclose changes in internal control over financial reporting that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting on a quarterly basis.

We have commenced the costly and challenging process of compiling the system and processing documentation necessary to perform the evaluation needed to comply with Section 404, and we may not be able to complete our evaluation, testing and any required remediation in a timely fashion. Our compliance with Section 404 will require that we incur substantial accounting expense and expend significant management efforts. In addition, as our business continues to grow in size and complexity, we are improving our processes and infrastructure to help ensure we can prepare financial reporting and disclosures within the timeline required for a public company. We may need to hire additional accounting and financial staff with appropriate public company experience and technical accounting knowledge to compile the system and process documentation necessary to perform the evaluation needed to comply with Section 404. In addition, prior to completing our internal control assessment under Section 404, we may become aware of and disclose material weaknesses that will require timely remediation. Due to our significant growth, we face challenges in timely and appropriately designing controls in response to evolving risks of material misstatement. During the evaluation and testing process of our internal controls, if we identify one or more material weaknesses in our internal control over financial reporting, we will be unable to assert that our internal control over financial reporting is effective.

We cannot assure you that there will not be material weaknesses in our internal control over financial reporting in the future. Any failure to maintain internal control over financial reporting could severely inhibit our ability to accurately report our financial condition or operating results. If we are unable to conclude that our internal control

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**Confidential Treatment Requested by Pattern Group Inc.**

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over financial reporting is effective, or if our independent registered public accounting firm determines we have a material weakness in our internal control over financial reporting, we could lose investor confidence in the accuracy and completeness of our financial reports, the market price of our Series A common stock could decline and we could be subject to sanctions or investigations by the stock exchange on which our securities are listed, the SEC or other regulatory authorities. Failure to remedy any material weakness in our internal control over financial reporting or to implement or maintain these and other effective control systems required of public companies, could also restrict our future access to the capital markets.

***Operating as a public company will require us to incur substantial costs and will require substantial management attention. In addition, our management team has limited experience managing a public company.***

As a public company, we will incur substantial legal, accounting and other expenses that we did not incur as a private company. For example, we will be subject to the reporting requirements of the Securities Exchange Act of 1934, as amended ("Exchange Act"), the applicable requirements of the Sarbanes-Oxley Act and the Dodd-Frank Wall Street Reform and Consumer Protection Act and the rules and regulations of the SEC. The rules and regulations of&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; will also apply to us following this offering. As part of the new requirements, we will need to establish and maintain effective disclosure and financial controls and make changes to our corporate governance practices. We expect that compliance with these requirements will increase our legal and financial compliance costs and will make some activities more time-consuming.

Most of our management and other personnel have little experience managing a public company and preparing public filings. In addition, we expect that our management and other personnel will need to divert attention from other business matters to devote substantial time to the reporting and other requirements of being a public company. In particular, we expect to incur significant expense and devote substantial management effort to complying with the requirements of Section 404. We will need to hire additional accounting and financial staff with appropriate public company experience and technical accounting knowledge.

***Changes in financial accounting standards or practices may cause adverse, unexpected financial reporting fluctuations and affect our results of operations.***

GAAP and related accounting pronouncements, implementation guidelines and interpretations we apply to a wide range of matters that are or could be relevant to our business, such as accounting for revenue recognition, inventory reserve, stock based compensation and income taxes, are complex and involve subjective assumptions, estimates and judgments by our management. Changes in these rules or their interpretation or changes in underlying assumptions, estimates or judgements by our management could significantly change or add significant volatility to our reported or expected financial performance. New accounting pronouncements and varying interpretations of accounting pronouncements have occurred in the past, and may occur in the future. Changes to existing rules or the questioning of current practices may adversely affect our reported financial results or the way we conduct our business. In addition, if we were to change our critical accounting estimates, including those related to the recognition of revenue and inventory reserves, our results of operations could be significantly affected. For more information, see *Note 2—Summary of Significant Accounting Polices*, in the sections titled "Notes to Consolidated Financial Statements" and "Management's Discussion and Analysis of Financial Condition and Results of Operations—Critical Accounting Estimates" included elsewhere in this prospectus.

***Changes in tax law may adversely affect us.***

The rules dealing with U.S. federal, state and local income taxation are constantly under review by persons involved in the legislative process and by the IRS and the U.S. Department of the Treasury. Changes to tax laws (which changes may have retroactive application) could adversely affect us or holders of our Series A common stock. In recent years, many such changes have been made and changes are likely to continue to occur in the future. It cannot be predicted whether, when, in what form or with what effective dates tax laws, regulations and rulings may be enacted, promulgated or issued, which could result in an increase in our or our stockholders' tax liability or require changes in the manner in which we operate in order to minimize or mitigate any adverse effects of changes in tax law. Prospective investors should consult their tax advisors regarding the potential consequences of changes in tax law on our business and on the ownership and disposition of our Series A common stock.

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**Confidential Treatment Requested by Pattern Group Inc.**

**Pursuant to 17 C.F.R. Section 200.83**

***Our business may be subject to sales and other taxes.***

The application of indirect taxes, such as sales and use tax, value-added tax, provincial taxes, goods and services tax, business tax and gross receipt tax, to businesses like ours and marketplaces is a complex and evolving issue. Significant judgment is required to evaluate applicable tax obligations and as a result amounts recorded are estimates and could change. In many cases, the ultimate tax determination is uncertain because it is not clear how existing statutes apply to our business or to marketplaces' businesses. One or more states, the federal government or other countries may seek to impose additional reporting, record-keeping or indirect tax collection obligations on businesses like ours that facilitate ecommerce. New taxes could also require us or marketplaces to incur substantial costs to capture data and collect and remit taxes. If such obligations were imposed, the additional costs associated with tax collection, remittance and audit requirements could make selling in marketplaces less attractive and more costly for us, which could adversely affect our business.

***Our ability to use tax attributes to offset future taxable income for tax purposes is subject to limitation and risk that could limit our ability to utilize such attributes.***

Under Sections 382 and 383 of the Internal Revenue Code of 1986, as amended ("Code"), if a corporation undergoes an "ownership change," generally defined as a greater than 50 percentage point change (by value) in its equity ownership by certain stockholders over a rolling three-year period, the corporation's ability to use its pre-change net operating loss carryforwards ("NOLs") and other pre-change tax attributes (such as research and development tax credits) to offset its post-change income or taxes may be limited. We may experience ownership changes in the future as a result of subsequent shifts in our stock ownership (some of which shifts in stock ownership may be outside our control). As a result, our ability to use any pre-change tax attributes (including any NOLs and tax credits) to offset future taxable income, if any, could be subject to limitations. Similar provisions of state tax law may also apply. Further, there is a risk that due to changes to the Code, regulatory changes or other unforeseen reasons, our existing tax attributes could expire or otherwise become unavailable to offset future income tax liabilities. As a result, we may currently or in the future be unable to use a material portion of our tax attributes. Furthermore, any state or local level credits or incentives (or carryforwards thereof) anticipated by us may become unavailable due to a change in eligibility, a change in circumstances, a change of law or otherwise, and will not be available to reduce future tax liabilities.

***Litigation could have a material adverse effect on our business and results of operations.***

Lawsuits and other administrative or legal proceedings that may arise in the course of our operations can involve substantial costs, including the costs associated with investigation, litigation and possible settlement, judgment, penalty or fine. In addition, lawsuits and other legal proceedings may be time consuming and may require a commitment of management and personnel resources that will be diverted from our normal business operations. Although we generally maintain insurance to mitigate certain costs, there can be no assurance that costs associated with lawsuits or other legal proceedings will not exceed the limits of insurance policies. Moreover, we may be unable to continue to maintain our existing insurance at a reasonable cost, if at all, or to secure additional coverage, which may result in costs associated with lawsuits and other legal proceedings being uninsured. Our business, financial condition and results of operations could be adversely affected if a judgment, penalty or fine is not fully covered by insurance.

Additionally, as a result of disclosure obligations required of a public company, our business and financial condition will become more visible, which may result in an increased risk of threatened or actual litigation, including by competitors and other third parties.

**Risks Related to Our Corporate Structure**

***We are a "controlled company" under the corporate governance requirements of Nasdaq, and intend to avail ourselves of certain reduced corporate governance requirements.***

As a result of our dual series common stock structure and the&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; , our co-founders will collectively hold a majority of the voting power of our outstanding capital stock following the completion of this offering and&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; will have the authority (and irrevocable proxy) to direct the vote and vote the shares of Series B

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**Confidential Treatment Requested by Pattern Group Inc.**

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common stock held by&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; , and their respective permitted entities and permitted transferees, at his discretion on all matters to be voted upon by stockholders. Therefore, we will be considered a "controlled company" as that term is set forth in the corporate governance requirements of Nasdaq. Under these listing standards, a company in which over 50% of the voting power for the election of directors is held by an individual, a group or another company is a "controlled company" and may elect not to comply with certain corporate governance requirements of Nasdaq, including:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• the requirement that a majority of its board of directors consist of independent directors;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• the requirement that its nominating or corporate governance committee be composed entirely of independent directors with a written charter addressing the committee's purpose and responsibilities, or if no such committee exists, that its director nominees be selected or recommended by independent directors constituting a majority of the board's independent directors in a vote in which only independent directors participate, and an annual performance evaluation of the committee; and

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• the requirement that its compensation committee be composed entirely of independent directors with a written charter addressing the committee's purpose and responsibilities and an annual performance evaluation of the committee.

Following this offering, we intend to utilize certain of these exemptions. As a result, we do not expect that the nominating and corporate governance committee will consist entirely of independent directors upon the consummation of the offering. Accordingly, you will not have the same protections afforded to stockholders of companies that are subject to all of the corporate governance requirements of Nasdaq.

***The dual series structure of our common stock and the existing ownership of capital stock by our co-founders and their affiliates have the effect of concentrating voting control with our co-founders and their affiliates for the foreseeable future, which will limit your ability to influence corporate matters.***

Our Series B common stock has ten votes per share, and our Series A common stock, which is the stock we are offering in this initial public offering, has one vote per share. Given the greater number of votes per share attributed to our Series B common stock, our co-founders, who beneficially own all shares of our Series B common stock, will collectively beneficially own shares representing approximately&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; % of the voting power of our outstanding capital stock (or % if the underwriters exercise their option to purchase additional shares of our Series A common stock from the selling stockholders in full) following the completion of this offering. Consequently, the holders of Series B common stock collectively will continue to be able to control a majority of the voting power even if their stock holdings represent as few as approximately&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; % of the outstanding number of shares of our common stock. Further, our co-founders will own shares representing approximately&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; % of the economic interest (or % if the underwriters exercise their option to purchase additional shares of our Series A common stock from the selling stockholders in full) and&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; % of the voting power (or % if the underwriters exercise their option to purchase additional shares of our Series A common stock from the selling stockholders in full) of our outstanding capital stock following this offering and, together with our other executive officers, directors and their affiliates, will own shares representing approximately&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; % of the economic interest (or % if the underwriters exercise their option to purchase additional shares of our Series A common stock from the selling stockholders in full) and &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; % of the voting power (or % if the underwriters exercise their option to purchase additional shares of our Series A common stock from the selling stockholders in full) of our outstanding capital stock following this offering. This concentrated control will limit your ability to influence corporate matters for the foreseeable future. For example, these stockholders will be able to control elections of directors, amendments of our amended and restated certificate of incorporation or amended and restated bylaws, increases to the number of shares available for issuance under our equity incentive plans or adoption of new equity incentive plans and approval of any merger or sale of assets for the foreseeable future. This control may materially adversely affect the market price of our Series A common stock. Additionally, the holders of our Series B common stock may cause us to make strategic decisions or pursue acquisitions that could involve risks to you or may not be aligned with your interests. The holders of our Series B common stock will also be entitled to a separate vote in the event we seek to amend our amended and restated certificate of incorporation to increase or decrease the par value of a class of our common stock or in a

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**Confidential Treatment Requested by Pattern Group Inc.**

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manner that alters or changes the powers, preferences or special rights of the Series B common stock in a manner that affects its holders adversely. Future transfers by holders of Series B common stock will generally result in those shares converting on a 1:1 basis to Series A common stock, which will have the effect, over time, of increasing the relative voting power of those holders of Series B common stock who retain their shares in the long-term, which may include our co-founders and their affiliates. For information about our dual series structure, see the section titled "Description of Capital Stock."

**Risks Related to this Offering and Ownership of Our Series A Common Stock**

***The initial public offering price of our Series A common stock may not be indicative of the market price of our Series A common stock after this offering. There has been no prior market for our Series A common stock. An active market may not develop or be sustainable, and investors may be unable to resell their shares at or above the initial public offering price.***

There has been no public market for our Series A common stock prior to this offering. The initial public offering price for our Series A common stock was determined through negotiations between the representatives of the underwriters and us and may vary from the market price of our Series A common stock following the completion of this offering. An active or liquid market in our Series A common stock may not develop upon completion of this offering or, if it does develop, it may not be sustainable. In the absence of an active trading market for our Series A common stock, you may not be able to resell those shares at or above the initial public offering price or at all. We cannot predict the prices at which our Series A common stock will trade.

***We cannot predict the effect our dual series structure may have on the market price of our Series A common stock.***

We cannot predict whether our dual series structure will result in a lower or more volatile market price of our Series A common stock, in adverse publicity or other adverse consequences. Certain investors, including large institutional investors, may prefer companies that do not have multiple share classes or may have investment guidelines that preclude them from investing in companies that have multiple share classes. In addition, certain index providers have previously implemented, and may in the future determine to implement, restrictions on including companies with multiple class share in certain of their indices. For example, from July 2017 to April 2023, S&P Dow Jones excluded companies with multiple share classes from the S&P Composite 1500 (composed of the S&P 500, S&P MidCap 400 and S&P SmallCap 600). Indices have discretion to reassess and implement such policies with respect to multi-class differing voting right structures. Under any such policies, our dual series structure of our common stock would make us ineligible for inclusion in any of these indices. As a result, the market price of our Series A common stock could be materially adversely affected.

***Provisions in our charter documents and under Delaware law could make an acquisition of our company more difficult, limit attempts by our stockholders to replace or remove our current board of directors and limit the trading price of our Series A common stock.***

Provisions in our amended and restated certificate of incorporation and amended and restated bylaws may have the effect of deterring hostile takeovers and delaying or preventing a change in control of our board of directors or management team. Our amended and restated certificate of incorporation and amended and restated bylaws, which became effective immediately following the effectiveness of the registration statement of which this prospectus forms a part, include provisions that:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• provide that, except with regard to directors nominated by Mr. Wright and Ms. Alder, vacancies on our board of directors shall be filled only by a majority of directors then in office, even though less than a quorum, or by a sole remaining director;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• provide that our directors can be removed for cause only, once Mr. Wright and Ms. Alder no longer controls 50% of the voting power of our capital stock;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• provide that, once Mr. Wright and Ms. Alder no longer controls 50% of the voting power of our capital stock, any action required or permitted to be taken by the stockholders must be effected at a duly called

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**Confidential Treatment Requested by Pattern Group Inc.**

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annual or special meeting of stockholders and may not be effected by any consent in writing in lieu of a meeting of such stockholders;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• specify that, once Mr. Wright and Ms. Alder no longer control 50% of the voting power of our capital stock, special meetings of our stockholders can be called only by our board of directors or the Chairman of our board of directors (prior to such time, special meetings of our stockholders shall be called by our board of directors, the Chairman of our board of directors or our Secretary at the request of our co-founders who hold more than 50% of the voting power of our outstanding capital stock);

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• provide that our board of directors will be classified into three classes of directors with staggered three-year terms;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• provide that the board of directors is expressly authorized to alter or repeal our amended and restated bylaws;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• authorize the issuance of "blank check" preferred stock that our board of directors could use to implement a stockholder rights plan;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• do not give the holders of our common stock cumulative voting rights with respect to the election of directors, which means that the holders of a majority of the voting power of our outstanding shares of common stock can elect all directors standing for election;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• provide for a dual series common stock structure which will provide our co-founders with significant influence over all matters requiring stockholder approval, including the election of directors and significant corporate transactions, such as a merger or other sale of our company or assets; and

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• contain advance notice procedures for stockholders seeking to bring business before our annual meeting of stockholders or to nominate candidates for election as directors at our annual meeting of stockholders.

Moreover, Section 203 of the Delaware General Corporation Law ("DGCL") may deter, delay or prevent a change in control of our company. Section 203 imposes certain restrictions on mergers, asset sales or other transactions between us and holders of 15% or more of our common stock. See the section titled "Description of Capital Stock" for additional information.

***Our amended and restated bylaws to be effective immediately following the completion of this offering designate specific courts as the sole and exclusive forum for certain disputes that may be initiated by our stockholders, which could limit our stockholders' ability to obtain a favorable judicial forum for disputes with us or our directors, officers or employees.***

Pursuant to our amended and restated bylaws that will be effective immediately following the completion of this offering, unless we consent in writing to the selection of an alternative forum, the Court of Chancery of the State of Delaware will be the sole and exclusive forum for state law claims for (i) any derivative action or proceeding brought on our behalf, (ii) any action asserting a claim of, or a claim based on, a breach of a fiduciary duty owed by any current or former director, officer or other employee of ours to us or our stockholders, (iii) any action asserting a claim pursuant to any provision of the DGCL, our amended and restated certificate of incorporation or our amended and restated bylaws or as to which the DGCL confers jurisdiction on the Court of Chancery of the State of Delaware or (iv) any action asserting a claim governed by the internal affairs doctrine (collectively, the "Delaware Forum Provision"). The Delaware Forum Provision does not apply to any causes of action arising under the Securities Act or the Exchange Act, or to any claim for which the federal courts have exclusive jurisdiction. Our amended and restated bylaws will further provide that unless we consent in writing to the selection of an alternative forum, the federal district courts of the United States will be the sole and exclusive forum for resolving any complaint asserting a cause of action arising under the Securities Act or the Exchange Act and the respective rules and regulations promulgated thereunder ("Federal Forum Provision"). In addition, our amended and restated bylaws will provide that any person or entity purchasing or otherwise acquiring any interest in shares of our common stock is deemed to have notice of and consented to the Delaware Forum Provision and the Federal Forum Provision; provided,

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**Confidential Treatment Requested by Pattern Group Inc.**

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however, that stockholders cannot and will not be deemed to have waived our compliance with the federal securities laws and the rules and regulations thereunder.

***We may invest or spend the proceeds of this offering in ways with which you may not agree or in ways that may not yield a return.***

We currently intend to use the net proceeds from this offering primarily for working capital and other general corporate purposes and to fund our growth strategies discussed in this prospectus, including continued investments in our business globally. We may also use a portion of the net proceeds that we receive to acquire or invest in complementary businesses, products, services, technologies or other assets. We do not, however, have any agreements or commitments to enter into any acquisitions or investments at this time. We also intend to use a portion of the net proceeds we receive from this offering to satisfy the anticipated tax withholding and remittance obligations of (i) approximately $&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; million related to the settlement of our outstanding RSUs in connection with this offering, based on 12,140,354 RSUs outstanding for which the service-based vesting condition has been satisfied as of March 31, 2025 and (ii) approximately $&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; million related to the settlement of our Milestone RSUs in connection with this offering, based on 1,259,023 Milestone RSUs outstanding for which we expect the milestone-based and liquidity-based vesting conditions will be satisfied in connection with this offering. Our management will have considerable discretion in the application of the net proceeds, and you will not have the opportunity, as part of your investment decision, to assess whether the proceeds are being used appropriately. The net proceeds may be used for purposes that do not increase the value of our business or increase the risks to you, which could cause the price of our stock to decline. Until net proceeds are used, they may be placed in investments that do not produce significant income or that may lose value.

***We anticipate incurring substantial tax obligations on the initial settlement of our outstanding RSUs and Milestone RSUs in connection with this offering. The manner in which we fund these tax liabilities may have an adverse effect on our financial condition and may further dilute our stockholders.***

In light of the large number of RSUs and Milestone RSUs that will initially settle in connection with this offering, we anticipate that we will expend substantial funds, primarily using net proceeds from this offering, to satisfy tax withholding and remittance obligations. The RSUs granted prior to the date of this prospectus vest upon the satisfaction of service and liquidity-based conditions. The Milestone RSUs vest upon the satisfaction of the service-based, milestone-based and the liquidity-based conditions. With respect to the RSUs, the service-based condition is generally satisfied over a period of four years. With respect to the Milestone RSUs, the service-based requirement will be achieved if Mr. Wright continues his Required Service Relationship through our achievement of both the milestone-based and liquidity-based requirements.The liquidity-based condition is satisfied on the earlier of our change in control, as defined in the 2019 Plan, or our initial public offering (which would include this offering), in each case prior to the expiration date. As a result, such RSUs that have previously satisfied the service-based condition and the Milestone RSUs that satisfy the milestone-based and liquidity-based conditions in connection with

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this offering will fully vest in connection with the effectiveness of the registration statement of which this prospectus forms a part. In connection with the settlement of these RSUs and Milestone RSUs, we plan to withhold certain shares underlying RSUs and Milestone RSUs and remit income taxes on behalf of the holders of such RSUs and Milestone RSUs at applicable statutory tax withholding rates based on the initial public offering price per share in this offering. See the section titled "Use of Proceeds."

Based on the number of RSUs for which the service-based condition was fully satisfied on or before December 31, 2024, and assuming (i) that the value of our Series A common stock at the time of settlement was equal to the assumed initial public offering price of $&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; per share, the midpoint of the price range set forth on the cover page of this prospectus, and (ii) a&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; % tax withholding rate for the RSUs, we estimate that our tax liability on the settlement date for these RSUs will be approximately $&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; million in the aggregate. Accordingly, we would expect to deliver an aggregate of approximately&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; shares of our Series A common stock to RSU holders after withholding an aggregate of approximately&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; shares of our Series A common stock. The amount of these tax liabilities and withholdings could be higher or lower, depending on, among other things, the actual price of shares of our Series A common stock sold in this offering, the actual tax withholding rates and the actual number of RSUs for which the service-based condition has been satisfied on the settlement or vesting date (after accounting for forfeitures prior to the settlement or vesting date). As a result, depending on these factors, we may need to use existing cash, cash equivalents and short-term investments to fund a portion of these tax withholding and remittance obligations.

***You will incur immediate and substantial dilution in the net tangible book value of the Series A common stock that you purchase in this offering.***

The initial public offering price of our Series A common stock is substantially higher than the pro forma net tangible book value per share of our Series A common stock. Therefore, if you purchase shares of our Series A common stock in this offering, you will pay a price per share that substantially exceeds our pro forma net tangible book value per share after this offering. You will experience immediate dilution of $&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; per share, representing the difference between our pro forma net tangible book value per share after giving effect to this offering and the initial public offering price. See the section titled "Dilution" for more detail, including the calculation of the pro forma net tangible book value per share of our Series A common stock.

In addition, following this offering, any common stock that we issue under our existing equity incentive plans or other equity incentive plans that we may adopt in the future would dilute the percentage ownership held by the investors who purchase shares of our Series A common stock in this offering. Also, in the future, we may also issue securities in connection with investments, acquisitions or capital raising activities. In particular, the number of shares of our Series A common stock issued in connection with an investment or acquisition or to raise additional equity capital could constitute a material portion of our then-outstanding shares of our Series A common stock. Any such issuance of additional securities in the future may result in additional dilution to you or may adversely impact the price of our Series A common stock.

***A significant portion of our total outstanding shares may be sold into the public market in the near future, which could cause the market price of our Series A common stock to drop significantly.***

Sales of a substantial number of our shares in the public market could occur at any time after the expiration of the&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;-day contractual lock-up period described in the "Underwriting" section of this prospectus. These sales, or the market perception that the holders of a large number of shares intend to sell shares, could significantly reduce the market price of the shares of our Series A common stock and the market price could decline below the initial public offering price. We cannot predict the effect, if any, that future public sales of these securities or the availability of these securities for sale will have on the market price of the shares of our Series A common stock. If the market price of the shares of our Series A common stock was to drop as a result, this might impede our ability to raise additional capital and might cause remaining stockholders to lose all or part of their investments.

After the closing of this offering, we will have&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; shares of our Series A common stock and&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; shares of our Series B common stock outstanding. This includes&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; shares of our Series A common stock that we are selling in this offering and the conversion of &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; shares of Series B common stock

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into&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; shares of Series A common stock in connection with the sale of shares in this offering by the selling stockholders, assuming no exercise by the underwriters of their option to purchase shares of Series A common stock from the selling stockholders in this offering, which may be resold in the public market immediately. Our co-founders are the holders of all of our outstanding shares of Series B common stock, collectively representing&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; % of our outstanding shares on a fully-diluted basis and our directors, executive officers and employees are the holders of&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; shares of Series A common stock, collectively representing&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; % of our outstanding shares on a fully-diluted basis, have agreed with the underwriters that, subject to limited exceptions, for a period of&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; days after the date of this prospectus, they will not directly or indirectly offer, pledge, sell, contract to sell, grant any option to purchase or otherwise dispose of any share of Series A common stock or Series B common stock or any securities convertible into or exercisable or exchangeable for such shares, in any manner transfer all or a portion of the economic consequences associated with the ownership of our Series A common stock or Series B common stock or cause a registration statement or prospectus relating to shares of our Series A common stock or Series B common stock to be filed without the prior written consent of the designated representative of the underwriters, who may, in their sole discretion and at any time without notice, release all or any portion of the shares subject to these lock-up agreements. Following the expiration of the&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; -day period, the shares of Series A common stock issuable upon conversion of the Series B common stock that will be outstanding immediately following completion of this offering will be available for sale in the public markets subject to restrictions under applicable securities laws.

Moreover, after this offering, certain of our stockholders will have certain rights to require us to file registration statements in the United States covering their shares or to include their shares in registration statements or prospectuses that we may file for ourselves or on behalf of other stockholders, subject to some conditions and the lock-up agreements described above.

Further, we cannot predict the size of future issuances of our Series A common stock or the effect, if any, that future issuances and sales of our Series A common stock will have on the market price of our Series A common stock. Sales of substantial amounts of our shares, or the perception that such sales could occur, may adversely affect prevailing market prices for our Series A common stock.

***We do not intend to pay dividends for the foreseeable future.***

We have never declared or paid any dividends on our securities. We do not have any present intention to pay cash dividends on shares of our Series A common stock, and we do not anticipate paying any cash dividends on shares of our Series A common stock in the foreseeable future. We currently intend to invest our future earnings, if any, to fund our growth. Any future determination as to the declaration and payment of dividends, if any, will be at the discretion of our board of directors and will depend on our financial condition, operating results, contractual restrictions, capital requirements, business prospects and other factors our board of directors may deem relevant. As a result, stockholders must rely on sales of their Series A common stock after price appreciation as the only way to realize any future gains on their investment.

***The trading price of our Series A common stock may be volatile, and you could lose all or part of your investment.***

The trading price of our Series A common stock following this offering is likely to be volatile and could be subject to fluctuations in response to various factors, some of which are beyond our control. These fluctuations could cause you to lose all or part of your investment in our Series A common stock since you might be unable to sell your shares at or above the price you paid in this offering. Factors that could cause fluctuations in the trading price of our Series A common stock include the following:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• price and volume fluctuations in the overall stock market from time to time;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• volatility in the trading prices and trading volumes of technology stocks;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• changes in operating performance and stock market valuations of other technology companies generally or those in our industry in particular;

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&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• number of shares of our Series A common stock made available for trading;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• sales of shares of our Series A common stock by us or our stockholders;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• changes in the pricing of our solutions;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• failure of securities analysts to maintain coverage of us, changes in financial estimates by securities analysts who follow our company or our failure to meet these estimates or the expectations of investors;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• the financial projections we may provide to the public, any changes in those projections or our failure to meet those projections;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• announcements by us or our competitors of new solutions, services, products or platform features;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• the public's reaction to our press releases, other public announcements and filings with the SEC;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• rumors and market speculation involving us or other companies in our industry;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• actual or anticipated changes in our results of operations or fluctuations in our results of operations;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• actual or anticipated developments in our business, our competitors' businesses or the competitive landscape generally;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• litigation involving us, our industry or both, or investigations by regulators into our operations or those of our competitors;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• actual or perceived privacy or security breaches or other incidents;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• developments or disputes concerning our intellectual property or other proprietary rights;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• announced or completed acquisitions of businesses, services or technologies by us or our competitors;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• new laws or regulations or new interpretations of existing laws or regulations applicable to our business in the United States or globally;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• changes in accounting standards, policies, guidelines, interpretations or principles;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• any significant change in our management;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• expiration of lock-up agreements and market stand-off provisions;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• general economic conditions and slow or negative growth of our markets;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• other events or factors, including those resulting from war, incidents of terrorism, natural disasters, public health concerns or epidemics, such as pandemics, natural disasters or responses to these events; and

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• our anticipated uses of net proceeds from this offering.

In addition, in the past, following periods of volatility in the overall market and the market price of a particular company's securities, securities class action litigation has often been instituted against these companies. This litigation, if instituted against us, could result in substantial costs and a diversion of our management's attention and resources.

Our business and financial performance may differ from any projections that we disclose or any information that may be attributed to us by third parties.

From time to time, we will provide guidance via public disclosure regarding our projected business or financial performances. However, any such projections involve risks, assumptions and uncertainties, and our actual results

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**Confidential Treatment Requested by Pattern Group Inc.**

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could differ materially from such projections. Factors that could cause or contribute to such differences include, but are not limited to, those identified in this section, some or all of which are not predictable or within our control.

Other unknown or unpredictable factors also could adversely impact our performance, and we undertake no obligation to update or revise any projections, whether as a result of new information, future events or otherwise, except as may be required by law. In addition, various news sources, bloggers and other publishers often make statements regarding our historical or projected business or financial performances, and we cannot assure you of the reliability of any such information even if it is attributed directly or indirectly to us.

***If securities or industry analysts do not publish research or reports about our business, or publish negative reports about our business, our share price and trading volume could decline.***

The trading market for our Series A common stock will depend in part on the research and reports that securities or industry analysts publish about us or our business, our market and our competitors. Securities or industry analysts do not currently provide coverage of our Series A common stock, and we cannot assure you that any securities or industry analysts will adequately provide research coverage of our Series A common stock after the listing of our Series A common stock on&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; . We do not have any control over these analysts. If one or more of the analysts who cover us downgrade our shares or change their opinion of our shares, our share price would likely decline. If one or more of these analysts cease coverage of our company or fail to regularly publish reports on us, we could lose visibility in the financial markets, which could cause our share price or trading volume to decline.

**General Risks**

***Our corporate culture has contributed to our success, and if we cannot maintain this culture as we grow, we could lose the innovation, creativity and teamwork fostered by our culture, and our business may be harmed.***

We believe that an important contributor to our success to date has been our corporate culture, which we believe fosters innovation, teamwork and passion for our brand. Other than our executive officers, as a result of our growth, most of our employees have been with us for fewer than two years. As we continue to grow and develop the infrastructure of a public company, we must effectively integrate, develop and motivate a growing number of new employees, including employees in international markets. As a result, we may find it difficult to maintain important aspects of our corporate culture, which could limit our ability to innovate and operate effectively. Any failure to preserve our culture could also negatively affect our ability to retain and recruit personnel, continue to perform at current levels or execute on our business strategy.

***The effects of natural disasters, terrorism, acts of war and public health issues may adversely affect our business.***

Natural disasters, including earthquakes, hurricanes, floods and tornadoes could affect warehouse operations and the products we sell. Our operations, including warehouse operations, may also be vulnerable to damage or interruption from power loss, telecommunications failures, fires, vandalism and similar events. If our warehouses were affected by such disasters, we would incur substantial losses. While many of these losses may be recoverable through our insurance policies, our revenues could be affected in the short term as a result. In addition, acts of terrorism, acts of war and military action both in the United States and abroad can have a significant effect on economic conditions and may negatively affect our ability to purchase merchandise from brand partners for sale to our customers. Public health issues, such as flu or other pandemics, whether occurring in the United States or abroad, could disrupt our operations and result in a significant part of our workforce being unable to operate or maintain our infrastructure or perform other tasks necessary to conduct our business. Additionally, public health issues may disrupt, or have an adverse effect on, our brand partners' operations, our operations, marketplaces' operations, our customers or consumer demand. Our ability to mitigate the adverse effect of these events depends, in part, upon the effectiveness of our disaster preparedness and response planning as well as business continuity planning. However, we cannot be certain that our plans will be adequate or implemented properly in the event of an actual disaster. We may be required to suspend operations in some or all our locations, which could have a material adverse effect on our business, financial condition and results of operations. Any significant declines in public safety or uncertainties regarding future economic prospects that affect consumer spending habits could have a material adverse effect on customer purchases of our brand partners' products.

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***Climate change may have a long-term impact on our business.***

We recognize that there are inherent climate-related risks wherever business is conducted. Any of our primary office locations may be vulnerable to the adverse effects of climate change. For example, our offices globally may experience climate-related events at an increasing frequency, including drought, water scarcity, heat waves, cold waves, wildfires and resultant air quality impacts and power shutoffs associated with wildfire prevention. While this danger currently has a low-assessed risk of disrupting our normal business operations, it has the potential to disrupt employees' abilities to commute to work or to work from home and stay connected effectively. Furthermore, it is more difficult to mitigate the impact of these events on our employees to the extent they work from home. Climate-related events, including the increasing frequency of extreme weather events and their impact on the critical infrastructure of the United States and other major regions, have the potential to disrupt our business, our brand partners and/or marketplaces, and may cause us to experience higher attrition, losses and additional costs to maintain or resume operations. Regulatory developments, changing market dynamics and stakeholder expectations regarding climate change may impact our business, financial condition and results of operations.

***Our cash could be adversely affected if the financial institutions in which we hold our cash fail.***

We maintain domestic cash deposits in Federal Deposit Insurance Corporation ("FDIC") insured banks. The domestic bank deposit balances may exceed the FDIC insurance limits. These balances could be impacted if one or more of the financial institutions in which we deposit monies fails or is subject to other adverse conditions in the financial or credit markets.

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**Confidential Treatment Requested by Pattern Group Inc.**

**Pursuant to 17 C.F.R. Section 200.83**

**SPECIAL NOTE REGARDING FORWARD-LOOKING STATEMENTS**

This prospectus contains forward-looking statements within the meaning of the federal securities laws, which are statements that involve substantial risks and uncertainties. Forward-looking statements generally relate to future events or our future financial or operating performance. All statements other than statements of historical fact included in this prospectus, including statements regarding our strategy, future operations, financial position, estimated revenues and losses, projected costs, prospects, plans and objectives of management are forward-looking statements. In some cases, you can identify forward-looking statements because they contain words such as "may," "will," "shall," "should," "expects," "plans," "anticipates," "could," "intends," "target," "projects," "contemplates," "believes," "estimates," "predicts," "potential" or "continue" or the negative of these words or other similar terms or expressions that concern our expectations, strategy, plans or intentions. Forward-looking statements contained in this prospectus include, but are not limited to, statements about:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• our expectations regarding our revenue, costs and other operating results;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• the estimated size of our addressable market opportunity;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• the growth rate of the markets in which we compete;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• our ability to grow existing and attract new brand partners;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• our ability to expand and enhance our platform;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• our ability to launch and monetize incremental solutions;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• our ability to expand into global geographies;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• our ability to utilize AI successfully in our current and future solutions;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• our anticipated capital expenditures and our estimates regarding our capital requirements;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• investments in our selling and marketing efforts;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• our ability to compete effectively with existing competitors and new market entrants;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• our reliance on our senior management and our ability to identify, recruit and integrate strategic personnel hires;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• our ability to effectively manage our growth;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• our intended use of the net proceeds from this offering;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• our ability to provide a quality purchasing experience for our consumers;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• our ability to purchase products from our brand partners (including expanding product selection);

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• our ability to enhance and innovate our technology;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• investments in technology;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• our ability to expand into global geographies and marketplaces;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• industry trends and other macroeconomic factors, such as fluctuating interest rates and rising inflation, including the impact on consumer spending; and

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• the impact of general, business and geopolitical conditions worldwide on our industry, business and results of operations.

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We caution you that the foregoing list may not contain all of the forward-looking statements made in this prospectus.

We have based the forward-looking statements contained in this prospectus primarily on management's current beliefs and our current expectations and projections about future events and trends that we believe may affect our business, results of operations, financial condition and prospects. The outcome of the events described in these forward-looking statements is subject to risks, uncertainties and other factors described in the section titled "Risk Factors" and elsewhere in this prospectus. Moreover, we operate in a very competitive and rapidly changing environment. New risks and uncertainties emerge from time to time, and it is not possible for us to predict all risks and uncertainties that could have an impact on the forward-looking statements contained in this prospectus. The results, events and circumstances reflected in the forward-looking statements may not be achieved or occur, and actual results, events or circumstances could differ materially from those described in the forward-looking statements.

The forward-looking statements made in this prospectus relate only to events as of the date on which the statements are made. We undertake no obligation to update any forward-looking statements made in this prospectus to reflect events or circumstances after the date of this prospectus or to reflect new information or the occurrence of unanticipated events, except as required by law. We may not actually achieve the plans, intentions or expectations disclosed in our forward-looking statements and you should not place undue reliance on our forward-looking statements. Our forward-looking statements do not reflect the potential impact of any future acquisitions, mergers, dispositions, joint ventures or investments we may make.

In addition, statements that "we believe" and similar statements reflect our beliefs and opinions on the relevant subject. These statements are based upon information available to us as of the date of this prospectus, and while we believe such information forms a reasonable basis for such statements, such information may be limited or incomplete, and our statements should not be read to indicate that we have conducted an exhaustive inquiry into, or review of, all potentially available relevant information. These statements are inherently uncertain, and you are cautioned not to unduly rely upon these statements.

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**Confidential Treatment Requested by Pattern Group Inc.**

**Pursuant to 17 C.F.R. Section 200.83**

**INDUSTRY AND MARKET DATA**

This prospectus contains statistical data, estimates and forecasts regarding our industry and the markets in which we operate that are based on various sources, including independent industry publications and other publicly available information, as well as other information based on our internal sources. Some data and other information contained in this prospectus are also based on management's estimates and calculations, which are derived from our review and interpretation of internal and independent sources. Data regarding the industries in which we compete and our market position and market share within these industries is inherently imprecise and is subject to significant business, economic and competitive uncertainties beyond our control, but we believe it generally indicates size, position and market share within this industry. While we believe such information is reliable, we have not independently verified any third-party information. While we believe our internal company research and estimates are reliable, such research and estimates have not been verified by any independent source. In addition, assumptions and estimates of our and our industry's future performance are necessarily subject to a high degree of uncertainty and risk due to a variety of factors, including those described in the section titled "Risk Factors." These and other factors could cause our future performance to differ materially from our assumptions and estimates, and you are cautioned not to give undue weight to these estimates. As a result, you should be aware that market, ranking and other similar industry data included in this prospectus, and estimates and beliefs based on that data, may not be reliable. Neither we nor the underwriters can guarantee the accuracy or completeness of any such information contained in this prospectus. The content of, or accessibility through, the below sources and websites, except to the extent specifically set forth in this prospectus, does not constitute a portion of this prospectus and is not incorporated herein and any websites are an inactive textual reference only.

The sources of the statistical data, estimates and market and industry data contained in this prospectus are identified by superscript notations and are provided below:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• Euromonitor International, Retail: Euromonitor from trade sources/national statistics – October 2024;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• Search Engine Journal, Amazon's Search Engine Ranking Algorithm: What Marketers Need to Know – August 2018, https://www.searchenginejournal.com/amazon-search-engine-ranking-algorithm-explained/;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• eMarketer, Industry KPIs: Advertising on Amazon is getting more expensive, but ROAS is holding steady – March 2024;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• Factset, Ecommerce Intelligence (ID # FI3550US), for the three years ended December 31, 2023 (Accessed on November 21, 2024);

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• eMarketer, US Ecommerce Forecast 2024: Retail Sales Will Chart a Modest and Steady Course Through Ongoing Headwinds – August 2024, https://content-naf.emarketer.com/us-ecommerce-forecast-2024;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• eMarketer, Over 60% of US online shoppers start their product search on Amazon – August 2022;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• eMarketer, US Ecommerce by Category 2024: A Slowdown in Growth Reshapes the Landscape – February 2024;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• Insider Intelligence (eMarketer), Share of users purchasing on TikTok in the United States from 2020 to 2023 – August 2022 (ID #1416784);

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• Retail Dive, Thirty percent of consumers use more than three commerce channels: Study, https://www.retaildive.com/ex/mobilecommercedaily/thirty-percent-of-consumers-use-more-than-three-commerce-channels;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• Incopro, Counterfeit products are endemic – and it is damaging brand value – July 2019, https://www.incoproip.com/wp-content/uploads/2020/02/Incopro-Market-Research-Report.pdf;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• Market Pulse, Top Amazon Marketplace Sellers, https://www.marketplacepulse.com/top-amazon-usa-sellers (Accessed on November 3, 2024);

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• eMarketer, Marketplace Pulse, Amazon Share of US Retail Sales, 2023, https://www.emarketer.com/chart/266156/amazon-share-of-us-retail-sales-2023-of-total (Accessed on March 12, 2025); and

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**Confidential Treatment Requested by Pattern Group Inc.**

**Pursuant to 17 C.F.R. Section 200.83**

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• ECDB, ByteDance on the Fast Track With a High Level of Revenue and Strong Growth – January 28, 2025, https://ecommercedb.com/insights/the-top-5-global-ecommerce-companies/5053.

Information in this prospectus on the ecommerce industry is from independent market research carried out by Euromonitor International Limited but should not be relied upon in making, or refraining from making, any investment decision.

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**Confidential Treatment Requested by Pattern Group Inc.**

**Pursuant to 17 C.F.R. Section 200.83**

**USE OF PROCEEDS**

We estimate that the net proceeds from the sale of shares of our Series A common stock that we are selling in this offering will be approximately $&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; million (or approximately $&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; million if the underwriters' option to purchase additional shares is exercised in full), based upon an assumed initial public offering price of $&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; per share, which is the midpoint of the estimated offering price range set forth on the cover page of this prospectus, and after deducting estimated underwriting discounts and commissions and estimated offering expenses payable by us. We will not receive any proceeds from the sale of the shares of Series A common stock being offered by the selling stockholders, including upon the sale of shares of Series A common stock by the selling stockholders if the underwriters exercise their option to purchase additional shares in full.

Each $1.00 increase or decrease in the assumed initial public offering price of $&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; per share, which is the midpoint of the estimated offering price range set forth on the cover page of this prospectus, would increase or decrease, as applicable, the net proceeds that we receive from this offering by approximately $&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; million, assuming that the number of shares of Series A common stock offered by us, as set forth on the cover page of this prospectus, remains the same and after deducting the estimated underwriting discounts and commissions and estimated offering expenses payable by us. Similarly, each increase or decrease of 1.0 million in the number of shares of our Series A common stock offered by us would increase or decrease the net proceeds that we receive from this offering by approximately $&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; million, assuming the assumed initial public offering price remains the same and after deducting the estimated underwriting discounts and commissions and estimated offering expenses payable by us.

The principal purposes of this offering are to increase our capitalization, increase our financial flexibility, create a public market for our Series A common stock, and enable access to the public equity markets for our stockholders and us. We currently intend to use the net proceeds that we will receive from this offering for working capital and other general corporate purposes and to fund our growth strategies discussed in this prospectus, including continued investments in our business globally. We may also use a portion of the net proceeds that we receive to acquire or invest in complementary businesses, products, services, technologies or other assets. We do not, however, have any agreements or commitments to enter into any acquisitions or investments at this time.

We intend to use a portion of the net proceeds we receive from this offering to satisfy the anticipated tax withholding and remittance obligations of (i) approximately $&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; million related to the settlement of our outstanding RSUs in connection with this offering, based on 12,140,354 RSUs outstanding for which the service-based vesting condition has been satisfied as of March 31, 2025 and (ii) approximately $&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; million related to the settlement of our Milestone RSUs in connection with this offering, based on 1,259,023 Milestone RSUs outstanding for which we expect the milestone-based and liquidity-based vesting conditions will be satisfied in connection with this offering, based on the assumed initial public offering price of $&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; per share, which is the midpoint of the estimated offering price range set forth on the cover page of this prospectus, and an assumed&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; % tax withholding rate. Each $1.00 increase or decrease in the assumed initial public offering of $&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; price per share, which is the midpoint of the estimated offering price range set forth on the cover page of this prospectus, would increase or decrease the amount we would be required to pay to satisfy our tax withholding and remittance obligations related to the RSU and Milestone RSU settlement by approximately $&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; million. In addition, a 1% increase or decrease in the tax withholding rate would increase or decrease the amount of tax withholding and remittance obligations related to the RSU and Milestone RSU settlement by $&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; million.

The expected use of net proceeds from this offering represents our intentions based upon our present plans and business conditions. We cannot specify with certainty the particular uses of the net proceeds that we will receive from this offering or the amounts we actually spend on the uses set forth above. The timing and amount of our actual expenditures will be based on many factors, including cash flows from operations and the anticipated growth of our business. Pending the use of proceeds from this offering as described above, we plan to invest a portion of the net proceeds that we receive in this offering in short-term and intermediate-term interest-bearing obligations, investment-grade investments, certificates of deposit or direct or guaranteed obligations of the U.S. government. Our management will have broad discretion in the application of the net proceeds from this offering and investors will be relying on the judgment of our management regarding the application of the proceeds.

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**Confidential Treatment Requested by Pattern Group Inc.**

**Pursuant to 17 C.F.R. Section 200.83**

**DIVIDEND POLICY**

We have never declared or paid any cash dividend on our capital stock. We currently intend to retain any future earnings, if any, to fund the development and expansion of our business and do not expect to pay any dividends in the foreseeable future. Any future determination to declare cash dividends will be made at the discretion of our board of directors, subject to applicable laws, and will depend on a number of factors, including our financial condition, results of operations, capital requirements, any contractual restrictions, general business conditions and other factors that our board of directors may deem relevant.

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**Confidential Treatment Requested by Pattern Group Inc.**

**Pursuant to 17 C.F.R. Section 200.83**

**CAPITALIZATION**

The following table sets forth cash and restricted cash, as well as our capitalization, as of March 31, 2025 as follows:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• on an actual basis;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• on a pro forma basis, giving effect to (i) the filing and effectiveness of our amended and restated certificate of incorporation and the adoption of our amended and restated bylaws, (ii) the Reclassification, (iii) the Convertible Preferred Stock Conversion, (iv) the net issuance of&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; shares of our Series A common stock issuable pursuant to the vesting and settlement of RSUs for which the service-based condition was satisfied as of March 31, 2025, and for which we expect the liquidity event condition to be satisfied in connection with this offering, after withholding an aggregate of&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; shares to satisfy associated estimated income tax obligations (based on an assumed&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; % tax withholding rate), (v) the net issuance of&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; shares of our Series A common stock issuable pursuant to the vesting and settlement of Milestone RSUs for which we expect the milestone event and liquidity event conditions to be satisfied in connection with this offering, after withholding an aggregate of&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; shares to satisfy associated estimated income tax obligations (based on an assumed&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; % tax withholding rate), (vi) the increase in other accrued liabilities and an equivalent decrease in additional paid-in capital in connection with tax withholding and remittance obligations related to such RSUs and Milestone RSUs, based upon the initial public offering price of $&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; per share, which is the midpoint of the estimated offering price range set forth on the cover page of this prospectus, all of which will occur immediately prior to the completion of this offering, as if such actions had occurred on March 31, 2025, (vii) $&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; million of cumulative share-based compensation expense related to the RSUs for which the service-based condition was satisfied as of March 31, 2025 and for which we expect the liquidity event condition to be satisfied in connection with this offering and (viii) $&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; million of cumulative share-based compensation expense related to the Milestone RSUs for which we expect the milestone event and liquidity event conditions to be satisfied in connection with this offering; and

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• on a pro forma as adjusted basis, giving effect to (i) the pro forma adjustments set forth above, (ii) the conversion of &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; shares of our Series B common stock held by the selling stockholders into &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; shares of our Series A common stock in connection with this offering and (iii) the sale and issuance by us of&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; shares of our Series A common stock and the sale by the selling stockholders of &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; shares of our Series A common stock in this offering, based on an assumed initial public offering price of $&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; per share, which is the midpoint of the estimated offering price range set forth on the cover page of this prospectus, after deducting the estimated underwriting discounts and commissions and estimated offering expenses payable by us.

The pro forma as adjusted information set forth in the table below is illustrative only and will be adjusted based on the actual initial public offering price and other final terms of this offering. You should read this table together with our consolidated financial statements and related notes and the section titled "Management's Discussion and Analysis of Financial Condition and Results of Operations" that are included elsewhere in this prospectus.

------

**Confidential Treatment Requested by Pattern Group Inc.**

**Pursuant to 17 C.F.R. Section 200.83**

---

| | | | |
|:---|:---|:---|:---|
| | **As of March 31, 2025** | **As of March 31, 2025** | **As of March 31, 2025** |
| **(in thousands, except per share data)** | **Actual** | **Pro Forma** | **Pro Forma as Adjusted** |
| Cash and cash equivalents | $218780 | $&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;  | $&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;  |
| Convertible preferred stock, $0.001 par value, 28,972 shares authorized; 28,966 shares issued and outstanding, actual; no shares authorized, issued and outstanding, pro forma and pro forma as adjusted | $270601 | $ | $ |
| Stockholders' equity: |  |  |  |
| Common stock, $0.001 par value; 140,287 shares authorized, 3,799 shares issued and outstanding, actual; no shares authorized, no shares issued and outstanding, pro forma; no shares authorized, no shares issued and outstanding, pro forma as adjusted | $4 |  |  |
| Preferred stock, $0.001 par value, 88,869 shares authorized, 86,792 shares issued and outstanding, actual;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; shares authorized, no shares issued and outstanding, pro forma and pro forma as adjusted | 86 |  |  |
| Series A common stock, $0.001 par value; shares authorized, issued and outstanding, actual;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; shares authorized, no shares issued and outstanding, pro forma; and&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; shares authorized,&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; shares issued and outstanding, pro forma as adjusted |  |  |  |
| Series B common stock, $&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; par value; no shares authorized, issued and outstanding, actual;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; shares authorized,&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; shares issued and outstanding, pro forma; and&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; shares authorized,&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; shares issued and outstanding, pro forma as adjusted |  |  |  |
| Additional paid-in capital | 2764 |  |  |
| Accumulated other comprehensive loss | (993) |  |  |
| Retained earnings | 129657 |  |  |
| Total stockholders' equity: | 131518 |  |  |
| Total capitalization | $402119 | $&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;  | $&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;  |

---

Each $1.00 increase or decrease in the assumed initial public offering price of $&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; per share, which is the midpoint of the estimated offering price range set forth on the cover page of this prospectus, would increase or decrease, as applicable, our cash and restricted cash, additional paid-in capital, total stockholders' equity (deficit) and total capitalization by approximately $&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; million, assuming that the number of shares offered by us, as set forth on the cover page of this prospectus, remains the same and after deducting the estimated underwriting discounts and commissions and estimated offering expenses payable by us. Similarly, each increase or decrease of 1.0 million shares in the number of shares of our Series A common stock offered by us would increase or decrease, as applicable, our cash and restricted cash, additional paid-in capital, total stockholders' equity (deficit) and total capitalization by approximately $&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; million, assuming the assumed initial public offering price remains the same, and after deducting underwriting discounts and commissions and estimated offering expenses payable by us.

The pro forma column in the table above is based on&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; shares of our Series A common stock and&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; shares of our Series B common stock outstanding as of March 31, 2025, and excludes:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• 6,638,823 shares of our Series A common stock that are issuable in connection with the settlement of RSUs issued pursuant to our 2019 Plan upon the satisfaction of both a service-based condition and a liquidity event condition outstanding as of March 31, 2025, for which the service-based condition was not yet satisfied as of March 31, 2025;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; shares of our Series A common stock that are issuable in connection with the settlement of RSUs upon satisfaction of both a service-based condition and a liquidity event condition that were granted after March 31, 2025;

------

**Confidential Treatment Requested by Pattern Group Inc.**

**Pursuant to 17 C.F.R. Section 200.83**

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• 7,554,138 shares of our Series A common stock that are issuable in connection with the settlement of Milestone RSUs upon satisfaction of certain service-based, liquidity-based and milestone-based requirements;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; shares of our Series A common stock reserved for future issuance under our 2025 Plan, which will become effective on the day prior to the effectiveness of the registration statement of which this prospectus forms a part, including &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; new shares and the number of shares (not to exceed &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; shares) (i) that remain available for grant of future awards under the 2019 Plan, at the time the 2025 Plan becomes effective, which shares will cease to be available for issuance under the 2019 Plan at such time, and (ii) any shares underlying awards granted under the 2019 Plan that are forfeited, cancelled, held back, reacquired or are otherwise terminated; and

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; shares of our Series A common stock reserved for future issuance under our ESPP.

Each of the 2025 Plan and the ESPP provide for annual automatic increases in the number of shares of our Series A common stock reserved thereunder, and the 2025 Plan provides for increases to the number of shares of our Series A common stock that may be granted thereunder based on shares underlying any awards under the 2025 Plan and the 2019 Plan that are forfeited, cancelled or are otherwise terminated, as more fully described in the section titled "Executive Compensation—Employee Benefit and Equity Compensation Plans."

**Series B Preferred Stock Conversion**

The Series B Preferred Stock Conversion reflects the automatic conversion of all 13,215,614 shares of our Series B Preferred Stock into shares of Series A common stock immediately prior to the completion of this offering pursuant to the terms of our amended and restated certificate of incorporation as currently in effect. Each share of Series B Preferred Stock converts into a number of shares of Series A common stock determined by dividing the original issue price of such share by the lesser of (a) the original issue price of such share (subject to certain anti-dilution adjustments) and (b) the initial public offering price per share in this offering discounted by&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; %. As a result, if the initial public offering price is above $&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; per share, the Series B Preferred Stock will convert into Series A common stock on a one-for-one basis. If the initial public offering price is below $&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; per share, each share of Series B Preferred Stock will convert into more than one share of Class A common stock. Based upon the assumed initial public offering price of $&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; per share, the midpoint of the price range set forth on the cover page of this prospectus, the outstanding shares of our Series B Preferred Stock would convert into an aggregate of&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; shares of our Series A common stock. A $1.00 increase in the initial public offering price would decrease the number of shares of Series A common stock issuable upon the conversion of our Series B Preferred Stock by&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; shares, and a $1.00 decrease in the initial public offering price would increase the number of shares of Series A common stock issuable upon the conversion of our Series B Preferred Stock by&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; shares. See Note 9—*Convertible Preferred Stock*, in the section titled "Notes to Consolidated Financial Statements" included elsewhere in this prospectus for additional information regarding our Series B Preferred Stock.

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**Confidential Treatment Requested by Pattern Group Inc.**

**Pursuant to 17 C.F.R. Section 200.83**

**DILUTION**

If you invest in our Series A common stock in this offering, your ownership interest will be diluted to the extent of the difference between the initial public offering price per share of our Series A common stock and the pro forma as adjusted net tangible book value per share of our Series A common stock immediately after this offering. Net tangible book value dilution per share to new investors represents the difference between the amount per share paid by purchasers of shares of Series A common stock in this offering and the pro forma as adjusted net tangible book value per share of Series A common stock immediately after completion of this offering.

Our pro forma net tangible book value as of March 31, 2025 was $&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; million, or $&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; per share, based on the total number of shares of our common stock outstanding as of March 31, 2025, after giving effect to (i) the filing and effectiveness of our amended and restated certificate of incorporation and the adoption of our amended and restated bylaws, (ii) the Reclassification, (iii) the Convertible Preferred Stock Conversion, (iv) the net issuance of&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; shares of our Series A common stock issuable pursuant to the vesting and settlement of RSUs for which the service-based condition was satisfied as of March 31, 2025, and for which we expect the liquidity event condition to be satisfied in connection with this offering, after withholding an aggregate of&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; shares to satisfy associated estimated income tax obligations (based on an assumed&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; % tax withholding rate), (v) the net issuance of&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; shares of our Series A common stock issuable pursuant to the vesting and settlement of Milestone RSUs for which we expect the milestone event and liquidity event conditions to be satisfied in connection with this offering, after withholding an aggregate of&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; shares of our Series A common stock to satisfy associated estimated income tax obligations (based on an assumed&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; % tax withholding rate), (vi) the increase in other accrued liabilities and an equivalent decrease in additional paid-in capital in connection with tax withholding and remittance obligations related to such RSUs and Milestone RSUs, based upon the initial public offering price of $&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; per share, which is the midpoint of the estimated offering price range set forth on the cover page of this prospectus, all of which will occur immediately prior to the completion of this offering, as if such actions had occurred on March 31, 2025, (vii) $&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; million of cumulative share-based compensation expense related to the RSUs for which the service-based condition was satisfied as of March 31, 2025 and for which we expect the liquidity event condition to be satisfied in connection with this offering and (viii) $&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; million of cumulative share-based compensation expense related to the Milestone RSUs for which we expect the milestone event and liquidity event conditions to be satisfied in connection with this offering.

After giving effect to the sale by us of&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; shares of our Series A common stock in this offering at an assumed initial public offering price of $&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; per share, which is the midpoint of the estimated offering price range set forth on the cover page of this prospectus, after deducting estimated underwriting discounts and commissions and estimated offering expenses payable by us, our pro forma as adjusted net tangible book value as of March 31, 2025 would have been $&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; million, or $&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; per share. This represents an immediate increase in pro forma net tangible book value of $&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; per share to our existing stockholders and immediate dilution of $&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; per share to investors purchasing shares of our Series A common stock in this offering. There is no impact on dilution per share to investors participating in this offering as a result of the sale of shares of Series A common stock by the selling stockholders. The following table illustrates this dilution:

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| | |
|:---|:---|
| Assumed initial public offering price per share | $&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;  |
| Historical net tangible book value per share as of March 31, 2025 | $ |
| Increase per share attributable to the pro forma adjustments described |  |
| Pro forma net tangible book value per share as of March 31, 2025 | $ |
| Increase in pro forma net tangible book value per share attributable to new investors in this offering |  |
| Pro forma as adjusted net tangible book value per share immediately after this offering |  |
| Dilution in pro forma net tangible book value per share to new investors in this offering | $&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; |

---

Each $1.00 increase or decrease in the assumed initial public offering price of $&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; per share, which is the midpoint of the estimated offering price range set forth on the cover page of this prospectus, would increase or

------

**Confidential Treatment Requested by Pattern Group Inc.**

**Pursuant to 17 C.F.R. Section 200.83**

decrease, as applicable, our pro forma as adjusted net tangible book value per share to new investors by $&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; , and would increase or decrease, as applicable, dilution per share to new investors in this offering by $&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; , assuming that the number of shares of our Series A common stock offered by us, as set forth on the cover page of this prospectus, remains the same and after deducting estimated underwriting discounts and commissions and estimated offering expenses payable by us and tax withholdings related to the settlement of RSUs and Milestone RSUs. Similarly, each increase or decrease of 1.0 million shares in the number of shares of our Series A common stock offered by us would increase or decrease the total consideration paid by new investors and total consideration paid by all stockholders by $&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; million, assuming the assumed initial public offering price remains the same and after deducting estimated underwriting discounts and commissions and estimated offering expenses payable by us and tax withholdings related to the settlement of RSUs and Milestone RSUs.

If the underwriters exercise their option to purchase additional shares of our Series A common stock from us in full, the pro forma as adjusted net tangible book value per share of our common stock immediately after this offering would be $&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; per share, and the dilution in pro forma net tangible book value per share to new investors in this offering would be $&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; per share.

The following table presents, on a pro forma as adjusted basis as of March 31, 2025, the differences between the existing stockholders and the new investors purchasing shares of our Series A common stock in this offering with respect to the number of shares purchased from us, the total consideration paid or to be paid to us, which includes net proceeds received from the issuance of common stock, and the average price per share paid or to be paid to us at an assumed initial public offering price of $&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; per share, which is the midpoint of the estimated offering price range set forth on the cover page of this prospectus, before deducting estimated underwriting discounts and commissions and estimated offering expenses payable by us:

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| | | | | |
|:---|:---|:---|:---|:---|
| | **Shares Purchased** | **Shares Purchased** | **Total Consideration** | **Average Price per Share** |
| | **Number** | **Percent** | **Percent** | **Average Price per Share** |
| | **(in thousands)** | | | |
| Existing stockholders |  | &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; % | $&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; % | $&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;  |
| Investors purchasing shares of our Series A common stock in this offering |  |  |  |  |
| Total |  | 100% | $100% |  |

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Each $1.00 increase or decrease in the assumed initial public offering price of $&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; per share, which is the midpoint of the estimated offering price range set forth on the cover page of this prospectus, would increase or decrease, as applicable, the total consideration paid by new investors and total consideration paid by all stockholders by approximately $&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; million, assuming that the number of shares of Series A common stock offered by us, as set forth on the cover page of this prospectus, remains the same and after deducting estimated underwriting discounts and commissions and estimated offering expenses payable by us. Similarly, each increase or decrease of 1.0 million shares in the number of shares of our Series A common stock offered by us would increase or decrease the total consideration paid by new investors and total consideration paid by all stockholders by $&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; million, assuming the assumed initial public offering price remains the same and after deducting estimated underwriting discounts and commissions and estimated offering expenses payable by us and tax withholdings related to the settlement of RSUs and Milestone RSUs. In addition, to the extent any outstanding RSUs vest or new awards are granted under our equity compensation plans, new investors will experience further dilution.

Except as otherwise indicated, the above discussion and tables assume no exercise of the underwriters' option to purchase additional shares of Series A common stock from the selling stockholders. Sales by the selling stockholders in this offering will reduce the number of shares held by existing stockholders to&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; , or approximately&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; % of the total shares of common stock outstanding after completion of this offering, and will increase the number of shares held by investors purchasing shares in this offering to&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; , or approximately&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; % of the total shares of common stock outstanding after the completion of this offering.

Except as otherwise indicated, the above discussion and tables assume no exercise of the underwriters' option to purchase additional shares of Series A common stock. If the underwriters exercise their option to purchase

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**Confidential Treatment Requested by Pattern Group Inc.**

**Pursuant to 17 C.F.R. Section 200.83**

additional shares of Series A common stock in full from us, our existing stockholders will own&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; % and our new investors would own&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; % of the total number of shares of our common stock outstanding upon the completion of this offering.

The number of shares of our Series A common stock and Series B common stock that will be outstanding after this offering is based on&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; shares of our Series A common stock and&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; shares of our Series B common stock outstanding as of March 31, 2025, in each case, after giving effect to the Reclassification and the Convertible Preferred Stock Conversion, and the net issuance of Series A common stock issuable pursuant to the vesting and settlement of RSUs for which the service-based condition was satisfied as of March 31, 2025, and excludes:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• 6,638,823 shares of our Series A common stock that are issuable in connection with the settlement of RSUs issued pursuant to our 2019 Plan upon the satisfaction of both a service-based condition and a liquidity event condition outstanding as of March 31, 2025, for which the service-based condition was not yet satisfied as of March 31, 2025;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; shares of our Series A common stock that are issuable in connection with the settlement of RSUs upon satisfaction of both a service-based condition and a liquidity event condition that were granted after March 31, 2025;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• 7,554,138 shares of our Series A common stock that are issuable in connection with the settlement of Milestone RSUs upon satisfaction of certain service-based, liquidity-based and milestone-based requirements;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; shares of our Series A common stock reserved for future issuance under our 2025 Plan, which will become effective on the day prior to the effectiveness of the registration statement of which this prospectus forms a part, including &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; new shares and the number of shares (not to exceed &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; shares) (i) that remain available for grant of future awards under the 2019 Plan, at the time the 2025 Plan becomes effective, which shares will cease to be available for issuance under the 2019 Plan at such time, and (ii) any shares underlying awards granted under the 2019 Plan that are forfeited, cancelled, held back, reacquired or are otherwise terminated; and

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; shares of our Series A common stock reserved for future issuance under our ESPP.

Each of the 2025 Plan and the ESPP provide for annual automatic increases in the number of shares of our Series A common stock reserved thereunder, and the 2025 Plan provides for increases to the number of shares of our Series A common stock that may be granted thereunder based on shares underlying any awards under the 2025 Plan and the 2019 Plan that are forfeited, cancelled or are otherwise terminated, as more fully described in the section titled "Executive Compensation—Employee Benefit and Equity Compensation Plans."

For information on the conversion provisions applicable to our Series B Preferred Stock, see the section titled "Capitalization—Series B Preferred Stock Conversion" included elsewhere in this prospectus.

To the extent that any outstanding RSUs vest or new awards are granted under our equity compensation plans, there will be further dilution to investors participating in this offering.

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**Confidential Treatment Requested by Pattern Group Inc.**

**Pursuant to 17 C.F.R. Section 200.83**

**MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS**

*You should read the following discussion and analysis of our financial condition and results of operations in conjunction with the consolidated financial statements and related notes thereto included elsewhere in this prospectus. The following discussion is intended to help the reader understand our Company, our operations and our present business environment, and contains forward-looking statements that reflect our plans, estimates and beliefs. Our actual results could differ materially from those discussed in the forward-looking statements. Factors that could cause or contribute to these differences include those discussed below and elsewhere in this prospectus, particularly in the sections titled "Special Note Regarding Forward-Looking Statements" and "Risk Factors." Our historical results are not necessarily indicative of the results that may be expected for any period in the future.* 

**Overview**

At Pattern, we are on a mission to help brands accelerate profitable growth on global ecommerce marketplaces. Today, our proprietary technology and on-demand experts operate across more than 60 marketplaces to increase product sales to consumers in more than 100 countries. Utilizing more than 44 trillion data points and sophisticated machine learning and AI models, we strive to optimize and automate key levers of ecommerce growth, including advertising, content creation and management, pricing, forecasting and customer service. The result is a powerful platform that allows brands to navigate the complexity of operating on global ecommerce marketplaces at scale.

Today, our software, with a combined total of 26 issued patents and patents pending, is supported by approximately 350 software engineers, data scientists and other technology professionals who are dedicated to enhancing and innovating upon our technology to further increase our capabilities. We have a team that offers on-demand expertise and capabilities across marketplace management, marketing, fulfillment and brand protection on a global basis. Today, we sell tens of thousands of products from more than 200 brands across different industries and geographies including the Americas, Europe, Australia and Asia. Our current brand partners' industry presence includes health and wellness, beauty and personal care, home and lifestyle, pet, sports and outdoors and consumer electronics.

In the year ended December 31, 2024, we generated revenue of $1,796 million, which represents a CAGR of 35% over the last two years. During the same period, our net income increased $71 million from ($3) million to $68 million. Our Adjusted EBITDA during 2024 was $101 million, which represents a CAGR of 138% over the last two years.

![mda1ba.jpg](mda1ba.jpg)

For the three months ended March 31, 2025, we generated revenue of $540 million, representing an increase of 32% over the three months ended March 31, 2024. During the same period, our net income increased $5 million

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**Confidential Treatment Requested by Pattern Group Inc.**

**Pursuant to 17 C.F.R. Section 200.83**

from $18 million to $23 million. Our Adjusted EBITDA during the three months ended March 31, 2025 was $34 million, representing an increase of 31% over the three months ended March 31, 2024.

Adjusted EBITDA is a non-GAAP financial measure. For additional information about our non-GAAP financial measure, including reconciliations of the non-GAAP financial measure to the most directly comparable financial measure stated in accordance with GAAP, see the section titled below "Key Business Metric and Non-GAAP Financial Measure."

**Our Business Model**

We generate the substantial majority of our revenue from consumer product sales on global ecommerce marketplaces. Pattern acquires inventory based on contractual relationships with brand partners and uses its platform to optimize the ecommerce equation by driving traffic, increasing conversion, managing price, and maintaining product availability across global ecommerce marketplaces. We operate on over 60 different marketplaces worldwide.

We target brand partners with a proven track record of selling highly rated products, a loyal customer base, and growth potential, assessed through our proprietary scorecard. Using our extensive data, we identify potential brand partners, and our sales team efficiently markets to and signs new brand partners.

We have developed and maintain strong and long-lasting brand partner relationships. For the year ended December 31, 2024, approximately 87% of our revenue was attributable to existing brand partners, and more than 48% of our revenue was attributable to brand partners that have been with Pattern for more than five years. Revenue attributable to brand partners consists of consumer product sales and other revenue, including subscription and consulting fees. Our NRR for the year ended December 31, 2024 was 116%, and was 115% for the quarter ended March 31, 2025. See the section titled below "—Key Business Metric and Non-GAAP Financial Measure" for information on how we define and calculate NRR.

Purchasing our brand partners' products offers several advantages, creating a mutually beneficial partnership that supports growth for both Pattern and our brand partners by:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• Providing a low-friction model where brands simply sell their products to Pattern at predetermined prices

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• Reducing the need for brands to allocate technology and overhead budget

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• Allowing Pattern to manage the marketplace experience and optimize the ecommerce equation

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• Enabling Pattern to gather data, conduct real-time testing, and enhance predictive models with AI

We mitigate inventory risk by leveraging data, experience, and pricing models to more accurately forecast demand and make cost-effective inventory purchases. By considering all shipping, logistics and fulfillment costs, we ensure precise expected pricing and rarely need to discount products we sell to drive demand. Our effective management of the working capital cycle seeks to balance cash required for inventory purchases with our cash conversion cycle. As a result, our weighted average inventory write-off as a percentage of our revenue has been less than 0.2% over the last three years, and in 2024, our inventory turnover ratio was 4.5x and our North American in-stock rate was 96%.

Our operating model capitalizes on global economies of scale to optimize costs while investing in future growth. By managing more brand partners, we streamline logistics, reducing delivery times and costs. As we enhance operational efficiencies, we remain committed to innovating our technology, expanding capabilities, and offering new solutions to our partners. Investments in technology and warehouse automation have significantly boosted our operational efficiency and realize tangible economic benefits from scale. For example, the global units processed throughout cross-dock facilities increased by 65% from 2022 to 2024 with only 12% increase in square footage for cross-dock facilities during that period.

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**Confidential Treatment Requested by Pattern Group Inc.**

**Pursuant to 17 C.F.R. Section 200.83**

**Our Contractual Arrangements** 

Pattern enters into written agreements that grant us the right to purchase products from brand partners at pre-determined prices and the exclusive rights to sell those products on marketplaces as their ecommerce acceleration solution. Typically, these agreements have an initial term of one year. Following the initial term, the agreements automatically renew for successive one-year periods, with either party retaining the right to terminate for convenience with written notice.

Pattern manages advertising spend funded by the brand partners through our platform without an advertising fee markup. Where applicable, the products we sell are subject to our brand partners' pricing policies, which set a cross-channel baseline for pricing to prevent advertised prices from dropping below a brand-determined level. However, those policies do not prevent us from independently setting the price at which we sell our products. Generally, if we experience an extended featured offer<sup>12</sup> loss or suppression for a brand partner's products, the brand partner will fund the necessary promotional price difference. Similarly, marketplace fees are a structural expense we encounter as the seller of record on marketplaces and our agreements with brand partners allow us to adjust the product purchase price we pay to brand partners on account of changes in marketplace fees. These contractual features are designed to allow Pattern to maintain stable economics.

Occasionally, we hold inventory for longer than our average during 2024 of 82 days due to specific circumstances, and our contracts usually include an aged inventory clause. This clause provides us with several avenues to work with brand partners to limit the exposure of aged inventory. To further mitigate inventory risk, if a brand partner seeks to terminate a contract, they are generally obligated to repurchase any excess inventory from us after a sell-off period at the original price we paid for the products.

**Factors Affecting Our Performance**

We believe that the growth and future success of our business depends on many factors. While each of these factors presents significant opportunities for our business, they also pose important challenges that we must successfully address in order to sustain our growth, improve our results of operations and maintain or increase profitability.

***Retention and growth with our Existing Brand Partners***

Our ability to retain and grow our revenue attributable to existing brand partners drives our overall revenue growth through continued optimization of the ecommerce equation. Additionally, as we accelerate brand partners' growth, they continue to grant us exclusive access to sell their products, and we seek to expand the number of different products that we are able to sell on an increasing number of marketplaces. The number of marketplaces on which we sell has grown by 50 marketplaces in the last 5 years. For example, we partner with over 60 brands for which we sell products on five or more marketplaces—three times the number since 2022. Additionally, the number of brand partners for which we sell products in more than two countries has doubled since 2022. Our brand partners also fund advertising through our platform to drive traffic for consumer products on marketplaces. In the year ended December 31, 2024, our brand partners invested more than $140 million in advertising spend through our platform.

The chart below illustrates the annual revenue that Pattern generates from certain cohorts of brand partners. Each brand partner is placed in a cohort based upon the year in which we first generated revenue attributable to such brand partner. The annual revenue set forth below for each cohort represents the total revenue attributable to the brand partners in that cohort generated during the applicable year. The revenue we generate attributable to each

<sup>12</sup>*&nbsp;&nbsp;&nbsp;&nbsp; Most marketplaces include some sort of "add to cart" section of a product listing page, which is also known as the featured offer.*

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**Confidential Treatment Requested by Pattern Group Inc.**

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cohort has generally increased in each year, demonstrating the predictable and resilient revenue that is the foundation of our financial model.

![mda2fa.jpg](mda2fa.jpg)

***Identification and onboarding of new brand partners***

Onboarding new brand partners is a driver of our growth and attracting brand partners from various geographies and across different categories is crucial to our success. We have made significant investments to create an efficient go-to-market strategy and focus on identifying and partnering with brand partners across a wide range of industries and regions. Our current brand portfolio, which includes over 200 brand partners, represents only a small portion of the global ecommerce market that we believe can benefit from our solutions. Successfully tapping into this opportunity will depend on the effectiveness of our solutions, our ability to effectively sell inventory, the competitive landscape and the strength of our marketing efforts.

![mda3fa.jpg](mda3fa.jpg)

*Existing brand partners refer to brand partners that have been with Pattern for more than twelve months since Pattern first generated over $1,000 in revenue attributable to such brand partner.*

***Investment in our technology***

A key factor influencing our performance is our ongoing investment in our technology platform to optimize the ecommerce equation and enhance our ecommerce acceleration capabilities across global marketplaces. Currently, approximately 350 software engineers, data scientists and other technology professionals support our technology

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**Confidential Treatment Requested by Pattern Group Inc.**

**Pursuant to 17 C.F.R. Section 200.83**

functions, and to date, Pattern has invested over $133 million in technology development and related acquisitions. These investments are crucial for optimizing the ecommerce equation and strengthening our proprietary data set consisting of more than 44 trillion data points.

We are also investing to accelerate our AI capabilities. AI is particularly well suited for ecommerce, given the global complexity, importance of content and of immense scale of user generated data points. We utilize AI in a number of areas in our business, including SEO, advertising, content generation and inventory management. Additionally, AI can help refine our pricing strategies by dynamically considering market conditions, competitor pricing and consumer demand.

***Investment in future growth***

While we have already made substantial investments in our business, we believe that the large and growing global market we are targeting is still in its nascent stages. To capitalize on this potential, we plan to continue investing in our business to drive growth, expand internationally, enhance our operations and boost revenue. Recognizing the significant opportunities for further expansion, we are committed to increasing our investments to enhance our presence on both existing and new global ecommerce marketplaces. We also see immense potential in global marketplaces and are dedicated to building localized teams that can leverage regional insights to accelerate the sales of our brand partners' products. Additionally, we are channeling resources to grow our direct sales team, enabling us to onboard more high-quality brand partners and diversify our industry category mix over time. Furthermore, as we transition to becoming a public company, we anticipate incurring additional general and administrative expenses.

***Operational capabilities and capital-efficient processes***

A key factor influencing our performance is our ability to drive efficient operations and maintain capital-efficient processes. By concentrating on these areas, we aim to develop a scalable operation that supports our global growth objectives while maintaining high levels of customer satisfaction and operational efficiency.

To enhance capital efficiency, we prioritize optimizing our inventory levels and increasing inventory turns, which have improved from 3.9 in 2022 to 4.5 in 2024. Additionally, we seek to strategically avoid capital-intensive operations such as last-mile delivery and trucking, choosing instead to partner with leading third-party providers. We also take advantage of our scale to drive operational cost efficiencies. For example, because we process very high volumes, we batch our shipments, allowing us to ship approximately 92% of our units in the United States in full truck loads, which have a shipping cost that is generally more than 75% below less-than-full truckloads.

***Monetization of incremental solutions***

We generate a substantial majority of our revenue from consumer product sales on global ecommerce marketplaces. We also continue to invest in new and innovative solutions to diversify our revenue mix. We are committed to enhancing our SaaS capabilities, with a particular focus on our Product Experience Management ("PXM") and Creators. These solutions enable brands to more easily generate optimized content across all ecommerce channels, while also supporting the expanding social commerce<sup>13</sup> sector by providing a centralized platform for recruiting, engaging and managing affiliate marketing campaigns. Additionally, we are investing in our fulfillment capabilities to accelerate our shipping processes and offer marketplace preparation services to other third-party sellers. We are also investing in expanding the reach of our middle mile solution, which we estimate saved up to 50% of shipping costs into marketplaces during 2024. Furthermore, we are dedicated to enhancing our Services solutions, which deliver tailored consulting and design solutions to our brand partners.

**Key Business Metric and Non-GAAP Financial Measure**

We measure our business using both financial and operating metrics and use the following metric and measure to assess the near-term and long-term performance of our overall business, including identifying trends, formulating financial projections, making strategic decisions, assessing operational efficiencies and monitoring our business.

<sup>13</sup>&nbsp;&nbsp;&nbsp;&nbsp; *The practice of selling products and services directly through social media platforms, rather than redirecting users to a website.*

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**Confidential Treatment Requested by Pattern Group Inc.**

**Pursuant to 17 C.F.R. Section 200.83**

***Net Revenue Retention Rate***

NRR is an important metric to measure the long-term value of our brand partner relationships. In any given period, we calculate NRR by comparing total revenue attributable to all existing brand partners in the current trailing 12-month period to that of the previous trailing 12-month period. This metric, expressed as a percentage, provides valuable insight into the accelerated growth delivered through our platform, the effectiveness of our brand expansion strategies and our ability to deepen relationships with existing brand partners. For the purpose of our NRR calculation, we only include brand partners that, as of the measurement date, have been with Pattern for more than twelve months since we first generated over $1,000 in revenue attributable to such brand partner. Additionally, for those existing brand partners that, as of the measurement date, have been with Pattern for more than twelve full months but less than 24 full months since we first generated over $1,000 in revenue attributable to such brand partner, we only include current period revenue for the corresponding months in the current period for which the brand partner had attributable revenue in the previous period. For example, when calculating NRR as of December 31, 2024 for a brand partner that Pattern first generated over $1,000 of attributable revenue in June 2023, we would only include that brand partner's attributable revenue from June 2024 through December 2024 in the numerator and that brand partner's attributable revenue from June 2023 through December 2023 in the denominator. Current period revenue includes the impact of any expansion, contraction and attrition. NRR excludes revenue attributable to new brand partners during the current period. All revenue attributable to services relating to consulting and design are excluded.

![mda4fa.jpg](mda4fa.jpg)

***Adjusted EBITDA***

In addition to our results determined in accordance with GAAP, we believe that Adjusted EBITDA, a non-GAAP financial measure, is useful in evaluating our operational performance. We calculate Adjusted EBITDA, a non-GAAP financial measure, as net (loss) income excluding depreciation and amortization; share-based compensation expense; interest income (expense), net; income tax provision; and other recurring and nonrecurring items that we do not consider representative of our underlying operations. We believe it is useful to exclude non-cash charges, such as depreciation and amortization and share-based compensation expense from our Adjusted EBITDA because the amount of such expenses in any specific period may not directly correlate to the underlying performance of our business operations. We believe it is useful to exclude interest income (expense), net; other (expense), net; income tax provision; and other items that are not components of our core business operations. Non-GAAP financial measures such as Adjusted EBITDA should not be considered in isolation or as an alternative to net (loss) income or any other measure of financial performance calculated and prescribed in accordance with GAAP. In addition, Adjusted EBITDA may not be comparable to similarly titled measures in other organizations because other

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**Confidential Treatment Requested by Pattern Group Inc.**

**Pursuant to 17 C.F.R. Section 200.83**

organizations may not calculate Adjusted EBITDA in the same manner as we do, thus limiting its usefulness as a comparative measure.

![mda5ha.jpg](mda5ha.jpg)

The following table provides a reconciliation of non-GAAP Adjusted EBITDA to the most directly comparable financial measure presented in accordance with GAAP.

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| | | | | | |
|:---|:---|:---|:---|:---|:---|
| | **Year Ended December 31,** | **Year Ended December 31,** | **Year Ended December 31,** | **Three Months Ended March 31,** | **Three Months Ended March 31,** |
| **(in thousands)** | **2022** | **2023** | **2024** | **2024** | **2025** |
| Net (loss) income | $(2975) | $41264 | $67856 | $17657 | $22802 |
| *Add (deduct):* |  |  |  |  |  |
| Depreciation and amortization | 9590 | 12102 | 14811 | 3405 | 4045 |
| Share-based compensation | (159) | (206) |  |  |  |
| Interest (income) expense, net | 502 | (2849) | (6066) | (1226) | (1517) |
| Provision for income taxes | 1284 | 15077 | 23379 | 6065 | 7962 |
| Other: |  |  |  |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;Indirect initial public offering costs | 666 | 729 | 718 | 61 | 604 |
| &nbsp;&nbsp;&nbsp;&nbsp;Goodwill and intangibles impairment | 6050 |  |  |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;Loss (income) from wind down of subsidiary | 2769 | (1394) |  |  |  |
| Adjusted EBITDA | $17727 | $64723 | $100698 | $25962 | $33896 |

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**Components of Results of Consolidated Operations**

***Revenue***

We derive revenue primarily from consumer product sales attributable to brand partners, across a number of categories including health and wellness, beauty and personal care, home and lifestyle, pet, sports and outdoors and consumer electronics, through both domestic and international ecommerce marketplaces. Revenue from the sale of products is recorded when products are shipped to the customer, net of returns allowances. Taxes collected from customers are excluded from revenue.

We also generate revenue through subscription and consulting fees for our comprehensive suite of ecommerce solutions, including advanced advertising and marketing technology, actionable business insights, compliance solutions, logistics and fulfillment support, creative design and strategic growth services.

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**Confidential Treatment Requested by Pattern Group Inc.**

**Pursuant to 17 C.F.R. Section 200.83**

***Cost of Goods Sold***

Cost of goods sold consists of the purchase price of inventory sold to customers. Shipping costs to receive products from our brand partners and costs to ship products to third-party fulfillment centers are included in our inventory and recognized as cost of goods sold upon sale of the products to customers.

***Operations, General and Administrative***

Operations, general and administrative expenses consist of third-party fulfillment costs; payroll and related expenses; warehousing costs; facilities and equipment, including depreciation and amortization, rent and other occupancy expenses; professional and legal fees; as well as costs associated with other general costs for corporate functions, including accounting, finance and human resources.

Fulfillment costs represent those costs incurred from third-party fulfillment centers and in operating and staffing our fulfillment centers, including costs related to buying, receiving, inspecting and warehousing inventories, picking, packaging and preparing customer orders for shipment.

***Sales and Marketing***

Sales and marketing expenses consist of third-party online marketplace commission fees, targeted online advertising and other marketing expenses, payroll and related expenses for personnel engaged in marketing and selling activities.

***Research and Development***

Research and development costs include payroll and related expenses for employees involved in the research and development of our technology, development and design of our websites and curation and display of products available on third-party marketplaces.

**Results of Consolidated Operations**

The following tables set forth our results of operations for the periods presented and express the relationship of certain line items as a percentage of net sales for those periods. The period-to-period comparison of financial results is not necessarily indicative of future results.

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|:---|:---|:---|:---|:---|:---|
| | **Year Ended December 31,** | **Year Ended December 31,** | **Year Ended December 31,** | **Three Months Ended March 31,** | **Three Months Ended March 31,** |
| **($ in thousands)** | **2022** | **2023** | **2024** | **2024** | **2025** |
| **Consolidated Statements of Operations** | **Consolidated Statements of Operations** | **Consolidated Statements of Operations** | **Consolidated Statements of Operations** |  |  |
| Revenues | $990535 | $1366417 | $1796161 | $410672 | $540406 |
| Operating expenses: |  |  |  |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;Cost of goods sold | 561620 | 765203 | 1014812 | 226935 | 304600 |
| &nbsp;&nbsp;&nbsp;&nbsp;Operations, general and administrative | 226662 | 276272 | 338508 | 80686 | 100076 |
| &nbsp;&nbsp;&nbsp;&nbsp;Sales and marketing | 187299 | 257513 | 337672 | 75624 | 100679 |
| &nbsp;&nbsp;&nbsp;&nbsp;Research and development | 10833 | 14644 | 17987 | 4112 | 5643 |
| Total operating expenses | 986414 | 1313632 | 1708979 | 387357 | 510998 |
| Operating income | 4121 | 52785 | 87182 | 23315 | 29408 |
| &nbsp;&nbsp;&nbsp;&nbsp;Interest income |  | 2882 | 6164 | 1249 | 1559 |
| &nbsp;&nbsp;&nbsp;&nbsp;Interest expense | (502) | (33) | (98) | (23) | (42) |
| &nbsp;&nbsp;&nbsp;&nbsp;Other income (expense), net | (5310) | 707 | (2013) | (819) | (161) |
| Income (loss) before income taxes | (1691) | 56341 | 91235 | 23722 | 30764 |
| Provision for income taxes | 1284 | 15077 | 23379 | 6065 | 7962 |
| Net (loss) income | $(2975) | $41264 | $67856 | $17657 | $22802 |

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**Confidential Treatment Requested by Pattern Group Inc.**

**Pursuant to 17 C.F.R. Section 200.83**

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|:---|:---|:---|:---|:---|:---|
| | **Year Ended December 31,** | **Year Ended December 31,** | **Year Ended December 31,** | **Three Months Ended March 31,** | **Three Months Ended March 31,** |
| **(% of revenue)** | **2022** | **2023** | **2024** | **2024** | **2025** |
| Revenues | 100.0% | 100.0% | 100.0% | 100.0% | 100.0% |
| Operating expenses: |  |  |  |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;Cost of goods sold | 56.7% | 56.0% | 56.5% | 55.3% | 56.4% |
| &nbsp;&nbsp;&nbsp;&nbsp;Operations, general and administrative | 22.9% | 20.2% | 18.8% | 19.6% | 18.5% |
| &nbsp;&nbsp;&nbsp;&nbsp;Sales and marketing | 18.9% | 18.8% | 18.8% | 18.4% | 18.6% |
| &nbsp;&nbsp;&nbsp;&nbsp;Research and development | 1.1% | 1.1% | 1.0% | 1.0% | 1.0% |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Total operating expenses | 99.6% | 96.1% | 95.1% | 94.3% | 94.6% |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Operating income | 0.4% | 3.9% | 4.9% | 5.7% | 5.4% |
| &nbsp;&nbsp;&nbsp;&nbsp;Interest income | 0.0% | 0.2% | 0.3% | 0.3% | 0.3% |
| &nbsp;&nbsp;&nbsp;&nbsp;Interest expense | (0.1%) | (0.0%) | (0.0%) | (0.0%) | (0.0%) |
| &nbsp;&nbsp;&nbsp;&nbsp;Other income (expense), net | (0.5%) | 0.0% | (0.1%) | (0.2%) | 0.0% |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Income (loss) before income taxes | (0.2%) | 4.1% | 5.1% | 5.8% | 5.7% |
| Provision for income taxes | 0.1% | 1.1% | 1.3% | 1.5% | 1.5% |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Net (loss) income | (0.3%) | 3.0% | 3.8% | 4.3% | 4.2% |

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***Comparison of the three months ended March 31, 2024 and 2025***

***Revenue***

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| | | | | |
|:---|:---|:---|:---|:---|
| | **Three Months Ended March 31,** | **Three Months Ended March 31,** | | |
| **($ in thousands)** | **2024** | **2025** | **$ Change** | **% Change** |
| Revenues | $410672 | $540406 | $129734 | 31.6% |

---

The increase in revenue was primarily driven by the growth of consumer product sales attributable to existing brand partners, as evidenced by our NRR of 115% for the first quarter of 2025.

***Cost of Goods Sold***

---

| | | | | |
|:---|:---|:---|:---|:---|
| | **Three Months Ended March 31,** | **Three Months Ended March 31,** | | |
| **($ in thousands)** | **2024** | **2025** | **$ Change** | **% Change** |
| Cost of goods sold | $226935 | $304600 | $77665 | 34.2% |

---

The increase in cost of goods sold was primarily driven by an increase in revenue of 31.6%. The increase in cost of goods sold was larger than the increase in revenue on a percentage basis, primarily driven by product and brand mix.

***Operations, General and Administrative***

---

| | | | | |
|:---|:---|:---|:---|:---|
| | **Three Months Ended March 31,** | **Three Months Ended March 31,** | | |
| **($ in thousands)** | **2024** | **2025** | **$ Change** | **% Change** |
| Operations, general and administrative | $80686 | $100076 | $19390 | 24.0% |

---

The increase in operations, general and administrative expenses was primarily driven by the increase in consumer product sales and the associated fulfillment costs, which increased by $16.8 million. Depreciation and amortization expense increased by $0.6 million driven by additional investment in warehouse automation and capitalized internal-use software. The remaining increase for the three months ended March 31, 2025 was driven by an increase of corporate headcount and rent expense.

------

**Confidential Treatment Requested by Pattern Group Inc.**

**Pursuant to 17 C.F.R. Section 200.83**

***Sales and Marketing***

---

| | | | | |
|:---|:---|:---|:---|:---|
| | **Three Months Ended March 31,** | **Three Months Ended March 31,** | | |
| **($ in thousands)** | **2024** | **2025** | **$ Change** | **% Change** |
| Sales and marketing | $75624 | $100679 | $25055 | 33.1% |

---

The increase in sales and marketing expenses was primarily driven by an increase in marketplace commissions of $19.5 million, or 33.7%, which grew at a higher rate than revenue on a percentage basis, primarily due to marketplace mix. The remaining increase of $5.5 million related to other selling expenses that generally increased in line with revenue on a percentage basis. These costs included additional brand management, sales and marketing, advertising and creative headcount and other sales, marketing and advertising expenses.

***Research and Development***

---

| | | | | |
|:---|:---|:---|:---|:---|
| | **Three Months Ended March 31,** | **Three Months Ended March 31,** | | |
| **($ in thousands)** | **2024** | **2025** | **$ Change** | **% Change** |
| Research and development | $4112 | $5643 | $1531 | 37.2% |

---

The increase in research and development costs was primarily driven by the headcount increase of software engineers, data scientists and other technology professionals to drive new platform capabilities and enhanced features.

***Provision for Income Taxes***

---

| | | | | |
|:---|:---|:---|:---|:---|
| | **Three Months Ended December 31,** | **Three Months Ended December 31,** | | |
| **($ in thousands)** | **2024** | **2025** | **$ Change** | **% Change** |
| Income taxes | $6065 | $7962 | $1897 | 31.3% |

---

Our effective tax rate for the three months ended March 31, 2025 was 25.9% of earnings before income taxes compared with an effective tax rate of 25.6% for three months ended March 31, 2024. The increase in provision for income taxes was primarily driven by the increase in income before income taxes of $7.0 million for the three months ended March 31, 2025. See *Note 10—Provision for Income Taxes*, in the section titled "Notes to Condensed Consolidated Financial Statements" included elsewhere in this prospectus for additional information.

***Comparison of the years ended December 31, 2023 and 2024***

***Revenue***

---

| | | | | |
|:---|:---|:---|:---|:---|
| | **Year Ended December 31,** | **Year Ended December 31,** | | |
| **($ in thousands)** | **2023** | **2024** | **$ Change** | **% Change** |
| Revenues | $1366417 | $1796161 | $429744 | 31.5% |

---

The increase in revenue was primarily driven by the growth of consumer product sales attributable to existing brand partners, as evidenced by our NRR of 116% for 2024, and new brand partner revenue of $232 million.

***Cost of Goods Sold***

---

| | | | | |
|:---|:---|:---|:---|:---|
| | **Year Ended December 31,** | **Year Ended December 31,** | | |
| **($ in thousands)** | **2023** | **2024** | **$ Change** | **% Change** |
| Cost of goods sold | $765203 | $1014812 | $249609 | 32.6% |

---

The increase in cost of goods sold was primarily driven by an increase in revenue of 31.5%. The increase in cost of goods sold was larger than the increase in revenue on a percentage basis, primarily driven by product and brand mix.

------

**Confidential Treatment Requested by Pattern Group Inc.**

**Pursuant to 17 C.F.R. Section 200.83**

***Operations, General and Administrative***

---

| | | | | |
|:---|:---|:---|:---|:---|
| | **Year Ended December 31,** | **Year Ended December 31,** | | |
| **($ in thousands)** | **2023** | **2024** | **$ Change** | **% Change** |
| Operations, general and administrative | $276272 | $338508 | $62236 | 22.5% |

---

The increase in operations, general and administrative expenses was primarily driven by the increase in consumer product sales and the associated fulfillment cost, which increased by $55.3 million. Depreciation and amortization expense increased by $2.7 million driven by additional investment in warehouse automation and capitalized internal-use software. The remaining increase in fiscal year 2024 was driven by an increase of corporate headcount and rent expense.

***Sales and Marketing***

---

| | | | | |
|:---|:---|:---|:---|:---|
| | **Year Ended December 31,** | **Year Ended December 31,** | | |
| **($ in thousands)** | **2023** | **2024** | **$ Change** | **% Change** |
| Sales and marketing | $257513 | $337672 | $80159 | 31.1% |

---

The increase in sales and marketing expenses was primarily driven by an increase in marketplace commissions of $63.2 million, or 32.4%, which is consistent with the 31.5% increase in revenue compared to fiscal year 2023. The remaining increase of $17.0 million related to other selling expenses that generally increased in line with revenue on a percentage basis. These costs included additional brand management, sales and marketing, advertising and creative headcount and other sales, marketing and advertising expenses.

***Research and Development***

---

| | | | | |
|:---|:---|:---|:---|:---|
| | **Year Ended December 31,** | **Year Ended December 31,** | | |
| **($ in thousands)** | **2023** | **2024** | **$ Change** | **% Change** |
| Research and development | $14644 | $17987 | $3343 | 22.8% |

---

The increase in research and development costs was primarily driven by headcount increase of software engineers, data scientists and other technology professionals to drive new platform capabilities and enhanced features.

***Other Income (Expenses)***

---

| | | | | |
|:---|:---|:---|:---|:---|
| | **Year Ended December 31,** | **Year Ended December 31,** | | |
| **($ in thousands)** | **2023** | **2024** | **$ Change** | **% Change** |
| Interest income | $2882 | $6164 | $3282 | 113.9% |
| Interest expense | $(33) | $(98) | $(65) | 197.0% |
| Other income (expense), net | $707 | $(2013) | $(2720) | (384.7%) |

---

The increase in interest income was driven by the investment of excess cash into interest bearing cash equivalents.

The decrease in other income (expense), net was driven primarily by realized losses on foreign currency transactions.

***Provision for Income Taxes***

---

| | | | | |
|:---|:---|:---|:---|:---|
| | **Year Ended December 31,** | **Year Ended December 31,** | | |
| **($ in thousands)** | **2023** | **2024** | **$ Change** | **% Change** |
| Income taxes | $15077 | $23379 | $8302 | 55.1% |

---

------

**Confidential Treatment Requested by Pattern Group Inc.**

**Pursuant to 17 C.F.R. Section 200.83**

Our effective tax rate for fiscal year 2024 was 25.6% of earnings before income taxes compared with an effective tax rate of 26.8% for fiscal year 2023. The increase in provision for income taxes was primarily driven by the increase in income before income taxes of $34.9 million in 2024. See *Note 12—Provision for Income Taxes*, in the section titled "Notes to Consolidated Financial Statements" included elsewhere in this prospectus for additional information.

***Comparison of the years ended December 31, 2022 and 2023***

***Revenue***

---

| | | | | |
|:---|:---|:---|:---|:---|
| | **Year Ended December 31,** | **Year Ended December 31,** | | |
| **($ in thousands)** | **2022** | **2023** | **$ Change** | **% Change** |
| Revenues | $990535 | $1366417 | $375882 | 37.9% |

---

The increase in revenue was primarily driven by the growth of consumer product sales attributable to existing brand partners, as evidenced by our NRR of 115% for 2023, and new brand partner revenue of $251 million.

***Cost of Goods Sold***

---

| | | | | |
|:---|:---|:---|:---|:---|
| | **Year Ended December 31,** | **Year Ended December 31,** | | |
| **($ in thousands)** | **2022** | **2023** | **$ Change** | **% Change** |
| Cost of goods sold | $561620 | $765203 | $203583 | 36.2% |

---

The increase in cost of goods sold was primarily driven by an increase in revenue of 37.9%. The increase in cost of goods sold was smaller than the increase in revenue on a percentage basis, primarily driven by product and brand mix.

***Operations, General and Administrative***

---

| | | | | |
|:---|:---|:---|:---|:---|
| | **Year Ended December 31,** | **Year Ended December 31,** | | |
| **($ in thousands)** | **2022** | **2023** | **$ Change** | **% Change** |
| Operations, general and administrative | $226662 | $276272 | $49610 | 21.9% |

---

The increase in operations, general and administrative expenses was primarily driven by the increase in consumer product sales and the associated fulfillment cost, which increased by $45.6 million. Depreciation and amortization expense increased by $2.5 million driven by additional investment in warehouse automation and capitalized internal-use software. The remaining increase in fiscal year 2023 was driven by an increase of corporate headcount.

***Sales and Marketing***

---

| | | | | |
|:---|:---|:---|:---|:---|
| | **Year Ended December 31,** | **Year Ended December 31,** | | |
| **($ in thousands)** | **2022** | **2023** | **$ Change** | **% Change** |
| Sales and marketing | $187299 | $257513 | $70214 | 37.5% |

---

The increase in sales and marketing expenses was primarily driven by an increase of marketplace commissions of $53.7 million, or 38.1%, which is consistent with the 37.9% increase in revenue compared to fiscal year 2022. The remaining increase of $16.5 million related to other selling expenses that generally increased in line with revenue on a percentage basis. These costs included additional brand management, sales and marketing, advertising and creative headcount and other sales, marketing and advertising expenses.

------

**Confidential Treatment Requested by Pattern Group Inc.**

**Pursuant to 17 C.F.R. Section 200.83**

***Research and Development***

---

| | | | | |
|:---|:---|:---|:---|:---|
| | **Year Ended December 31,** | **Year Ended December 31,** | | |
| **($ in thousands)** | **2022** | **2023** | **$ Change** | **% Change** |
| Research and development | $10833 | $14644 | $3811 | 35.2% |

---

The increase in research and development costs was primarily driven by headcount increase of software engineers, data scientists and other technology professionals to drive new platform capabilities and enhanced features.

***Other Income (Expenses)***

---

| | | | | |
|:---|:---|:---|:---|:---|
| | **Year Ended December 31,** | **Year Ended December 31,** | | |
| **($ in thousands)** | **2022** | **2023** | **$ Change** | **% Change** |
| Interest income | $— | $2882 | $2882 | 100.0% |
| Interest expense | $502 | $33 | $(469) | (93.4%) |
| Other income (expense), net | $(5310) | $707 | $6017 | (113.3%) |

---

The increase in interest income was driven by the investment of excess cash into interest bearing cash equivalents.

The decrease in interest expense was driven by the payoff of the remaining term loan in early fiscal year 2022.

The decrease in other income (expense), net was driven primarily by $6.1 million in goodwill and acquired intangibles impairment charges related to the wind down of an acquired subsidiary in fiscal year 2022.

***Provision for Income Taxes***

---

| | | | | |
|:---|:---|:---|:---|:---|
| | **Year Ended December 31,** | **Year Ended December 31,** | | |
| **($ in thousands)** | **2022** | **2023** | **$ Change** | **% Change** |
| Income taxes | $1284 | $15077 | $13793 | 1074.2% |

---

Our effective tax rate for fiscal year 2023 was 26.8% of earnings before income taxes compared with an effective tax rate of (75.9%) for fiscal year 2022. The increase in provision for income taxes was primarily driven by the increase in income (loss) before income taxes of $58.0 million and movement from a loss position in 2022 to an income position in 2023. See *Note 12—Provision for Income Taxes*, in the section titled "Notes to Consolidated Financial Statements" included elsewhere in this prospectus for additional information.

**Unaudited Quarterly Results of Operations**

The following table sets forth our unaudited quarterly consolidated results of operations for each of the quarterly periods for the years ended December 31, 2023 and 2024 and the three months ended March 31, 2025. These unaudited quarterly results of operations have been prepared on the same basis as our audited consolidated financial statements included elsewhere in this prospectus. In the opinion of management, the financial information reflects all normal recurring adjustments necessary for the fair statement of the results of operations and cash flows for these periods. This information should be read in conjunction with our consolidated financial statements and the

------

**Confidential Treatment Requested by Pattern Group Inc.**

**Pursuant to 17 C.F.R. Section 200.83**

related notes included elsewhere in this prospectus. The results of historical periods are not necessarily indicative of the results in any future period.

---

| | | | | | | | | | |
|:---|:---|:---|:---|:---|:---|:---|:---|:---|:---|
| | **Quarter ended** | **Quarter ended** | **Quarter ended** | **Quarter ended** | **Quarter ended** | **Quarter ended** | **Quarter ended** | **Quarter ended** | **Quarter ended** |
| **($ in thousands)** | **March 31, 2023** | **June 30, 2023** | **September 30, 2023** | **December 31, 2023** | **March 31, 2024** | **June 30, 2024** | **September 30, 2024** | **December 31, 2024** | **March 31, 2025** |
| **Consolidated Statements of Operations** | **Consolidated Statements of Operations** | **Consolidated Statements of Operations** | **Consolidated Statements of Operations** | **Consolidated Statements of Operations** | | | | | |
| Revenues | $296601 | $333223 | $342557 | $394036 | $410672 | $430629 | $439395 | $515465 | $540406 |
| Operating expenses: |  |  |  |  |  |  |  |  |  |
| Cost of goods sold | 166491 | 186926 | 191569 | 220217 | 226935 | 243951 | 248959 | 294967 | 304600 |
| Operations, general and administrative | 61495 | 66027 | 68294 | 80456 | 80686 | 76858 | 86124 | 94840 | 100076 |
| Sales and marketing | 56121 | 64802 | 62990 | 73600 | 75624 | 82214 | 82587 | 97247 | 100679 |
| Research and development | 3149 | 3593 | 3965 | 3937 | 4112 | 4517 | 4071 | 5287 | 5643 |
| Total operating expenses | 287256 | 321348 | 326818 | 378210 | 387357 | 407540 | 421741 | 492341 | 510998 |
| Operating income | 9345 | 11875 | 15739 | 15826 | 23315 | 23089 | 17654 | 23124 | 29408 |
| Interest income (expense), net | (27) | 857 | 959 | 1060 | 1226 | 1590 | 1714 | 1536 | 1517 |
| Other income (expense), net | (752) | 242 | (16) | 1233 | (819) | (778) | (8) | (408) | (161) |
| Income before income taxes | 8566 | 12974 | 16682 | 18119 | 23722 | 23901 | 19360 | 24252 | 30764 |
| Provision for income taxes | 2487 | 3547 | 4437 | 4606 | 6065 | 6101 | 5164 | 6049 | 7962 |
| Net income | $6079 | $9427 | $12245 | $13513 | $17657 | $17800 | $14196 | $18203 | $22802 |
| **Non-GAAP Financial Measure** |  |  |  |  |  |  |  |  |  |
| Adjusted EBITDA<sup>(1)</sup> | $11531 | $15355 | $18514 | $19323 | $25962 | $25945 | $21831 | $26960 | $33896 |

---

__________________

(1)Adjusted EBITDA is a non-GAAP financial measure. See reconciliation of GAAP measures to the non-GAAP measure below.

---

| | | | | | | | | | |
|:---|:---|:---|:---|:---|:---|:---|:---|:---|:---|
| | **Quarter ended** | **Quarter ended** | **Quarter ended** | **Quarter ended** | **Quarter ended** | **Quarter ended** | **Quarter ended** | **Quarter ended** | **Quarter ended** |
| **($ in thousands)** | **March 31, 2023** | **June 30, 2023** | **September 30, 2023** | **December 31, 2023** | **March 31, 2024** | **June 30, 2024** | **September 30, 2024** | **December 31, 2024** | **March 31, 2025** |
| **Reconciliation of Net Income to Adjusted EBITDA** | **Reconciliation of Net Income to Adjusted EBITDA** | **Reconciliation of Net Income to Adjusted EBITDA** | **Reconciliation of Net Income to Adjusted EBITDA** | **Reconciliation of Net Income to Adjusted EBITDA** | | | | | |
| Net income | $6079 | $9427 | $12245 | $13513 | $17657 | $17800 | $14196 | $18203 | $22802 |
| Add (deduct): |  |  |  |  |  |  |  |  |  |
| Depreciation and amortization | 2841 | 3108 | 3064 | 3089 | 3405 | 3634 | 3825 | 3947 | 4045 |
| Share-based compensation | 97 | 130 | (433) |  |  |  |  |  |  |
| Interest (income) expense, net | 27 | (857) | (959) | (1060) | (1226) | (1590) | (1714) | (1536) | (1517) |
| Income tax | 2487 | 3547 | 4437 | 4606 | 6065 | 6101 | 5164 | 6049 | 7962 |
| Other: |  |  |  |  |  |  |  |  |  |
| Indirect initial public offering costs  |  |  | 160 | 569 | 61 |  | 360 | 297 | 604 |
| Income from wind down of subsidiary |  |  |  | (1394) |  |  |  |  |  |
| Adjusted EBITDA | $11531 | $15355 | $18514 | $19323 | $25962 | $25945 | $21831 | $26960 | $33896 |

---

***Quarterly Revenue Trends***

Quarterly revenue increased quarter-over-quarter in each period presented above primarily due to increased consumer product sales attributable to both existing and new brand partners.

***Quarterly Operating Expenses Trends***

Quarterly operating expenses have generally increased quarter-over-quarter in each period presented above primarily due to an increase in sales commissions and fulfillment costs related to increased consumer product sales. Additionally, we also invested in additional headcount to support the overall growth of our business.

------

**Confidential Treatment Requested by Pattern Group Inc.**

**Pursuant to 17 C.F.R. Section 200.83**

**Liquidity and Capital Resources**

Our principal sources of liquidity are cash and cash equivalents. At March 31, 2025, we had cash and cash equivalents of $218.8 million. We also have access to external sources of liquidity through our revolving credit facility as further described within "Credit Facility" below.

We believe that our cash and cash equivalents, cash from operations and availability under our revolving credit facility will be sufficient to fund our working capital, capital expenditure requirements and contractual obligations for at least the next twelve months. Our opinions concerning liquidity are based on currently available information. To the extent our liquidity assumptions prove to be inaccurate, or if circumstances change, future availability of credit or other sources of financing may be reduced and our liquidity could be adversely affected. In addition, we may choose to raise additional funds at any time through equity or debt financing arrangements, which may or may not be needed for additional working capital, capital expenditures or other strategic investments. Our future capital requirements and the adequacy of available funds will depend on many factors, including those described in the section titled "Risk Factors" included elsewhere in this prospectus. Depending on the severity and direct impact of these factors on us, we may be unable to secure additional financing to meet our operating requirements on terms favorable to us, or at all.

**Historical Cash Flows**

The following table sets forth a summary of our cash flow information for the periods presented:

---

| | | | | | |
|:---|:---|:---|:---|:---|:---|
| | **Year Ended December 31,** | **Year Ended December 31,** | **Year Ended December 31,** | **Three Months Ended March 31,** | **Three Months Ended March 31,** |
| **(in thousands)** | **2022** | **2023** | **2024** | **2024** | **2025** |
| Net cash provided by operating activities | $14231 | $41476 | $70347 | $39880 | $48400 |
| Net cash used in investing activities | $(30520) | $(14498) | $(20438) | $(5547) | $(5228) |
| Net cash used in financing activities | $(36620) | $— | $(2901) | $— | $— |

---

***Operating Activities***

Net cash provided by operating activities was $48.4 million for the three months ended March 31, 2025, which primarily consisted of $22.8 million of net income, $4.0 million of non-cash adjustments, such as depreciation and amortization expense, and a cash increase of $21.6 million from the management of working capital.

Net cash provided by operating activities was $39.9 million for the three months ended March 31, 2024, which primarily consisted of $17.7 million of net income, $3.4 million of non-cash adjustments, such as depreciation and amortization expense, and a cash increase of $18.8 million from the management of working capital.

Net cash provided by operating activities was $70.3 million for the year ended December 31, 2024, which primarily consisted of $67.9 million of net income, $13.6 million of non-cash adjustments, such as depreciation and amortization expense, and a cash decrease of $11.1 million from the management of working capital.

Net cash provided by operating activities was $41.5 million for the year ended December 31, 2023, which primarily consisted of $41.3 million of net income, $10.6 million of non-cash adjustments, such as depreciation and amortization expense, and a cash decrease of $10.4 million from the management of working capital.

Net cash provided by operating activities was $14.2 million for the year ended December 31, 2022, which primarily consisted of ($3.0) million net loss, $10.5 million of non-cash adjustments, such as depreciation and amortization expense, impairment and deferred taxes, and a cash increase of $6.7 million from the management of working capital.

------

**Confidential Treatment Requested by Pattern Group Inc.**

**Pursuant to 17 C.F.R. Section 200.83**

***Investing Activities***

Net cash used in investing activities was $5.2 million for the three months ended March 31, 2025, primarily related to capital expenditures for our internally developed software and investments in machinery and leasehold improvements related to our North Las Vegas warehouse and other warehouse automation.

Net cash used in investing activities was $5.5 million for the three months ended March 31, 2024, primarily related to capital expenditures for our internally developed software and investments in machinery and leasehold improvements related to our North Las Vegas warehouse and other warehouse automation.

Net cash used in investing activities was $20.4 million for the year ended December 31, 2024, primarily consisting of capital expenditures related to $9.1 million invested in our internally developed software and $7.2 million in machinery and leasehold improvements largely related to the addition of our North Las Vegas warehouse and other warehouse automation.

Net cash used in investing activities was $14.5 million for the year ended December 31, 2023, primarily consisting of capital expenditures related to $8.5 million invested in our internally developed software and $3.3 million in machinery and leasehold improvements to facilitate warehouse automation.

Net cash used in investing activities was $30.5 million for the year ended December 31, 2022, primarily consisting of capital expenditures of $7.9 million invested in our internally developed software and $4.0 million related to a land purchase in Lehi, Utah. An additional $14.3 million was used in the acquisition of Current Technologies, LLC ("Current Technologies"). Current Technologies provides software and online social media campaign services. The acquisition of Current Technologies was intended to expand our ability to promote products online through expanded social media ambassadors and influencers.

***Financing Activities***

Net cash used in financing activities was $0 for the three months ended March 31, 2025.

Net cash used in financing activities was $0 for the three months ended March 31, 2024.

Net cash used in financing activities was $2.9 million for the year ended December 31, 2024 related to the repurchase of 182,008 shares of common stock.

Net cash used in financing activities was $0 for the year ended December 31, 2023.

Net cash used in financing activities was $36.6 million for the year ended December 31, 2022, driven by the repayment of long-term debt.

***Credit Facility***

Our revolving credit facility with JPMorgan Chase Bank, N.A. pursuant to the Third Amended and Restated Credit Agreement dated July 16, 2019, as amended ("Credit Facility"), provides for non-amortizing revolving loans in the aggregate principal amount of up to $50 million, with the option to increase the aggregate principal amount up to $100 million under certain conditions subject to lender approval. The Credit Facility matures in March 2027. The revolving line of credit bears interest at a variable base rate plus an applicable margin ranging from 0.75% to 2.50%. We are required to pay commitment fees on the unused portion that range from 0.20% to 0.35% per annum. As of March 31, 2025, we had no outstanding borrowings under the Credit Facility and we had a $50 million borrowing capacity under the Credit Facility. As of March 31, 2025, we were in compliance with the financial covenants described below. Our obligations under the Credit Facility are guaranteed by certain of our subsidiaries and are secured by a first priority lien on substantially all of our tangible and intangible property.

We are required to maintain compliance as of the end of each calendar quarter with the following financial covenants:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• a consolidated fixed charge coverage ratio on a trailing 12-month basis of no less than 1.25 to 1.00; and

------

**Confidential Treatment Requested by Pattern Group Inc.**

**Pursuant to 17 C.F.R. Section 200.83**

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• a consolidated net leverage ratio on a trailing 12-month basis not greater than 4.00 to 1.00.

For additional information with respect to the Credit Facility, see *Note 7—Credit Facilities*, in the section titled "Notes to Consolidated Financial Statements" included elsewhere in this prospectus.

***Contractual Obligations and Commitments***

We have contractual obligations and other commitments that will need to be funded in the future, in addition to our working capital, capital expenditures and other strategic initiatives. Material contractual obligations relate to operating lease obligations.

Operating lease obligations relate to corporate offices and warehouses under non-cancelable operating leases, which expire at various dates through 2029. As of December 31, 2024, operating lease obligations included minimum lease payments of $35.6 million. For additional information related to real estate and operating leases, see *Note 6— Operating Leases*, in the section titled "Notes to Consolidated Financial Statements" included elsewhere in this prospectus.

**Critical Accounting Estimates**

Our discussion and analysis of our financial condition and results of operations are based upon our consolidated financial statements, which have been prepared in accordance with U.S. GAAP. The preparation of our consolidated financial statements and related disclosures requires us to make estimates, assumptions and judgments that affect the reported amounts of assets, liabilities, revenue, costs and expenses and related disclosures. We believe that the estimates, assumptions and judgments involved in the accounting policies described below involve a significant level of estimation uncertainty and have the greatest potential impact on our financial condition and results of operations and, therefore, we consider these to be our critical accounting policies. Accordingly, we evaluate our estimates, assumptions and judgments on an ongoing basis. Our actual results may differ from these estimates under different assumptions, judgments and conditions. See *Note 2—Summary of Significant Accounting Policies*, in the section titled "Notes to Consolidated Financial Statements" included elsewhere in this prospectus for a description of our significant accounting policies.

***Revenue Recognition***

We recognize revenue on a gross basis for consumer product sales generated through domestic and international ecommerce marketplaces. Determining whether to recognize revenue on a gross or net basis requires judgment in evaluating whether we are the principal or agent in contracts with both our customers and brand partners. We have concluded that in the vast majority of our contracts, we are the principal in the transaction and control the product before it is transferred to the customer. We control products when we are responsible for fulfilling the promise to the customer and take responsibility for the acceptability of the goods, assume inventory risk and have discretion in establishing prices on ecommerce marketplaces. We recognize revenue when control of the product passes to the customer, typically at the time of shipment. Revenues are presented net of customer returns.

***Inventory Reserve***

Our inventories represent finished good products that are available for sale. Inventory is accounted for using the average cost method and is stated at the lower of cost or net realizable value.

We periodically evaluate the composition of our inventory and recognize adjustments when the cost of inventory is not expected to be fully recoverable. The market value of inventory is estimated by considering current and anticipated demand based on historical sales, buying trends and the method of disposal for aged inventory, such as through sales to individual customers, returns to brand partners, liquidations and expected recoverable values of each disposition category.

***Stock Based Compensation***

We record compensation expense in connection with all stock-based awards based on the grant date fair value of the awards. Our stock-based awards generally have both a service-based and performance-based vesting

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condition. We have elected to account for forfeitures of awards as they occur. No stock-based compensation expense has been recognized related to our equity plan as the performance condition was determined as not probable of being met. See *Note 11—Stock-Based Compensation*, in the section titled "Notes to Consolidated Financial Statements" included elsewhere in this prospectus.

***Income Taxes***

Estimates of deferred income taxes reflect management's assessment of actual future taxes to be paid on items reflected in the consolidated financial statements, giving consideration to both timing and the probability of realization. Actual income taxes could vary from these estimates due to future changes in income tax law, state income tax apportionment or the outcome of any review of our tax returns by the IRS or other government entities, as well as actual operating results that may vary significantly from anticipated results. For additional information on deferred tax assets and liabilities, see *Note 12—Provision for Income Taxes*, in the section titled "Notes to Consolidated Financial Statements" included elsewhere in this prospectus.

**Recent Accounting Pronouncements**

Information regarding recent accounting pronouncements is included in *Note 2—Summary of Significant Accounting Policies*, in the "Notes to Consolidated Financial Statements" included elsewhere in this prospectus.

**Quantitative and Qualitative Disclosures About Market Risk**

We have operations both within the United States and internationally, and we are exposed to market risks in the ordinary course of our business, including the effects of foreign currency fluctuations, interest rate changes and inflation. Information relating to quantitative and qualitative disclosures about these market risks is below.

***Foreign Currency Risk***

A significant majority of our sales are denominated in the prevailing currencies of the countries in which we operate. Additionally, our operating expenses are largely denominated in the currencies of the countries in which our operations are located or in which revenue is generated. Therefore, our operations are not currently subject to significant foreign currency risk on a regional basis. However, as our international business has grown, fluctuations in foreign currency exchange rates have started to have a greater impact, and as a result we face exposure to adverse movements in foreign currency exchange rates, as the financial results of our international operations are translated from local currency, or functional currency, into U.S. dollars upon consolidation. Fluctuations in foreign currency exchange rates may cause us to recognize transaction gains and losses in our consolidated statements of operations. To date, foreign currency transaction gains and losses have not been material to our financial statements, and we have not engaged in any foreign currency hedging transactions, but we may do so in the future. The effect of foreign currency exchange on our business historically has varied from quarter to quarter and may continue to do so, potentially materially. In addition, global economic conditions may result in changes in exchange rates, and in particular a weakening of foreign currencies relative to the U.S. dollar may negatively affect our revenue as expressed in U.S. dollars.

***Interest Rate Risk***

Our cash equivalents consist primarily of money market accounts and have an original maturity date of 90 days or less. The fair value of our cash and cash equivalents would not be significantly affected by either an increase or decrease in interest rates due mainly to the short-term nature of these instruments. Any future borrowings incurred under our revolving credit facility will accrue interest at a floating rate based on a formula tied to certain market rates at the time of incurrence. A 10% increase or decrease in interest rates would not have a material effect on our interest income or expense.

***Inflation Risk***

We continue to monitor the impact of inflation in order to minimize its effects through pricing strategies, productivity improvements and cost reductions. If our costs were to be subject to more significant inflationary

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pressures, we are generally able to offset such higher costs through price increases or other cost efficiency measures. Our inability or failure to do so could harm our business, financial condition and results of operations.

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**BUSINESS**

**Overview**

At Pattern, we are on a mission to help brands accelerate profitable growth on global ecommerce marketplaces. Today, our proprietary technology and on-demand experts operate across more than 60 marketplaces to increase product sales to consumers in more than 100 countries. Utilizing more than 44 trillion data points and sophisticated machine learning and AI models, we strive to optimize and automate key levers of ecommerce growth, including advertising, content creation and management, pricing, forecasting and customer service. The result is a powerful platform that allows brands to navigate the complexity of operating on global ecommerce marketplaces at scale.

***The Ecommerce Opportunity is Massive***

The approximately $4 trillion global ecommerce market is forecasted to grow at a CAGR of 9.3% from 2024 to 2028, representing more than $400 billion of annual growth.<sup>14</sup> Consumers are increasingly shopping online and, as a result, U.S. ecommerce sales are expected to grow more than four times as fast as all other U.S. non-ecommerce sales over this span.<sup>15</sup> Not only is global ecommerce expanding, it is also becoming a larger share of retail, increasing from 10% of retail sales in 2016 to a projected 25% by 2028, with each 1% shift from brick-and-mortar to ecommerce representing over $140 billion in retail value.<sup>14</sup> Within global ecommerce, marketplaces commanded 59% of total revenue in 2023 and, in the United States, grew more than twice as fast as D2C channels in 2023.<sup>16</sup>

![business1fa.jpg](business1fa.jpg)

\**Euromonitor International, Retail: Euromonitor from trade sources/national statistics – October 2024.*

***Ecommerce is Simple for Consumers but Complex for Brands***

For consumers, it is increasingly easy to shop online and have products show up at their doors within days or even hours. For brands, the shift to ecommerce has created new opportunities to grow. However, in making shopping easier for consumers, much of the complexity has shifted to brands. Brick-and-mortar retailers offer finite shelf space, relatively stable pricing and more straightforward advertising and fulfillment processes. Conversely, ecommerce marketplaces leverage algorithms for product discovery and real-time pricing, offer unconstrained shelf space that dynamically updates and necessitates always-on advertising to drive product visibility. The stakes are heightened by the "winner-takes-most" nature of the ecommerce marketplace ecosystem where the top three organic

<sup>14</sup>&nbsp;&nbsp;&nbsp;&nbsp; *Euromonitor International, Retail: Euromonitor from trade sources/national statistics* – *October 2024.*

<sup>15</sup>&nbsp;&nbsp;&nbsp;&nbsp; *Factset, Ecommerce Intelligence (ID # FI3550US), for the three years ended December 31, 2023 (Accessed on November 21, 2024); eMarketer, US Ecommerce Forecast 2024: Retail Sales Will Chart a Modest and Steady Course Through Ongoing Headwinds – August 2024, https://content-naf.emarketer.com/us-ecommerce-forecast-2024.* 

<sup>16</sup> &nbsp;&nbsp;&nbsp;&nbsp; *Euromonitor International, Retail: Euromonitor from trade sources/national statistics – October 2024; Factset, Ecommerce Intelligence (ID # FI3550US), for the three years ended December 31, 2023 (Accessed on November 21, 2024).*

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search results on the first page capture over 60% of clicks.<sup>17</sup> Moreover, marketplaces present complex and expensive warehousing, packaging and shipping challenges for brands to meet consumer expectations of same day or next-day delivery. Most brands lack the resources, scale and capabilities needed to grow their ecommerce business profitably on their own. As a result, they stand to benefit from a comprehensive solution.

***Pattern is the Solution***

We have spent more than a decade obsessing over how to make managing ecommerce easier for consumer brands so that they can focus on what they do best: creating products that customers want to buy. Pattern's platform sits as a thin layer between brands, marketplaces and consumers.

![prosummary2a.jpg](prosummary2a.jpg)

*\**&nbsp;&nbsp;&nbsp;&nbsp; *Euromonitor International, Retail: Euromonitor from trade sources/national statistics – October 2024.*

*&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The diagram above shows Pattern's position in the ecommerce landscape. Pattern is a third-party seller and works with brands to sell their products on global marketplaces to reach consumers worldwide. The flags of nations represented under "Global Consumers" represent the global marketplace of consumers generally.*

Our patented technology and on-demand experts function as the "easy button" for brands as they navigate the complex ecosystem of marketplaces, regions, languages, regulatory environments, technology point-solutions and agencies. We believe that, over time, brands will have an increasingly difficult time managing all of this on their own, and Pattern will become an even more compelling solution to the complexities of scaling and accelerating within global ecommerce.

The marketplaces on which we operate benefit from both the more positive consumer experience we offer, as well as the accelerated consumer sales growth that our platform enables. Given our reputation for positive consumer experience and breadth of product selection, we receive inbound requests from marketplaces interested in working with Pattern as they expand their third-party offerings.

***Our Business Model***

We believe that one of the best ways to monetize our technology and expertise is by purchasing products from our brand partners and selling those products to consumers on global marketplaces. We generate the substantial majority of our revenue from consumer product sales on global ecommerce marketplaces. This model results in a more seamless, low-friction relationship that is familiar to our brand partners and allows Pattern maximum control over the customer experience, including content, pricing, logistics and customer service. In our experience, this

<sup>17</sup>&nbsp;&nbsp;&nbsp;&nbsp; *Search Engine Journal, Amazon's Search Engine Ranking Algorithm: What Marketers Need to Know – August 2018, https://www.searchenginejournal.com/amazon-search-engine-ranking-algorithm-explained/.*

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business model aligns Pattern's and our brand partners' incentives toward maximizing growth. Importantly, transacting directly with consumers also allows us to accumulate comprehensive marketplace data, perform real-time testing and build more powerful predictive models. As a result of the advantages of our platform and business model, our revenue outpaced the growth of the ecommerce segment by a multiple of approximately&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; x over&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; .

***How We Do What We Do***

As the pioneer of ecommerce acceleration, Pattern defines what it means to be an ecommerce accelerator: a platform that combines proprietary technology and on-demand expertise. Given the complexities that consumer brands face in scaling and accelerating global ecommerce, we have organized our platform around a simple and intuitive formula, which we call the ecommerce equation:

![prosummary3a.jpg](prosummary3a.jpg)

Today, our software, with a combined total of 26 issued patents and patents pending, is supported by approximately 350 software engineers, data scientists and other technology professionals who are dedicated to enhancing and innovating upon our technology to further increase our capabilities. We believe our data and technology provide a competitive advantage and will continue to differentiate our platform from alternative solutions.

We believe ecommerce complexity cannot currently be solved without the right combination of sophisticated technology and on-demand expertise, and that it is unlikely to be solved in the near future by technology alone. We have a team that offers differentiated, comprehensive, on-demand expertise and capabilities across marketplace management, marketing, fulfillment and brand protection on a global basis. Our brand partners trust our industry experts with everything from day-to-day ad campaign management and creative execution to strategic decisions, such as what product categories have the most potential or which global markets to enter. Our operational experts also help brand partners access our worldwide fulfillment network, utilizing our proprietary WMS to deliver efficient and scalable volume to marketplaces and, in some cases, directly to consumers across the globe. Leveraging our technology, our in-house industry experts deliver data-driven outcomes efficiently across all aspects of the ecommerce equation. Today, we sell tens of thousands of products from more than 200 brands across different industries and geographies including the Americas, Europe, Australia and Asia. Our current brand partners' industry presence includes health and wellness, beauty and personal care, home and lifestyle, pet, sports and outdoors and consumer electronics.

***Our Results***

We have developed and maintained, and continue to develop and maintain, strong and long-lasting brand partner relationships. For the year ended December 31, 2024, approximately 87% of our revenue was attributable to existing brand partners. More than 48% of our revenue was attributable to brand partners that have been with Pattern for more than five years. For the year ended December 31, 2024, our NRR was 116%. See the section titled

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"Management's Discussion and Analysis of Financial Condition and Results of Operations—Key Business Metric and Non-GAAP Financial Measure" for information on how we define and calculate NRR.

We believe that we benefit from a powerful flywheel effect supporting our growth at scale: the more data we collect, the more accurate our insights become and the faster we accelerate brand partners. As our brand partners grow and we attract new brand partners, the more efficient our operations become and the more we can invest in technology. We use our technology and data advantage to identify high-potential new brand partners and leverage a targeted, efficient go-to market approach to bring them onto our platform, further fueling our flywheel. At the same time, our average cost to serve our brand partners globally as a percentage of revenue has decreased over the past two years. As we continue to scale, we expect continued improvement, and we plan to share these savings with our brand partners while we continue to invest in our platform.

In the year ended December 31, 2024, we generated revenue of $1,796 million, which represents a CAGR of 35% over the last two years. During the same period, our net income increased $71 million from ($3) million to $68 million. Our Adjusted EBITDA during 2024 was $101 million, which represents a CAGR of 138% over the last two years.

For the three months ended March 31, 2025, we generated revenue of $540 million, representing an increase of 32% over the three months ended March 31, 2024. During the same period, our net income increased $5 million from $18 million to $23 million. Our Adjusted EBITDA during the three months ended March 31, 2025 was $34 million, representing an increase of 31% over the three months ended March 31, 2024.

Adjusted EBITDA is a non-GAAP financial measure. For additional information about our non-GAAP financial measure, including reconciliations of the non-GAAP financial measure to the most directly comparable financial measure stated in accordance with GAAP, see the section titled "Management's Discussion and Analysis of Financial Condition and Results of Operations—Key Business Metric and Non-GAAP Financial Measure."

![prosummary4e.jpg](prosummary4e.jpg)

**Industry Background**

***Consumer Trends***

The approximately $4 trillion global ecommerce market is forecasted to grow at a CAGR of 9.3% 2024 to 2028, representing more than $400 billion of annual growth.<sup>18</sup> Not only is global ecommerce expanding, it is also becoming a larger share of retail, increasing from 10% of retail sales in 2016 to a projected 25% by 2028.<sup>18</sup> This represents a meaningful shift in consumer spending, as each 1% shift from brick-and-mortar to ecommerce represents over $140 billion in retail value.<sup>18</sup> Ecommerce is the preferred channel for an increasing number of consumers, with the global ecommerce market representing 22% of the global retail market in 2023.<sup>18</sup> In the top two countries with the highest ecommerce penetration, South Korea and China, ecommerce represents 46% and 36% of total retail sales, respectively, indicating potential upside for the rest of the world.<sup>18</sup>

<sup>18</sup>&nbsp;&nbsp;&nbsp;&nbsp; *Euromonitor International, Retail: Euromonitor from trade sources/national statistics – October 2024.*

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Within ecommerce, marketplaces commanded the largest share of global ecommerce revenue at 59% of total revenue in 2023.<sup>18</sup> For example, in the United States, marketplaces grew more than twice as fast as D2C channels in 2023, growing at 19% year over year compared to 8% for D2C channels.<sup>19</sup>

An increasing number of new marketplaces, such as Temu and TikTok Shop, are fueled by advancements in technology and changing consumer trends such as social commerce. The growth of marketplaces is primarily driven by 3P sellers and the selection they offer. 3P seller revenue grew from $736 billion in 2018 to $1.9 trillion in 2023, representing a 21% CAGR.<sup>20</sup>

As marketplaces continue to grow, consumer shopping behavior has also evolved, with an increasing number of consumers searching for products directly within marketplaces rather than using traditional search engines. For example, 61% of online shoppers began their product search on Amazon in 2022.<sup>21</sup> With this shift, it is increasingly important that brands stand out on the "digital shelf", or among the top of the search results for a given keyword/keyword phrase. Physical stores have finite shelf space that is largely static, while marketplaces offer an unconstrained digital shelf that dynamically updates. There are hundreds of thousands of keywords to compete on and the "winner-take-most" dynamic of the digital shelf makes it critical to the success of any brand. The top three organic search results on the first page capture over 60% of clicks,<sup>22</sup> meaning brands must compete to optimize their listings for organic search and/or pay to be included in sponsored results. This type of advertising is lucrative for marketplaces that have monetized this placement, but has made it challenging for many brands to balance visibility and profitability.

The consumer shopping journey continues to shift, with more and more consumers discovering products through new channels such as social media, fueling rapid advancements in social commerce. The number of TikTok Social Buyers<sup>23</sup> has increased from 6% of total TikTok users in 2020 to 37% of total TikTok users in 2023,<sup>24</sup> creating an opportunity for brands to broaden their channel strategy. Consumers also expect a seamless shopping experience across all touchpoints including product selection, quality and description, competitive pricing and convenience including fulfillment speed, return service and customer support. Approximately 33% of consumers use three or more channels to browse, research and purchase products.<sup>25</sup>

***Artificial Intelligence Tailwind***

Ecommerce is poised to benefit greatly from AI. This advantage stems from the vast number of consumer data points generated with each click, interaction and transaction that take place across the customer journey. AI-enabled solutions can analyze trillions of ecommerce data points to predict consumer behavior, generate personalized recommendations, detect fraud, forecast demand and manage inventory more accurately and efficiently than ever before.

The application of AI is particularly well-suited to ecommerce, where success is driven by optimizing customer experiences, including engaging and compelling product content, availability and pricing. Unlike other industries where the inaccuracy of AI could pose significant risks (e.g., autonomous driving), AI in ecommerce poses much less risk and can be effective in optimizing a wide range of activities including SEO, advertising, content generation and inventory management. As a result, companies with data and technology advantages are well-positioned to use AI to streamline operations and increase consumer satisfaction. Because publicly-available AI solutions have largely been trained on the same data sets, they are now converging on the same answers and results. As a result, companies that possess large, unique and proprietary data sets are well-positioned to drive growth and compete effectively.

<sup>19</sup>&nbsp;&nbsp;&nbsp;&nbsp; *Factset, Ecommerce Intelligence (ID # FI3550US), for the three years ended December 31, 2023 (Accessed on November 21, 2024).*

<sup>20</sup> &nbsp;&nbsp;&nbsp;&nbsp; *Euromonitor International, Retail: Euromonitor from trade sources/national statistics – October 2024.*

<sup>21</sup>&nbsp;&nbsp;&nbsp;&nbsp; *eMarketer, Over 60% of US online shoppers start their product search on Amazon – August 2022.*

<sup>22</sup>&nbsp;&nbsp;&nbsp;&nbsp; *Search Engine Journal, Amazon's Search Engine Ranking Algorithm: What Marketers Need to Know – August 2018, https://www.searchenginejournal.com/amazon-search-engine-ranking-algorithm-explained/.*

<sup>23</sup>&nbsp;&nbsp;&nbsp;&nbsp; *TikTok Social Buyers are users that make purchases either via links on the app or directly through the platform.*

<sup>24</sup>&nbsp;&nbsp;&nbsp;&nbsp; *Insider Intelligence (eMarketer), Share of users purchasing on TikTok in the United States from 2020 to 2023 – August 2022 (ID #1416784).*

<sup>25</sup>&nbsp;&nbsp;&nbsp;&nbsp; *Retail Dive, Thirty percent of consumers use more than three commerce channels: Study, https://www.retaildive.com/ex/mobilecommercedaily/thirty-percent-of-consumers-use-more-than-three-commerce-channels.*

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***Challenges that Brands Experience***

Effectively selling across global marketplaces is extremely complex and requires brands to master an array of variables, including:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• **Traffic generation:** creating awareness and interest in the products

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• **Demand capture:** identifying and converting existing demand into sales

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• **Content optimization:** enhancing listings to maximize visibility and conversion

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• **Brand consistency:** maintaining a cohesive consumer experience across all channels

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• **Inventory management:** optimizing inventory levels to ensure the right products are available at the right time while minimizing excess stock and storage costs

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• **Marketplace compliance:** complying with policies across marketplaces and regions

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• **Shipping logistics:** offering fast and reliable yet cost-effective ways to deliver products

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• **Post-purchase engagement:** converting one-time purchasers to repeat customers

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• **International expansion:** capitalizing on growth opportunities across different regions

At Pattern, we believe it is virtually impossible for brands to optimize each variable by themselves. Our 2024 internal survey of more than 300 North American brand leaders showed that half of brands have ecommerce teams of five or fewer and 70% have 10 or fewer. These brands with ecommerce teams can be tasked with managing hundreds of SKUs across dozens of global marketplaces (including their own .com or D2C sites), often executing on thousands of keywords per product and navigating complexity that increases each year. These complexities apply regardless of business model – whether they utilize 3P or 1P selling strategies, brands are required to list and market their own products on the marketplace while considering pricing and inventory levels.

With these complexities and opaque marketplace requirements, brands are presented with five key challenges:

*Challenge #1: Growing profitably* 

Achieving profitable growth online is a significant challenge for many brands, despite the expanding opportunities in ecommerce.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• The cost of acquiring new consumers online has steadily increased due to intense competition for digital ad space.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• Selling on major marketplaces involves substantial fees, including referral fees, advertising and merchandising fees and other marketplace fees.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• Managing logistics is particularly expensive, especially with growing consumer expectations for fast delivery, free shipping and easy returns.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• The balancing act between meeting consumer demand and avoiding excess inventory.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• Developing internal technology like inventory management and analytics is a time consuming and expensive endeavor.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• Maintaining and upgrading these technologies is expensive, and smaller brands struggle to afford the level of sophistication and lack the expertise and resources required to compete with larger, established players.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• The need for constant technological innovation adds further pressure on costs and profitability.

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*Challenge #2: Lack of technology* 

Many brands do not have integrated technology capabilities. Using a patchwork of solutions can make it difficult for brands to come up with coherent strategies and coordinated execution, leading to inefficiencies and inconsistencies.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• Utilizing disconnected technology for advertising and inventory management across different marketplaces can result in operating inefficiencies such as stockouts, which can increase costs, delay fulfillment and strain relationships with consumers.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• Managing a patchwork of ecommerce technology often leads to higher costs, since each tool or platform requires a separate subscription, custom integration and ongoing maintenance.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• Many brands also lack the technology or systems to capture and analyze data in real time, which can cause delayed insights for inventory and marketing strategies.

*Challenge #3: Lack of access to high quality and comprehensive data*

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• Brands often face significant challenges in capturing high quality and comprehensive ecommerce data, which can limit their ability to optimize strategies, improve customer experiences and drive growth.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• Brands are unable to access certain key data on global marketplaces, advertising platforms and social media without custom-built technology.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• Brands selling across multiple channels—direct-to-consumer websites, social media platforms and marketplaces—face difficulties consolidating data into a single source of truth.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• Different ecommerce platforms use varying formats and metrics, which can result in inaccurate or incomplete data when integrated improperly.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• Decentralized data and a lack of automation can also lead to overspending on advertising, which benefits marketplaces, but hurts brand profitability: in 2023, the average cost per click of sponsored product ads on Amazon U.S. increased by 11.6% from 2022.<sup>26</sup>

*Challenge #4: Lack of expertise*

Hiring a team that understands the complex ecommerce landscape is extremely difficult and expensive. Without dedicated teams to help integrate the necessary solutions, the technology alone is unlikely to translate into growth and operational efficiency.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• Brands require in-depth, specialized knowledge to succeed across multiple marketplaces and regions which have different and evolving regulations, rules and policies.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• Without experts, as brands scale, the aforementioned inefficiencies and inconsistencies like stockouts will only be exacerbated.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• As emerging ecommerce channels such as TikTok Shop rise in prominence, brands require a nimble team to adapt to the ever-changing landscape.

*Challenge #5: Retaining brand value throughout the consumer experience* 

It is difficult for brands to position themselves consistently across different marketplaces.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• As marketplaces attract more 3P sellers, the featured offer becomes increasingly competitive as dynamic pricing and marketplace algorithms often prioritize lower prices over other metrics, making it harder for brands to maintain premium positioning.

<sup>26</sup>&nbsp;&nbsp;&nbsp;&nbsp; *eMarketer, Industry KPIs: Advertising on Amazon is getting more expensive, but ROAS is holding steady – March 2024.*

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&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• Sellers are often forced to compete on price, driving down listing price and creating a "race to the bottom" across the ecommerce ecosystem that hurts brands' profitability and can harm overall brand reputation.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• Unauthorized sellers often list products for sale at lower prices with inaccurate or incomplete product descriptions, without adhering to brand guidelines, which undercuts authorized distributors and can weaken a brand's pricing and image.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• The sale of counterfeit products can damage a brand's reputation and erode consumer trust. For example, according to a survey, approximately 65% of consumers who have unintentionally purchased counterfeit goods lost trust in a brand after such purchases, stopping them from ever repurchasing anything from that brand again.<sup>27</sup>

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• As brands expand to new marketplaces, they often face challenges in maintaining high standards for delivery speed and customer service, which can ultimately hinder the success of their marketplace expansion efforts.

**The Ecommerce Acceleration Category**

Brands require a comprehensive solution to scale their ecommerce businesses. However, technology alone can't solve the complexities of ecommerce. Success requires a combination of advanced technology and proven industry expertise. As the pioneer of ecommerce acceleration, Pattern defines what it means to be an ecommerce accelerator: a platform that combines proprietary technology and on-demand expertise.

We created the ecommerce acceleration category to offer a platform to help brands rapidly scale their online presence and maximize their performance across digital channels. Key solutions from ecommerce accelerators include platform integration, data and analytics, marketing and advertising solutions, supply chain optimization, listing optimization, pricing and promotion management and customer engagement solutions. Coupled with on-demand expertise to facilitate execution, these solutions can help brands increase sales, improve customer experience, expand to new markets and marketplaces faster and better adapt to the changes in the dynamic ecommerce world.

<sup>27</sup>&nbsp;&nbsp;&nbsp;&nbsp; *Incopro, Counterfeit products are endemic – and it is damaging brand value – July 2019, https://www.incoproip.com/wp-content/uploads/2020/02/Incopro-Market-Research-Report.pdf.* 

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**Our Platform**

Our platform is a combination of our proprietary technology and our on-demand expertise, both of which sit upon our differentiated data set. Our software and global team of industry experts optimize traffic, conversion, price and availability to drive profitable growth for our brand partners.

![business5k.jpg](business5k.jpg)

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;*The diagram above illustrates the key components of our platform and the subparts that form a multi-faceted ecommerce acceleration value proposition. Our technology stack is illustrated on the right side of the diagram. Users start their journey by logging into the EXP, where they gain access to a myriad of data-driven insights at both the brand and product levels. They can choose from four execution engines (Traffic, Conversion, Price and Availability), each offering various modules to take action to optimize marketplace performance. These optimizations are informed by our proprietary data set, which is analyzed and transformed into actionable insights through our AI computational layer. Additional details of each layer within our platform are depicted on the left side of the diagram.*

**Our Technology**

***EXP Data Layer***

The backbone of Pattern's EXP is formed from its robust and extensive data layer. This layer acts as the central nervous system of the platform. Millions of daily API calls send critical information, with data points on everything from keyword data to fulfillment rates to market share that are leveraged to inform the rest of the platform's functions. This backbone not only draws on our existing 44 trillion data points, but also collects, stores and structures more than 100 billion new data points each week on average. This data covers a wide variety of signals across millions of products, keywords, brands, consumer behavioral inputs and more, including search, advertising, fulfillment, content conversion rates, ratings and reviews, social media influencers, likes, shares, clicks and comments. In addition, our data set is augmented by relationships with other data providers.

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***Artificial Intelligence***

The EXP data layer also includes the various machine learning, natural language processing engines and LLMs that train on our wide set of proprietary data. We refer to machine learning, natural language processing engines and LLMs collectively as our AI base that produces data-driven insights to power our platform. We have developed our own proprietary AI models and also license AI models and other technologies from third parties. Our AI models rely on a diverse range of sources, including data collected from our customers, brand partners and, in some cases, website scraping, other data collected from marketplaces and other third parties and self-generated data, including novel data generated through machine learning. This data covers a wide variety of signals across millions of products, keywords, brands, consumer behavioral inputs and more, including search, advertising, fulfillment, content conversion rates, ratings and reviews, social media influencers, likes, shares, clicks and comments. We review, refine and prepare the data, establishing clear criteria for the data used by our AI models. As opposed to algorithmic code which generates a determined outcome based on certain inputs, these AI models utilize internal logic to analyze billions of data points and learn how that data is connected, draw inferences from that data based on the models' internal logic and layered complex decision making, and use those inferences to produce valuable computations and insights when presented with novel data, which are then utilized by the rest of the platform. Our AI models continue to improve in line with the increasing data used to train each successive model. The AI layer also runs security protocols and authentication applications to help track users, accounts and other integration points. Despite the business scale we have reached due to our EXP, we believe our EXP is still in the early stages of product development and its potential. We continue to develop this proprietary technology daily through continued investment and refining of our data collection techniques and AI models. This development process has resulted in valuable and marketable byproducts secondary to the core EXP use cases, such as AI-generated product content optimization with applications beyond ecommerce acceleration. These byproducts have resulted in us licensing specific SaaS solutions to our consulting clients. We will continue to monitor our nascent business lines that we could potentially license in the future.

***Insights Engine***

The Pattern Insights Engine is the analytical brain of EXP. The Insights Engine compiles the AI-driven computations from the EXP data layer and continuously aggregates them into performance dashboards, scorecards, filter-ready reporting and ongoing notifications. The Insights Engine sits across the execution engines extending to every module of the EXP. This provides up-to-the-minute reporting and signals on hundreds of key processes and metrics, including payments to social influencers, impressions on listings, syndication failure rates for content being pushed to marketplaces, customer lifetime value and much more.

The Insights Engine is leveraged by Pattern experts and brand partners alike to keep a pulse on important trends, issues and opportunities. How did a brand's top SKU perform revenue-wise on Black Friday compared to last year? How fast is the category growing for "Facial Microdermabrasion Products" and is market share for Brand X in that sub-category up or down over the past 60 days? Which products are at risk of going out of stock in the next 45 days and what is the status of inbound goods to replenish them? What is the average fee paid to an influencer within the Beauty category on TikTok Shop? These are just a handful of the myriad insights being served up daily via the Pattern Insights Engine.

A powerful example of a module within the Insights Engine is Pattern's Digital Shelf. This capability works by prompting the user to enter in a product name, keyword or Amazon standard identification number ("ASIN"). Within milliseconds, it returns a detailed description of and important data regarding that product's top competitors across the Amazon site in the search field.

***Execution Engines***

In addition to an Insights Engine, Pattern's EXP includes four execution engines, which each contain modules that enable automation, scale, and execution based on the information and insights gleaned from the Insights Engine. These four Execution Engines align to the ecommerce equation: Traffic, Conversion, Price and Availability.

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*Traffic Engine*

The Pattern EXP Traffic Engine is the execution arm for all activity related to driving digital traffic (i.e., consumer eyeballs) to brands and product listings around the world. One of the highlights of this engine is a patented keyword recommendation module we call Destiny. The goal of Destiny is to increase organic (i.e., non-paid) traffic to a given listing by using machine learning and proprietary data to recommend keywords and keyword phrases on which said listing has mathematical propensity to win better placement.

The ecommerce Digital Shelf reflects a product's current competitive landscape, not aspirational comparisons. Marketplace algorithms prioritize products with strong performance indicators: high click-through and conversion rates, new-to-category customers, low return rates and repeat purchases. Destiny highlights keywords with the highest winnability, or a product's ability to outperform competitors across these key performance metrics. As strong performance drives higher organic rankings, products gain visibility across more keywords, unlocking greater sales opportunities. These incremental wins compound over time, driving growth.

Destiny works by identifying these keywords at a product level and then pushing those recommendations into Pattern's algorithmic bidding technology, which systematically optimizes advertising bids thousands of times throughout the day on the product and marketplace in question. By leveraging Destiny, brands are able to dramatically increase their advertising efficiency in two ways:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• Reallocating existing advertising spend to keywords on which they have higher winnability (which typically converts at a higher rate and costs less); and

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• Demonstrably improving the organic ranking of the brand's products across thousands of keywords.

The scale and volume of keywords and keyword phrases that Destiny analyzes is impracticable to replicate manually and offers the opportunity to capture sales on the full list of relevant searches. In addition, by bidding only on keywords or keyword phrases for which the product is not organically ranking, Destiny helps ensure that advertising-driven revenue is truly incremental.

The Pattern EXP Traffic Engine includes many other important modules, which enable recruiting, managing, paying and communicating with social media creators, managing advertising and influencer campaigns on marketplaces and social networks and managing/optimizing advertising spend across every aspect of the demand funnel, to name a few.

*Conversion Engine*

The Pattern EXP Conversion Engine is the execution arm for all efforts aimed at improving the efficacy and conversion rate of a brand's content and listings across dozens of ecommerce and social media platforms, which may include everything from product detail page titles and bullets to product photography, videos, user-generated content and other microsites, landing pages and advertisements. In addition to granular reporting on page views, click share, orders, category ranking and reviews for any given product, the Conversion Engine leverages our data, LLMs and transformer-based neural networks, a type of machine learning model that excels in tasks like language understanding, translation and text generation, to provide competitive insights comparisons to the digital shelf and make sophisticated content recommendations. This provides actionable value in three primary areas: content management, content optimization and content creation.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• **Content management:** For a given brand owner, each of their products have both digital assets (such as product photography and videos) as well as potentially hundreds of product attributes (such as weight, dimensions, model numbers, ingredients and product descriptions) that are shared daily with retailers, distributors and customers alike. Pattern's Conversion Engine includes both a digital asset management library ("DAM") as well as a product information management system ("PIM") that simultaneously catalog and categorize millions of product assets and attributes into an easy-to-use and easy-to-navigate system. Brands not only leverage these systems as an internal source of information, but also share access with partners and vendors. Because retailers and ecommerce platforms have different requirements related to assets (such as number of images, colors and sizing) and content (such as character length, SKU numbers

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and preferred attributes), Pattern's syndication module also provides ready-made templates for distributing content to retailers and marketplaces and in many cases, dynamically syndicates content and assets via API to these platforms in a manner designed to ensure any issues or failures are quickly addressed and resolved. The engine can also proactively monitor marketplaces to ensure that if a brand's content is inadvertently changed by another party, the brand will be notified that it does not "match" their preferred and often legally mandated content library.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• **Content optimization:** Pattern's patent-pending content optimization technology is based on deep data and analysis of a product's primary competitors, or digital shelf. In order to make recommendations for optimizing content on a given product, our technology uses AI to analyze more than 2 million data points including the images, titles, bullet points and brand content for hundreds of the product's closest competitors. The output of this analysis is a fact sheet that contains the equivalent of more than 10,000 pages of competitive insights. For example, for the photography recommendations, we use AI to determine image classifications or archetypes for every photo of every competitive product to determine which image archetypes are best converting and generating revenue on the marketplace. We then condense this data into a "Content Brief," which provides specific, data-driven recommendations on improving the functionality, positioning and content for the product in question.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• **Content creation:** For brands who desire greater scale, speed or efficiency, Pattern's Conversion Engine leverages AI-driven content creation solutions that are given detailed prompts extracted from the 10,000-page equivalent fact sheets that we generate for each content brief. The result is a vast array of photos designed to learn from and leverage the attributes of the highest-converting archetypes in the category.

*Price Engine*

Pattern's Price Engine includes a wide range of modules related to maintaining brand control on marketplaces. Most marketplaces include some sort of "add to cart" section of a product listing page, which is also known as the featured offer. The featured offer generally lists the product price, the name of the seller offering the product and some indication of how the product will be shipped to the customer — often fulfilled by the marketplace or directly shipped from the seller. Ironically, brands do not have good visibility into these dynamics or metrics for their products. Pattern's Price Engine allows brands to better understand if unauthorized sellers are selling their product, for what price they are selling it and what share of overall sales these sellers are commanding. For brands that have a minimum advertised pricing ("MAP") policy, they are able to view MAP-adherence for sellers in regions where MAP applies. Within this engine, Pattern also monitors hundreds of websites daily to help brands detect price suppression, price erosion and general price competitiveness.

*Availability Engine*

Pattern's Availability Engine contains a number of modules, including a robust order management system, which provides brands with ongoing visibility into their product inventory pools across marketplaces, as well as detailed information on where their products reside in the pipeline. Other modules in the Availability Engine provide Pattern internal teams with forecasting models and detailed information regarding in-stock rates, which helps brands avoid advertising products that are at imminent risk of going out of stock. Further product details provided include physical location and status of purchased goods, including area designations, location profiles, storage IDs and pick types. Other functionality within this engine includes inventory mapping, order queues and process types. This software is critical in helping maintain high in-stock rates for brand partners and keeping Pattern warehouses running efficiently.

**Our On-Demand Expertise**

Our team of global, in-house experts includes experienced brand managers, ad strategists, SEO strategists, art directors, account health specialists, data scientists, former brand and retail executives, customer service specialists and in-stock managers. Our experts leverage our platform and experience across many brands to seek to profitably grow our revenue while executing with our brand partners' specific goals and priorities in mind. Our experts execute against our acceleration playbook, which includes a number of activities across the brand partner lifecycle. We

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believe our technology is amplified by our team, and this combination will drive greater success than standalone agency models or technology solutions.

We kick off new brand partnerships by assigning a brand manager to each new brand partner to offer dedicated, end-to-end support and drive alignment on key priorities and goals through a joint business plan. Using our forecasting model, in-stock managers place orders for the inventory we expect to sell in the first few months of the relationship, which is shipped to Pattern's warehouses for preparation and shipment to the contracted marketplace(s). Better accuracy and speed means customers see in-stock messaging faster and more reliably on product listing pages, which drives traffic and conversion. This is also bolstered by optimized product titles, bullets and product descriptions. Once products are in stock with optimized listings on the relevant marketplace(s), advertising strategists launch campaigns, leveraging Pattern's patented technology, with the goal of driving placement in the top four search results for relevant keyword/keyword phrases. Our customer service teams also begin managing customer interactions and any customer loyalty programs.

As revenue ramps, we manage ongoing business performance measurement, tracking metrics including revenue, price consistency, in-stock rates, inventory health, catalog completeness, advertising efficiency and customer review sentiments. We also ensure readiness for growth opportunities, including brand participation in events (such as Black Friday and Chinese Singles Day) and use our data to surface opportunities to expand to new marketplaces and new regions.

Our team is accessible to brand partners through regular business reviews scheduled on a weekly, monthly and quarterly cadence, as well as on an ad-hoc basis, offering brand leaders and executives assurance that any emergent opportunities or issues will be quickly identified and addressed.

**Our Competitive Strengths** 

***Win-win Partnership Mindset***

We run our business on the philosophy that a brand partner's success and our success are linked. Our business model avoids the "agency mindset," as the incentives of both Pattern and our brand partners are economically aligned towards driving consumer product sales. Whereas traditional marketplace agencies and technology providers charge fees, retainers and percentages of advertising spend, Pattern's brand partners benefit from a highly symbiotic business model where our revenue is directly tied to the sales of our brand partners' products. The more we sell to customers, the more we buy from our brand partners and, therefore, our success is our brand partner's success.

Acquiring inventory demonstrates our commitment to and belief in our own capabilities while providing a more seamless and a low-friction collaboration with our brand partners by allowing us to maintain control over the entire process, from product content and pricing to customer service, logistics and data collection. Our model helps create enduring relationships with our brand partners and offers scalability that we believe surpasses most software-only monetization strategies.

***Comprehensive Proprietary Technology and Data Sets***

As one of the largest third-party sellers worldwide—and the largest on Amazon in the United States<sup>28</sup>—we hold a distinct and growing data advantage. We gather massive amounts of real-time data, with more than 44 trillion data points captured since our inception and more than 100 billion new data points added each week on average. Our proprietary and scaled data assets allow us to provide differentiated insights for our brand partners across the ecommerce equation, from sales to marketing, consumer behavior, fulfillment and logistics. By virtue of our increasing presence and data collection on more than 500 million products across 100 marketplaces, advertising platforms and social media applications around the world, we continue to enhance our proprietary data set.

Collectively, our Insights Engine and software that form the Pattern platform cover all aspects of the ecommerce equation for our brand partners. The foundation of our technology is Pattern's EXP, composed of our data and computational layers, including our AI technologies. Our various machine learning, natural language

<sup>28</sup>&nbsp;&nbsp;&nbsp;&nbsp; *Market Pulse, Top Amazon Marketplace Sellers, https://www.marketplacepulse.com/top-amazon-usa-sellers (Accessed on November 3, 2024).*

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processing and LLMs analyze billions of data points to provide valuable computations. Our Insights Engine then continuously aggregates insights from Pattern's EXP into performance dashboards driving all of our modules, producing traffic, conversion, price and availability insights that we use to make data-driven decisions at scale. We provide brand partners with crucial data to safeguard their brand equity online by facilitating consistency across marketplaces and enabling brands to have unified product listing content, fast delivery speeds and quality customer service. The scale and volume of data points that our machine language-powered software analyzes is impracticable to replicate manually, which we believe provides us with a technological advantage over other ecommerce accelerators.

***Integrated, On-demand Expertise***

The strength of our platform is amplified by our integrated, on-demand industry experts who use our technology to offer valuable insights and best practices for succeeding in online channels. Our experts have extensive experience across multiple brands, categories, marketplaces and regions – possessing a depth of knowledge that surpasses what any single brand could independently achieve. For example, our experts can help create a tailored operational strategy, offering expertise to our brand partners, including marketing strategy and implementation, creative development and customer service. Among other things, these experts offer expertise on digital marketing, leveraging SEO, social media, email campaigns and paid advertising to drive traffic and boost conversions. In addition, as brands expand globally, our experts can pass on critical information such as the largest and most strategic shipping ports in the world and associated costs. Our experts work closely with brand partners, maintaining strong relationships and open lines of communication, providing brands regular performance updates. This transparency fosters a strong, collaborative relationship where both parties are aligned in their objectives.

***Scale***

Our global scale is at the heart of our efficacy as an ecommerce accelerator. Every element of our platform benefits from compounding scale, from breadth and diversity of data, to technology investment and on-demand experts, to our global logistics network. For example, we have approximately 350 software engineers, data scientists and other technology professionals focused on enhancing our technology, and we have large talent centers dedicated to excellent operational support. We also batch our shipments, allowing us to ship approximately 92% of our units in the United States in full truckloads, which have a shipping cost that is generally more than 75% below shipments sent in less-than-full truckloads. These benefits of scale have compounding returns, as the more data we collect, the more accurate our insights become, the faster we accelerate brands. As our brand partners grow and we attract new brands, the more efficient our operations become and the more we can invest in technology. Without the benefits we derive from scale, many of our brand partners would be unable to effectively compete in marketplaces.

***First-mover Advantage***

We also benefit from first-mover advantages. We invested early in building proprietary technology to gather and analyze ecommerce data. As the first mover, we have built a competitive edge by accumulating a robust data set, entering complex international markets and establishing a track record of seller excellence across global marketplaces, which allows us to offer data-driven insights and comprehensive optimization strategies for our brand partners. We also leverage our first-mover status to scale globally, establishing infrastructure and expertise in international markets before many competitors. This head start allows us to assist brands with global expansion, providing a significant competitive advantage.

***Deep and Long-lasting Brand Partner Relationships***

We have built enduring relationships with our brand partners that we believe surpass most software-only monetization models. For the year ended December 31, 2024, approximately 87% of our revenue was attributable to existing brand partners, and more than 48% of our revenue was attributable to brand partners that have been with Pattern for more than five years, demonstrating our strong and durable relationships.

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***Proven Leadership Team***

We believe our talent, expertise and culture are key competitive advantages. Our founder-led, data-obsessed team comprises a diverse range of experts who are highly focused on execution, innovation and continuous improvement. Our team is at the core of our ability to drive results.

**Our Flywheel Effect**

We use our proprietary data and technology and our global logistics network to optimize the ecommerce equation to drive growth for our brand partners. We believe we benefit from a powerful flywheel effect supporting our growth at scale: the more data we collect, the more accurate our insights become and the faster we accelerate brands. As our brand partners grow and we attract new brands, the more efficient our operations become and the more we can invest in technology.

Our presence on multiple marketplaces allows us to gather valuable data and insights from the larger data set, which helps us drive success for our brand partners. This data improves our targeting and marketing capabilities on platforms like Google, Facebook and marketplaces. Our scale allows us to test and optimize at a level that smaller operators cannot afford. With a larger volume of ad campaigns and data, our understanding across market share, revenue share, click share and keyword impressions becomes more accurate and we can more effectively leverage machine learning and AI to optimize marketing strategies. The insights gained from managing more brands provide an advantage in terms of refining advertising techniques and maximizing return on investment.

With more brands under management, and as we increase volume and overall scale, we better optimize logistics and shipping across our platform, improving delivery times and decreasing the cost per brand using our platform. This creates an attractive offering for brands that lack the ability to effectively leverage the shipping and fulfillment networks, preventing them from being able to deliver in-demand service such as one-day shipping and participating in specific marketplace programs that would otherwise increase demand in their products.

With greater operating leverage, we are able to continue to prioritize investment in product development, innovation, research and development and go-to-market. This means we can introduce new features and test cutting-edge marketing strategies, supporting even better outcomes for our brand partners and driving results that help us attract new brand partners. By spreading investments across multiple regions and categories, we can experiment with innovations while reducing risk. Successes can then be scaled across our entire portfolio.

**Benefits to Our Ecosystem**

Our platform drives demonstrable value across the ecommerce ecosystem: consumers, brand partners and marketplaces.

***Benefits to Consumers***

We provide a consistent and efficient experience for consumers across all ecommerce channels that we operate in.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• Because we follow our brand partners' brand policies, consumers can trust that they are purchasing authentic products.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• Highly ranked on price competitiveness across marketplaces and offering quick response times to customers, we have a 4.9/5.0 seller rating with over 425 thousand ratings and our response time averages 2.4x better than industry averages on Amazon.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• Through effective inventory and logistics management, we ensure products are available and delivered quickly and efficiently into marketplaces, enabling fast shipping to consumers.

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&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• Low order defect rate and a high in-stock rate builds trust and satisfaction with customers, with our buyer dissatisfaction<sup>29</sup> rate more than 10x lower than the industry average.

***Benefits to Brand Partners***

Whereas traditional marketplace agencies and technology providers charge fees, retainers and percentages of advertising spend, Pattern's brand partners benefit from a highly symbiotic business model where our revenue is directly tied to the sales of our brand partners' products. The more we sell to the customers, the more we buy from our brand partners.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• We utilize our integrated end-to-end technology stack to help our brand partners solve the complex ecommerce equation, driving increased consumer sales.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• Our proprietary technology collects more than 100 billion new data points weekly on average, creating a rich data source that brand partners cannot access from any other competitor or technology product.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• We utilize our database to power our analytics technology, helping our brand partners to identify growth opportunities, including new customer acquisition, product development and global expansion. For example, every day we run a list of branded keywords across every geography we operate in, compare their GMVs and analyze the search frequency to identify potential geographies our brand partners can expand to.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• Our industry experts provide tailored strategies across marketing, fulfillment, customer service and inventory management on a global level.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• We protect our brand partners' reputation and brand integrity by continuously monitoring and identifying unauthorized sellers and counterfeit products and abiding by their brand guidelines.

***Benefits to Marketplaces***

Marketplaces on which we operate benefit from both the more positive consumer experience we offer, as well as the accelerated consumer sales growth that our platform enables. Given our reputation for positive consumer experience and breadth of product selection, we receive inbound requests from marketplaces such as Walmart and Temu interested in working with Pattern as they expand their third-party offerings.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• We help marketplaces diversify product selection by enabling brand partners to easily launch and scale their products in new channels through the utilization of our technology and comprehensive support.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• We leverage our expertise and track record to provide feedback and share insights with marketplaces, helping them fine tune their technology and customer and seller experience.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• We help drive advertising spend on marketplaces. Our technology brand gives partners better actionable insights into how to best engage with consumers, which gives them confidence to invest into advertising on marketplaces.

Through end-to-end data, technology and expertise, we create a streamlined and effective ecommerce experience that fosters growth, trust and satisfaction across relevant stakeholders.

**Our Market Opportunity**

Pattern operates within the expansive, approximately $4 trillion global ecommerce market,<sup>30</sup> a sector characterized by its large scale and the increasing number of consumers shopping online. Ecommerce stands as the fastest-growing retail channel worldwide, with projected annual sales volume increases exceeding $400 billion and a projected CAGR of 9.3% from 2024 to 2028.<sup>30</sup> This market is ripe for innovation, as many traditional retailers, having no

<sup>29</sup>&nbsp;&nbsp;&nbsp;&nbsp; *Buyer dissatisfaction tracks the total number of "No" responses to the survey question, "Did this solve your problem?" divided by the total number of surveys sent to buyers.*

<sup>30</sup>&nbsp;&nbsp;&nbsp;&nbsp; *Euromonitor International, Retail: Euromonitor from trade sources/national statistics – October 2024.*

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t fully embraced the transition to online, are unable to provide personalized and data-driven shopping experiences.

As of 2024, the global ecommerce sector is estimated to have a penetration rate of 23%.<sup>31</sup> We believe that several of our core categories, including health and wellness and beauty and home goods, are currently under-penetrated. In the United States, ecommerce penetration for similar categories is estimated to range from 20% to 40% as of 2024, whereas more mature ecommerce categories, such as books, music and video, have penetration rates approaching 70%.<sup>32</sup> Looking ahead, our core categories are forecasted to reach penetration rates of 30% to 50% by 2028 in the United States.<sup>32</sup> Historically, shifts in penetration rates have been a major driver of ecommerce growth, and we anticipate that this trend will continue to provide significant momentum for our business.

As we explore opportunities to expand our presence in global ecommerce marketplaces, we have identified additional retail brands that we believe can potentially benefit from our platform. We estimate that these brands represent a GMV of approximately $400 billion annually. This estimate is comprised of brands that currently have products offered on marketplaces in the geographies where we operate and includes the products these brands sell on those marketplaces. By leveraging third-party data sources, we aggregate ASIN-level product and pricing information for brands that we believe meet criteria that would make them attractive potential brand partners. Our focus is on brand size, potential unit economics, pricing and sales optimization, SKU concentration and inventory risk and complexity. While there can be no assurance that we will pursue, engage or enter into agreements with any of these brands, we believe there is significant potential to increase our sales through partnerships with new brand partners and to expand our relationships with existing brand partners. Our scale, technology and expertise deliver value to brands across marketplaces and regions. We believe we are in the early stages of capturing our market opportunity and hold a distinct competitive advantage through our data-driven approach.

**Our Growth Strategies** 

***Grow with our Existing Brand Partners***

One of our core priorities is retaining and growing our revenue attributable to existing brand partners through continued optimization of the ecommerce equation. We have strong and long-lasting brand partner relationships. For the year ended December 31, 2024, approximately 87% of our revenue was attributable to existing brand partners, and more than 48% of our revenue was attributable to brand partners that have been with Pattern for more than five years. For the year ended December 31, 2024, our NRR was 116%. See the section titled "Management's Discussion and Analysis of Financial Condition and Results of Operations—Key Business Metric and Non-GAAP Financial Measure" for information on how we define and calculate NRR. We plan to continue to increase our revenue by optimizing the ecommerce equation to increase our brand partners' revenue – optimizing product listings, keywords and advertising strategies to increase visibility and conversion.

We will also continue to grow by expanding our product selection from each brand partner. As we demonstrate our value to our brand partners, they often entrust us with a growing proportion of their products, which further strengthens our relationship and contributes to our growth. By deepening our relationships with our existing brand partners, we help them achieve greater sales and efficiency, which in turn drives our own growth.

We also help brand partners diversify across marketplaces, increasing their reach and resilience against market fluctuations. We partner with over 60 brands for which we sell products on five or more marketplaces—three times the number of brands since 2022. Additionally, the number of brand partners for which we sell products in more than two countries has doubled since 2022. We believe international marketplaces represent a significant growth opportunity in addition to domestic marketplaces.<sup>33</sup> For brand partners ready to expand internationally, we support entry into new global markets by providing localized strategies that consider cultural differences, language and local consumer behavior.

<sup>31</sup>&nbsp;&nbsp;&nbsp;&nbsp; *Euromonitor International, Retail: Euromonitor from trade sources/national statistics – October 2024.*

<sup>32</sup>&nbsp;&nbsp;&nbsp;&nbsp; *eMarketer, US Ecommerce by Category 2024: A Slowdown in Growth Reshapes the Landscape – February 2024.*

<sup>33</sup> *ECDB, ByteDance on the Fast Track With a High Level of Revenue and Strong Growth – January 28, 2025, https://ecommercedb.com/insights/the-top-5-global-ecommerce-companies/5053.* 

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***Attract New Brand Partners***

We also grow by signing new brand partners to our platform. We target brand partners with a proven track record of selling highly rated products, a loyal customer base and growth potential, assessed through our proprietary scorecard. Using our extensive data, we identify potential brand partners and our sales team efficiently markets to and signs new brand partners. The process involves thorough research, collaboration, clear communication and an emphasis on building long-term, mutually beneficial relationships. We utilize our strong track record of execution with current brand partners and reputation as a leading ecommerce accelerator to attract new brand partners looking for proven expertise in scaling online sales. Satisfied brand partners often lead to referrals and increased visibility within their industry, creating a positive cycle that helps us attract even more brand partners.

***Enhance and Expand our Platform***

Continuing to innovate and expand the breadth and quality of our platform enhances our value to our brand partners, differentiates ourselves in the ecommerce accelerator space and meets evolving market demands. We believe the investments we have made in research and development to build our technology have been a core differentiator of our EXP, and we will continue to focus on increasing our data set and creating new proprietary AI-powered solutions.

As a part of our technological advancement, we plan to enhance and integrate our existing solutions into current and new ecommerce marketplaces. Our ability to understand and optimize each lever of the ecommerce equation is essential and we continuously invest in our analytic technology to deliver actionable insights and strengthen our advertising capabilities to help our brand partners drive profitable growth.

The strength of our platform is core to driving differentiated growth and we will continue to be thoughtful in weighing organic growth, partnerships, investments and acquisitions to expand our solutions.

***Monetize Incremental Solutions***

Due to the strength of each element of our platform and the unique space we occupy at the intersection of brands and marketplaces, we will continue to evaluate the potential to monetize discrete components of the value chain and to diversify our revenue mix.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• **Software-as-a-Service:** We are committed to enhancing our SaaS capabilities with a particular focus on our PXM and Creators solutions. These solutions enable brands to more easily generate optimized content across all ecommerce channels, while also supporting the expanding social commerce sector by providing a centralized platform for recruiting, engaging and managing affiliate marketing campaigns.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• **Fulfillment:** We are investing in our fulfillment capabilities to accelerate our shipping processes and offer marketplace preparation services to other third-party sellers. We are also investing in expanding the reach of our middle mile solution, which we estimate saved up to 50% of shipping costs into marketplaces during 2024.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• **Services:** We are dedicated to enhancing our Services solutions, which deliver tailored consulting and design solutions to our brand partners.

***Continue to Expand into Global Geographies***

One of our competitive strengths lies in our global capabilities, and we believe there is a significant opportunity to increase our revenue by further expanding outside the United States. We plan to build on our solutions for our brand partners and to enhance our capabilities in other key regions such as Asia. Ultimately, we hope to be an ecommerce accelerator across all major ecommerce marketplaces across the world.

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**Our Brand Partners** 

Today, we partner with more than 200 brand partners across different industries and geographies including the Americas, Europe, Australia and Asia. Our current brand partners' industry presence includes health and wellness, beauty and personal care, home and lifestyle, pet, sports and outdoors and consumer electronics.

We believe the following case studies are examples of how some of our brand partners have benefited from our platform. We have highlighted brand partners of varying size and types across different industries, including health and wellness, home and lifestyle and sports and outdoors. Our brand partners experience different results depending on a number of factors, and these case studies are not necessarily representative of the results achieved by other brand partners of these types or otherwise.

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![feetures_casexstudyxonexpaa.jpg](feetures_casexstudyxonexpaa.jpg)

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**Confidential Treatment Requested by Pattern Group Inc.**

**Pursuant to 17 C.F.R. Section 200.83**

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**Confidential Treatment Requested by Pattern Group Inc.**

**Pursuant to 17 C.F.R. Section 200.83**

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**Confidential Treatment Requested by Pattern Group Inc.**

**Pursuant to 17 C.F.R. Section 200.83**

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**Confidential Treatment Requested by Pattern Group Inc.**

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**Our Solutions**

![business6ba.jpg](business6ba.jpg)

We offer a range of solutions that leverage our proprietary technology and ecommerce expertise to accelerate revenue growth and profitability for consumer brands in online channels.

Our flagship, core solution that drives the majority of consumer product sales on our platform is our Global 3P Accelerator. Our Global 3P Accelerator leverages the full breadth of our EXP to optimize traffic, conversion, price and availability across marketplaces and regions. This comprehensive platform includes technology for forecasting, inventory management, listing optimization, advertising automation, a team of dedicated experts to manage day-to-day execution, content creation and customer service, to name a few.

***Other Solutions***

Our technology and data has enabled us to identify new solutions that are in the early stages of development.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• **1P Accelerator:** Similar to our 3P Accelerator offering, our 1P Accelerator allows brands to benefit from our technology, services and operational expertise, but in this model, Pattern does not purchase any inventory (brands pay platform and services fees, allowing brands to maintain a 1P selling model (selling inventory directly to the marketplace)).

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• **Software-as-a-Service:** We offer PXM and Creators as a standalone service. PXM is our product experience management software that allows brands to seamlessly create optimized brand content across every ecommerce channel, including integrated PIM and DAM. Creators is a solution that offers brands a central place to recruit, engage and manage their affiliate marketing campaigns.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• **Fulfillment:** Our fulfillment services include Marketplace Prep, helping brands prepare and ship their products to marketplaces and DTC. This streamlines brands' direct fulfillment operations and middle mile, helping sellers save on inbound shipping.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• **Services:** We offer bespoke consulting services to provide market share insights and category analysis and design services to provide packaging, product design and prototyping expertise.

**Our Operations**

***Our Inventory Management and Warehouse Operations***

Pattern's inventory management strategy is critical to its success in delivering optimal inventory levels while keeping products in-stock across multiple platforms, marketplaces and physical locations.

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We believe the strongest inventory management execution requires world-class people developing sustainable processes and building scalable technology to deliver the correct amount of inventory, at the right time, in the right place. Our investment in experienced inventory management resources and technology has positioned Pattern to develop more accurate forecasts and, coupled with a dynamic and robust warehouse operations network, quickly recover when forecasts and market dynamics shift.

***Forecasting***

Our forecasting is anchored on a series of proprietary, data-science-driven models that analyze and explain historical trends to model the precise expected future performance of a specific product. The model, combined with our large repository of data and our close relationships with brand partners, enables us to optimize inventory levels based on consumer demand, expected promotional efforts and shifts in marketplace dynamics, attributes which are impossible to predict without expertise and knowledge of future initiatives resulting from joint planning with our brands. As a testament to our efficient inventory management, our weighted average inventory write-off as a percentage of our revenue has been less than 0.2% over the last three years, and in 2024, our inventory turnover ratio was 4.5x and our North American in-stock rate was 96%.

Inputs to forecasting algorithms include proprietary insights from historical sales, current price competitiveness of our offers on specific marketplaces, current inventory pipelines, total supply chain lead times for specific SKUs, seasonality, promotional periods, advertising spend, off-platform brand awareness campaigns, category trends and overall market dynamics. The technology handles the complexity of calculating and tracking the trends, enabling trained forecasting professionals to make the best buying decisions for Pattern.

***Inventory Purchasing Mechanics***

Our purchasing cadence and transparent buying mechanisms are built to reduce risk for our brand partners and for Pattern. Consistent, weekly purchasing for the majority of brand partners' products ensures we have the ability to quickly optimize inventory levels to reduce out-of-stock risk and overbuying scenarios.

Passing through our cross-dock facilities, leveraging our scale and utilizing our custom integrations with marketplaces makes our brand partners' products available to customers in days, compared to weeks or months for the average seller. This execution enables us to be more efficient and responsive to demand changes while maintaining lower overall inventory levels.

***Global Warehouse Operations and Logistics***

We leverage existing, third-party transportation networks to execute the deliveries to destinations around the world, whether that is on a customer's doorstep or to an ecommerce marketplace distribution center. At the same time, we focus on investing in the part of the supply chain that is high-tech and capital light.

Our investment in automation in our warehouse network has consistently been focused on software within the warehouse while using repeatable and widely available hardware solutions, such as automated conveyance, to execute the manual work the software is guiding it to do.

Pattern's investment and execution in its worldwide fulfillment network is one of our major differentiators. The speed through our network and a short overall supply chain keeps us nimble and efficient – and our scale enables us to reduce variable expenses while leveraging our fixed costs.

Our proprietary WMS powers the operators in our warehouse network to deliver efficient and scalable volume to marketplaces and, in some cases, directly to consumers across the globe. By leveraging hardware and software automation, we optimize inventory flow to ship more products into global ecommerce marketplaces than any other operation in the world. Our modular, flow-based configuration reduces costs and increases flexibility, which we believe has prepared us for many years of future growth without significant further investment in warehouse space.

The WMS built by Pattern utilizes marketplace and carrier integrations to deliver all aspects of our requirements in a way that other warehouse software currently does not address–making our WMS a key investment for us. Delivering marketplace item preparation and shipment creation, direct to consumer fulfillment, reverse logistics

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capabilities, storage and inventory movement and leveraging third-party transportation integrations–the WMS is a robust, comprehensive solution that we believe is unique amongst our competitors. It also features multi-lingual support so the same software can be used in all Pattern-operated facilities worldwide.

**Sales and Marketing**

Our sales and marketing strategy and investments are informed by our comprehensive ecommerce data set, which we use to identify a highly targeted set of prospective brand partners that are a strong fit for our EXP and mutually beneficial partnership model. We start by creating a personalized, data-driven marketplace performance scorecard for each target brand to assess performance across the ecommerce equation (revenue = traffic x conversion x price x availability) on a given marketplace, such as Amazon, Walmart, TMall and TikTok Shop. This scorecard includes 20 different quantitative metrics such as branded and non-branded traffic, retail readiness, ratings and reviews, pricing stability and compliance, in-stock availability, channel control and international availability. This scorecard and data forms the basis of our outreach and marketing messages to our target brand personnel and helps us remain knowledgeable, helpful, present and personalized as we engage with key accounts.

We have a highly efficient sales organization, with global named account managers who build and maintain deep relationships with target brands throughout the customer lifecycle, supported by inside sales representatives who nurture target accounts and key contacts, product support specialists who offer product-specific expertise for multi-product deals and have their own mid-market target accounts and business development, responsible for building relationships with industry organizations and referral partners including law firms, venture capital and private equity firms, former executives of top brands and industry thought leaders.

Our sales organization is also supported by a global, full-funnel, in-house marketing team that is organized into five primary functions: Creative and Brand, Public Relations and Communications, Product Marketing, Digital Demand Generation and Events. Our awareness and demand generation content and programs leverage our data, insights and in-house experts to demonstrate our deep understanding of the ecommerce pain points that brands face as well as our leadership in solving these challenges in innovative ways. We complement our upper-funnel digital marketing efforts with a robust calendar of live events that offer brands bespoke opportunities to engage with our executives and functional experts, ranging from curated executive retreats to our annual Accelerate conference, which attracts more than 1,500 ecommerce professionals for two full days of learning, networking and inspiration. Social proof is also central to our marketing programs, as we leverage our engaged brand partner community across digital and physical properties, including customer case studies, testimonials and references.

As of December 31, 2024, we had over 100 global sales and marketing employees with in-region presence across North America, Europe, Australia and Asia. We plan to continue to invest in our sales and marketing capabilities to capitalize on our market opportunity, particularly as we launch new solutions within the ecommerce acceleration category.

**Our Competition**

We believe that our relentless focus on technology, data, talent and brand partners has helped us create our industry-defining EXP. However, the ecommerce industry is highly competitive. Brands have a number of options to execute their ecommerce strategy. We view competition as:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• Brands growing their ecommerce business themselves;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• Existing technology and service providers focusing on part of the ecommerce equation;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• Marketplaces offering a 1P model for brands; and

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• Other ecommerce accelerators.

Most other companies that offer alternate solutions only address specific parts of the ecommerce equation and operate on fewer marketplaces or in fewer geographies. For example, ShipBob and ShipHero offer warehouse

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management and logistics efficiency solutions, ReCom offers 3P acceleration services in the United States on Amazon and Spreetail offers 3P acceleration services in the United States and in certain European markets.

We believe that our ability to compete successfully depends primarily on the following factors:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• continuing to advance our technology;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• leveraging our data and AI capabilities;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• maintaining and attracting brand partners;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• developing and launching new platform capabilities;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• continuing to provide a holistic suite of solutions;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• offering a deep and broad set of marketplaces on our platform;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• maintaining our global approach;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• responding to changing consumer demands in a timely manner;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• maintaining the value and reputation of our brand partners;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• attracting and retaining a team committed to innovation, data and serving our brand partners;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• effectiveness of our platform solutions;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• competitive pricing; and

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• customer service.

**Our People and Culture**

At Pattern, our people are the driving force behind our mission to accelerate global ecommerce for our brand partners and we believe our team's talent and expertise is a key competitive advantage. We maintain a meticulous and rigorous hiring process. Each full-time candidate undergoes an in-depth review, personally overseen by our CEO. We conduct comprehensive reference checks, including direct conversations with their previous managers, and these managers consistently rank our candidates among the top 20% of their teams. Our new hires bring substantial experience to the table, with an average of eight years of relevant work history.

From our headquarters in Utah's Silicon Slopes technology hub to our 15 other offices and 8 distribution centers across Asia, Australia, North America and Europe, our more than 1,600 full-time employees and 300 contractors and other personnel worldwide as of December 31, 2024 create meaningful impact every day for Pattern. Our team works together to realize a singular vision: to accelerate growth for global brand partners by leveraging data-driven insights, relentless brand partner obsession and a bias for action.

We have built a culture that prioritizes both impact and the employee experience. Recognized as one of Newsweek's Global Most Loved Workplaces® and one of Inc.'s Best-Led Companies, Pattern places employees at the heart of our business model, and we are dedicated to a balanced work-life experience for our employees. This dedication is evident in our employee surveys, where the top two responses to what people love most about working here have consistently been: first, "the people," and second, "work-life balance." We provide our employees with the fundamentals to thrive: competitive compensation, outstanding benefits, leadership philosophies that empower and the chance to make a tangible impact on our rapidly growing organization. Our employees are the reason why hundreds of brands worldwide trust Pattern to power their ecommerce accelerations.

Pattern's culture is deeply interconnected and global. Employees have the opportunity to collaborate with colleagues from across the world and gain exposure to a wide variety of perspectives and experiences. We celebrate our shared values during our annual Values Week. This special event brings together employees worldwide through

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company-sponsored activities, including a synchronized global 5K run. It's a joyful, energizing way to connect and reinforce our commitment to our values. Values Week includes our annual Innovation Cup, a marquee event where employees from around the globe submit groundbreaking ideas for patentable technology that could drive Pattern forward. We recognize and celebrate our winners, and several innovative patent applications have been born from this competition, showcasing our commitment to innovation.

Our core values are the compass guiding everything we do:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• **Data Fanatics:** We are deeply passionate about data, using it to uncover opportunities, test hypotheses and drive results. Our teams collaborate to turn data into actionable insights, allowing our brand partners to benefit from precise, high-impact solutions.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• **Brand Partner Obsessed:** Our brand partners' success is our success. We listen, empathize and commit to exceeding expectations with integrity and responsiveness. Earning and maintaining brand partner trust through excellence is at the core of our philosophy.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• **Team of Doers:** Action defines us. We embrace challenges with enthusiasm and a spirit of collaboration. Accountable and resilient, our people work with urgency and responsibility to overcome obstacles and deliver on our promises.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• **Game Changers:** We don't just adapt; we innovate. From disrupting industry norms to discovering new opportunities, we are committed to leading change. We believe in thinking boldly and pushing boundaries for our company and our brand partners.

Our company leadership principles complement these values, shaping a culture where team members can thrive and grow. We build winning teams by recruiting top talent and aligning team structures with evolving business needs. We trust and empower, encouraging autonomy and work-life balance while eliminating unnecessary bureaucracy. We accelerate talent by providing continuous learning opportunities and offering top-of-market compensation to attract and retain the best talent. Finally, we value impact over ego, prioritizing outcomes and fostering transparent communication and empathy within our teams.

Pattern has a culture where our people are inspired to innovate, connect and make a difference. By investing in our employees and celebrating their achievements, we make Pattern a great place to work and a leader in shaping the future of global ecommerce.

**Government Regulation**

As with any company operating on the internet, we are subject to a growing number of local, national and international laws and regulations. These laws are often complex and unclear, sometimes contradicting other laws, and are frequently changing. Compliance is costly and can require changes to our business practices, along with significant amounts of management time and focus. In addition, regulatory and other legal proceedings in the United States and abroad are increasingly focused on the activities of ecommerce marketplaces as well as sellers and other third parties.

Laws may be interpreted and enforced in different ways in various locations around the world, posing a significant challenge to our global business. For example, federal and state laws in the United States, EU laws and other national laws govern the processing of payments and consumer protection; other laws define and regulate unfair and deceptive trade practices. Still other laws dictate when and how sales or other taxes must be collected. Defamation laws apply online and vary by country. Jurisdictions vary as to how, or whether, existing laws governing areas such as personal privacy and data security, consumer protection or sales and other taxes, among other areas, apply to the internet and ecommerce, and these laws are continually evolving. Related laws may govern the manner in which we store or transfer sensitive information or impose obligations on us in the event of a security breach or an inadvertent disclosure of such information. International jurisdictions impose different, and sometimes more stringent, consumer and privacy protections. In addition, some of these requirements introduce friction into our platform for the promotion and sale of merchandise and may impact the scope and effectiveness of our marketing efforts. Tax regulations in jurisdictions where we do not currently collect taxes may subject us to the obligation to

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collect and remit such taxes or to requirements intended to assist jurisdictions with their tax collection efforts. New legislation or regulations, the application of laws from jurisdictions whose laws do not currently apply to our business, or the application of existing laws and regulations to the internet and ecommerce generally could result in significant additional taxes on our business. Further, we could be subject to fines or other payments for any past failures to comply with these requirements. The continued growth of and demand for ecommerce is likely to result in more laws and regulations that impose additional compliance burdens on ecommerce companies. We are also subject to a broad range of federal, state, local and foreign laws and regulations related to public health and safety, including food safety standards, packaging, labeling, advertising, marketing, shipment, pricing and competition. Additionally, because we operate internationally, we need to comply with various laws associated with doing business outside of the United States, including anti-money laundering, sanctions, anti-corruption and export control laws. See the section titled "Risk Factors—Risks Related to Legal, Regulatory and Compliance**—**We are subject to extensive laws and regulations and we may incur material liabilities or costs related to complying with existing or future laws and regulations, and our failure to comply may result in enforcements, penalties, recalls and other adverse actions."

**Intellectual Property**

Our commercial success depends in part on our ability to obtain and maintain intellectual property protection for our brand, solutions and proprietary technology, defend and enforce our intellectual property rights, preserve the confidentiality of our trade secrets, operate our business without infringing, misappropriating or otherwise violating the intellectual property or proprietary rights of third parties and prevent third parties from infringing, misappropriating or otherwise violating our intellectual property rights. We rely on a combination of patents, copyrights, trademarks, trade secrets, license agreements, confidentiality procedures, non-disclosure agreements, employee disclosure and invention assignment agreements, as well as other legal protections and contractual rights, to establish and protect our core technology and proprietary rights.

Today, we own one issued patent and 25 pending patent applications in the United States and abroad. Our issued patents and pending patent applications generally relate to commerce systems and methods and digital marketplaces. These issued patents, and any patents granted from our pending patent applications, are expected to expire between 2040 and 2056, without taking potential patent term extensions or adjustments into account. We routinely review our development efforts to assess the existence and patentability of new inventions.

Moreover, we rely, in part, on trade secrets to protect aspects of our business that are not amenable to, or that we do not consider appropriate for, patent protection. However, trade secrets can be difficult to protect. While we take commercially reasonable steps to protect and maintain our trade secrets, including by entering into confidentiality agreements with our employees, consultants, brand partners and contractors and by maintaining physical security of our premises and physical and electronic security of our information technology systems, such measures may not prove to be adequate and there may not be any available remedies. In addition, our trade secrets may otherwise become known or be independently discovered by competitors or others.

We also protect our brand through common law trademark protections and trademark registrations. As of March 31, 2025, we had a total of 10 registered trademarks and 18 pending trademarks in the United States and 37 registered trademarks and 15 pending trademarks in non-U.S. jurisdictions. We also have registered domain names for websites that we use in our business, such as www.pattern.com.

In addition, we seek to protect our intellectual property rights by requiring our employees and independent contractors who contribute to the development of intellectual property on our behalf to enter into agreements acknowledging that all works or other intellectual property generated or conceived by them on our behalf are our property, and assigning to us all intellectual property rights, that they may claim or otherwise have in those works or technology, to the extent allowable under applicable law.

**Facilities**

Our corporate headquarters is located in Lehi, Utah, where we currently lease approximately 90,890 square feet of office space pursuant to a lease agreement and a sublease agreement that expire on June 30, 2027. We lease approximately 259,200 square feet of warehouse space in Hebron, Kentucky pursuant to a lease agreement that

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expires on February 28, 2027 and approximately 114,400 square feet of warehouse space in North Las Vegas, Nevada pursuant to a lease agreement that expires on February 29, 2032. We lease approximately 7,200 square feet for a certain office and warehouse space in Lehi, Utah from ISERVE INVESTMENTS, LLC, an entity controlled by Melanie Alder, our co-founder, Chief Strategy Officer and Director. See the section titled "Certain Relationships and Related Party Transactions—Other Transactions" for more information. We also lease additional facilities in Europe, Australia and Asia to support our sales and logistics operations.

We believe that our facilities are suitable to meet our current needs. We intend to expand our facilities or add new facilities as we grow, and we believe that suitable additional or alternative space will be available on commercially reasonable terms as needed to accommodate any such growth.

**Legal Proceedings**

We are not currently a party to any material pending legal proceedings. From time to time, we may be subject to legal proceedings and claims arising in the ordinary course of business. The results of any current or future litigation cannot be predicted with certainty, and regardless of the outcome, litigation can have an adverse impact on us because of defense and settlement costs, diversion of management resources and other factors.

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**MANAGEMENT**

**Executive Officers and Directors**

The following table provides information regarding our executive officers and directors as of December 31, 2024:

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| | | |
|:---|:---|:---|
| **Name** | **Age** | **Position** |
| *Executive Officers:* |  |  |
| &nbsp;&nbsp;&nbsp;David Wright | 49 | Co-founder, Chief Executive Officer and Director |
| &nbsp;&nbsp;&nbsp;Melanie Alder | 49 | Co-founder, Chief Strategy Officer and Director |
| &nbsp;&nbsp;&nbsp;Jason Beesley | 48 | Chief Financial Officer |
| *Non-Employee Directors:* |  |  |
| &nbsp;&nbsp;&nbsp;Daniel Gay | 45 | Director |
| &nbsp;&nbsp;&nbsp;John Bailey | 44 | Director |
| &nbsp;&nbsp;&nbsp;Scott Hilton | 61 | Director |
| &nbsp;&nbsp;&nbsp;Susan Taylor | 56 | Director |

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__________________

(1)Member of the audit committee.

(2)Member of the compensation committee.

(3)Member of the nominating and corporate governance committee.

Each executive officer serves at the discretion of our board of directors and holds office until his or her successor is duly elected and qualified or until his or her earlier resignation or removal. David Wright, our Chief Executive Officer and member of our board of directors, and Melanie Alder, our Chief Strategy Officer and member of our board of directors, are married. Otherwise, no family relationships exist between any of our officers or directors.

***Executive Officers***

**David Wright** is a co-founder of Pattern and has served as our Chief Executive Officer and as a member of our board of directors since our inception in November 2018. Mr. Wright has served as a member of Pattern Inc.'s board of directors since January 2013. From 2004 to 2015, Mr. Wright held various roles within a large non-profit organization, including director of enterprise information management and database team manager. Mr. Wright holds a Bachelor of Science degree in Accounting and an equivalency certificate for a Bachelor of Science degree in Information Systems Management from Brigham Young University. We believe that Mr. Wright is qualified to serve as a member of our board of directors because of his knowledge of our company and our business, his experience building and leading our company and his perspective into corporate matters as our Chief Executive Officer.

**Melanie Alder** is a co-founder of Pattern and has served as our Secretary and as a member of our board of directors since our inception in November 2018. Ms. Alder has served as a member of Pattern Inc.'s board of directors since January 2013. Ms. Alder served as our Chief Operating Officer from January 2013 to May 2018, Chief Investment Officer from May 2018 to February 2024 and Chief Strategy Officer since February 2024. Ms. Alder holds a Bachelor of Science degree in Family Science from Brigham Young University. We believe that Ms. Alder is qualified to serve as a member of our board of directors because of her knowledge of our company and our business, her experience building and leading our company and her perspective into our operations, strategic planning and revenue growth.

**Jason Beesley** has served as our Chief Financial Officer since January 2021. From July 2007 to August 2020, Mr. Beesley held various senior financial leadership roles at NBCUniversal, Inc., a multinational media and entertainment company, including most recently as chief financial officer of NBCUniversal International. Prior to that Mr. Beesley held various finance roles at General Electric. Mr. Beesley holds a Bachelor of Science degree in Economics from Brigham Young University.

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***Non-Employee Directors***

**Daniel Gay** has served as a member of Pattern's board of directors since December 2024. Mr. Gay previously served as a member of Pattern's board of directors from May 2020 to September 2021. Mr. Gay is a co-founder of KSV Global, an investment firm, and has served as its managing partner since November 2018. Mr. Gay has served as a managing partner of the private investment arm of Kensington Capital Holdings, an investment firm, since March 2012. Mr. Gay currently serves and has previously served as a director of several portfolio companies of KSV Global and Kensington Capital Holdings. Mr. Gay holds a Bachelor of Business Administration degree from the John M. Huntsman School of Business at Utah State University and a Master of Business Administration degree from the F. W. Olin Graduate School of Business at Babson College. Mr. Gay was appointed to our board of directors pursuant to the right of the holders of our Series A Preferred Stock to designate one member of our board of directors, which right will terminate upon the consummation of this offering. We believe that Mr. Gay is qualified to serve as a member of our board of directors because of his extensive business and leadership experience.

**John Bailey** has served as a member of Pattern's board of directors since September 2021. Mr. Bailey is the founder of Knox Lane, an investment firm focused on the consumer and technology-enabled services sectors, and has served as its managing partner since August 2019. Mr. Bailey previously served as the president and chief financial officer of e.l.f. Beauty, Inc. (NYSE: ELF), a multi-brand beauty company, from August 2015 to March 2019, and served as its lead board member from January 2014 to August 2015. Prior to that, Mr. Bailey served as a partner for TPG Growth, TPG's middle-market buyout and growth equity arm. Mr. Bailey currently serves and/or has previously served as a director of several portfolio companies of Knox Lane and TPG. Mr. Bailey holds a Bachelor of Business Administration degree in Finance/Accounting from the University of Michigan Business School. Mr. Bailey was appointed to our board of directors pursuant to the right of the holders of our Series B Preferred Stock to designate two members of our board of directors, which right will terminate upon the consummation of this offering. We believe that Mr. Bailey is qualified to serve as a member of our board of directors because of his proven financial and leadership skills and extensive experience in both the consumer products and services and tech-enabled services industries, including executive and director functions at a publicly traded company.

**Scott Hilton** has served as a member of Pattern's board of directors since January 2023. Mr. Hilton served as the chief executive officer of Wonder, an ecommerce food company, from December 2019 to January 2023. Mr. Hilton served as Walmart's chief revenue officer of U.S. eCommerce from January 2017 to May 2019 and as chief revenue officer for the ecommerce company Jet.com from July 2014 to January 2017. Mr. Hilton holds a Bachelor of Science degree in Physics and Mathematics from the University of Puget Sound, a Master of Engineering degree in Engineering Physics from Cornell University, and a Master of Business Administration degree from the Wharton School of the University of Pennsylvania. We believe that Mr. Hilton is qualified to serve as a member of our board of directors because of his proven business and leadership skills and extensive experience in the ecommerce and consumer goods industries.

**Susan Taylor** has served as a member of Pattern's board of directors since May 2025. Ms. Taylor previously served as chief accounting officer of Meta Platforms, Inc., a social media and technology company, from April 2017 until June 2023. From 2012 to 2017, Ms. Taylor served as vice president, controller and chief accounting officer of LinkedIn Corporation, a professional social networking company. From 2009 to 2012, Ms. Taylor served as the vice president, controller and chief accounting officer of Silver Spring Networks, Inc., a provider of networking solutions, and from 2008 to 2009, Ms. Taylor served as the senior director, accounting policy of Yahoo! Inc. ("Yahoo!"). Prior to Yahoo!, Ms. Taylor spent over thirteen years at PricewaterhouseCoopers, an accounting firm, in various accounting roles. Ms. Taylor holds a Bachelor of Commerce degree from the University of Toronto and is a Certified Public Accountant (inactive) in California. We believe that Ms. Taylor is qualified to serve as a member of our board of directors because of her extensive financial experience and leadership functions at publicly traded companies.

**Code of Conduct**

Our board of directors have adopted a code of conduct that applies to all of our employees, officers and directors, including our Chief Executive Officer, Chief Financial Officer and other executive and senior financial

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officers. The full text of our code of business conduct will be posted on the investor relations page on our website upon the completion of this offering. We intend to disclose any amendments to our code of conduct, or waivers of its requirements, on our website or in filings under the Exchange Act.

**Board of Directors**

Our business and affairs are managed under the direction of our board of directors. The number of directors will be fixed by our board of directors, subject to the terms of our amended and restated certificate of incorporation and amended and restated bylaws that will become effective immediately prior to the completion of this offering. Our board of directors consists of&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; directors,&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; of whom will qualify as "independent" under the corporate governance requirements of Nasdaq.

In accordance with our amended and restated certificate of incorporation and our amended and restated bylaws, immediately after the completion of this offering our board of directors will be divided into three classes with staggered three-year terms. Only one class of directors will be elected at each annual meeting of our stockholders, with the other classes continuing for the remainder of their respective three-year terms. Our directors will be divided among the three classes as follows:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• the Class I directors will be&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; and&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; , and their terms will expire at the annual meeting of stockholders to be held in 2026;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• the Class II directors will be&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; and&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; , and their terms will expire at the annual meeting of stockholders to be held in 2027; and

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• the Class III directors will be&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; and&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; , and their terms will expire at the annual meeting of stockholders to be held in 2028.

Each director's term will continue until the election and qualification of his or her successor, or his or her earlier death, resignation or removal. Any increase or decrease in the number of directors will be distributed among the three classes so that, as nearly as possible, each class will consist of one-third of the directors.

This classification of our board of directors may have the effect of delaying or preventing changes in control of our company.

**Director Independence**

Our board of directors has undertaken a review of the independence of each director. Based on information provided by each director concerning his or her background, employment and affiliations, our board of directors has determined that each of&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; does not have a relationship that would interfere with the exercise of independent judgment in carrying out the responsibilities of a director and that each of these directors is "independent" as that term is defined under the applicable rules and regulations of the SEC and the corporate governance requirements of Nasdaq. In making these determinations, our board of directors considered the current and prior relationships that each non-employee director has with our company and all other facts and circumstances our board of directors deemed relevant in determining their independence, including the beneficial ownership of our capital stock by each non-employee director, and the transactions involving them described in the section titled "Certain Relationships and Related Party Transactions."

**Controlled Company**

After the consummation of the offering, we will be considered a "controlled company" under the corporate governance requirements of Nasdaq, as our co-founders will have more than 50% of the voting power for the election of directors. See the section titled "Principal and Selling Stockholders" for additional information. As a "controlled company," we will not be subject to certain corporate governance requirements, including that: (i) a majority of our board of directors consists of "independent directors," as defined under the corporate governance requirements of Nasdaq; (ii) we have a nominating and corporate governance committee that is composed entirely of independent directors with a written charter addressing the committee's purpose and responsibilities, or if no such committee exists, that our director nominees be selected or recommended by independent directors constituting a

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majority of the board of director's independent directors in a vote in which only independent directors participate; (iii) we have a compensation committee that is composed entirely of independent directors with a written charter addressing the committee's purpose and responsibilities; and (iv) we perform annual performance evaluations of the nominating and corporate governance and compensation committees. As a result, we may not have a majority of independent directors on our board of directors, an entirely independent nominating and corporate governance committee, an entirely independent compensation committee or perform annual performance evaluations of the nominating and corporate governance and compensation committees unless and until such time as we are required to do so. We expect to have &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; independent directors upon the closing of this offering, all of whom will qualify as independent for audit committee purposes. Following this offering, we intend to utilize certain of these exemptions. We do not expect that the nominating and corporate governance committee will consist entirely of independent directors upon the consummation of the offering.

While our co-founders continue to control more than 50% of the voting power of our outstanding common stock, we qualify for, and may rely on, these exemptions. Accordingly, you will not have the same protections afforded to stockholders of companies that are subject to all of the corporate governance requirements of Nasdaq.

In the event we cease to be a "controlled company" and our shares continue to be listed on Nasdaq, we will be required to comply with these provisions within the applicable transition periods. See the section titled "Risk Factors—Risks Related to Our Corporate Structure—We are a "controlled company" under the corporate governance requirements of Nasdaq, and intend to avail ourselves of certain reduced corporate governance requirements" for more information."

**Committees of the Board of Directors**

Our board of directors has established an audit committee, a compensation committee and a nominating and corporate governance committee, and may establish other committees from time to time. The composition and responsibilities of each of the committees of our board of directors is described below. Members will serve on these committees until their resignation or until as otherwise determined by our board of directors.

***Audit Committee***

Our audit committee consists of &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; , &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;and&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; , with&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; serving as chair. The composition of our audit committee meets the requirements for independence under the corporate governance requirements of Nasdaq and SEC rules and regulations. Each member of our audit committee meets the financial literacy requirements of the corporate governance requirements of Nasdaq. In addition, our board of directors has determined that&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; is an audit committee financial expert within the meaning of Item 407(d) of Regulation S-K under the Securities Act. Our audit committee will, among other things, be responsible for:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• selecting a qualified firm to serve as the independent registered public accounting firm to audit our financial statements;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• helping to ensure the independence and performance of the independent registered public accounting firm;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• discussing the scope and results of the audit with the independent registered public accounting firm, and review, with management and the independent registered public accounting firm, our interim and year-end results of operations;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• developing procedures for employees to submit concerns anonymously about questionable accounting or audit matters;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• reviewing our financial statements and our critical accounting policies and practices;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• reviewing our quarterly earnings press releases and financial information and earnings guidance provided to analysis and rating agencies;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• reviewing the adequacy of our internal controls;

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&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• reviewing our policies on risk assessment and risk management;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• reviewing related-party transactions;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• approving or, as required, pre-approving, all audit and all permissible non-audit services to be performed by the independent registered public accounting firm; and

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• overseeing the performance and independence of our internal audit function.

Upon completion of this offering, our audit committee will operate under a written charter, to be effective prior to the completion of this offering, that satisfies the applicable rules of the SEC and the corporate governance requirements of Nasdaq.

***Compensation Committee***

Our compensation committee consists of&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; ,&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; and&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; , with&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; serving as chair. The composition of our compensation committee meets the requirements for independence under the corporate governance requirements of Nasdaq and SEC rules and regulations. Each member of the compensation committee is also a non-employee director, as defined in Rule 16b-3 promulgated under the Exchange Act. The purpose of our compensation committee is to discharge the responsibilities of our board of directors relating to compensation of our executive officers and non-employee directors. Our compensation committee will, among other things, be responsible for:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• reviewing, approving and determining or making recommendations to our board of directors regarding, the compensation of our executive officers, including any long-term incentive components of our compensation programs, any employment agreements, severance arrangements, change in control agreements or provisions and any special or supplemental benefits;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• reviewing and making recommendations to the board of directors regarding the compensation of non-employee directors;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• approving the retention of compensation consultants or other advisers;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• administering our equity-based plans;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• reviewing and approving or making recommendations to our board of directors regarding, incentive compensation and equity-based plans; and

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• overseeing administration of all incentive compensation and equity-based plans for our employees.

Our compensation committee will operate under a written charter, to be effective prior to the completion of this offering, that satisfies the applicable rules of the SEC and the corporate governance requirements of Nasdaq.

***Nominating and Corporate Governance Committee***

Our nominating and corporate governance committee consists of&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; ,&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; and&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; , with&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; serving as chair. The composition of our nominating and corporate governance committee meets the requirements for independence under the corporate governance requirements of Nasdaq and SEC rules and regulations. Our nominating and corporate governance committee will, among other things, be responsible for:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• identifying, evaluating and selecting or making recommendations to our board of directors regarding, nominees for election to our board of directors and its committees;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• evaluating the performance of our board of directors, its committees and management;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• reviewing developments in corporate governance practices;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• evaluating the adequacy of our corporate governance practices; and

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&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• developing and making recommendations to our board of directors regarding corporate governance guidelines and matters.

The nominating and corporate governance committee will operate under a written charter, to be effective prior to the completion of this offering, that satisfies the applicable corporate governance requirements and rules of Nasdaq.

**Role of Board of Directors in Risk Oversight Process**

Our board of directors has responsibility for the oversight of our risk management processes and, either as a whole or through its committees, regularly discusses with management our major risk exposures, their potential impact on our business, and the steps we take to manage them. The risk oversight process includes receiving regular reports from board committees and members of senior management to enable our board of directors to understand our risk identification, risk management and risk mitigation strategies with respect to areas of potential material risk, including operations, finance, legal, regulatory, cybersecurity, strategic and reputational risk.

**Compensation Committee Interlocks and Insider Participation**

None of the members of our compensation committee is, or has been, an officer or employee of our company. None of our executive officers currently serves, or in the past year has served, as a member of the board of directors or compensation committee of any entity that has one or more executive officers serving on our board of directors or compensation committee.

**Non-Employee Director Compensation**

***2024 Director Compensation Table***

The following table presents the total compensation for each person who served as a non-employee director of our board of directors during the fiscal year ended December 31, 2024 ("fiscal year 2024"). Other than as set forth in the table and described more fully below, we did not pay any compensation, make any equity awards or non-equity awards to or pay any other compensation to any of the non-employee members of our board of directors in 2024 for their services as members of the board of directors. Messrs. Bailey and Ainge did not receive any compensation for their services as members of the board of directors due to their affiliation with KL Pattern Holdings LP and Pattern Preferred Investors, LLC, respectively, and Messrs. Reeves and Gay did not receive any compensation for their services as members of the board of directors due to their affiliation with Duchossois Capital Management and KSV Pattern, LLC, respectively. Mr. Wright and Ms. Alder served as members of our board of directors, as well as serving as employees, and were not separately compensated for their services as members of the board of directors. The compensation paid to Mr. Wright and Ms. Alder are reported in the "Executive Compensation—Fiscal Year 2024 Summary Compensation Table" below.

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| | | | | |
|:---|:---|:---|:---|:---|
| **Name**  | **Fees Earned or Paid in Cash ($)** | **Stock Awards ($)** | **All other Compensation ($)** | **Total ($)** |
| John Bailey<sup>(1)</sup> |  |  |  |  |
| Eric Reeves<sup>(1)(2)</sup> |  |  |  |  |
| Scott Hilton<sup>(3)</sup> | $50000 |  |  | $50000 |
| Tanner Ainge<sup>(1)(4)</sup> |  |  |  |  |
| Daniel Gay<sup>(1)(4)</sup> |  |  |  |  |

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__________________

(1)As of December 31, 2024, Messrs. Bailey, Reeves, Ainge and Gay did not hold any outstanding equity awards.

(2)Mr. Reeves stepped down from our board of directors in May 2024.

(3)As of December 31, 2024, Mr. Hilton held 50,000 RSUs.

(4)Mr. Ainge joined the board in May 2024 and resigned in December 2024. As his replacement, Mr. Gay was appointed as a member of the board effective as of December 6, 2024.

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**Confidential Treatment Requested by Pattern Group Inc.**

**Pursuant to 17 C.F.R. Section 200.83**

***Director Agreements***

*Scott Hilton*. Mr. Hilton joined our board of directors on January 31, 2023. We have entered into a director agreement with Mr. Hilton. Pursuant to Mr. Hilton's director agreement, Mr. Hilton received 50,000 RSUs for Pattern's common stock, which are subject to vesting based on the satisfaction of both certain service-and liquidity-based vesting conditions. With respect to the service-based vesting condition, 25% of the RSUs satisfied such condition on January 31, 2023 and the remaining 75% of the RSUs satisfy such condition in three (3) equal annual installments thereafter, subject to Mr. Hilton's continued service with Pattern on each applicable date. The liquidity-based vesting condition will be satisfied based on the earlier of a Pattern change of control, as defined in the applicable award agreement, or initial public offering ("IPO"), in each case prior to the expiration date of the RSUs. This offering will satisfy the liquidity-based vesting condition. In addition, pursuant to Mr. Hilton's director agreement, Mr. Hilton is entitled to receive an annual cash retainer of $50,000, payable in equal quarterly installments. Mr. Hilton is eligible to receive reimbursement for his travel expenses reasonably incurred for performing his obligations as a director.

*Susan Taylor*. Susan Taylor joined our board of directors on May 28, 2025. We have entered into a director agreement with Ms. Taylor. Pursuant to Ms. Taylor's director agreement, Ms. Taylor is eligible to receive an initial grant of 25,030 RSUs for Pattern's common stock (the "Initial Grant") which will be granted following her appointment to our board of directors and which will be subject to vesting based on the satisfaction of both certain service- and liquidity-based vesting conditions. With respect to the service-based vesting condition, one-third of the Initial Grant will satisfy such condition in three (3) equal annual installments on the first three anniversaries, respectively, of Ms. Taylor's appointment to our board of directors, subject to Ms. Taylor's continued service with Pattern on each applicable date. Pursuant to Ms. Taylor's director agreement, Ms. Taylor is also eligible to receive an annual grant of 11,780 RSUs for Pattern's common stock (the "Annual Grant") which will be granted following her appointment to our board of directors and, which will be subject to vesting based on the satisfaction of both certain service- and performance-based vesting conditions. With respect to the service-based vesting condition, the Annual Grant will satisfy such condition on the earlier of one year from the date of Ms. Taylor's appointment to our board of directors or the next annual meeting of our stockholders, subject to Ms. Taylor's continued service with Pattern on the applicable date. The Initial Grant and the Annual Grant will satisfy the liquidity-based vesting condition satisfied based on the earlier of a Pattern change of control, as defined in the applicable award agreement, or IPO, in each case prior to the expiration date of the RSUs. This offering will satisfy the liquidity-based vesting condition. In addition, pursuant to Ms. Taylor's director agreement, Ms. Taylor is entitled to receive an annual cash retainer of $55,000, payable in equal quarterly installments, and an initial annual cash retainer of $18,000, payable in equal quarterly installments, for services on the audit committee, which amount will increase to $24,000 following the effectiveness of the registration statement of which this prospectus is part. Ms. Taylor is eligible to receive reimbursement for her travel expenses reasonably incurred for performing her obligations as a director.

***Non-Employee Director Compensation Policy***

In connection with this offering, we intend to adopt a non-employee director compensation policy, the material terms of which are described below, which is designed to align compensation with our business objectives and the creation of stockholder value, while enabling us to attract, retain, incentivize and reward directors who contribute to our long-term success.

Under the contemplated policy, our non-employee directors will be eligible to receive cash retainers (which will be prorated for partial years of service) as set forth below:

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| | |
|:---|:---|
| | **Annual Retainer** |
| **Board of Directors:** | |
| Members | $ |
| Non-executive chair | $ |

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| | |
|:---|:---|
| **Audit Committee:** | |
| Members (other than chair) | $ |
| Retainer for chair | $ |
| **Compensation Committee:** | |
| Members (other than chair) | $ |
| Retainer for chair | $ |
| **Nominating and Corporate Governance Committee:** | |
| Members (other than chair) | $ |
| Retainer for chair | $ |

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The aggregate amount of compensation, including both equity compensation and cash compensation, paid to any non-employee director of Pattern in a calendar year period for services as a director will not exceed $&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; in the first calendar year such individual becomes a non-employee director and $&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; in any other calendar year.

We will reimburse all reasonable out-of-pocket expenses incurred by directors for their attendance at meetings of the board of directors or any committee thereof.

Employee directors will receive no additional compensation for their service as a director.

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**Confidential Treatment Requested by Pattern Group Inc.**

**Pursuant to 17 C.F.R. Section 200.83**

**EXECUTIVE COMPENSATION**

**Compensation Discussion and Analysis**

This Compensation Discussion and Analysis is intended to assist our stockholders in understanding our executive compensation program by providing an overview of our policies, practices and decisions for fiscal year 2024. This Compensation Discussion also explains how we determined the material elements of compensation for our named executive officers in fiscal year 2024, who were:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• David Wright, Co-founder and Chief Executive Officer;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• Melanie Alder, Co-founder and Chief Strategy Officer; and

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• Jason Beesley, Chief Financial Officer.

We did not have any other executive officers during fiscal year 2024.

**Executive Compensation Philosophy and Objectives**

Our executive compensation program is designed to:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• Attract, retain and motivate our employees;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• Provide compensation structures that meet our strategic needs and take into consideration broader market practice; and

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• Align executives' interests with those of our stockholders.

As our business continues to grow and transform, we expect that our compensation practices will continue to evolve. We have, and will, continue to carefully evaluate our compensation practices and develop programs that we believe most appropriately motivate our executives to execute on our strategic and operational objectives, which in turn will drive sustained, long-term value creation for our stockholders.

**Compensation-Setting Process**

***Role of the Board of Directors***

Beginning in the fiscal year ending December 31, 2025 ("fiscal year 2025") our board of directors or compensation committee, as applicable, will be responsible for reviewing and approving the compensation of our Chief Executive Officer and other named executive officers, including base salaries, short- or long-term incentive compensation, the size and structure of equity awards and any other compensation. In structuring an executive's total compensation package, our board of directors will make decisions on a case-by-case basis considering the following factors:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• our performance and business needs;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• each executive's prior experience and performance, scope of job function and criticality of his or her skills and contributions;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• the need to attract new and retain existing talent in a highly competitive market for senior talent;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• our Chief Executive Officer's recommendations, other than for himself or for Ms. Alder;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• our culture and values;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• each executive's current equity ownership and total direct compensation;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• aggregate compensation cost and impact on stockholder dilution; and

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&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• positioning relative to market data.

Our board of directors will generally determine the principal components of our named executive officers' compensation on an annual basis, although decisions may be made throughout the year as appropriate in the case of new hires, promotions or other special circumstances.

Prior to fiscal year 2025, our management has been responsible for reviewing and approving the compensation for our named executive officers other than our Chief Executive Officer and Chief Strategy Officer, as described below, and our board of directors has reviewed and approved the compensation for our Chief Executive Officer and Chief Strategy Officer.

***Role of Management***

Our board of directors works with, and receives information and analyses from, management, including individuals within our legal, finance and human resources functions, in considering and ultimately determining the structure and amount of compensation paid to our named executive officers. From time to time, these individuals and other employees, as well as outside advisors or consultants, may make presentations or provide information or advice to the board of directors regarding compensation matters, and may attend portions of board meetings.

Our Chief Executive Officer evaluates and provides assessments of named executive officers' performance (other than for himself and our Chief Strategy Officer) to our board of directors. He also provides recommendations, outside the presence of any other named executive officers, regarding decisions affecting base salaries, incentive compensation and other compensation-related matters. Our board of directors retains authority to make all compensation decisions for our named executive officers, including our Chief Executive Officer. No executive may be present during decisions regarding his or her compensation.

***Role of Compensation Consultant***

Our board of directors has the authority to engage its own advisors, including compensation consultants, to assist in carrying out its responsibilities. Our board of directors has engaged Compensia, Inc. ("Compensia") a leading compensation consulting firm, to provide guidance regarding the amount and types of compensation that we pay our executives, how our compensation practices compare to the practices of other similar companies, including with respect to a set of peer companies developed in consultation with Compensia, and other compensation-related matters. Representatives of Compensia attend meetings of our board of directors as requested and also communicate with our board of directors outside of board meetings. Compensia reports directly to our board of directors, although it may meet with members of management for purposes of gathering information on proposals that management may make to our board of directors. Compensia does not provide any services to us other than the services provided to our board of directors. Our board of directors has evaluated Compensia's independence pursuant to the corporate governance requirements of Nasdaq and SEC rules and has determined that no conflict of interest has arisen as a result of the work performed by Compensia.

***Comparative Market Data***

We believe that it is important to understand the current practices of comparable companies with which we compete for talent to inform its compensation decision-making. Accordingly, during fiscal year 2023, our board of directors worked with Compensia to develop a compensation peer group for use as a reference point in assessing 2024 compensation practices, pay levels and market positioning going forward. Compensia undertook a detailed review of U.S.-based publicly-traded companies, taking into consideration our industry sector, the size of such companies (based on revenue and market capitalization) relative to our size and growth rate and the comparability of Pattern's:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• business model;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• primary sales channels, including via the internet;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• products focus;

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&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• operating history;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• geographic location;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• organizational complexities and growth attributes;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• maturity curve stage (which increases its likelihood of attracting the type of executive talent for whom we compete); and

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• operational performance.

Following this review, in October 2023, we reviewed a peer group consisting of 22 publicly traded companies in related or adjacent industries and geographies generally aiming for companies with revenues in a recommended range. The companies comprising the 2024 compensation peer group include: Semrush Holdings, Sprout Social, BigCommerce Holdings, Braze, Integral Ad Science Holding, DoubleVerify Holdings, Klaviyo, Magnite, Digital Turbine, e.l.f. Beauty, Sprinklr, Squarespace, Revolve Group, Wix.com, Qualtrics International, YETI Holdings, Overstock.com, Etsy, Maplebear, Twilio, Chewy and Wayfair. As noted above, this 2024 compensation peer group was used as one factor in guiding our compensation decision-making for 2024 and we did not specifically benchmark to a particular percentile of our peer group in setting compensation for 2024.

**Executive Compensation Program Elements and Design** 

Our executive compensation program consists of two primary elements: base salary and long-term incentives in the form of equity awards. During fiscal year 2024, we did not maintain a formal short-term incentive program.

***Base Salary***

We believe that a competitive base salary is a necessary element of our compensation program, so that we can attract and retain a stable management team. Base salaries for our named executive officers are intended to provide an appropriate, competitive level of fixed cash compensation to compensate an individual for the day-to-day responsibilities associated with his or her role. Generally, we establish base salaries initially through arm's length negotiation upon hire, taking into account the executives' position, qualifications, experience, prior salary level and the base salaries of our other executive officers. Thereafter, our board of directors (or management, as applicable) may review base salaries for potential adjustment. Following this offering, the board of directors plans to perform such a review on an annual basis. The annual base salaries of each of our named executive officers for fiscal year 2024 are listed below.

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| | |
|:---|:---|
| **Executive** | **2024 Annual Base Salary ($)** |
| David Wright | 835000<sup>(1)</sup> |
| Melanie Alder\* | 300000<sup>(1)</sup> |
| Jason Beesley | 731000<sup>(1)</sup> |

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__________________

(1)Mr. Wright's and Ms. Alder's salaries were effective as of September 1, 2024 and Mr. Beesley's salary was effective as of May 16, 2024. Prior to September 1, 2024, the base salaries for Mr. Wright and Ms. Alder were $580,000 and $220,000, respectively, and prior to May 16, 2024, the base salary for Mr. Beesley was $500,000.

\*Ms. Alder's 2024 annual base salary reflects pro-rationing due to her reduced-hour employee status during such year.

***Long-Term Incentive Compensation***

In fiscal year 2024 and in prior years, we granted equity compensation to our executive officers (starting in fiscal year 2024 for our Chief Executive Officer and Chief Strategy Officer) primarily in the form of RSUs, which serve as a motivation and retention tool, encouraging executives to remain with and build Pattern's value over the long-term, while motivating them to achieve corporate objectives that in turn will deliver sustained value creation over the long-term. The vast majority of our named executive officers' target total direct compensation (starting in fiscal year 2024 for our Chief Executive Officer and Chief Strategy Officer) is delivered in long-term equity incentives.

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**Confidential Treatment Requested by Pattern Group Inc.**

**Pursuant to 17 C.F.R. Section 200.83**

Our general practice in effect prior to this offering was to grant initial equity awards upon hiring that generally vested on an annual basis over four years, with one-fourth of the award vesting on the first through fourth anniversaries following grant. Subsequently, we may provide refresh grants from time-to-time as warranted based on our Chief Executive Officer's recommendation and our board of director's consideration of the other factors described above.

*2024 Grants*

On September 9, 2024, our board of directors approved grants of 375,000 RSUs and 125,000 RSUs to Mr. Wright and Ms. Alder, respectively, with vesting subject to satisfaction of certain service-based and liquidity-based requirements. 50% of the service-based condition will be satisfied on September 1, 2025 and the remaining 50% of the service-based condition will be satisfied on September 1, 2026, subject to Mr. Wright's and Ms. Alder's, as applicable, continued service with Pattern through each applicable vesting date. The liquidity-based condition will be satisfied based on the earlier of Pattern's change in control, as defined in the 2019 Plan, or IPO (which would include this offering), in each case prior to the expiration date.

On May 10, 2024, our board of directors approved a grant of 28,180 RSUs to Mr. Beesley, with vesting subject to satisfaction of certain service-based and liquidity-based requirements. Twenty-five percent of the service-based condition will be satisfied on each anniversary of January 1, 2024, subject to Mr. Beesley's continued service with Pattern through each applicable vesting date. The liquidity-based condition will be satisfied based on the earlier of Pattern's change in control, as defined in the 2019 Plan, or IPO (which would include this offering), in each case prior to the expiration date.

***2025 Grants***

On February 11, 2025, the board of directors approved a grant of 8,813,161 Milestone RSUs to Mr. Wright with vesting subject to the satisfaction of certain service-based, liquidity-based and milestone-based requirements. The service-based requirement will be achieved if Mr. Wright continues service as our Chief Executive Officer, Chairman of our board of directors or in a similar position acceptable to our board of directors ("Required Service Relationship") through our achievement of both the milestone-based and liquidity-based requirements. The milestone-based requirement is comprised of seven different IPO and/or stock-price-based milestones as set forth in the table below.

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| | | |
|:---|:---|:---|
| **Tranche** | **Multiple of IPO Price** | **Number of Milestone RSUs that will Satisfy the Milestone-Based Requirement** |
| 1 | vests upon the closing of an IPO | 1259023 |
| 2 | 2x | 1259023 |
| 3 | 3x | 1259023 |
| 4 | 4x | 1259023 |
| 5 | 5x | 1259023 |
| 6 | 6x | 1259023 |
| 7 | 8x | 1259023 |

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If any of such milestones are satisfied, then 1/7<sup>th</sup> of the milestone requirement shall be deemed achieved; provided, that such satisfaction occurs prior to the earlier of: (i) December 31, 2026, if this offering has not closed on or before such date, (ii) the date that is 10 years following the grant date of such Milestone RSUs, and (iii) the date on which Mr. Wright's Required Service Relationship ends (the "Expiration Date"). The liquidity-based requirement will be satisfied upon the closing of an IPO (which would include this offering) prior to the Expiration Date. Without our prior written consent, Mr. Wright may not sell or otherwise transfer any shares of our Series A common stock issued in settlement of such Milestone RSUs for a period of one year after such shares are issued to him, other than to satisfy applicable tax obligations. See the section titled "Stand-Alone Restricted Stock Unit Award Agreement" below for additional information regarding the Milestone RSUs.

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**Confidential Treatment Requested by Pattern Group Inc.**

**Pursuant to 17 C.F.R. Section 200.83**

**Other Features of Our Executive Compensation Program** 

***Employment Offer Letters***

Each of our named executive officers is an at-will employee. We have entered into an offer letter agreement with Mr. Beesley that set forth the terms and conditions of his employment, including position, base salary and certain severance benefits, as described below.

***Severance and Change in Control Benefits***

Pursuant to Mr. Beesley's offer letter with us, Mr. Beesley is eligible for severance and/or change in control benefits in the case of certain qualifying terminations, a change of control of the company and/or due to death or disability, each as defined in his offer letter. A detailed description of these arrangements is provided in the section titled "Potential Payments Upon Termination or Change in Control Table."

In addition, Mr. Beesley holds equity awards that were granted under and subject to the terms of our equity incentive plans and the applicable award agreements thereunder, which include certain acceleration of vesting benefits in the case of certain qualifying terminations, a change of control of the company and/or due to death or disability.

Our board of directors believes these severance benefits are important from a retention perspective to provide some level of protection to our executives, and that the amounts are reasonable and maintain the competitiveness of our executive compensation and retention program. Further, our board of directors believes this structure serves to mitigate the distraction and loss of key executive officers that may occur in connection with a potential or actual change in control. Such payments protect the interests of our stockholders by enhancing executive focus during potential change in control activity, retaining executives despite the uncertainty that generally exists while a transaction is under consideration and encouraging the executives responsible for negotiating potential transactions to do so with independence and objectivity. Payment of severance is contingent on the executive timely providing us with a general release of claims.

In addition, each of our named executive officers holds equity awards that were granted under and subject to the terms of our equity incentive plans and the applicable award agreements thereunder.

***401(k) Plan, Welfare and Health Benefits***

Pattern provides a retirement savings plan (the "401(k) plan"), to U.S. employees that is intended to qualify for favorable tax treatment under Section 401(a) of the Code, and contains a cash or deferred feature that is intended to meet the requirements of Section 401(k) of the Code. U.S. employees who are at least 18 years of age are generally eligible to participate in the 401(k) plan, subject to certain criteria, including attaining at least three months of service with us. Participants may make pre-tax and certain after-tax (Roth) salary deferral contributions to the plan from their eligible earnings up to the statutorily prescribed annual limit under the Code. Participants who are 50 years of age or older may contribute additional amounts based on the statutory limits for catch-up contributions. Participant contributions are held in trust as required by law. An employee's interest in his or her salary deferral contributions is 100% vested when contributed. Our 401(k) plan allows for safe harbor matching contributions under the plan equal to 100% of up to the first 3% of eligible compensation and 50% of up to the next 2% of eligible compensation. In addition, we have the ability to make discretionary nonelective contributions under the 401(k) plan. Matching and nonelective contributions made by us are immediately vested.

In addition, we generally provide other benefits to our named executive officers on the same basis as to our other full-time employees. These benefits include, but are not limited to, medical, dental, vision, life, disability and accidental death and dismemberment insurance plans. In general, we pay the premiums for the life, disability and accidental death and dismemberment insurance for our employees, subject to certain limitations, including our named executive officers.

We design our employee benefits programs to be affordable and competitive in relation to the market, as well as compliant with applicable laws and practices.

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**Confidential Treatment Requested by Pattern Group Inc.**

**Pursuant to 17 C.F.R. Section 200.83**

***Perquisites and Other Personal Benefits***

Currently, we do not view perquisites or other personal benefits as a significant component of our executive compensation programs. Accordingly, we generally do not provide perquisites or other personal benefits to our named executive officers beyond those provided to all employees as outlined above. In the future, we may provide such benefits to the extent we believe doing so is appropriate to assist an individual in the performance of his or her duties, to make our executive officers more efficient and effective and for recruitment and retention purposes.

**Other Compensation Policies and Practices**

***Clawback Policy***

As a public company, if we are required to restate our financial results due to our material noncompliance with any financial reporting requirements under the federal securities laws as a result of misconduct, our Chief Executive Officer and Chief Financial Officer may be required to reimburse us for any bonus or other incentive-based or equity-based compensation they receive in accordance with the provisions of Section 304 of the Sarbanes-Oxley Act. Additionally, in connection with this offering, we will implement a Dodd-Frank Wall Street Reform and Consumer Protection Act-compliant compensation recoupment policy in accordance with SEC and&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; requirements, which provides that in the event we are required to prepare a restatement of financial statements due to material noncompliance with any financial reporting requirement under securities laws, we will seek to recover any incentive-based compensation that was based upon the attainment of a financial reporting measure and that was received by any current or former executive officer during the three-year period preceding the date that the restatement was required if such compensation exceeds the amount that the executive officer would have received had the financial results been properly reported.

***Policy Prohibiting Hedging and Pledging***

In connection with our initial public offering, we intend to adopt and maintain an Insider Trading Policy that, among other things, prohibits all of our employees, our executive officers, including our named executive officers, and our directors from engaging in certain transactions and activities relating to our securities. Pursuant to the policy, there is a blanket prohibition on hedging and pledging transactions with respect to our securities and our executive officers and the members of our board of directors are prohibited from engaging in the following transactions:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• selling any of our securities that they do not own at the time of the sale, or a short sale;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• buying or selling puts, calls, other derivative securities of the Company or any derivative securities that provide the economic equivalent of ownership of any of our securities or an opportunity, direct or indirect, to profit from any change in the value of our securities or engaging in any other hedging transaction with respect to our securities;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• using our securities as collateral in a margin account; and

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• pledging our securities as collateral for a loan (or modifying an existing pledge), except as may be approved by our board of directors.

**Tax and Accounting Implications**

***Accounting for Stock-Based Compensation***

Under ASC Topic 718, we are required to measure the compensation expense for all stock-based awards made to employees and directors based on the grant-date fair value of these awards. We record stock-based compensation expense on an ongoing basis according to ASC Topic 718. The accounting impact of our compensation programs is one of many factors that our board of directors considers in determining the structure and size of our executive compensation programs.

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**Confidential Treatment Requested by Pattern Group Inc.**

**Pursuant to 17 C.F.R. Section 200.83**

***Deductibility of Executive Compensation***

Under Section 162(m) of the Code ("Section 162(m)") compensation paid to each of the Company's "covered employees" that exceeds $1 million per taxable year is generally non-deductible unless the compensation qualifies for certain grandfathered exceptions (including the "performance-based compensation" exception) for certain compensation paid pursuant to a written binding contract in effect on November 2, 2017 and not materially modified on or after such date.

Although our board of directors will continue to consider tax implications as one factor in determining executive compensation, our board of directors also looks at other factors in making its decisions and retains the flexibility to provide compensation for our named executive officers in a manner consistent with the goals of our executive compensation program and the best interests of our company and stockholders, which may include providing for compensation that is not deductible by the company due to the deduction limit under Section 162(m). Our board of directors also retains the flexibility to modify compensation that was initially intended to be exempt from the deduction limit under Section 162(m) if it determines that such modifications are consistent with our business needs.

***Taxation of "Parachute" Payments***

Sections 280G and 4999 of the Code provide that executive officers and directors who hold significant equity interests and certain other service providers may be subject to additional taxes if they receive payments or benefits in connection with a change in control of the Company that exceeds certain prescribed limits, and that we (or a successor) may forfeit a deduction on the amounts subject to this additional tax. We have not provided any named executive officer with a "gross-up" or other reimbursement payment for any tax liability that he or she might owe as a result of the application of Sections 280G or 4999 and we have not agreed and are not otherwise obligated to provide any named executive officer, with such a "gross-up" or other reimbursement payment.

***Section 409A of the Internal Revenue Code***

Section 409A of the Code imposes additional significant taxes in the event that an executive officer, director or service provider receives "deferred compensation" that does not satisfy the requirements of Section 409A of the Code. Although we do not maintain a traditional nonqualified deferred compensation plan, Section 409A of the Code does apply to certain severance arrangements and equity awards. We structure all our severance arrangements, and equity awards in a manner to either avoid the application of Section 409A or, to the extent doing so is not possible, to comply with the applicable requirements of Section 409A of the Code.

**Fiscal Year 2024 Summary Compensation Table**

The following table presents information regarding the total compensation awarded to, earned by and paid to Pattern's named executive officers for services rendered to Pattern in all capacities in the fiscal year ended December 31, 2024 ("fiscal year 2024") and December 31, 2023 ("fiscal year 2023"), as applicable.

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| | | | | | |
|:---|:---|:---|:---|:---|:---|
| **Name and Principal Position** | **Year** | **Salary ($)** | **Stock Awards ($)**<sup>(1)</sup> | **All Other Compensation ($)** | **Total ($)** |
| David Wright, | 2024 | 654375<sup>(2)</sup> | 4822500 |  | 5476875 |
| &nbsp;&nbsp;&nbsp;*Chief Executive Officer* | 2023 | 580000 |  | 11640 | 591640 |
| Melanie Alder, | 2024 | 243333<sup>(2)</sup> | 1607500 | 9733<sup>(3)</sup> | 1860566 |
| &nbsp;&nbsp;&nbsp;*Chief Strategy Officer* | 2023 | 220000 |  | 8800 | 228800 |
| Jason Beesley, | 2024 | 634750<sup>(2)</sup> | 344078 |  | 978828 |
| &nbsp;&nbsp;&nbsp;*Chief Financial Officer* | 2023 | 500000 | 1011000 |  | 1511000 |

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___________________

(1)The amounts reported represent the aggregate grant date fair value of the RSUs of common stock granted to our named executive officers during fiscal year 2024 and fiscal year 2023, calculated in accordance with FASB ASC Topic 718. During fiscal year 2024 and fiscal year 2023, Mr. Wright, Ms. Alder and Mr. Beesley were granted RSUs that are subject to both service-based and liquidity-based vesting conditions. The grant date fair value of RSUs granted in fiscal year 2024 and fiscal year 2023 reported in the table above assumes

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**Confidential Treatment Requested by Pattern Group Inc.**

**Pursuant to 17 C.F.R. Section 200.83**

achievement of the liquidity-based vesting condition and therefore the grant date fair value, calculated in accordance with FASB ASC Topic 718, in the table is based on maximum achievement of the performance conditions, which is the same as the grant date fair value, calculated in accordance with FASB ASC Topic 718, based on probable achievement of the performance conditions. Such grant date fair values do not take into account any estimated forfeitures. The assumptions used in calculating the grant date fair value of the RSUs reported in this column are set forth in *Note 11—Stock-Based Compensation*, in the "Notes to Consolidated Financial Statements" included elsewhere in this prospectus. The amount reported in this column reflects the accounting cost for the award and does not correspond to the actual economic value that may be received by our named executive officers upon vesting of the RSUs or any sale of the shares.

(2)From January 1, 2024 through August 31, 2024, the annual base salaries for Mr. Wright and Ms. Alder were $580,000 and $220,000, respectively. From January 1, 2024 through May 15, 2024, the annual base salary for Mr. Beesley was $500,000. Effective as of September 1, 2024, the annual base salaries for Mr. Wright and Ms. Alder increased to $835,000 and $300,000, respectively, and effective as of May 16, 2024, the annual base salary for Mr. Beesley increased to $731,000. Ms. Alder's 2024 annual base salary reflects pro-rationing due to her reduced-hour employee status during such year.

(3)The amount reported represents matching contributions made by us under our 401(k) plan.

**Grants of Plan-Based Awards for Fiscal Year 2024**

The following table presents information concerning grants of plan-based awards to each of the named executive officers as of December 31, 2024.

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| | | | | | | | | | | | |
|:---|:---|:---|:---|:---|:---|:---|:---|:---|:---|:---|:---|
| **Name** | **Grant Date** | **Estimated Future Payouts Under Non-Equity Incentive Plan Awards** | **Estimated Future Payouts Under Non-Equity Incentive Plan Awards** | **Estimated Future Payouts Under Non-Equity Incentive Plan Awards** | **Estimated Future Payouts Under Equity Incentive Plan Awards** | **Estimated Future Payouts Under Equity Incentive Plan Awards** | **Estimated Future Payouts Under Equity Incentive Plan Awards** | **All other Stock Awards: Number of Shares of Stock or units (#)**<sup>(1)</sup> | **All other Option Awards: Number of Securities Underlying Options (#)** | **Exercise or Base Price of Option Awards ($/Sh)** | **Grant date fair value of Stock and Option Awards**<sup>(2)</sup> |
| **Name** | **Grant Date** | **Thresh-old ($)** | **Target ($)** | **Maximum ($)** | **Thresh-old ($)** | **Target ($)** | **Maximum ($)** | **All other Stock Awards: Number of Shares of Stock or units (#)**<sup>(1)</sup> | **All other Option Awards: Number of Securities Underlying Options (#)** | **Exercise or Base Price of Option Awards ($/Sh)** | **Grant date fair value of Stock and Option Awards**<sup>(2)</sup> |
| David Wright | 9/9/2024 |  |  |  |  |  |  | 375000 |  |  | 4822500 |
| Melanie Alder | 9/9/2024 |  |  |  |  |  |  | 125000 |  |  | 1607500 |
| Jason Beesley | 5/10/2024 |  |  |  |  |  |  | 28180 |  |  | 344078 |

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___________________

(1)Represent RSUs that vest based on the satisfaction of both service-based and liquidity-based vesting conditions, which is described above under Executive Competition Program Elements and Design—Long-Term Incentive Compensation—2024 Grants and below in the "Outstanding Equity Awards at 2024 Fiscal Year-End" table.

(2)The amounts reported represent the aggregate grant date fair value of the RSUs of common stock granted to our named executive officer during fiscal year 2024, calculated in accordance with FASB ASC Topic 718. During fiscal year 2024, Mr. Wright, Ms. Alder and Mr. Beesley were granted RSUs that are subject to both service-based and liquidity-based vesting conditions. The grant date fair value of RSUs granted in fiscal year 2024 reported in the table above assumes achievement of the liquidity-based vesting condition and therefore the grant date fair value, calculated in accordance with FASB ASC Topic 718, in the table is based on maximum achievement of the performance conditions, which is the same as the grant date fair value, calculated in accordance with FASB ASC Topic 718, based on probable achievement of the performance conditions. Such grant date fair values do not take into account any estimated forfeitures. The assumptions used in calculating the grant date fair value of the RSUs reported in this column are set forth in *Note 11—Stock-Based Compensation*, in the "Notes to Consolidated Financial Statements" included elsewhere in this prospectus. The amount reported in this column reflects the accounting cost for the award and does not correspond to the actual economic value that may be received by our named executive officers upon vesting of the RSUs or any sale of the shares.

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**Confidential Treatment Requested by Pattern Group Inc.**

**Pursuant to 17 C.F.R. Section 200.83**

**Outstanding Equity Awards at 2024 Fiscal Year-End**

The following table sets forth information concerning outstanding equity awards held by each of the named executive officers as of December 31, 2024.

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| | | | | | | | |
|:---|:---|:---|:---|:---|:---|:---|:---|
| | | | **Stock Awards** | **Stock Awards** | **Stock Awards** | **Stock Awards** | **Stock Awards** |
|<br>**Name** |<br>**Grant Date** |<br>**Vesting Commencement Date** | **Number of Shares or Units of Stock That Have Not Vested (#)**<sup>(1)</sup> | **Number of Shares or Units of Stock That Have Not Vested (#)**<sup>(1)</sup> | **Market Value of Shares or Units of Stock That Have Not Vested ($)**<sup>(2)</sup> | **Equity Incentive Plan Awards: Number of Unearned Shares, Units or Other Rights that have Not Vested (#)** | **Equity Incentive Plan Awards: Market or Payout Value of Unearned Shares, Units or Other Rights That Have Not Vested ($)** |
| David Wright | 9/9/2024 | 9/1/2024 | 375000 | <sup>(3)</sup> |  |  |  |
| Melanie Alder | 9/9/2024 | 9/1/2024 | 125000 | <sup>(3)</sup> |  |  |  |
| Jason Beesley | 4/5/2021 | 1/20/2021 | 850000 | <sup>(4)</sup> |  |  |  |
|  | 4/13/2023 | 3/3/2023 | 150000 | <sup>(4)</sup> |  |  |  |
|  | 5/10/2024 | 1/1/2024 | 28180 | <sup>(4)</sup> |  |  |  |

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___________________

(1)Represent RSUs that vest based on the satisfaction of both service-based and liquidity-based vesting conditions, as described above under "Executive Compensation Program Elements and Design—Long-Term Incentive Compensation—2024 Grants." None of our named executive officers have received any stock options.

(2)Amounts are calculated by multiplying the number of RSUs shown in the table by the fair market value of our common stock as of December 31, 2024. As there was no public market for our common stock on December 31, 2024, we have assumed that the fair market value on such date was $ per share, which represents the midpoint of the estimated price range set forth on the cover page of this prospectus.

(3)The RSUs are subject to vesting based on the satisfaction of both certain service-and liquidity-based vesting conditions. The service-based vesting condition is satisfied as follows: 50% of the RSUs satisfy such condition on the first anniversary of the vesting commencement date and the remaining 50% of the RSUs satisfy such condition on the second anniversary of the vesting commencement date, subject to the named executive officer's continued service with us on each applicable date. The liquidity-based vesting condition will be satisfied based on the earlier of the Company's change in control, as defined in the applicable award agreement, or IPO, in each case prior to the expiration date.

(4)The RSUs are subject to vesting based on the satisfaction of both certain service-and liquidity-based vesting conditions. The service-based vesting condition is satisfied as follows: 25% of the RSUs satisfy such condition on the first anniversary of the vesting commencement date and the remaining 75% of the RSUs satisfy such condition in three (3) equal annual installments thereafter, subject to the named executive officer's continued service with us on each applicable date. The liquidity-based vesting condition will be satisfied based on the earlier of the Company's change in control, as defined in the applicable award agreement, or IPO, in each case prior to the expiration date. The RSUs are also subject to certain acceleration of vesting rights as set forth in the named executive's offer letter as described below in the "Potential Payments Upon Termination or Change in Control Table" section.

**Option Exercises and Stock Vested During Fiscal Year 2024**

During fiscal year 2024, no options were exercised by our named executive officers and no RSUs held by our named executive officers vested.

**Pension Benefits**

We did not offer any defined benefit pension plans for our employees.

**Non-qualified Deferred Compensation**

We did not offer any non-qualified deferred compensation arrangements for our employees.

**Post-Employment Compensation**

*Jason Beesley*

Pursuant to Mr. Beesley's offer letter, in the event of a change of control, as defined in the applicable award agreement, other than an IPO, the service-based vesting condition for Mr. Beesley's outstanding RSUs will be

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**Confidential Treatment Requested by Pattern Group Inc.**

**Pursuant to 17 C.F.R. Section 200.83**

deemed fully satisfied, provided that upon the closing of such change of control, 50% of the value of such RSUs will be paid to Mr. Beesley in cash upon the closing of the change of control and the remaining 50% will be paid to him on the first anniversary of the closing of the change of control, unless Mr. Beesley has been terminated for cause, as defined in the 2019 Plan, prior to the date that payment of the second installment becomes due. Mr. Beesley will be entitled to payment of the second installment upon Pattern's termination of him without cause, as defined in the applicable award agreement, Mr. Beesley's resignation for good reason, as defined in the offer letter, Mr. Beesley's death or Mr. Beesley's termination due to disability.

In addition, in the event of death, disability or voluntary resignation other than a resignation for good reason upon a prior notice of at least three (3) months, as defined in the offer letter, he will be entitled to his then vested RSUs, and, with respect to twenty-five percent (25%) of his RSUs that would have time-vested on the next immediate anniversary of the vesting commencement date had he remained employed, a portion of such unearned twenty-five percent (25%) of the RSUs equal to the product of (x) the twenty-five percent (25%) and (y) the fraction, the numerator of which is the number of months (partial deemed an entire month) he was employed during the 12-month period that ends on the immediate upcoming anniversary of his vesting commencement date, and the denominator of which is 12.

Furthermore, (i) in the event that Mr. Beesley is terminated without cause, as defined in the applicable award agreement, or resigns for good reason, as defined in his offer letter, prior to the first anniversary of the applicable grant date of his RSUs, he will be entitled to receive one (1) year of base salary payable in a lump sum within 30 days of the date his employment ceases, and the RSUs will be forfeited and (ii) in the event that Mr. Beesley is terminated without cause or resigns for good reason after the first anniversary of the applicable grant date of his RSUs, he will be entitled to his then vested RSUs and fifty-percent (50%) acceleration of time-based vesting with respect to his unvested RSUs as of the date immediately prior to the date his employment ceases, subject, in each case, to Mr. Beesley's timely execution of a separation agreement including a release in favor of us.

**Potential Payments Upon Termination or Change in Control Table**

The table below quantifies the potential payments and benefits that would have become due to our named executive officers assuming that one of the triggering events below occurred as of December 31, 2024, assuming that for purposes of the RSUs, the offering has occurred as of December 31, 2024, any acceleration of vesting value is with respect to service-based vesting condition only, and the values below are based on Pattern's fair market value for a share of common stock on December 31, 2024. As there was no public market for our common stock on December 31, 2024, we have assumed that the fair market value on such date was $ per share, which represents the midpoint of the estimated price range set forth on the cover page of this prospectus.

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| | | | | | | |
|:---|:---|:---|:---|:---|:---|:---|
| **Name** | **Payments and Benefits** | **Change in Control (no termination of employment)** | **Termination Without Cause or for Good Reason not in connection with a Change in Control** | **Termination Without Cause or for Good Reason not in connection with a Change in Control** | **Termination upon Death, Disability or Voluntary Resignation not in connection with a Change in Control** | **Termination upon Death, Disability, Without Cause or for Good Reason in connection with a Change in Control** |
| David Wright | Cash Severance |  |  |  |  |  |
| David Wright | Equity Acceleration |  |  |  |  |  |
| David Wright | Total |  |  |  |  |  |
| Melanie Alder | Cash Severance |  |  |  |  |  |
| Melanie Alder | Equity Acceleration |  |  |  |  |  |
| Melanie Alder | Total |  |  |  |  |  |
| Jason Beesley | Cash Severance |  | 731000 |  |  |  |
| Jason Beesley | Equity Acceleration | <sup>(1)</sup> |  | <sup>(2)</sup> | <sup>(3)</sup> | <sup>(4)</sup> |
| Jason Beesley | Total |  |  |  |  |  |

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__________________

(1)Represents the value of acceleration of vesting of 100% of Mr. Beesley's RSUs, of which 50% of the value will be paid in cash upon the closing of the change of control and the remaining 50% will be paid to on the first anniversary of the closing of the change of control.

(2)Represents, for Mr. Beesley's 2024 RSUs, one (1) year of base salary and for Mr. Beesley's 2021 RSUs and 2023 RSUs, the value of acceleration of vesting of 50% of his RSUs.

(3)Represents the pro-rated value of acceleration of vesting of the 25% of Mr. Beesley's RSUs, based on the number of months he was employed during the applicable 12-month period.

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**Confidential Treatment Requested by Pattern Group Inc.**

**Pursuant to 17 C.F.R. Section 200.83**

(4)Represents the value of acceleration of vesting of 100% of Mr. Beesley's RSUs.

**Employee Benefit and Equity Compensation Plans**

***2025 Stock Option and Incentive Plan***

We intend to adopt the 2025 Plan which will become effective upon the date immediately preceding the date on which the registration statement of which this prospectus is part is declared effective by the SEC. The 2025 Plan will replace the 2019 Plan, as amended from time to time. The 2025 Plan will provide flexibility to our compensation committee to use various equity-based incentive awards as compensation tools to motivate our workforce.

We will initially reserve&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; shares of our Series A common stock for the issuance of awards under the 2025 Plan, plus the&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; shares of our Series A common stock remaining available for issuance under the 2019 Plan on the effective date of the 2025 Plan ("Initial Limit"). The 2025 Plan will provide that the number of shares reserved and available for issuance under the 2025 Plan will automatically increase on January 1, 2026 and each January 1 thereafter, by 3% of the number of shares of our Series A and Series B common stock issued and outstanding on the immediately preceding December 31 (on an as converted to Series A common stock basis), or such lesser number of shares as determined by our compensation committee (the "Annual Increase"). The number of shares reserved under the 2025 Plan is subject to adjustment in the event of a stock split, stock dividend or other change in our capitalization.

The shares we issue under the 2025 Plan will be authorized but unissued shares or shares that we reacquire. The shares of Series A common stock underlying any awards under the 2025 Plan and the 2019 Plan, in each case, that are forfeited, cancelled, held back upon exercise or settlement of an award to satisfy the exercise price or tax withholding, reacquired by us prior to vesting, satisfied without the issuance of stock or are otherwise terminated (other than by exercise) will be added back to the shares of Series A common stock available for issuance under the 2025 Plan.

The maximum aggregate number of shares that may be issued in the form of incentive stock options shall not exceed the Initial Limit, cumulatively increased on January 1, 2026 and on each January 1 thereafter by the lesser of the Annual Increase for such year or&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; shares of Series A common stock.

The grant date fair value of all awards made under our 2025 Plan and all other cash compensation paid by us to any non-employee director in any calendar year for services as a non-employee director shall not exceed $&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; ; provided, however, that such amount shall be $&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; for the calendar year in which the applicable non-employee director is initially elected or appointed to our board of directors.

The 2025 Plan will be administered by our compensation committee. Our compensation committee has the full power to select, from among the individuals eligible for awards, the individuals to whom awards will be granted and the number of shares subject to such awards, to make any combination of awards to participants, to accelerate at any time the exercisability or vesting of any award, to impose any limitations and/or vesting conditions on each award and to determine the specific terms and conditions of each award, subject to the provisions of the 2025 Plan. Persons eligible to participate in the 2025 Plan will be those full or part-time officers, employees, non-employee directors and consultants as selected from time to time by our compensation committee in its discretion.

The 2025 Plan permits the granting of both options to purchase Series A common stock intended to qualify as incentive stock options under Section 422 of the Code and options that do not so qualify. The option exercise price of each option will be determined by our compensation committee but may not be less than 100% of the fair market value of our Series A common stock on the date of grant unless the option is granted (i) pursuant to a transaction described in, and in a manner consistent with, Section 424(a) of the Code or (ii) to individuals who are not subject to U.S. income tax. The term of each option will be fixed by our compensation committee and may not exceed ten years from the date of grant. Our compensation committee will determine at what time or times each option may be exercised.

Our compensation committee may award stock appreciation rights subject to such conditions and restrictions as it may determine. Stock appreciation rights entitle the recipient to shares of Series A common stock, or cash, equal

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**Confidential Treatment Requested by Pattern Group Inc.**

**Pursuant to 17 C.F.R. Section 200.83**

to the value of the appreciation in our stock price over the exercise price. The exercise price of each stock appreciation right may not be less than 100% of the fair market value of our Series A common stock on the date of grant unless the stock appreciation right is granted (i) pursuant to a transaction described in, and in a manner consistent with, Section 424(a) of the Code or (ii) to individuals who are not subject to U.S. income tax. The term of each stock appreciation right will be fixed by our compensation committee and may not exceed ten years from the date of grant. Our compensation committee will determine at what time or times each stock appreciation right may be exercised.

Our compensation committee may award restricted shares of Series A common stock and RSUs to participants subject to such conditions and restrictions as it may determine. These conditions and restrictions may include the achievement of certain performance goals and/or continued employment with us through a specified vesting period. Our compensation committee may also grant shares of Series A common stock that are free from any restrictions under the 2025 Plan. Unrestricted stock may be granted to participants in recognition of past services or for other valid consideration and may be issued in lieu of cash compensation due to such participant.

Our compensation committee may grant dividend equivalent rights to participants that entitle the recipient to receive credits for dividends that would be paid if the recipient had held a specified number of shares of our Series A common stock.

Our compensation committee may grant cash bonuses under the 2025 Plan to participants, subject to the achievement of certain performance goals.

The 2025 Plan will provide that upon the effectiveness of a "sale event," as defined in the 2025 Plan, an acquirer or successor entity may assume, continue or substitute outstanding awards under the 2025 Plan. To the extent that awards granted under the 2025 Plan are not assumed or continued or substituted by the successor entity, upon the effective time of the sale event, such awards shall terminate. In such case, except as may be otherwise provided in the relevant award certificate, all awards with time-based vesting, conditions or restrictions shall become fully vested and exercisable or nonforfeitable as of the effective time of the sale event, and all awards with conditions and restrictions relating to the attainment of performance goals may become vested and exercisable or nonforfeitable in connection with a sale event in the administrator's discretion or to the extent specified in the relevant award certificate. In the event of such termination, individuals holding options and stock appreciation rights (i) may be permitted to exercise such options and stock appreciation rights (to the extent exercisable) within a specified period of time prior to the sale event or (ii) we may make or provide for a payment, in cash or in kind, to participants holding vested and exercisable options and stock appreciation rights equal to the difference between the per share consideration payable to stockholders in the sale event and the exercise price of the options or stock appreciation rights. In addition, we may make or provide for a payment, in cash or in kind, to participants holding other vested awards.

Our board of directors may amend or discontinue the 2025 Plan and our compensation committee may amend or cancel outstanding awards for purposes of satisfying changes in law or any other lawful purpose but no such action may adversely affect rights under an award without the holder's consent. Certain amendments to the 2025 Plan require the approval of our stockholders. The administrator of the 2025 Plan is specifically authorized to exercise its discretion to reduce the exercise price of outstanding stock options and stock appreciation rights or effect the repricing of such awards through cancellation and re-grants without stockholder consent. No awards may be granted under the 2025 Plan after the date that is ten years from the effective date of the 2025 Plan. No awards under the 2025 Plan have been made prior to the date of this prospectus.

***2019 Equity Incentive Plan***

Our 2019 Plan was originally adopted by our board of directors and stockholders on March 4, 2019. The 2019 Plan provides flexibility to our board of directors or compensation committee to use various equity-based incentive awards as compensation tools to motivate our workforce.

We reserved 24,698,512 shares of our Series A common stock for the issuance of awards under the 2019 Plan. The maximum aggregate number of shares that may be issued in the form of incentive stock options cannot exceed 24,698,512 shares of Series A common stock. The number of shares reserved under the 2019 Plan is subject to

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**Confidential Treatment Requested by Pattern Group Inc.**

**Pursuant to 17 C.F.R. Section 200.83**

adjustment in the event of a stock split, stock dividend or other change in our capitalization. As of December 31, 2024, 17,587,138 RSUs were outstanding under the 2019 Plan.

The shares we issue under the 2019 Plan are authorized but unissued shares or shares that we reacquire. The shares of Series A common stock underlying any awards under the 2019 Plan that are not purchased or are forfeited or are reacquired by Pattern (including any shares withheld by Pattern or shares tendered to satisfy any tax withholding obligation on awards or shares covered by an award that are settled in cash) or otherwise terminated or cancelled without delivery of any shares will be added back to the shares of Series A common stock available for issuance under the 2019 Plan.

The 2019 Plan is administered by our board of directors or by the compensation committee of our board of directors when constituted. The 2019 Plan's administrator has the full power to select, from among the individuals eligible for awards, the individuals to whom awards will be granted and the number of shares subject to such awards, to make any combination of awards to participants, to accelerate at any time the exercisability or vesting of any award, to impose any limitations and/or vesting conditions on each award and to determine the specific terms and conditions of each award, subject to the provisions of the 2019 Plan. Persons eligible to participate in the 2019 Plan will be those officers, employees, non-employee directors, consultants, independent contractors and advisors as selected from time to time by the 2019 Plan's administrator in its discretion.

The 2019 Plan permits the granting of both options to purchase Series A common stock intended to qualify as incentive stock options under Section 422 of the Code and options that do not so qualify as well as stock appreciation rights. The exercise price of each option or stock appreciation right will be determined by the 2019 Plan's administrator but may not be less than 100% of the fair market value of our Series A common stock on the date of grant; provided, however, the 2019 Plan's administrator may designate a purchase price below fair market value on the date of grant if the option or stock appreciation right is granted in substitution for an option or stock appreciation right previously granted by an entity that is acquired by or merged with Pattern or an affiliate. The term of each option will be fixed by the 2019 Plan's administrator and may not exceed ten years from the date of grant. The 2019 Plan's administrator determines at what time or times each option or stock appreciation right may be exercised.

The 2019 Plan's administrator may award restricted shares of Series A common stock and RSUs to participants subject to such conditions and restrictions as it may determine. These conditions and restrictions may include the achievement of certain performance goals and/or continued employment with us through a specified vesting period.

The 2019 Plan provides that in the event of any reorganization, merger, consolidation, split-up, spin-off, combination, plan of arrangement, take-over bid or tender offer, repurchase or exchange of shares or other securities of Pattern or any other similar corporate transaction or event involving Pattern, each, a Transaction, the 2019 Plan's administrator may, in its sole discretion, provide for any of the following to be effective upon the consummation of the event: (i) either (A) termination of any such award, whether or not vested, in exchange for an amount of cash and/or other property, if any, equal to the amount that would have been attained upon the exercise of the vested portion of the award or realization of the participant's vested rights (and, for the avoidance of doubt, if, as of the date of the occurrence of the applicable Transaction, the 2019 Plan's administrator determines in good faith that no amount would have been attained upon the exercise of such award or realization of the participant's vested rights, then such award may be terminated by Pattern without any payment) or (B) the replacement of such award with other rights or property selected by the 2019 Plan's administrator, (ii) that such award be assumed by the successor or survivor corporation, or a parent or subsidiary thereof, or shall be substituted for by similar options, rights or awards covering the stock of the successor or survivor corporation, or a parent or subsidiary thereof, with appropriate adjustments as to the number and kind of shares and prices, (iii) that such award shall be exercisable or payable or fully vested with respect to all shares or (iv) that the award cannot vest, be exercised or become payable after a date certain in the future, which may be the effective date of the event.

The 2019 Plan's administrator may amend or discontinue the 2019 Plan, including without limitation amendment of any form of applicable award agreement or instrument to be executed pursuant to the 2019 Plan, but no such action may adversely affect rights under an award without the holder's consent. Certain amendments to the 2019 Plan require the approval of our stockholders. No awards may be granted under the 2019 Plan after the date

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**Confidential Treatment Requested by Pattern Group Inc.**

**Pursuant to 17 C.F.R. Section 200.83**

that is ten years from the effective date of the 2019 Plan. No awards will be granted under our 2019 Plan following this offering.

***2025 Employee Stock Purchase Plan***

The ESPP will be adopted by our board of directors on&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; 2025, will be approved by our stockholders on&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; 2025 and will become effective on the date immediately preceding the date on which the registration statement of which this prospectus is part is declared effective by the SEC. The ESPP is intended to have two components: a component intended to qualify as an "employee stock purchase plan" within the meaning of Section 423 of the Code (the "423 Component") and a component that is not intended to qualify (the "Non-423 Component"). Except as otherwise provided, the Non-423 Component will be operated and administered in the same manner as the 423 Component, except where prohibited by law.

The ESPP initially reserves and authorizes the issuance of up to a total of &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; shares of Series A common stock to participating employees. The ESPP provides that the number of shares reserved and available for issuance will automatically increase on January 1, 2026 and each January 1 thereafter through January 1, 2035, by the least of (i)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; shares of Series A common stock, (ii) 1% of the number of shares of our Series A and Series B common stock issued and outstanding on the immediately preceding December 31 (on an as converted to Series A common stock basis) or (iii) such lesser number of shares of our Series A common stock as determined by the administrator of the ESPP. The number of shares reserved under the ESPP will be subject to adjustment in the event of a stock split, stock dividend or other change in our capitalization.

All individuals classified as employees on the payroll records of the Company or a "designated company" (as defined in the ESPP) as of the first day of the applicable offering period, or the offering date, are eligible to participate in the ESPP; provided that the administrator of the ESPP may determine, in advance of any offering period, that employees are eligible only if, as of the offering date, they are customarily employed by us or a designated company for more than 20 hours a week. However, any employee who owns, or as a result of participation in the ESPP would own or hold, 5% or more of the total combined voting power or value of all classes of our stock will not be eligible to purchase shares of Series A common stock under the ESPP.

We may make one or more offerings, consisting of one or more purchase periods, each year to our employees to purchase shares under the ESPP. Unless otherwise determined by the administrator, this offering will begin on the date of the initial public offering and will end on the following&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; ("Initial Offering"). Thereafter, unless otherwise determined by the administrator, an offering shall begin on the first business day occurring on or after each&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; and&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; and will end on the last business day occurring on or before the first&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; and&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; thereafter, respectively. The administrator may, in its discretion, designate a different period for any offering; provided, that no offering will exceed 27 months in duration. Each eligible employee at the time of this offering shall be deemed to be a participant at such time, but such individual shall be deemed not to have authorized payroll deductions and shall not purchase any of our Series A common stock unless such individual thereafter authorizes payroll deductions by submitting an enrollment form within 15 days of such offering. Each eligible employee who is not a participant in any prior offering may elect to participate in a subsequent offering by submitting an enrollment form at least 15 business days before the applicable offering date. Unless the administrator chooses otherwise prior to an offering date, and to the extent an offering has more than one purchase period, if the fair market value of the our Series A common stock on any exercise date in an offering is lower than the fair market value of our Series A common stock on the offering date, then all participants in such offering automatically will be withdrawn from such offering immediately after the exercise of their option on such exercise date and automatically re-enrolled in the immediately following offering as of the first day thereof and the preceding offering will terminate.

Each employee who is a participant in the ESPP will be able to purchase shares by authorizing payroll deductions of up to 15% of his or her eligible compensation during an offering period. Unless the participating employee has previously withdrawn from the offering, his or her accumulated payroll deductions will be used to purchase shares of Series A common stock on the last business day of the offering period at a price equal to 85% of the fair market value of the shares on the first business day or the last business day of the offering period, whichever is lower, provided that no more than a number of shares of Series A common stock determined by dividing $25,000

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**Confidential Treatment Requested by Pattern Group Inc.**

**Pursuant to 17 C.F.R. Section 200.83**

by the fair market value of the Series A common stock on the first day of the offering may be purchased by any one employee during any offering period. Under applicable tax rules, an employee may purchase no more than $25,000 worth of shares of Series A common stock, valued at the start of the purchase period, under the ESPP in any calendar year.

In the case of and subject to the consummation of a "sale event," as defined in the ESPP, the administrator of the ESPP, in its discretion, and on such terms and conditions as it deems appropriate, is authorized to take any one or more of the following actions under the ESPP or with respect to any right under the ESPP or to facilitate such transactions or events: (i) provide for either (a) termination of any outstanding option in exchange for an amount of cash, if any, equal to the amount that would have been obtained upon the exercise of such option had such option been currently exercisable or (b) the replacement of such outstanding option with other options or property selected by the administrator of the ESPP in its sole discretion; (ii) provide that the outstanding options under the ESPP shall be assumed by the successor or survivor corporation, or a parent or subsidiary thereof, or shall be substituted for similar options covering the stock of the successor or survivor corporation, or a parent or subsidiary thereof, with appropriate adjustments as to the number and kind of shares and prices; (iii) make adjustments in the number and type of shares of Series A common stock (or other securities or property) subject to outstanding options under the ESPP and/or in terms and conditions of outstanding options and options that may be granted in the future; (iv) provide that the offering with respect to which an option relates will be shortened by setting a new exercise date on which such offering period will end; and (v) provide that all outstanding options shall terminate without being exercised and all amounts in the accounts of participants shall be promptly refunded.

The accumulated payroll deductions of any employee who is not a participant on the last day of an offering period will be refunded. An employee's rights under the ESPP will terminate upon voluntary withdrawal from the plan or when the employee ceases employment with us for any reason.

The ESPP may be terminated or amended by our board of directors at any time. An amendment that increases the number of shares of Series A common stock authorized under the ESPP and certain other amendments will require the approval of our stockholders.

***Stand-Alone Restricted Stock Unit Award Agreement***

On February 11, 2025, the board of directors approved a grant of 8,813,161 Milestone RSUs to Mr. Wright with vesting subject to the satisfaction of certain service-based, liquidity-based and milestone-based requirements. The service-based requirement will be achieved if Mr. Wright continues his Required Service Relationship through our achievement of both the milestone-based and liquidity-based requirements.

The milestone-based requirement is comprised of seven different IPO and/or stock-price based milestones as follows: (i) the closing of the IPO on or prior to December 31, 2026, (ii) following the date that is 18 months after the closing of the IPO (the "Measurement Start Date"), the first date on which the average closing price per share as reported on the&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; for any given period of 120 consecutive trading days occurring after the Measurement Start Date ("Measurement Period"), is at least two times the IPO Price (as defined in the award agreement), (iii) the average closing price per share that our Series A common stock trades at on&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; for a Measurement Period is at least three times the IPO Price, (iv) the average closing price per share that our Series A common stock trades at on&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; for a Measurement Period is at least four times the IPO Price, (v) the average closing price per share that our Series A common stock trades at on&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; for a Measurement Period is at least five times the IPO Price, (vi) the average closing price per share that our Series A common stock trades at on&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; for a Measurement Period is at least six times the IPO Price and (vii) the average closing price per share that the Series A common stock trades at on&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; for a Measurement Period is at least eight times the IPO Price.

If any of such milestones are satisfied, then 1/7<sup>th</sup> of the milestone requirement shall be deemed achieved; provided, that such satisfaction occurs prior to the Expiration Date. The liquidity-based requirement will be satisfied upon the closing of an IPO prior to the Expiration Date. See the section titled "Compensation Discussion and Analysis—Long-Term Incentive Compensation—2025 Grants" for additional information. Without our prior written consent, Mr. Wright may not sell or otherwise transfer any of the shares our Series A common stock issued in

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**Confidential Treatment Requested by Pattern Group Inc.**

**Pursuant to 17 C.F.R. Section 200.83**

settlement of such Milestone RSUs for a period of one year after such shares are issued to him, other than to satisfy applicable tax obligations.

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**Confidential Treatment Requested by Pattern Group Inc.**

**Pursuant to 17 C.F.R. Section 200.83**

**CERTAIN RELATIONSHIPS AND RELATED PARTY TRANSACTIONS**

In addition to the compensation arrangements, including employment, termination of employment and change in control arrangements, and indemnification arrangements discussed, when required, in the sections titled "Management" and "Executive Compensation" and the registration rights described in the section titled "Description of Capital Stock—Registration Rights," the following is a description of each transaction since January 1, 2022 and each currently proposed transaction in which:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• we have been or are to be a participant;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• the amount involved exceeded or exceeds $120,000; and

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• any of our directors, executive officers or beneficial owners of more than 5% of our capital stock, or any immediate family member of, or person sharing the household with, any of these individuals, had or will have a direct or indirect material interest.

**Investors' Rights Agreement**

We are party to an amended and restated investors' rights agreement, dated as of September 28, 2021 ("Investors' Rights Agreement") that provides, among other things, certain holders of our capital stock, including entities affiliated with KSV Pattern, LLC, an affiliate of Daniel Gay, a member of our board of directors, and KL Pattern Holdings LP, an affiliate of John Bailey, a member of our board of directors, with registration rights. See the section titled "Description of Capital Stock—Registration Rights" for more information regarding these registration rights.

**Right of First Refusal**

Pursuant to our bylaws and an amended and restated right of first refusal and co-sale agreement dated September 28, 2021 with certain holders of our capital stock, including entities affiliated with KSV Pattern, LLC, an affiliate of Daniel Gay, a member of our board of directors, entities affiliated with KL Pattern Holdings LP, an affiliate of John Bailey, a member of our board of directors, and entities affiliated with David Wright, our co-founder, Chief Executive Officer and Director, and Melanie Alder, our co-founder, Chief Strategy Officer and Director, we or our assignees have a right to purchase shares of our capital stock that certain stockholders propose to sell to other parties. This right will terminate upon completion of this offering. Since January 1, 2022, we have waived, exercised or assigned our right of first refusal in connection with the sale of certain shares of our capital stock, including with respect to sales by or to certain of our executive officers and directors. See the section titled "Principal and Selling Stockholders" for additional information regarding beneficial ownership of our capital stock.

**Voting Agreement**

We are party to an amended and restated voting agreement dated September 28, 2021 under which certain holders of our capital stock, including entities affiliated with KSV Pattern, LLC, an affiliate of Daniel Gay, a member of our board of directors, entities affiliated with KL Pattern Holdings LP, an affiliate of John Bailey, a member of our board of directors, and entities affiliated with David Wright, our co-founder, Chief Executive Officer and Director, and Melanie Alder, our co-founder, Chief Strategy Officer and Director, have agreed as to the manner in which they will vote their shares of our capital stock on certain matters, including with respect to the election of directors. Upon completion of this offering, the amended and restated voting agreement will terminate.

**Other Transactions**

We lease approximately 7,200 square feet for a certain office and warehouse space in Lehi, Utah from ISERVE INVESTMENTS, LLC, an entity controlled by Melanie Alder, our co-founder, Chief Strategy Officer and Director. The lease expires on June 30, 2025, and we have the option to terminate with 60 days' notice. During fiscal years 2024, 2023 and 2022, we made aggregate payments under the lease agreement and for associated costs of $88,066, $86,302 and $84,033, respectively. We expect to continue leasing the space following the completion of this offering.

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**Confidential Treatment Requested by Pattern Group Inc.**

**Pursuant to 17 C.F.R. Section 200.83**

We have granted RSUs to our executive officers and certain of our directors. See the sections titled "Executive Compensation" and "Non-Employee Director Compensation" for a description of these RSUs.

We have entered into change in control arrangements with certain of our executive officers that, among other things, provide for certain severance and change in control benefits.

**Limitation of Liability and Indemnification of Officers and Directors**

We expect to adopt an amended and restated certificate of incorporation in connection with this offering, which will become effective immediately prior to the completion of this offering and which will contain provisions that limit the liability of our directors and officers for monetary damages to the fullest extent permitted by Delaware law. Consequently, our directors and officers will not be personally liable to us or our stockholders for monetary damages for any breach of fiduciary duties as directors and officers, except liability for the following:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• any breach of their duty of loyalty to our company or our stockholders;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• any act or omission not in good faith or that involves intentional misconduct or a knowing violation of law;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• for our directors, unlawful payments of dividends or unlawful stock repurchases, or redemptions as provided in Section 174 of the DGCL;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• any transaction from which they derived an improper personal benefit; or

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• for our officers, any derivative action by or in the right of the corporation.

Any amendment to, or repeal of, these provisions will not eliminate or reduce the effect of these provisions in respect of any act, omission or claim that occurred or arose prior to that amendment or repeal. If the DGCL is amended to provide for further limitations on the personal liability of directors and officers of corporations, then the personal liability of our directors and officers will be further limited to the greatest extent permitted by the DGCL.

In addition, we expect to adopt amended and restated bylaws in connection with this offering, which will become effective immediately prior to the completion of this offering and which will provide that we will indemnify, to the fullest extent permitted by law, any person who is or was a party or is threatened to be made a party to any action, suit or proceeding by reason of the fact that he or she is or was one of our directors or officers or is or was serving at our request as a director or officer of another corporation, partnership, joint venture, trust or other enterprise. Our amended and restated bylaws are expected to provide that we may indemnify to the fullest extent permitted by law any person who is or was a party or is threatened to be made a party to any action, suit or proceeding by reason of the fact that he or she is or was one of our employees or agents or is or was serving at our request as an employee or agent of another corporation, partnership, joint venture, trust or other enterprise. Our amended and restated bylaws will also provide that we must advance expenses incurred by or on behalf of a director or officer in advance of the final disposition of any action or proceeding, subject to very limited exceptions.

Further, we have entered into or will enter into, prior to the completion of this offering, indemnification agreements with each of our directors and executive officers that may be broader than the specific indemnification provisions contained in the DGCL. These indemnification agreements will require us, among other things, to indemnify our directors and executive officers against liabilities that may arise by reason of their status or service. These indemnification agreements will also require us to advance all expenses incurred by the directors and executive officers in investigating or defending any such action, suit or proceeding. We believe that these agreements are necessary to attract and retain qualified individuals to serve as directors and executive officers.

The limitation of liability and indemnification provisions that are expected to be included in our amended and restated certificate of incorporation, amended and restated bylaws and in indemnification agreements that we enter into with our directors and executive officers may discourage stockholders from bringing a lawsuit against our directors and executive officers for breach of their fiduciary duties. They may also reduce the likelihood of derivative litigation against our directors and executive officers, even though an action, if successful, might benefit us and other stockholders. Further, a stockholder's investment may be harmed to the extent that we pay the costs of settlement and damage awards against directors and executive officers as required by these indemnification

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**Confidential Treatment Requested by Pattern Group Inc.**

**Pursuant to 17 C.F.R. Section 200.83**

provisions. At present, we are not aware of any pending litigation or proceeding involving any person who is or was one of our directors, officers, employees or other agents or is or was serving at our request as a director, officer, employee or agent of another corporation, partnership, joint venture, trust or other enterprise, for which indemnification is sought, and we are not aware of any threatened litigation that may result in claims for indemnification.

We will obtain insurance policies under which, subject to the limitations of the policies, coverage is provided to our directors and executive officers against loss arising from claims made by reason of breach of fiduciary duty or other wrongful acts as a director or executive officer, including claims relating to public securities matters, and to us with respect to payments that may be made by us to these directors and executive officers pursuant to our indemnification obligations or otherwise as a matter of law.

Certain of our non-employee directors may, through their relationships with their employers, be insured and/or indemnified against certain liabilities incurred in their capacity as members of our board of directors.

The underwriting agreement to be filed as Exhibit 1.1 to this registration statement of which this prospectus forms a part will provide for indemnification by the underwriters of us and our officers, directors and employees for certain liabilities arising under the Securities Act, or otherwise with respect to information provided by the underwriters specifically for inclusion in the registration statement.

Insofar as indemnification for liabilities arising under the Securities Act may be permitted to directors, officers or persons controlling our company pursuant to the foregoing provisions, we have been informed that, in the opinion of the SEC, such indemnification is against public policy as expressed in the Securities Act and is therefore unenforceable.

**Policies and Procedures for Related Party Transactions**

Following the completion of this offering, our audit committee charter will provide that the audit committee has the primary responsibility for reviewing and approving or disapproving "related party transactions," which are transactions, arrangements or relationships (or any series of similar transactions, arrangements or relationships) between us and related persons in which the aggregate amount involved exceeds or may be expected to exceed $120,000 and in which a related person has or will have a direct or indirect material interest. For purposes of this policy, a related person will be defined as a director, executive officer, nominee for director or greater than 5% beneficial owner of our common stock, in each case since the beginning of the most recently completed year, and their immediate family members. In determining whether to approve or ratify any such transaction, our audit committee will take into account, among other factors it deems appropriate, (i) whether the transaction is on terms no less favorable than terms generally available to unaffiliated third parties under the same or similar circumstances and (ii) the extent of the related party's interest in the transaction. All of the transactions described above were entered into prior to the adoption of this policy.

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**Confidential Treatment Requested by Pattern Group Inc.**

**Pursuant to 17 C.F.R. Section 200.83**

**PRINCIPAL AND SELLING STOCKHOLDERS**

The following table sets forth certain information with respect to the beneficial ownership of our Series A common stock and Series B common stock as of &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;, 2025 ("Beneficial Ownership Date") for:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• each of our named executive officers;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• each of our directors;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• all of our current executive officers and directors as a group;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• each of the selling stockholders; and

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• each person, or group of affiliated persons, known by us to be the beneficial owner of more than five percent of any class of our voting securities.

We have determined beneficial ownership in accordance with the rules of the SEC, and thus it represents sole or shared voting or investment power with respect to our securities. Unless otherwise indicated below, to our knowledge, the persons and entities named in the table have sole voting and sole investment power with respect to all shares that they beneficially owned, subject to community property laws where applicable. We have deemed shares of our common stock subject to RSUs that would vest based on service-based vesting conditions, assuming any applicable liquidity event condition had been achieved, within 60 days of the Beneficial Ownership Date to be beneficially owned by the person holding the RSUs for the purpose of computing the percentage ownership of that person but have not treated them as outstanding for the purpose of computing the percentage ownership of any other person.

We have based percentage ownership of our common stock before this offering on&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; shares of our Series A common stock outstanding and&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; shares of our Series B common stock outstanding as of the Beneficial Ownership Date, in each case, after giving effect to the Reclassification and the Convertible Preferred Stock Conversion. Percentage ownership of our common stock after this offering assumes our sale of&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; shares of Series A common stock in this offering, the sale of shares of Series A common stock by the selling stockholders, and no exercise by the underwriters of their option to purchase&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; or &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; additional shares of our Series A common stock from us or the selling stockholders, respectively.

In addition, prior to this offering, our common stock was entitled to one vote per share and our Founder Voting Preferred Stock was entitled to 1,000 votes per share, each of which is reflected in the percentage of voting power in "Shares Beneficially Owned Prior to this Offering" in the table below. Upon the completion of this offering, shares of our Series B common stock will be entitled to 10 votes per share, which is reflected in the percentage of voting power in "Shares Beneficially Owned After this Offering" in the table below.

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**Confidential Treatment Requested by Pattern Group Inc.**

**Pursuant to 17 C.F.R. Section 200.83**

Unless otherwise indicated, the address of each beneficial owner listed in the table below is c/o Pattern Group Inc., 1441 West Innovation Way, Suite 500, Lehi, UT 84043.

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| | | | | | | | | | | |
|:---|:---|:---|:---|:---|:---|:---|:---|:---|:---|:---|
| **Name of Beneficial Owner** | **Shares Beneficially Owned Before this Offering** | **Shares Beneficially Owned Before this Offering** | **Shares Beneficially Owned Before this Offering** | **Shares Beneficially Owned Before this Offering** | **% Total Voting Power Before this Offering** | **Shares Beneficially Owned After this Offering** | **Shares Beneficially Owned After this Offering** | **Shares Beneficially Owned After this Offering** | **Shares Beneficially Owned After this Offering** | **% Total Voting Power After this Offering**<sup>(2)</sup> |
| **Name of Beneficial Owner** | **Series A** | **Series A** | **Series B**<sup>(1)</sup> | **Series B**<sup>(1)</sup> | **% Total Voting Power Before this Offering** | **Series A** | **Series A** | **Series B** | **Series B** | **% Total Voting Power After this Offering**<sup>(2)</sup> |
| **Name of Beneficial Owner** | **Shares** | **%** | **Shares** | **%** | **% Total Voting Power Before this Offering** | **Shares** | **%** | **Shares** | **%** | **% Total Voting Power After this Offering**<sup>(2)</sup> |
| **Named Executive Officers, Directors and Director Nominee:**  | | | | | | | | | | |
| David Wright<sup>(3)</sup> |  |  |  |  |  |  |  |  |  |  |
| Melanie Alder<sup>(4)</sup> |  |  |  |  |  |  |  |  |  |  |
| Jason Beesley<sup>(5)</sup> |  |  |  |  |  |  |  |  |  |  |
| Daniel Gay<sup>(6)</sup> |  |  |  |  |  |  |  |  |  |  |
| John Bailey<sup>(7)</sup> |  |  |  |  |  |  |  |  |  |  |
| Scott Hilton<sup>(8)</sup> |  |  |  |  |  |  |  |  |  |  |
| All directors and executive officers as a group (6 persons)<sup>(9)</sup> |  |  |  |  |  |  |  |  |  |  |
| **5% or Greater Stockholders:**  |  |  |  |  |  |  |  |  |  |  |
| Entities associated with David Wright<sup>(3)</sup> |  |  |  |  |  |  |  |  |  |  |
| Entities associated with Melanie Alder<sup>(4)</sup> |  |  |  |  |  |  |  |  |  |  |
| Pattern Preferred Investors, LLC<sup>(10)</sup> |  |  |  |  |  |  |  |  |  |  |
| Entities affiliated with KL Pattern Holdings LP<sup>(11)</sup> |  |  |  |  |  |  |  |  |  |  |
| Other Selling Stockholders: |  |  |  |  |  |  |  |  |  |  |

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__________________

(1)Each share of Series B common stock is convertible at any time at the option of the holder into one share of Series A common stock.

(2)Percentage of total voting power represents voting power with respect to all shares of our Series A common stock and Series B common stock, as a single class. The holders of our Series B common stock are entitled to ten votes per share, and holders of our Series A common stock are entitled to one vote per share. See the section titled "Description of Capital Stock" for more information about the voting rights of our Series A common stock and Series B common stock.

(3)Consists of (i) &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; shares of Series B common stock held by Mr. Wright, (ii) &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; shares of Series B common stock held by The Wright Irrevocable Trust dated December 5, 2019 of which Mr. Wright serves as an investment trustee and (iii) an aggregate of &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; shares of Series B common stock held by Ms. Alder, who is the spouse of Mr. Wright, and her affiliated entities.

(4)Consists of (i) &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; shares of Series B common stock held by Ms. Alder, (ii) &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; shares of Series B common stock held by The Alder Irrevocable Trust dated December 5, 2019 of which Ms. Alder serves as an investment trustee and (iii) an aggregate of &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; shares of Series B common stock held by Mr. Wright, who is the spouse of Ms. Alder, and his affiliated entities.

(5)Includes **&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;** shares of common stock subject to outstanding RSUs that would vest based on time-based vesting conditions, assuming any applicable liquidity event condition had been achieved, within 60 days of Beneficial Ownership Date.

(6) &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; .

(7) &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; .

(8)Includes&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; shares of common stock subject to outstanding RSUs that would vest based on time-based vesting conditions, assuming any applicable liquidity event condition had been achieved, within 60 days of Beneficial Ownership Date.

(9)Includes an aggregate of **&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;** shares of common stock subject to outstanding RSUs that would vest based on time-based vesting conditions, assuming any applicable liquidity event condition had been achieved, within 60 days of Beneficial Ownership Date.

(10)The mailing address is &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; .

(11)The mailing address is &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; .

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**Confidential Treatment Requested by Pattern Group Inc.**

**Pursuant to 17 C.F.R. Section 200.83**

**DESCRIPTION OF CAPITAL STOCK**

**General**

The following description summarizes the most important terms of our capital stock, as they are expected to be in effect upon the completion of this offering. We expect to adopt an amended and restated certificate of incorporation and amended and restated bylaws in connection with this offering, and this description summarizes the provisions that are expected to be included in those documents. Because it is only a summary, it does not contain all the information that may be important to you. For a complete description of the matters that are summarized in this section titled "Description of Capital Stock," you should refer to our amended and restated certificate of incorporation and amended and restated bylaws and our Investors' Rights Agreement, which are included as exhibits to the registration statement of which this prospectus forms a part, and to the applicable provisions of Delaware law. Immediately following the completion of this offering, our authorized capital stock will consist of&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; shares of Series A common stock, $0.001 par value per share,&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; shares of Series B common stock, $0.001 par value per share, and&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; shares of undesignated preferred stock, $0.001 par value per share.

As of March 31, 2025 (after giving effect to the Reclassification and the Convertible Preferred Stock Conversion), there were&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; shares of Series A common stock outstanding, held by&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; stockholders of record,&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; shares of our Series B common stock outstanding, held by&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; stockholders of record, and no shares of preferred stock outstanding. The number of shares of our Series A common stock issuable as a result of the Series B Preferred Stock Conversion depends in part on the initial public offering price in this offering. Each share of Series B Preferred Stock converts into a number of shares of Series A common stock determined by dividing the original issue price of such share by the lesser of (a) the original issue price of such share (subject to certain anti-dilution adjustments) and (b) the initial public offering price per share in this offering discounted by&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; %. As a result, if the initial public offering price is above $&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; per share, the Series B Preferred Stock will convert into Series A common stock on a one-for-one basis. If the initial public offering price is below $&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; per share, each share of Series B Preferred Stock will convert into more than one share of Class A common stock. Based upon the assumed initial public offering price of $&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; per share, the midpoint of the price range set forth on the cover page of this prospectus, the outstanding shares of our Series B Preferred Stock would convert into an aggregate of&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; shares of our Series A common stock. A $1.00 increase in the initial public offering price would decrease the number of shares of Series A common stock issuable upon the conversion of our Series B Preferred Stock by&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; shares, and a $1.00 decrease in the initial public offering price would increase the number of shares of Series A common stock issuable upon the conversion of our Series B Preferred Stock by&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; shares. See *Note 9—Convertible Preferred Stock*, in the section titled "Notes to Consolidated Financial Statements" included elsewhere in this prospectus for additional information regarding our Series B Preferred Stock.

Our board of directors is authorized, without stockholder approval except as required by the corporate governance requirements of Nasdaq, to issue additional shares of our capital stock.

**Series A Common Stock and Series B Common Stock**

We have authorized a series of Series A common stock and a series of Series B common stock. Immediately prior to the completion of this offering, all outstanding shares of our existing common stock will be reclassified into an equivalent number of shares of our Series A common stock and all outstanding shares of our existing Founder Voting Preferred Stock and Founder Non-Voting Preferred stock will be reclassified into an equivalent number of shares of our Series B common stock.

In addition, any RSUs outstanding prior to the completion of this offering will become eligible to be settled in or exercisable for shares of our new Series A common stock. Other than as described below under the subsections titled "—Voting Rights" and "—Conversion", the rights of our Series A and Series B common stock are identical.

***Dividend Rights***

Subject to preferences that may apply to any shares of preferred stock outstanding at the time, the holders of our common stock are entitled to receive dividends out of funds legally available if our board of directors, in its

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**Confidential Treatment Requested by Pattern Group Inc.**

**Pursuant to 17 C.F.R. Section 200.83**

discretion, determines to issue dividends and then only at the times and in the amounts that our board of directors may determine.

***Voting Rights***

Holders of our Series A common stock are entitled to one vote for each share, and holders of our Series B common stock are entitled to 10 votes per share, on all matters submitted to a vote of stockholders. The holders of our Series A common stock and Series B common stock will generally vote together as a single class on all matters submitted to a vote of our stockholders, unless otherwise required by Delaware law or our amended and restated certificate of incorporation. If we were to seek to amend our amended and restated certificate of incorporation in a manner that alters or changes the powers, preferences or special rights of a series of a class of our capital stock in a manner that affected its holders adversely, but does not affect the entire class, Delaware law would require either holders of our Series A common stock or Series B common stock to vote separately as a single class to approve the proposed amendment.

We do not expect to provide for cumulative voting for the election of directors in our amended and restated certificate of incorporation. Our amended and restated certificate of incorporation and amended and restated bylaws will establish a classified board of directors that is divided into three classes with staggered three-year terms. Only the directors in one class will be subject to election by a plurality of the votes cast at each annual meeting of our stockholders, with the directors in the other classes continuing for the remainder of their respective three-year terms.

***Conversion***

Each outstanding share of Series B common stock will be convertible at any time at the option of the holder into one share of Series A common stock. In addition, each share of Series B common stock will convert automatically into one share of Series A common stock upon (i) any transfer, whether or not for value, except for certain permitted transfers described in our amended and restated certificate of incorporation, including transfers to a co-founder, transfers to family members, trusts solely for the benefit of the stockholder or their family members and partnerships, corporations and other entities exclusively owned by the stockholder or their family members or (ii), in the case of a stockholder who is a natural person, the death or incapacity of such stockholder, provided that in the case of the death or incapacity of a co-founder, the shares of Series B common stock held by such co-founder will not convert into Series A common stock for so long as the living co-founder retains voting control over such shares of Series B common stock and provided further, that following the death of both co-founders, the shares of Series B common stock held by our co-founders will not convert into Series A common stock for a minimum period of nine months. Once converted into Series A common stock, the Series B common stock will not be reissued.

Each outstanding share of Series B common stock will convert automatically into one share of Series A common stock upon the date specified by affirmative vote of the holders of at least&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; % of the outstanding shares of Series B common stock, voting as a single class.

***No Preemptive or Similar Rights***

Our Series A common stock and Series B common stock are not entitled to preemptive rights and are not subject to conversion (except, with respect to the Series B common stock, as noted above), redemption or sinking fund provisions.

***Right to Receive Liquidation Distributions***

If we become subject to a liquidation, dissolution or winding-up, the assets legally available for distribution to our stockholders would be distributable ratably among the holders of our Series A common stock and Series B common stock and any participating preferred stock outstanding at that time, subject to prior satisfaction of all outstanding debt and liabilities and the preferential rights of and the payment of liquidation preferences, if any, on any outstanding shares of preferred stock.

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**Confidential Treatment Requested by Pattern Group Inc.**

**Pursuant to 17 C.F.R. Section 200.83**

***Fully Paid and Non-Assessable***

All of the outstanding shares of our Series A common stock and Series B common stock are, and the shares of our Series A common stock to be issued pursuant to this offering will be, fully paid and non-assessable.

**Preferred Stock**

Following this offering, our board of directors will be authorized, subject to limitations prescribed by Delaware law, to issue preferred stock in one or more class, to establish from time to time the number of shares to be included in each class to fix the designation, powers, preferences and rights of the shares of each series and any of its qualifications, limitations or restrictions, in each case without further vote or action by our stockholders. Our board of directors can also increase or decrease the number of shares of any class of preferred stock, but not below the number of shares of that class then outstanding, without any further vote or action by our stockholders. Our board of directors may authorize the issuance of preferred stock with voting or conversion rights that could adversely affect the voting power or other rights of the holders of our common stock. The issuance of preferred stock, while providing flexibility in connection with possible acquisitions and other corporate purposes, could, among other things, have the effect of delaying, deferring or preventing a change in control of our company and might adversely affect the market price of our Series A common stock and the voting and other rights of the holders of our Series A common stock and Series B common stock. We have no current plan to issue any shares of preferred stock.

**Restricted Stock Units**

As of March 31, 2025, we had outstanding RSUs representing 18,779,177 shares of our Series A common stock (after giving effect to the Reclassification), issued pursuant to our 2019 Plan, and outstanding Milestone RSUs representing 8,813,161 shares of our Series A common stock issued under a stand-alone restricted stock unit agreement.

**Registration Rights**

After the completion of this offering, certain holders of our Series A common stock will be entitled to rights with respect to the registration of their shares under the Securities Act. These registration rights are contained in the Investors' Rights Agreement. We, along with certain holders of our common stock, are parties to the Investors' Rights Agreement. The registration rights set forth in the Investors' Rights Agreement will expire five years following the completion of this offering, or, with respect to any particular stockholder, following the completion of this offering, when such stockholder is able to sell all of its shares pursuant to Rule 144 of the Securities Act. We will pay the registration expenses (other than underwriting discounts, selling commissions and stock transfer taxes) of the holders of the shares registered pursuant to the registrations described below, including the reasonable fees, not to exceed $100,000, of one counsel for the selling holders. In an underwritten offering, the underwriters have the right, subject to specified conditions, to limit the number of shares such holders may include. In connection with this offering, each stockholder that has registration rights will agree not to sell or otherwise dispose of any securities without the prior written consent of&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; for a period of 180 days after the date of this prospectus, subject to certain terms and conditions. See the section titled "Underwriting" for more information regarding such restrictions.

***Demand Registration Rights on Form S-1***

After the completion of this offering, the holders of up to approximately&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; shares of our Series A common stock will be entitled to certain demand registration rights. At any time beginning 180 days after the effective date of the registration statement of which this prospectus forms a part, the holders of at least a majority of these shares then outstanding may request that we register the offer and sale of their shares on a registration statement on Form S-1, so long as the request covers at least 40% of the shares registrable pursuant to the Investors' Rights Agreement or such lesser percentage if the anticipated aggregate offering price, net of selling expenses, would exceed $10.0 million, subject to certain limitations. We are obligated to effect only two such registrations in the aggregate. If we determine that it would be materially detrimental to us and our stockholders to affect such a demand registration, we have the right to defer such registration, not more than twice in any 12-month period, for a period of not more than 60 days. Additionally, we will not be required to effect a demand registration on Form S-1 during the period beginning 60 days before our good faith estimate of the filing of, and ending on the date 180 days

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**Confidential Treatment Requested by Pattern Group Inc.**

**Pursuant to 17 C.F.R. Section 200.83**

following the effectiveness of, a registration statement on Form S-1 relating to the public offering of our common stock. Additionally, we will not be required to effect a demand registration on Form S-1 if the requesting stockholders propose to dispose of shares of our common stock that may be immediately registered pursuant to a demand registration on Form S-3 (as described in the subsection titled "—Demand Registration Rights on Form S-3" below).

***Piggyback Registration Rights***

After the completion of this offering, if we propose to register the offer and sale of our common stock under the Securities Act, in connection with the public offering of such common stock, the holders of up to approximately&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; shares of our Series A common stock will be entitled to certain "piggyback" registration rights allowing such holders to include their shares in such registration, subject to certain marketing and other limitations. As a result, whenever we propose to file a registration statement under the Securities Act, other than with respect to (i) a registration relating to the sale or grant of securities to our employees or a subsidiary pursuant to any stock option, stock purchase, equity incentive or similar plan, (ii) a registration relating to a transaction under Rule 145 of the Securities Act; (iii) a registration on any form that does not include substantially the same information as would be required to be included in a registration statement covering the sale of our Series A common stock; or (iv) a registration in which the only common stock being registered is common stock issuable upon the conversion of debt securities that are also being registered, the holders of these shares are entitled to notice of the registration and have the right, subject to certain limitations, to include their shares in the registration.

***Demand Registration Rights on Form S-3***

After the completion of this offering, the holders of up to approximately&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; shares of our Series A common stock will be entitled to certain Form S-3 registration rights. The holders of at least 20% of these shares then outstanding may request that we register the offer and sale of their shares on a registration statement on Form S-3 if we are eligible to file a registration statement on Form S-3 so long as the request covers at least that number of shares with an anticipated aggregate offering price, net of selling expenses, of at least $3.0 million, subject to certain limitations. These stockholders may make an unlimited number of requests for registration on Form S-3; however, we will not be required to affect a registration on Form S-3 if we have affected one such registration in the 12-month period immediately preceding the date of such request. If we determine that it would be materially detrimental to our stockholders to affect such a registration, we have the right to defer such registration, not more than twice in any 12-month period, for a period of not more than 60 days. Additionally, we will not be required to effect a demand registration on Form S-3 during the period beginning 30 days before our good faith estimate of the filing of, and ending on the date 90 days following the effectiveness of, a registration statement on Form S-3 relating to the public offering of our common stock.

**Anti-Takeover Provisions**

Certain provisions of Delaware law, our amended and restated certificate of incorporation and our amended and restated bylaws, which are summarized below, may have the effect of delaying, deferring or discouraging another person from acquiring control of our company. They are also designed, in part, to encourage persons seeking to acquire control of us to negotiate first with our board of directors. We believe that the benefits of increased protection of our potential ability to negotiate with an unfriendly or unsolicited acquirer outweigh the disadvantages of discouraging a proposal to acquire us because negotiation of these proposals could result in an improvement of their terms.

***Delaware Law***

We are governed by the provisions of Section 203 of the DGCL. In general, Section 203 prohibits a public Delaware corporation from engaging in a "business combination" with an "interested stockholder" for a period of three years after the date of the transaction in which the person became an interested stockholder, unless the business combination is approved in a prescribed manner. A "business combination" includes mergers, asset sales or other transactions resulting in a financial benefit to the stockholder. An "interested stockholder" is a person who, together with affiliates and associates, owns, or within three years did own, 15% or more of the corporation's outstanding voting stock. These provisions may have the effect of delaying, deferring or preventing a change in our control.

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**Confidential Treatment Requested by Pattern Group Inc.**

**Pursuant to 17 C.F.R. Section 200.83**

***Amended and Restated Certificate of Incorporation and Amended and Restated Bylaws***

Our amended and restated certificate of incorporation and our amended and restated bylaws will include a number of provisions that could deter hostile takeovers or delay or prevent changes in control of our board of directors or management team, including the following:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• *Dual-Series Stock*. As described above in the subsection titled "—Series A Common Stock and Series B Common Stock—Voting Rights," our amended and restated certificate of incorporation will provide for a dual-series common stock structure, which will provide our co-founders with significant influence over all matters requiring stockholder approval, including the election of directors and significant corporate transactions, such as a merger or other sale of our company or our assets.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• *Board of Directors Vacancies*. Our amended and restated certificate of incorporation will authorize our co-founders and our board of directors to fill vacant directorships, including newly created seats. In addition, the number of directors constituting our board of directors will be permitted to be set only by a resolution adopted by a majority vote of our entire board of directors. These provisions would prevent another party from increasing the size of our board of directors and then gaining control of our board of directors by filling the resulting vacancies with its own nominees. These provisions will make it more difficult to change the composition of our board of directors and promote continuity of management.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• *Classified Board*. Our amended and restated certificate of incorporation and amended and restated bylaws will provide that our board of directors is classified into three classes of directors. A third party may be discouraged from making a tender offer or otherwise attempting to obtain control of us as it is more difficult and time consuming for stockholders to replace a majority of the directors on a classified board of directors. See the section titled "Management—Board of Directors."

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• *Stockholder Action; Special Meeting of Stockholders*. Our amended and restated certificate of incorporation will provide that if our co-founders collectively own greater than 50% of the voting power of our outstanding capital stock, (i) our stockholders shall have the right to take action by written consent to the extent so requested by holders of greater than 50% of the voting power of our outstanding capital stock; and (ii) a special meeting of our stockholders may be called by holders of greater than 50% of the voting power of our outstanding capital stock. Once our co-founders no longer control 50% of the voting power of our capital stock, special meetings of our stockholders can be called only by our board of directors or the Chairman of our board of directors (prior to such time, special meetings of our stockholders shall be called by our board of directors, the Chairman of our board of directors or our Secretary at the request of our co-founders who hold more than 50% of the voting power of our outstanding capital stock).

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• *Advance Notice Requirements for Stockholder Proposals and Director Nominations*. Our amended and restated bylaws will provide advance notice procedures for stockholders seeking to bring business before our annual meeting of stockholders or to nominate candidates for election as directors at our annual meeting of stockholders. Our amended and restated bylaws will also specify certain requirements regarding the form and content of a stockholder's notice. These provisions might preclude our stockholders from bringing matters before our annual meeting of stockholders or from making nominations for directors at our annual meeting of stockholders if the proper procedures are not followed. We expect that these provisions may also discourage or deter a potential acquirer from conducting a solicitation of proxies to elect the acquirer's own slate of directors or otherwise attempting to obtain control of our company.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• *No Cumulative Voting*. The DGCL provides that stockholders are not entitled to cumulate votes in the election of directors unless a corporation's certificate of incorporation provides otherwise. Our amended and restated certificate of incorporation will not provide for cumulative voting.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• *Removal of Directors*. Our amended and restated certificate of incorporation will provide that if our co-founders collectively own greater than 50% of the voting power of our outstanding capital stock, a majority of our stockholders shall have the right to remove directors with or without cause.

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**Confidential Treatment Requested by Pattern Group Inc.**

**Pursuant to 17 C.F.R. Section 200.83**

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• *Issuance of Undesignated Preferred Stock*. Our board of directors will have the authority, without further action by the stockholders, to issue up to&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; shares of undesignated preferred stock with rights and preferences, including voting rights, designated from time to time by our board of directors. The existence of authorized but unissued shares of preferred stock would enable our board of directors to render more difficult or to discourage an attempt to obtain control of us by means of a merger, tender offer, proxy contest or other means.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• *Exclusive Forum*. Our amended and restated bylaws will provide that, unless we consent in writing to the selection of an alternative forum, the Court of Chancery of the State of Delaware shall be the sole and exclusive forum for state law claims for (i) any derivative action or proceeding brought on our behalf, (ii) any action asserting a claim of, or a claim based on, a breach of a fiduciary duty owed by any of our current or former directors, officers and employees to us or our stockholders, (iii) any action asserting a claim against us, or any current or former director, officer or employee of ours, arising out of or pursuant to the DGCL, our amended and restated certificate of incorporation or our amended and restated bylaws or as to which the DGCL confers jurisdiction on the Court of Chancery of the State of Delaware or (iv) any action asserting a claim against us, or any current or former director, officer or employee that is governed by the internal affairs doctrine; provided, however, that this provision does not apply to any causes of action arising under the Securities Act or the Exchange Act, or to any claim for which the federal courts have exclusive jurisdiction. In addition, our amended and restated bylaws will provide that, unless we consent in writing to the selection of an alternative forum, the federal district courts of the United States will be the sole and exclusive forum for resolving any complaint asserting a cause of action arising under the Securities Act, the Exchange Act or the respective rules and regulations promulgated thereunder. To the fullest extent permitted by law, any person or entity purchasing or otherwise acquiring any interest in our securities will be deemed to have notice of and to have consented to these forum provisions. These forum provisions may impose additional litigation costs on stockholders in pursuing any such claims, particularly if the stockholders do not reside in or near the State of Delaware. Additionally, the forum selection clause that will be in our amended and restated bylaws may limit our stockholders' ability to bring a claim in a judicial forum they find favorable for disputes with us or our directors, officers or employees, which may discourage such lawsuits against us and our directors, officers and employees even though an action, if successful, might benefit our stockholders. In addition, while the Delaware Supreme Court and other state courts have upheld the validity of the federal forum selection provisions purporting to require claims under the Securities Act be brought in federal court, there is uncertainty as to whether other courts will enforce our Federal Forum Provision. If the Federal Forum Provision is found to be unenforceable in an action, we may incur additional costs associated with resolving such an action. The Federal Forum Provision may also impose additional litigation costs on stockholders who assert that the provision is not enforceable or invalid. The Court of Chancery of the State of Delaware and the federal district courts of the United States may also reach different judgments or results than would other courts, including courts where a stockholder considering an action may be located or would otherwise choose to bring the action, and such judgments may be more or less favorable to us than our stockholders.

**Transfer Agent and Registrar**

Upon the completion of this offering, the transfer agent and registrar for our Series A common stock and Series B common stock will be&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;. The transfer agent's address is&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; .

**Listing**

We intend to apply to list our Series A common stock on the Nasdaq Global Select Market under the symbol "PTRN".

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**Confidential Treatment Requested by Pattern Group Inc.**

**Pursuant to 17 C.F.R. Section 200.83**

**SHARES ELIGIBLE FOR FUTURE SALE**

Prior to this offering, there has been no public market for our Series A common stock, and we cannot predict the effect, if any, that future sales of shares of our Series A common stock or the availability for future sales of shares of our Series A common stock will have on the market price of our Series A common stock prevailing from time to time. Future sales of our Series A common stock in the public market, or the availability of such shares for sale in the public market, could adversely affect market prices prevailing from time to time. As described below, only a limited number of shares will be available for sale shortly after this offering due to contractual and legal restrictions on resale. Nevertheless, sales of our Series A common stock in the public market after such restrictions lapse, or the perception that those sales may occur, could adversely affect the prevailing market price at such time and our ability to raise equity capital in the future.

Following the completion of this offering, based on the number of shares of our common stock outstanding as of March 31, 2025, we will have a total of&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; shares of our Series A common stock and&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; shares of our Series B common stock outstanding, assuming (i) the Reclassification, (ii) the Convertible Preferred Stock Conversion, (iii) the net issuance of&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; shares of our Series A common stock issuable pursuant to the vesting and settlement of&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; RSUs for which the service-based condition was satisfied as of March 31, 2025, and for which we expect the liquidity event condition to be satisfied in connection with this offering (based on an assumed&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; % tax withholding rate) and (iv) the net issuance of&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; shares of our Series A common stock issuable pursuant to the vesting and settlement of Milestone RSUs for which we expect the milestone event and liquidity event conditions to be satisfied in connection with this offering, after withholding an aggregate of&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; shares to satisfy associated estimated income tax obligations (based on an assumed&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; % tax withholding rate),each immediately prior to the completion of this offering. For information on the conversion provisions applicable to our Series B Preferred Stock, see the section titled "Capitalization—Series B Preferred Stock Conversion." Of these outstanding shares, all of the shares of Series A common stock sold in this offering by us and the selling stockholders will be freely tradable, except that any shares purchased in this offering by our affiliates, as that term is defined in Rule 144 under the Securities Act, would only be able to be sold in compliance with the Rule 144 limitations described below.

The remaining outstanding shares of our Series A and Series B common stock, and shares of Series A common stock issuable pursuant to the vesting and settlement of outstanding RSUs, will be deemed "restricted securities" as defined in Rule 144. Restricted securities may be sold in the public market only if they are registered or if they qualify for an exemption from registration under Rule 144 or Rule 701 under the Securities Act, which are summarized below. In addition, all of our executive officers, directors and holders of substantially all of our common stock and securities convertible into or exchangeable for our common stock have entered into market standoff agreements with us or lock-up agreements with the underwriters under which they have agreed, subject to specific exceptions, not to sell any of our stock for at least 180 days following the date of this prospectus. Subject to these lock-up agreements and the provisions of Rule 144 under the Securities Act, as well as our insider trading policy, these restricted securities will be available for sale in the public market after the date of this prospectus.

**Lock-Up Agreements and Market Standoff Provisions**

We and our officers, directors, the selling stockholders and holders of substantially all of our common stock and securities convertible into or exchangeable for shares of our common stock have agreed or will agree with the underwriters that, subject to certain exceptions, until the date that is 180 days after the date of this prospectus, we and they will not, without the prior written consent of Goldman Sachs & Co. LLC and J.P. Morgan Securities LLC, transfer, dispose of or hedge any shares of our common stock or any securities convertible into or exchangeable for shares of our common stock. Goldman Sachs & Co. LLC and J.P. Morgan Securities LLC, in their sole discretion, may release any of the securities subject to these lock-up agreements at any time. These agreements are further described in the section titled "Underwriting."

In addition to the restrictions contained in the lock-up agreements described above, we have entered into agreements with substantially all of our security holders, including our Investors' Rights Agreement and our standard form of restricted stock unit agreements, that contain market stand-off provisions, which impose

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**Confidential Treatment Requested by Pattern Group Inc.**

**Pursuant to 17 C.F.R. Section 200.83**

restrictions on the ability of such security holders to offer, sell or transfer our equity securities for a period of 180 days following the date of this prospectus.

**Rule 144**

In general, under Rule 144 as currently in effect, once we have been subject to the public company reporting requirements of Section 13 or Section 15(d) of the Exchange Act for at least 90 days, a person who is not deemed to have been one of our affiliates for purposes of the Securities Act at any time during the 90 days preceding a sale and who has beneficially owned the shares proposed to be sold for at least six months, including the holding period of any prior owner other than our affiliates, is entitled to sell those shares without complying with the manner of sale, volume limitation or notice provisions of Rule 144, subject to compliance with the public information requirements of Rule 144 and subject to the expiration of the lock-up agreements and market standoff agreements described above. If such a person has beneficially owned the shares proposed to be sold for at least one year, including the holding period of any prior owner other than our affiliates, then that person would be entitled to sell those shares without complying with any of the requirements of Rule 144.

In general, under Rule 144, as currently in effect, our affiliates or persons selling shares on behalf of our affiliates are entitled to sell upon expiration of the lock-up agreements and market standoff agreements described above. Beginning 90 days after the date of this prospectus, within any three-month period, such stockholders may sell a number of shares that does not exceed the greater of:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• 1% of the number of shares of our Series A common stock then outstanding, which will equal approximately&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; shares immediately after the completion of this offering; or

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• the average weekly trading volume of our Series A common stock during the four calendar weeks preceding the filing of a notice on Form 144 with respect to that sale.

Sales under Rule 144 by our affiliates or persons selling shares on behalf of our affiliates are also subject to certain manner of sale provisions and notice requirements and to the availability of current public information about us.

**Rule 701**

Rule 701, as currently in effect, generally allows a stockholder who acquired shares of our common stock pursuant to a written compensatory plan or contract and who is not deemed to have been an affiliate of our company during the immediately preceding 90 days to sell these shares in reliance upon Rule 144, but without being required to comply with the public information, holding period, volume limitation or notice provisions of Rule 144. Rule 701 also permits affiliates of our company to sell their Rule 701 shares under Rule 144 without complying with the holding period requirements of Rule 144. All holders of Rule 701 shares, however, are required by that rule to wait until 90 days after the date of this prospectus before selling those shares pursuant to Rule 701, subject to the expiration of the lock-up agreements and market standoff agreements described above.

**Registration Rights**

Pursuant to the Investors' Rights Agreement, the holders of up to&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; shares of our Series A common stock and their transferees will be entitled to certain rights with respect to the registration of the offer and sale of those shares under the Securities Act. See the section titled "Description of Capital Stock—Registration Rights" for a description of these registration rights. If the offer and sale of these shares is registered, the shares will be freely tradable without restriction under the Securities Act, and a large number of shares may be sold into the public market.

**Registration Statement on Form S-8**

We intend to file one or more registration statements on Form S-8 under the Securities Act to register all of the shares of our Series A common stock issued or reserved for issuance under our 2019 Plan and our 2025 Plan. Shares covered by this registration statement will be eligible for sale in the public market, subject to the Rule 144 limitations applicable to affiliates, vesting restrictions and any applicable lock-up agreements, and market standoff

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**Confidential Treatment Requested by Pattern Group Inc.**

**Pursuant to 17 C.F.R. Section 200.83**

agreements. As of March 31, 2025, RSUs to purchase a total of 18,779,177 shares of our Series A common stock (after giving effect to the Reclassification) pursuant to our 2019 Plan were outstanding, Milestone RSUs to purchase a total of 8,813,161 shares of our Series A common stock (after giving effect to the Reclassification) pursuant to a Stand-Alone Restricted Stock Unit Award Agreement were outstanding and no RSUs or other equity awards were outstanding under our 2025 Plan.

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**Confidential Treatment Requested by Pattern Group Inc.**

**Pursuant to 17 C.F.R. Section 200.83**

**MATERIAL U.S. FEDERAL INCOME TAX CONSEQUENCES TO NON-U.S. HOLDERS OF OUR SERIES A COMMON STOCK**

The following is a general discussion of certain material U.S. federal income tax consequences relating to the ownership and disposition of our Series A common stock by a non-U.S. holder. For purposes of this discussion, the term "non-U.S. holder" means a beneficial owner of our Series A common stock that is not, for U.S. federal income tax purposes:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• an individual who is a citizen or resident of the United States;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• a corporation, or other entity treated as a corporation for U.S. federal income tax purposes, created or organized in or under the laws of the United States or of any political subdivision of the United States;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• an estate the income of which is subject to U.S. federal income taxation regardless of its source; or

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• a trust, if a U.S. court is able to exercise primary supervision over the administration of the trust and one or more "United States persons", as defined in the Code, have authority to control all substantial decisions of the trust or if the trust has a valid election in effect to be treated as a United States person under applicable U.S. Treasury Regulations.

This discussion is based on current provisions of the Code, existing, proposed and temporary U.S. Treasury Regulations promulgated thereunder, current administrative rulings, and judicial decisions, all as in effect as of the date of this prospectus and all of which are subject to change or to differing interpretation, possibly with retroactive effect. We have not sought and will not seek any rulings from the Internal Revenue Service ("IRS") regarding the matters discussed below. Any change could alter the tax consequences to non-U.S. holders described in this prospectus. In addition, the IRS could challenge one or more of the tax consequences described in this prospectus.

We assume in this discussion that each non-U.S. holder holds shares of our Series A common stock as a capital asset within the meaning of Section 1221 of the Code (generally, property held for investment). This discussion does not address all aspects of U.S. federal income taxation that may be relevant to a particular non-U.S. holder in light of that non-U.S. holder's individual circumstances nor does it address any aspects of U.S. state or local or non-U.S. taxes, the alternative minimum tax, the Medicare contribution tax on net investment income, the rules regarding qualified small business stock within the meaning of Section 1202 of the Code or U.S. federal taxes other than income (e.g., estate). This discussion also does not consider any specific facts or circumstances that may apply to a non-U.S. holder and does not address the special tax rules applicable to particular non-U.S. holders, such as:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• banks;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• insurance companies;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• mutual funds;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• tax-exempt organizations (including private foundations);

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• governmental or international organizations;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• regulated investment companies;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• real estate investment trusts;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• financial institutions;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• brokers or dealers in securities;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• pension plans;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• qualified foreign pension funds and entities all of the interests of which are held by qualified foreign pension funds;

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**Confidential Treatment Requested by Pattern Group Inc.**

**Pursuant to 17 C.F.R. Section 200.83**

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• tax-qualified retirement plans;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• controlled foreign corporations;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• passive foreign investment companies;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• corporations that accumulate earnings to avoid U.S. federal income tax;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• owners that hold our Series A common stock as part of a straddle, hedge, conversion transaction, synthetic security or other integrated investment;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• persons who own, or are deemed to own, more than five percent of our capital stock (except to the extent specifically set forth below);

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• certain U.S. expatriates;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• persons who have elected to mark securities to market;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• persons deemed to sell our Series A common stock under the constructive sale provisions of the Code;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• persons that elect to apply Section 1400Z-2 of the Code to gains recognized with respect to shares of our Series A common stock; or

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• persons who hold or receive our Series A common stock pursuant to the exercise of any warrant or option; persons who acquire our Series A common stock as compensation for services; persons subject to special tax accounting rules as a result of any item of gross income with respect to our Series A common stock being taken into account in an "applicable financial statement" as defined in Section 451(b) of the Code.

In addition, this discussion does not address the tax treatment of partnerships (including any entity or arrangement treated as a partnership for U.S. federal income tax purposes) or other entities that are transparent for U.S. federal income tax purposes or persons who hold their Series A common stock through partnerships or other entities that are transparent for U.S. federal income tax purposes. In the case of a holder that is classified as a partnership for U.S. federal income tax purposes, the tax treatment of a person treated as a partner in such partnership for U.S. federal income tax purposes generally will depend on the status of the partner, the activities of the partner and the partnership and certain determinations made at the partner level. A person treated as a partner in a partnership or who holds their stock through another transparent entity should consult his, her or its own tax advisor regarding the tax consequences of the ownership and disposition of our Series A common stock through a partnership or other transparent entity, as applicable.

The following discussion of certain material U.S. federal income tax considerations is for general information only. It is not tax advice. Prospective investors should consult their own tax advisors regarding the particular U.S. federal, state and local and non-U.S. tax consequences to them of acquiring, holding and disposing of our Series A common stock, including the consequences of any proposed changes in applicable laws and the application of any applicable income tax treaty.

**Distributions on our Series A Common Stock**

We do not expect to pay any dividends in the foreseeable future. See the section titled "Dividend Policy." However, in the event that we do pay distributions of cash or property on our Series A common stock, those distributions will constitute dividends for U.S. federal income tax purposes to the extent paid from our current or accumulated earnings and profits, as determined under U.S. federal income tax principles. If a distribution exceeds our current and accumulated earnings and profits, the excess will be treated as a tax-free return of the non-U.S. holder's investment, up to such holder's tax basis in our Series A common stock. Any remaining excess will be treated as capital gain, subject to the tax treatment described below under the heading "Gain on Sale, Exchange or Other Taxable Disposition of Series A Common Stock."

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**Confidential Treatment Requested by Pattern Group Inc.**

**Pursuant to 17 C.F.R. Section 200.83**

Subject to the discussion of effectively connected income below and the discussions below under the headings "Information Reporting and Backup Withholding" and "Foreign Account Tax Compliance Act", dividends paid to a non-U.S. holder generally will be subject to withholding of U.S. federal income tax at a 30% rate or such lower rate as may be specified by an applicable income tax treaty between the United States and such holder's country of residence. If we or the applicable withholding agent are unable to determine, at a time reasonably close to the date of payment of a distribution on our Series A common stock, what portion, if any, of the distribution will constitute a dividend, then we or the applicable withholding agent may withhold U.S. federal income tax on the basis of assuming that the full amount of the distribution will be a dividend. If we or another withholding agent withhold more than is required or if a non-U.S. holder does not timely provide us with the required certification, the non-U.S. holder may be entitled to a refund or credit of any excess tax withheld by timely filing an appropriate claim with the IRS.

A non-U.S. holder of our Series A common stock who claims the benefit of an applicable income tax treaty between the United States and such holder's country of residence with respect to U.S. withholding taxes generally will be required to provide a valid, properly executed IRS Form W-8BEN or W-8BEN-E (or applicable successor form) and satisfy applicable certification and other requirements. A non-U.S. holder that is eligible for a reduced rate of U.S. withholding tax under an income tax treaty may obtain a refund or credit of any excess amounts withheld by timely filing an appropriate claim with the IRS. Non-U.S. holders are urged to consult their own tax advisors regarding their entitlement to benefits under a relevant income tax treaty.

Dividends that are treated as effectively connected with a trade or business conducted by a non-U.S. holder within the United States, and, if an applicable income tax treaty so requires, that are attributable to a permanent establishment or a fixed base maintained by the non-U.S. holder within the United States, are generally exempt from the 30% withholding tax if the non-U.S. holder satisfies applicable certification and disclosure requirements. To obtain this exemption, a non-U.S. holder must generally and timely provide us or the applicable withholding agent with a valid, properly executed IRS Form W-8ECI properly certifying such exemption. However, such U.S. effectively connected income is generally taxed at the same graduated U.S. federal income tax rates applicable to U.S. persons, as defined in the Code. Any U.S. effectively connected income received by a non-U.S. holder that is a corporation may also, under certain circumstances, be subject to an additional "branch profits tax" at a 30% rate or such lower rate as may be specified by an applicable income tax treaty between the United States and such holder's country of residence, subject to any applicable qualification rules contained in such treaty.

Any documentation provided to an applicable withholding agent may need to be updated in certain circumstances. The certification requirements described above also may require a non-U.S. holder to provide its U.S. taxpayer identification number.

**Gain on Sale, Exchange or Other Taxable Disposition of Series A Common Stock**

Subject to the discussions below under the headings "Information Reporting and Backup Withholding" and "Foreign Account Tax Compliance Act," a non-U.S. holder generally will not be subject to U.S. federal income tax or withholding tax on gain recognized on a sale, exchange or other taxable disposition of our Series A common stock unless:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• the gain is effectively connected with the non-U.S. holder's conduct of a trade or business in the United States, and, if an applicable income tax treaty so provides, the gain is attributable to a permanent establishment or fixed base maintained by the non-U.S. holder in the United States; in these cases, the non-U.S. holder will generally be taxed on a net income basis at the regular graduated rates and in the manner applicable to United States persons, and, if the non-U.S. holder is a foreign corporation, an additional branch profits tax at a rate of 30%, or a lower rate as may be specified by an applicable income tax treaty, may also apply;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• the non-U.S. holder is a nonresident alien individual who is present in the United States for a period or periods aggregating 183 days or more in the taxable year of the disposition (treating portions of a day as a full day for purposes of this calculation) and certain other conditions are met, in which case the non-U.S. holder will be subject to U.S. federal income tax at a rate of 30% (or such lower rate as may be specified by

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**Confidential Treatment Requested by Pattern Group Inc.**

**Pursuant to 17 C.F.R. Section 200.83**

an applicable income tax treaty) on the amount by which the non-U.S. holder's capital gains allocable to U.S. sources exceed capital losses allocable to U.S. sources during the taxable year of the disposition (without taking into account any capital loss carryovers); or

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• we are or were a "United States real property holding corporation" during a certain look-back period, unless our Series A common stock is regularly traded on an established securities market and the non-U.S. holder held no more than five percent of our outstanding Series A common stock, directly or indirectly, actually or constructively, during the shorter of the five-year period ending on the date of the disposition or the period that the non-U.S. holder held our Series A common stock. In such case, such non-U.S. holder generally will be taxed on its net gain derived from the disposition at the graduated U.S. federal income tax rates applicable to United States persons, as defined in the Code. Generally, a corporation is a "United States real property holding corporation" if the fair market value of its "United States real property interests," as defined in the Code and applicable U.S. Treasury Regulations, equals or exceeds 50% of the sum of the fair market value of its worldwide real property interests plus its other assets used or held for use in a trade or business. Although there can be no assurance in this regard, we believe that we have not been and are not currently, and we do not anticipate becoming, a "United States real property holding corporation" for U.S. federal income tax purposes. No assurance can be provided that our Series A common stock will be regularly traded on an established securities market for purposes of the rules described above.

Non-U.S. Holders should consult their tax advisors regarding any applicable tax treaties that may provide for different rules.

**Information Reporting and Backup Withholding**

We (or the applicable paying agent) must report annually to the IRS and to each non-U.S. holder the gross amount of the distributions on our Series A common stock paid to such holder and the tax withheld, if any, with respect to such distributions. Non-U.S. holders may have to comply with specific certification procedures to establish that the holder is not a United States person, as defined in the Code, to avoid backup withholding at the applicable rate with respect to dividends on our Series A common stock. Generally, a holder will comply with such procedures if it provides a valid, properly executed IRS Form W-8BEN or W-8BEN-E or otherwise meets documentary evidence requirements for establishing that it is a non-U.S. holder, or otherwise establishes an exemption. However, information returns are required to be filed with the IRS in connection with any dividends on our common stock paid to the Non-U.S. Holder, regardless of whether any tax was actually withheld.

Information reporting and backup withholding generally will apply to the proceeds of a disposition of our Series A common stock by a non-U.S. holder effected by or through the U.S. office of any broker, U.S. or foreign, unless the holder certifies its status as a non-U.S. holder and satisfies certain other requirements, or otherwise establishes an exemption. Generally, information reporting and backup withholding will not apply to a payment of disposition proceeds to a non-U.S. holder where the transaction is effected outside the United States through a foreign broker. However, for information reporting purposes, dispositions effected through a non-U.S. office of a broker with substantial U.S. ownership or operations generally will be treated in a manner similar to dispositions effected through a U.S. office of a broker. Non-U.S. holders should consult their own tax advisors regarding the application of the information reporting and backup withholding rules to them.

Copies of information returns may be made available to the tax authorities of the country in which the non-U.S. holder resides or is incorporated under the provisions of a specific treaty or agreement. Any documentation provided to an applicable withholding agent may need to be updated in certain circumstances.

Backup withholding is not an additional tax. Any amounts withheld under the backup withholding rules from a payment to a non-U.S. holder may be refunded or credited against the non-U.S. holder's U.S. federal income tax liability, if any, provided that an appropriate claim is timely filed with the IRS.

**Foreign Account Tax Compliance Act**

Provisions of the Code commonly referred to as the Foreign Account Tax Compliance Act and associated guidance (collectively, "FATCA") generally impose a 30% withholding tax on any "withholdable payment", as

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**Confidential Treatment Requested by Pattern Group Inc.**

**Pursuant to 17 C.F.R. Section 200.83**

defined below, to a "foreign financial institution", as defined in the Code, unless such institution enters into an agreement with the U.S. government to collect and provide to the U.S. tax authorities substantial information regarding U.S. account holders of such institution (which would include certain equity and debt holders of such institution, as well as certain account holders that are foreign entities with United States owners) or another applicable exception applies or such institution is compliant with applicable foreign law enacted in connection with an applicable intergovernmental agreement between the United States and a foreign jurisdiction. FATCA will also generally impose a 30% withholding tax on any "withholdable payment", as defined below, to certain foreign entities that are not financial institutions, unless such entity provides the withholding agent with a certification identifying the substantial U.S. owners of the entity (which generally includes any United States person who directly or indirectly owns more than 10% of the entity), if any, or another applicable exception applies or such entity is compliant with applicable foreign law enacted in connection with an applicable intergovernmental agreement between the United States and a foreign jurisdiction. Under applicable U.S. Treasury regulations, "withholdable payments" currently include payments of dividends on our Series A common stock. Currently proposed U.S. Treasury Regulations (the preamble to which specifies that taxpayers are permitted to rely on them pending finalization) provide that FATCA withholding does not apply to gross proceeds from the disposition of property of a type that can produce U.S. source dividends or interest; however, prior versions of the rules would have made such gross proceeds subject to FATCA withholding. Taxpayers (including withholding agents) can currently rely on the proposed Treasury Regulations. Under certain circumstances, a non-U.S. holder might be eligible for refunds or credits of such taxes.

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**Confidential Treatment Requested by Pattern Group Inc.**

**Pursuant to 17 C.F.R. Section 200.83**

**UNDERWRITING**

The Company, the selling stockholders and the underwriters named below have entered into an underwriting agreement with respect to the shares of Series A common stock being offered. Subject to certain conditions, each underwriter has severally agreed to purchase the number of shares indicated in the following table. Goldman Sachs & Co. LLC and J.P. Morgan Securities LLC are the representatives of the underwriters.

---

| | |
|:---|:---|
| **Underwriters** | **Number of Shares** |
| Goldman Sachs & Co. LLC |  |
| J.P. Morgan Securities LLC |  |
| Total |  |

---

The underwriters are committed to take and pay for all of the shares being offered, if any are taken, other than the shares covered by the option described below unless and until this option is exercised.

The underwriters have an option to buy up to an additional&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; and &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; shares from the Company and the selling stockholders, respectively, to cover sales by the underwriters of a greater number of shares than the total number set forth in the table above. They may exercise that option for 30 days. If any shares are purchased pursuant to this option, the underwriters will severally purchase shares in approximately the same proportion as set forth in the table above.

The following table shows the per share and total underwriting discounts and commissions to be paid to the underwriters by the Company and the selling stockholders. Such amounts are shown assuming both no exercise and full exercise of the underwriters' option to purchase&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; and &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; additional shares from the Company and the selling stockholders, respectively.

---

| | | |
|:---|:---|:---|
| **Paid by the Company** | **No Exercise** | **Full Exercise** |
| Per Share | $ | $ |
| Total | $ | $ |

---

---

| | | |
|:---|:---|:---|
| **Paid by the Selling Stockholders** | **No Exercise** | **Full Exercise** |
| Per Share | $ | $ |
| Total | $ | $ |

---

Shares sold by the underwriters to the public will initially be offered at the initial public offering price set forth on the cover of this prospectus. Any shares sold by the underwriters to securities dealers may be sold at a discount of up to $&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; per share from the initial public offering price. After the initial offering of the shares, the representatives may change the offering price and the other selling terms. The offering of the shares by the underwriters is subject to receipt and acceptance and subject to the underwriters' right to reject any order in whole or in part.

The Company and its officers, directors and holders of substantially all of the Company's capital stock, including the selling stockholders, have agreed or will agree, with the underwriters, subject to certain exceptions, not to dispose of or hedge any of their Series A common stock or securities convertible into or exchangeable for shares of common stock during the period from the date of this prospectus continuing through the date 180 days after the date of this prospectus, except with the prior written consent of Goldman Sachs & Co. LLC and J.P. Morgan Securities LLC. See the section titled "Shares Eligible for Future Sale" for a discussion of certain transfer restrictions.

Goldman Sachs & Co. LLC and J.P. Morgan Securities LLC, in their sole discretion, may release the shares of common stock and other securities subject to the lock-up agreements described above in whole or in part at any time.

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**Confidential Treatment Requested by Pattern Group Inc.**

**Pursuant to 17 C.F.R. Section 200.83**

Prior to the offering, there has been no public market for the shares. The initial public offering price has been negotiated among the Company and the representatives. Among the factors to be considered in determining the initial public offering price of the shares, in addition to prevailing market conditions, will be the Company's historical performance, estimates of the business potential and earnings prospects of the Company, an assessment of the Company's management and the consideration of the above factors in relation to market valuation of companies in related businesses.

We intend to apply to list our Series A common stock on the Nasdaq Global Select Market under the symbol "PTRN".

The underwriters may also impose a penalty bid. This occurs when a particular underwriter repays to the underwriters a portion of the underwriting discount received by it because the representatives have repurchased shares sold by or for the account of such underwriter in stabilizing or short covering transactions.

Purchases to cover a short position and stabilizing transactions, as well as other purchases by the underwriters for their own accounts, may have the effect of preventing or retarding a decline in the market price of the Company's stock, and together with the imposition of the penalty bid, may stabilize, maintain or otherwise affect the market price of the Series A common stock. As a result, the price of the Series A common stock may be higher than the price that otherwise might exist in the open market. The underwriters are not required to engage in these activities and may end any of these activities at any time. These transactions may be effected on&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; , in the over-the-counter market or otherwise.

The Company estimates that its share of the total expenses of the offering, excluding underwriting discounts and commissions, will be approximately $&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; . We have also agreed to reimburse the underwriters for certain of their expenses in an amount up to $&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; .

The Company and the selling stockholders have agreed to indemnify the several underwriters against certain liabilities, including liabilities under the Securities Act of 1933.

The underwriters and their respective affiliates are full service financial institutions engaged in various activities, which may include sales and trading, commercial and investment banking, advisory, investment management, investment research, principal investment, hedging, market making, brokerage and other financial and non-financial activities and services. Certain of the underwriters and their respective affiliates have provided, and may in the future provide, a variety of these services to the issuer and to persons and entities with relationships with the issuer, for which they received or will receive customary fees and expenses. For example, JPMorgan Chase Bank, N.A., an affiliate of J.P. Morgan Securities LLC, acts as the administrative agent, issuing bank and a lender under the Credit Facility.

------

**Confidential Treatment Requested by Pattern Group Inc.**

**Pursuant to 17 C.F.R. Section 200.83**

In the ordinary course of their various business activities, the underwriters and their respective affiliates, officers, directors and employees may purchase, sell or hold a broad array of investments and actively trade securities, derivatives, loans, commodities, currencies, credit default swaps and other financial instruments for their own account and for the accounts of their customers, and such investment and trading activities may involve or relate to assets, securities and/or instruments of the issuer (directly, as collateral securing other obligations or otherwise) and/or persons and entities with relationships with the issuer. The underwriters and their respective affiliates may also communicate independent investment recommendations, market color or trading ideas and/or publish or express independent research views in respect of such assets, securities or instruments and may at any time hold, or recommend to clients that they should acquire, long and/or short positions in such assets, securities and instruments.

**European Economic Area**

In relation to each Member State of the European Economic Area, each a Relevant State, no shares of common stock have been offered or will be offered pursuant to the offering to the public in that Relevant State prior to the publication of a prospectus in relation to the shares of common stock which has been approved by the competent authority in that Relevant State or, where appropriate, approved in another Relevant State and notified to the competent authority in that Relevant State, all in accordance with the Prospectus Regulation, as defined below, except that the shares of common stock may be offered to the public in that Relevant State at any time:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• to any legal entity which is a qualified investor as defined under Article 2 of the Prospectus Regulation;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• to fewer than 150 natural or legal persons (other than qualified investors as defined under Article 2 of the Prospectus Regulation), subject to obtaining the prior consent of representatives for any such offer; or

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• in any other circumstances falling within Article 1(4) of the Prospectus Regulation,

provided that no such offer of the shares of common stock shall require us or any of the representatives to publish a prospectus pursuant to Article 3 of the Prospectus Regulation or supplement a prospectus pursuant to Article 23 of the Prospectus Regulation. For the purposes of this provision, the expression an "offer to the public" in relation to the shares of common stock in any Relevant State means the communication in any form and by any means of sufficient information on the terms of the offer and any shares of common stock to be offered so as to enable an investor to decide to purchase or subscribe for any shares of common stock, and the expression "Prospectus Regulation" means Regulation (EU) 2017/1129.

**United Kingdom**

No shares of common stock have been offered or will be offered pursuant to the offering to the public in the U.K. prior to the publication of a prospectus in relation to the shares of common stock which has been approved by the Financial Conduct Authority, except that the shares of common stock may be offered to the public in the U.K. at any time:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• to any legal entity which is a qualified investor as defined under Article 2 of the U.K. Prospectus Regulation, as defined below;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• to fewer than 150 natural or legal persons (other than qualified investors as defined under Article 2 of the U.K. Prospectus Regulation), subject to obtaining the prior consent of the representatives for any such offer; or

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• in any other circumstances falling within Section 86 of the Financial Services and Markets Act 2000 ("FSMA"),

provided that no such offer of the shares of common stock shall require the Company or any underwriter to publish a prospectus pursuant to Section 85 of the FSMA or supplement a prospectus pursuant to Article 23 of the UK Prospectus Regulation, as defined below. For the purposes of this provision, the expression an "offer to the public" in relation to the shares of common stock in the U.K. means the communication in any form and by any means of sufficient information on the terms of the offer and any shares of common stock to be offered so as to

------

**Confidential Treatment Requested by Pattern Group Inc.**

**Pursuant to 17 C.F.R. Section 200.83**

enable an investor to decide to purchase or subscribe for any shares of common stock and the expression "U.K. Prospectus Regulation" means Regulation (EU) 2017/1129 as it forms part of domestic law by virtue of the European Union (Withdrawal) Act 2018.

**Canada**

The securities may be sold in Canada only to purchasers purchasing, or deemed to be purchasing, as principal that are accredited investors, as defined in National Instrument 45-106 Prospectus Exemptions or subsection 73.3(1) of the Securities Act (Ontario), and are permitted clients, as defined in National Instrument 31-103 Registration Requirements, Exemptions and Ongoing Registrant Obligations. Any resale of the securities must be made in accordance with an exemption form, or in a transaction not subject to, the prospectus requirements of applicable securities laws.

Securities legislation in certain provinces or territories of Canada may provide a purchaser with remedies for rescission or damages if this prospectus (including any amendment thereto) contains a misrepresentation, provided that the remedies for rescission or damages are exercised by the purchaser within the time limit prescribed by the securities legislation of the purchaser's province or territory. The purchaser should refer to any applicable provisions of the securities legislation of the purchaser's province or territory of these rights or consult with a legal advisor.

Pursuant to section 3A.3 of National Instrument 33-105 Underwriting Conflicts ("NI 33-105") the underwriters are not required to comply with the disclosure requirements of NI 33-105 regarding underwriter conflicts of interest in connection with this offering.

**Hong Kong**

The shares of common stock may not be offered or sold in Hong Kong by means of any document other than (i) in circumstances which do not constitute an offer to the public within the meaning of the Companies (Winding Up and Miscellaneous Provisions) Ordinance (Cap. 32 of the Laws of Hong Kong) ("Companies (Winding Up and Miscellaneous Provisions) Ordinance") or which do not constitute an invitation to the public within the meaning of the Securities and Futures Ordinance (Cap. 571 of the Laws of Hong Kong) ("Securities and Futures Ordinance"), or (ii) to "professional investors" as defined in the Securities and Futures Ordinance and any rules made thereunder, or (iii) in other circumstances which do not result in the document being a "prospectus" as defined in the Companies (Winding Up and Miscellaneous Provisions) Ordinance, and no advertisement, invitation or document relating to the shares of common stock may be issued or may be in the possession of any person for the purpose of issue (in each case whether in Hong Kong or elsewhere), which is directed at, or the contents of which are likely to be accessed or read by, the public in Hong Kong (except if permitted to do so under the securities laws of Hong Kong) other than with respect to shares of common stock which are or are intended to be disposed of only to persons outside Hong Kong or only to "professional investors" in Hong Kong as defined in the Securities and Futures Ordinance and any rules made thereunder.

**Singapore**

This prospectus has not been registered as a prospectus with the Monetary Authority of Singapore. Accordingly, this prospectus and any other document or material in connection with the offer or sale, or invitation for subscription or purchase, of the shares of common stock may not be circulated or distributed, nor may the shares of common stock be offered or sold, or be made the subject of an invitation for subscription or purchase, whether directly or indirectly, to persons in Singapore other than (i) to an institutional investor, as defined under Section 4A of the Securities and Futures Act, Chapter 289 of Singapore ("SFA") under Section 274 of the SFA, (ii) to a relevant person, as defined in Section 275(2) of the SFA, pursuant to Section 275(1) of the SFA, or any person pursuant to Section 275(1A) of the SFA, and in accordance with the conditions specified in Section 275 of the SFA or (iii) otherwise pursuant to, and in accordance with the conditions of, any other applicable provision of the SFA, in each case subject to conditions set forth in the SFA.

Where the shares of common stock are subscribed or purchased under Section 275 of the SFA by a relevant person which is a corporation (which is not an accredited investor, as defined in Section 4A of the SFA) the sole business of which is to hold investments and the entire share capital of which is owned by one or more individuals,

------

**Confidential Treatment Requested by Pattern Group Inc.**

**Pursuant to 17 C.F.R. Section 200.83**

each of whom is an accredited investor, the securities, as defined in Section 239(1) of the SFA, of that corporation shall not be transferable for 6 months after that corporation has acquired the shares of common stock under Section 275 of the SFA except: (i) to an institutional investor under Section 274 of the SFA or to a relevant person, as defined in Section 275(2) of the SFA, (ii) where such transfer arises from an offer in that corporation's securities pursuant to Section 275(1A) of the SFA, (iii) where no consideration is or will be given for the transfer, (iv) where the transfer is by operation of law, (v) as specified in Section 276(7) of the SFA, or (vi) as specified in Regulation 32 of the Securities and Futures (Offers of Investments) (Shares and Debentures) Regulations 2005 of Singapore ("Regulation 32").

Where the shares of common stock are subscribed or purchased under Section 275 of the SFA by a relevant person which is a trust (where the trustee is not an accredited investor, as defined in Section 4A of the SFA) whose sole purpose is to hold investments and each beneficiary of the trust is an accredited investor, the beneficiaries' rights and interest (howsoever described) in that trust shall not be transferable for 6 months after that trust has acquired the shares of common stock under Section 275 of the SFA except: (i) to an institutional investor under Section 274 of the SFA or to a relevant person, as defined in Section 275(2) of the SFA, (ii) where such transfer arises from an offer that is made on terms that such rights or interest are acquired at a consideration of not less than $200,000 (or its equivalent in a foreign currency) for each transaction (whether such amount is to be paid for in cash or by exchange of securities or other assets), (iii) where no consideration is or will be given for the transfer, (iv) where the transfer is by operation of law, (v) as specified in Section 276(7) of the SFA, or (vi) as specified in Regulation 32.

**Japan**

The securities have not been and will not be registered under the Financial Instruments and Exchange Act of Japan (Act No. 25 of 1948, as amended) ("FIEA"). The securities may not be offered or sold, directly or indirectly, in Japan or to or for the benefit of any resident of Japan (including any person resident in Japan or any corporation or other entity organized under the laws of Japan) or to others for reoffering or resale, directly or indirectly, in Japan or to or for the benefit of any resident of Japan, except pursuant to an exemption from the registration requirements of the FIEA and otherwise in compliance with any relevant laws and regulations of Japan.

**Brazil**

THE OFFER AND SALE OF THE SECURITIES HAVE NOT BEEN AND WILL NOT BE REGISTERED WITH THE BRAZILIAN SECURITIES COMMISSION COMISSÃO DE VALORES MOBILIÁRIOS ("CVM") AND, THEREFORE, WILL NOT BE CARRIED OUT BY ANY MEANS THAT WOULD CONSTITUTE A PUBLIC OFFERING IN BRAZIL UNDER CVM RESOLUTION NO 160, DATED 13 JULY 2022, AS AMENDED, OR UNAUTHORIZED DISTRIBUTION UNDER BRAZILIAN LAWS AND REGULATIONS. THE SECURITIES MAY ONLY BE OFFERED TO BRAZILIAN PROFESSIONAL INVESTORS, AS DEFINED BY APPLICABLE CVM REGULATION, WHO MAY ONLY ACQUIRE THE SECURITIES THROUGH A NON-BRAZILIAN ACCOUNT, WITH SETTLEMENT OUTSIDE BRAZIL IN NON-BRAZILIAN CURRENCY. THE TRADING OF THESE SECURITIES ON REGULATED SECURITIES MARKETS IN BRAZIL IS PROHIBITED.

------

**Confidential Treatment Requested by Pattern Group Inc.**

**Pursuant to 17 C.F.R. Section 200.83**

**LEGAL MATTERS**

Goodwin Procter LLP, Redwood City, California, which has acted as our counsel in connection with this offering, will pass upon the validity of the shares of our Series A common stock being offered by this prospectus. The underwriters have been represented by Latham & Watkins LLP, Menlo Park, California.

**EXPERTS**

The financial statements of Pattern Group Inc., as of December 31, 2023 and 2024, and for each of the three years in the period ended December 31, 2024, included in this Prospectus, have been audited by Deloitte & Touche LLP, an independent registered public accounting firm, as stated in their report. Such financial statements are included in reliance upon the report of such firm given their authority as experts in accounting and auditing.

**WHERE YOU CAN FIND ADDITIONAL INFORMATION**

We have filed with the SEC a registration statement on Form S-1 under the Securities Act with respect to the shares of Series A common stock offered by this prospectus. This prospectus, which constitutes a part of the registration statement, does not contain all of the information set forth in the registration statement, some of which is contained in exhibits to the registration statement as permitted by the rules and regulations of the SEC. For further information with respect to us and our Series A common stock, we refer you to the registration statement, including the exhibits filed as a part of the registration statement. Statements contained in this prospectus concerning the contents of any contract or any other document are not necessarily complete. If a contract or document has been filed as an exhibit to the registration statement, please see the copy of the contract or document that has been filed. Each statement in this prospectus relating to a contract or document filed as an exhibit is qualified in all respects by the filed exhibit. The SEC also maintains an internet website that contains reports, proxy statements and other information about issuers, like us, that file electronically with the SEC. The address of that website is www.sec.gov.

As a result of this offering, we will become subject to the information and reporting requirements of the Exchange Act and, in accordance with this law, will file periodic reports, proxy statements and other information with the SEC. These periodic reports, proxy statements and other information will be available for inspection and copying at the SEC's public reference facilities and the website of the SEC referred to above. We also maintain a website at www.pattern.com. Upon completion of this offering, you may access these materials free of charge as soon as reasonably practicable after they are electronically filed with, or furnished to, the SEC. Information contained on our website is not a part of this prospectus and the inclusion of our website address in this prospectus is an inactive textual reference only.

------

**Confidential Treatment Requested by Pattern Group Inc.**

**Pursuant to 17 C.F.R. Section 200.83**

**INDEX TO CONSOLIDATED FINANCIAL STATEMENTS**

---

| | |
|:---|:---|
| **Audited Consolidated Financial Statements:** | |
| <u>[Report of Independent Registered Public Accounting Firm](#ia4c256ae0345410896f0a45598cf5279_2654)</u> | <u>[F-](#ia4c256ae0345410896f0a45598cf5279_2654)[1](#ia4c256ae0345410896f0a45598cf5279_2654)</u> |
| <u>[Consolidated Statements of Operations for the Years Ended December 31, 2022, 2023 and 2024 (Audited)](#ia4c256ae0345410896f0a45598cf5279_2660)</u> | <u>[F-](#ia4c256ae0345410896f0a45598cf5279_2660)[3](#ia4c256ae0345410896f0a45598cf5279_2660)</u> |
| <u>[Consolidated Statements of Comprehensive Income (Loss) for the Years Ended December 31, 2022, 2023 and 2024 (Audited)](#ia4c256ae0345410896f0a45598cf5279_2667)</u> | <u>[F-](#ia4c256ae0345410896f0a45598cf5279_2667)[4](#ia4c256ae0345410896f0a45598cf5279_2667)</u> |
| <u>[Consolidated Statements of Cash Flows for the Years Ended December 31, 2022, 2023 and 2024 (Audited)](#ia4c256ae0345410896f0a45598cf5279_2682)</u> | <u>[F-](#ia4c256ae0345410896f0a45598cf5279_2682)[5](#ia4c256ae0345410896f0a45598cf5279_2682)</u> |
| <u>[Consolidated Balance Sheets as of December 31, 2023 and 2024 (Audited)](#ia4c256ae0345410896f0a45598cf5279_2689)</u> | <u>[F-](#ia4c256ae0345410896f0a45598cf5279_2689)[6](#ia4c256ae0345410896f0a45598cf5279_2689)</u> |
| <u>[Consolidated Statements of Changes in Convertible Preferred Stock and Stockholders' Equity for the Years Ended December 31, 2022, 2023 and 2024 (Audited)](#ia4c256ae0345410896f0a45598cf5279_2698)</u> | <u>[F-](#ia4c256ae0345410896f0a45598cf5279_2698)[7](#ia4c256ae0345410896f0a45598cf5279_2698)</u> |
| <u>[Notes to Consolidated Financial Statements](#ia4c256ae0345410896f0a45598cf5279_2713)</u> | <u>[F-](#ia4c256ae0345410896f0a45598cf5279_2713)[8](#ia4c256ae0345410896f0a45598cf5279_2713)</u> |

---

---

| | |
|:---|:---|
| **Unaudited Interim Condensed Consolidated Financial Statements:** | |
| Unaudited Condensed Consolidated Financial Statements as of and for the Three Months Ended March 31, 2025 and 2024: |  |
| <u>[Condensed Consolidated Statements of Operations](#ia4c256ae0345410896f0a45598cf5279_4947802327947)[for the Three Months Ended March 31, 202](#ia4c256ae0345410896f0a45598cf5279_4947802327947)[4](#ia4c256ae0345410896f0a45598cf5279_4947802327947)[and 202](#ia4c256ae0345410896f0a45598cf5279_4947802327947)[5](#ia4c256ae0345410896f0a45598cf5279_4947802327947)[(Unaudited)](#ia4c256ae0345410896f0a45598cf5279_4947802327947)</u> | <u>[F-](#ia4c256ae0345410896f0a45598cf5279_4947802327947)[30](#ia4c256ae0345410896f0a45598cf5279_4947802327947)</u> |
| <u>[Condensed Consolidated Statements of Comprehensive Income](#ia4c256ae0345410896f0a45598cf5279_4947802327954)[for the Three Months Ended March 31, 202](#ia4c256ae0345410896f0a45598cf5279_4947802327954)[4](#ia4c256ae0345410896f0a45598cf5279_4947802327954)[and 202](#ia4c256ae0345410896f0a45598cf5279_4947802327954)[5](#ia4c256ae0345410896f0a45598cf5279_4947802327954)[(Unaudited)](#ia4c256ae0345410896f0a45598cf5279_4947802327954)</u> | <u>[F-](#ia4c256ae0345410896f0a45598cf5279_4947802327954)[31](#ia4c256ae0345410896f0a45598cf5279_4947802327954)</u> |
| <u>[Condensed Consolidated Statements of Cash Flows](#ia4c256ae0345410896f0a45598cf5279_4947802327969)[for the Three Months Ended March 31, 202](#ia4c256ae0345410896f0a45598cf5279_4947802327969)[4](#ia4c256ae0345410896f0a45598cf5279_4947802327969)[and 202](#ia4c256ae0345410896f0a45598cf5279_4947802327969)[5](#ia4c256ae0345410896f0a45598cf5279_4947802327969)[(Unaudited)](#ia4c256ae0345410896f0a45598cf5279_4947802327969)</u> | <u>[F-](#ia4c256ae0345410896f0a45598cf5279_4947802327969)[32](#ia4c256ae0345410896f0a45598cf5279_4947802327969)</u> |
| <u>[Condensed Consolidated Balance Sheets](#ia4c256ae0345410896f0a45598cf5279_4947802327976)[as of](#ia4c256ae0345410896f0a45598cf5279_4947802327976)[December 31, 2024 (Audited) a](#ia4c256ae0345410896f0a45598cf5279_4947802327976)[nd](#ia4c256ae0345410896f0a45598cf5279_4947802327976)[March 31, 2025](#ia4c256ae0345410896f0a45598cf5279_4947802327976)[(Unaudited)](#ia4c256ae0345410896f0a45598cf5279_4947802327976)</u> | <u>[F-](#ia4c256ae0345410896f0a45598cf5279_4947802327976)[33](#ia4c256ae0345410896f0a45598cf5279_4947802327976)</u> |
| <u>[Condensed Consolidated Statements of Changes in Convertible Preferred Stock and Stockholders' Equity](#ia4c256ae0345410896f0a45598cf5279_4947802327985)[for the Three Months Ended March 31, 202](#ia4c256ae0345410896f0a45598cf5279_4947802327985)[4](#ia4c256ae0345410896f0a45598cf5279_4947802327985)[and 202](#ia4c256ae0345410896f0a45598cf5279_4947802327985)[5](#ia4c256ae0345410896f0a45598cf5279_4947802327985)[(Unaudited](#ia4c256ae0345410896f0a45598cf5279_4947802327985)</u>) | <u>[F-](#ia4c256ae0345410896f0a45598cf5279_4947802327985)[34](#ia4c256ae0345410896f0a45598cf5279_4947802327985)</u> |
| <u>[Notes to](#ia4c256ae0345410896f0a45598cf5279_4947802328000)[Unaudited](#ia4c256ae0345410896f0a45598cf5279_4947802328000)[Condensed Consolidated Financial Statements](#ia4c256ae0345410896f0a45598cf5279_4947802328000)</u> | <u>[F-](#ia4c256ae0345410896f0a45598cf5279_4947802328000)[35](#ia4c256ae0345410896f0a45598cf5279_4947802328000)</u> |

---

F-i

------

**Confidential Treatment Requested by Pattern Group Inc.**

**Pursuant to 17 C.F.R. Section 200.83**

**Report of Independent Registered Public Accounting Firm**

To the stockholders and the Board of Directors of Pattern Group Inc.

**Opinion on the Financial Statements**

We have audited the accompanying consolidated balance sheets of Pattern Group Inc. and subsidiaries (the "Company") as of December 31, 2024 and 2023, the related consolidated statements of operations, comprehensive income (loss), cash flows, and changes in convertible preferred stock and stockholders' equity, for each of the three years in the period ended December 31, 2024, and the related notes (collectively referred to as the "financial statements"). In our opinion, the financial statements present fairly, in all material respects, the financial position of the Company as of December 31, 2024 and 2023, and the results of its operations and its cash flows for each of the three years in the period ended December 31, 2024, in conformity with accounting principles generally accepted in the United States of America.

**Basis for Opinion**

These financial statements are the responsibility of the Company's management. Our responsibility is to express an opinion on the Company's financial statements based on our audits. We are a public accounting firm registered with the Public Company Accounting Oversight Board (United States) ("PCAOB") and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.

We conducted our audits in accordance with the standards of the PCAOB and in accordance with auditing standards generally accepted in the United States of America. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement, whether due to error or fraud. The Company is not required to have, nor were we engaged to perform, an audit of its internal control over financial reporting. As part of our audits, we are required to obtain an understanding of internal control over financial reporting but not for the purpose of expressing an opinion on the effectiveness of the Company's internal control over financial reporting. Accordingly, we express no such opinion.

Our audits included performing procedures to assess the risks of material misstatement of the financial statements, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the financial statements. Our audits also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the financial statements. We believe that our audits provide a reasonable basis for our opinion.

**Critical Audit Matter** 

The critical audit matter communicated below is a matter arising from the current-period audit of the financial statements that was communicated or required to be communicated to the audit committee and that (1) relates to accounts or disclosures that are material to the financial statements and (2) involved our especially challenging, subjective, or complex judgments. The communication of critical audit matters does not alter in any way our opinion on the financial statements, taken as a whole, and we are not, by communicating the critical audit matter below, providing a separate opinion on the critical audit matter or on the accounts or disclosures to which it relates.

***Inventories – Inventory Reserve — Refer to Note 2 to the financial statements***

*Critical Audit Matter Description*

Inventories represent finished good products that are available for sale. Inventory is accounted for using the average cost method and is stated at the lower of cost or net realizable value. The Company periodically evaluates the composition of inventory and recognizes adjustments when the cost of inventory is not expected to be fully recoverable. The market value of inventory is estimated by considering current and anticipated demand based on historical sales, buying trends and the method of disposal for aged inventory, such as, through sales to individual customers, returns to brand partners, liquidations and expected recoverable values of each disposition category.

------

**Confidential Treatment Requested by Pattern Group Inc.**

**Pursuant to 17 C.F.R. Section 200.83**

We identified the inventory reserve as a critical audit matter due to the judgments required by management related to estimating the current and anticipated demand based on historical sales, buying trends and method of disposal necessary in determining the inventory reserve. This required a higher degree of auditor judgment and an increased extent of audit effort.

*How the Critical Audit Matter Was Addressed in the Audit*

We addressed the inventory reserve as follows:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• We performed procedures to evaluate the reasonableness of management's methods, assumptions, and judgments used in developing their estimate of the valuation of the inventory reserve, through consideration of historical sales trends including evaluation of information obtained from supply chain employees and appropriateness of whether to increase/decrease the reserve based on estimated disposal method.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• We tested the accuracy and completeness of the underlying data used in the Company's calculations of the of the inventory reserve, including historical sales, quantities on hand, and cost.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• We evaluated management's ability to accurately estimate the valuation of the inventory reserve by comparing actual results with reserves from previous years.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• We tested the mathematical accuracy of the Company's calculations of reserved inventories.

/s/ Deloitte & Touche LLP

Salt Lake City, Utah

March 17, 2025

We have served as the Company's auditor since 2021.

------

**Confidential Treatment Requested by Pattern Group Inc.**

**Pursuant to 17 C.F.R. Section 200.83**

**Pattern Group Inc. and Subsidiaries** 

**Consolidated Statements of Operations** 

(in thousands, expect per share data)

---

| | | | |
|:---|:---|:---|:---|
| | **Year Ended December 31,**  | **Year Ended December 31,**  | **Year Ended December 31,**  |
| | **2022** | **2023** | **2024** |
| Revenues | $990535 | $1366417 | $1796161 |
| Operating expenses: |  |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;Cost of goods sold | 561620 | 765203 | 1014812 |
| &nbsp;&nbsp;&nbsp;&nbsp;Operations, general and administrative | 226662 | 276272 | 338508 |
| &nbsp;&nbsp;&nbsp;&nbsp;Sales and marketing | 187299 | 257513 | 337672 |
| &nbsp;&nbsp;&nbsp;&nbsp;Research and development | 10833 | 14644 | 17987 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Total operating expenses | 986414 | 1313632 | 1708979 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Operating income | 4121 | 52785 | 87182 |
| &nbsp;&nbsp;&nbsp;&nbsp;Interest income |  | 2882 | 6164 |
| &nbsp;&nbsp;&nbsp;&nbsp;Interest expense | (502) | (33) | (98) |
| &nbsp;&nbsp;&nbsp;&nbsp;Other income (expense), net | (5310) | 707 | (2013) |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Income (loss) before income taxes | (1691) | 56341 | 91235 |
| Provision for income taxes | 1284 | 15077 | 23379 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Net (loss) income | $(2975) | $41264 | $67856 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Income allocable to participating Series A Preferred Stock |  | 3441 | 7373 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Series B Preferred Stock dividend - undeclared | 17992 | 17992 | 17992 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Net (loss) income attributable to common and preferred stockholders | $(20967) | $19831 | $42491 |
| Net earnings (loss) per share attributable to common and preferred stockholder (Note 2): |  |  |  |
| Basic | $(0.23) | $0.22 | $0.47 |
| Diluted | $(0.23) | $0.22 | $0.47 |
| Weighted-average common and preferred shares outstanding: |  |  |  |
| Basic | 90644 | 90767 | 90769 |
| Diluted | 90644 | 90767 | 90769 |

---

See accompanying notes to consolidated financial statements.

------

**Confidential Treatment Requested by Pattern Group Inc.**

**Pursuant to 17 C.F.R. Section 200.83**

**Pattern Group Inc. and Subsidiaries** 

**Consolidated Statements of Comprehensive Income (Loss)** 

(in thousands)

---

| | | | |
|:---|:---|:---|:---|
| | **Year Ended December 31,**  | **Year Ended December 31,**  | **Year Ended December 31,**  |
| | **2022** | **2023** | **2024** |
| Net income (loss) | $(2975) | $41264 | $67856 |
| Other comprehensive income (loss): |  |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;Interest on derivative instrument, reclassified to earnings | 97 |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;Unrealized gain (loss) on foreign currency translation | (2800) | 1025 | 1369 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Total other comprehensive income (loss) | (2703) | 1025 | 1369 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Comprehensive income (loss) | $(5678) | $42289 | $69225 |

---

See accompanying notes to consolidated financial statements.

------

**Confidential Treatment Requested by Pattern Group Inc.**

**Pursuant to 17 C.F.R. Section 200.83**

**Pattern Group Inc. and Subsidiaries** 

**Consolidated Statements of Cash Flows** 

(in thousands)

---

| | | | |
|:---|:---|:---|:---|
| | **Year Ended December 31,**  | **Year Ended December 31,**  | **Year Ended December 31,**  |
| | **2022** | **2023** | **2024** |
| **Cash flows from operating activities:** |  |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;Net (loss) income | $(2975) | $41264 | $67856 |
| &nbsp;&nbsp;&nbsp;&nbsp;Adjustments to reconcile net income (loss) to net cash provided by (used in) operating activities: |  |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Depreciation and amortization | 9590 | 12102 | 14811 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Deferred income taxes | (4172) | (74) | (1279) |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Impairment expense | 6050 |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Contingent consideration benefit | (818) | (1220) |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Other | (159) | (206) | 32 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Changes in operating assets and liabilities: |  |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Accounts receivable, net of allowance | (15971) | (1537) | (30811) |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Inventory | (34276) | (30892) | (73219) |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Prepaid expenses and other current assets | 544 | (2116) | (726) |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Other non-current assets | (297) | (85) | (2223) |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Operating leases, net | 1005 | 80 | 158 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Accounts payable | 48643 | 28096 | 86471 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Accrued expenses | 7329 | (4721) | 12180 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Other liabilities | (262) | 785 | (2903) |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Net cash provided by operating activities | 14231 | 41476 | 70347 |
| **Cash flows from investing activities:**  |  |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;Purchases of property and equipment | (16203) | (14498) | (20450) |
| &nbsp;&nbsp;&nbsp;&nbsp;Acquisition of Current Technologies LLC, net of cash acquired | (14317) |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;Proceeds from the sale of property and equipment |  |  | 12 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Net cash used in investing activities | (30520) | (14498) | (20438) |
| **Cash flows from financing activities:** |  |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;Payments on long term debt | (34953) |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;Repurchases of common stock |  |  | (2901) |
| &nbsp;&nbsp;&nbsp;&nbsp;Payment of contingent consideration | (1667) |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Net cash used in financing activities | (36620) |  | (2901) |
| Effect of exchange rates on cash and cash equivalents | (2438) | 1077 | 1374 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Net change in cash and cash equivalents | (55347) | 28055 | 48382 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Cash and cash equivalents at beginning of the year | 154525 | 99178 | 127233 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Cash and cash equivalents at end of the year | $99178 | $127233 | $175615 |
| **Supplemental disclosure of cash flow information:**  |  |  |  |
| Cash paid for interest | $454 | $106 | $101 |
| Cash paid for income taxes | 4660 | 18861 | 21345 |
| **Supplemental disclosure of non-cash investing and financing activities:**  |  |  |  |
| Contingent consideration settled with common stock | $1952 | $— | $— |

---

See accompanying notes to consolidated financial statements.

------

**Confidential Treatment Requested by Pattern Group Inc.**

**Pursuant to 17 C.F.R. Section 200.83**

**Pattern Group Inc. and Subsidiaries**

**Consolidated Balance Sheets**

(in thousands, expect per share data)

---

| | | |
|:---|:---|:---|
| | **December 31, 2023** | **December 31, 2024** |
| **<u>Assets</u>** | | |
| Current Assets: |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;Cash and cash equivalents | $127233 | $175615 |
| &nbsp;&nbsp;&nbsp;&nbsp;Accounts receivable, net of allowance | 76115 | 106926 |
| &nbsp;&nbsp;&nbsp;&nbsp;Inventory | 190884 | 264103 |
| &nbsp;&nbsp;&nbsp;&nbsp;Prepaid expenses and other current assets | 10712 | 11438 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Total current assets | 404944 | 558082 |
| Property and equipment, net | 25994 | 35035 |
| Intangible assets, net | 9958 | 6906 |
| Goodwill | 25938 | 25938 |
| Operating lease right-of-use assets | 17014 | 27877 |
| Other non-current assets | 7073 | 10584 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Total assets | $490921 | $664422 |
| **<u>Liabilities, Convertible Preferred Stock and Stockholders' Equity</u>** |  |  |
| Current Liabilities: |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;Accounts payable | $124688 | $211558 |
| &nbsp;&nbsp;&nbsp;&nbsp;Accrued expenses | 25665 | 37845 |
| &nbsp;&nbsp;&nbsp;&nbsp;Operating lease liabilities, current | 6054 | 8030 |
| &nbsp;&nbsp;&nbsp;&nbsp;Other current liabilities | 236 | 266 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Total current liabilities | 156643 | 257699 |
| Operating lease liabilities, non-current | 13050 | 22095 |
| Other non-current liabilities | 8227 | 5303 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Total liabilities | 177920 | 285097 |
| Commitments and contingencies (Note 13) |  |  |
| &nbsp;&nbsp;Convertible Preferred stock, $0.001 par value: 28,972 shares authorized; <br>28,966 shares issued and outstanding;<br>refer to Note 9 for aggregate liquidation preference | 270601 | 270601 |
| Stockholders' equity: |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;Common stock, $0.001 par value: 137,547 and 140,287 shares authorized; 3,373 and 3,799 shares issued and outstanding as of December 31, 2023 and 2024, respectively | 4 | 4 |
| &nbsp;&nbsp;&nbsp;&nbsp;Preferred stock, $0.001 par value: 88,869 shares authorized; 87,400 and 86,792 shares issued and outstanding as of December 31, 2023 and 2024, respectively | 87 | 86 |
| &nbsp;&nbsp;&nbsp;&nbsp;Additional paid-in capital | 5664 | 2764 |
| &nbsp;&nbsp;&nbsp;&nbsp;Accumulated other comprehensive loss | (2354) | (985) |
| &nbsp;&nbsp;&nbsp;&nbsp;Retained earnings | 38999 | 106855 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Total stockholders' equity | 42400 | 108724 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Total liabilities, convertible preferred stock and stockholders' equity | $490921 | $664422 |

---

See accompanying notes to consolidated financial statements.

------

**Confidential Treatment Requested by Pattern Group Inc.**

**Pursuant to 17 C.F.R. Section 200.83**

**Pattern Group Inc. and Subsidiaries** 

**Consolidated Statements of Changes in Convertible Preferred Stock and Stockholders' Equity** 

(in thousands)

---

| | | | | | | | | | | |
|:---|:---|:---|:---|:---|:---|:---|:---|:---|:---|:---|
| | **Convertible Preferred**  | **Convertible Preferred**  | **Common Stock** | **Common Stock** | **Preferred Stock** | **Preferred Stock** | **Additional Paid-in Capital** | **Accumulated Other Comprehensive (Loss) Income** | **Retained Earnings** | **Total Stockholders' Equity**  |
| | **Shares Issued** | **Amount** | **Shares Issued** | **Amount** | **Shares Issued** | **Amount** | **Additional Paid-in Capital** | **Accumulated Other Comprehensive (Loss) Income** | **Retained Earnings** | **Total Stockholders' Equity**  |
| Balance, December 31, 2021 | 28966 | $270601 | 2894 | $3 | 87400 | $87 | $3612 | $(676) | $710 | $3736 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Issuance of common stock to settle contingent consideration |  |  | 464 | 1 |  |  | 1952 |  |  | 1953 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Total other comprehensive loss |  |  |  |  |  |  |  | (2703) |  | (2703) |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Net loss |  |  |  |  |  |  |  |  | (2975) | (2975) |
| Balance, December 31, 2022 | 28966 | $270601 | 3358 | $4 | 87400 | $87 | $5564 | $(3379) | $(2265) | $11 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Stock compensation |  |  | 15 |  |  |  | 100 |  |  | 100 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Total other comprehensive income |  |  |  |  |  |  |  | 1025 |  | 1025 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Net income |  |  |  |  |  |  |  |  | 41264 | 41264 |
| Balance, December 31, 2023 | 28966 | $270601 | 3373 | $4 | 87400 | $87 | $5664 | $(2354) | $38999 | $42400 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Converted preferred to common shares |  |  | 608 | 1 | (608) | (1) |  |  |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Repurchase of common stock |  |  | (182) | (1) |  |  | (2900) |  |  | (2901) |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Total other comprehensive income |  |  |  |  |  |  |  | 1369 |  | 1369 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Net income |  |  |  |  |  |  |  |  | 67856 | 67856 |
| Balance, December 31, 2024 | 28966 | $270601 | 3799 | $4 | 86792 | $86 | $2764 | $(985) | $106855 | $108724 |

---

See accompanying notes to consolidated financial statements.

------

**Confidential Treatment Requested by Pattern Group Inc.**

**Pursuant to 17 C.F.R. Section 200.83**

**Pattern Group Inc. and Subsidiaries** 

**Notes to Consolidated Financial Statements** 

**1. Organization and Description of Business** 

***Description of Business***

Pattern Inc. was incorporated in Utah in January 2013. Pattern Group Inc. ("Pattern" or the "Company") was incorporated in Utah in January 2019, and subsequently converted to a Delaware corporation in May 2020. Following the Company's incorporation, the stockholders of Pattern Inc. contributed all shares of Pattern Inc. to the Company in exchange for shares in the Company, and Pattern Inc. continued as a wholly-owned subsidiary of the Company.

Pattern, an ecommerce accelerator, uses its technology platform, data science and a team of global experts to drive growth for brands. The Company acquires inventory from brand partners to sell to consumers, enabling full control over content, pricing, logistics and customer service. Brand partners that contract with the Company operate in various industries including health and wellness, beauty and personal care, home and lifestyle, pet, sports and outdoors and consumer electronics.

**2. Summary of Significant Accounting Policies**

***Basis of Presentation***

The consolidated financial statements have been prepared in accordance with generally accepted accounting principles in the United States ("U.S. GAAP") and include the accounts of the Company and its subsidiaries. All intercompany accounts and transactions have been eliminated.

***Use of Estimates***

The preparation of financial statements in accordance with U.S. GAAP requires management to make estimates and assumptions in the Company's consolidated financial statements and accompanying notes. On an ongoing basis, management evaluates these estimates and judgements.

Estimates are used for, but not limited to, determining the net realizable value and demand for inventory, allowance for sales returns, allowance for doubtful accounts, valuation allowances with respect to deferred tax assets, fair value of reporting units used in evaluation of goodwill impairment, the fair value of assets acquired and liabilities assumed in business combinations, the valuation of stock-based awards, the fair value of common stock and the incremental borrowing rate ("IBR") used to measure operating lease liabilities. The Company bases these estimates on historical and anticipated results, trends and various other assumptions that it believes are reasonable under the circumstances, including assumptions as to future events. Actual results could differ from these estimates and any such differences may be material to the Company's consolidated financial statements.

***Revenue***

The Company recognizes revenue primarily from product sales through domestic and international online marketplaces. Revenue is recognized on a gross basis as the Company is (i) the entity primarily responsible for fulfilling the promise to provide the specified products in the arrangement with the customer, (ii) has inventory risk before the products have been transferred to a customer and (iii) has discretion in establishing the price for the products sold on the online marketplaces.

The Company evaluated principal versus agent considerations to determine whether it is appropriate to record seller fees paid by the Company to the marketplaces as an expense or as a reduction of revenue. Seller fees charged by third-party marketplaces are not recorded as a reduction of revenue as the Company owns and controls all goods before they are transferred to the end customer. The Company is responsible for ensuring the goods promised to the end consumer are delivered. The Company establishes the price of its products, determines who fulfills the goods to the customer (third-party online marketplaces or the Company) and can limit quantities or stop selling the goods at any time. Revenues are presented net of customer returns. Based on these considerations, the Company is the principal in these arrangements.

------

**Confidential Treatment Requested by Pattern Group Inc.**

**Pursuant to 17 C.F.R. Section 200.83**

**Pattern Group Inc. and Subsidiaries** 

**Notes to Consolidated Financial Statements** 

A contract is created at the time the order is placed by the customer, which creates a single performance obligation to deliver the product to the customer. Revenue is measured as the amount of consideration the Company expects to receive in exchange for transferring the product and is recognized at the time control of the product passes to the customer, which is at the time of shipment. Taxes collected from customers for remittance to governmental bodies are excluded from revenues.

The following table presents the Company's revenues disaggregated by source of revenue:

---

| | | | |
|:---|:---|:---|:---|
| | **Year Ended December 31,** | **Year Ended December 31,** | **Year Ended December 31,** |
| **(in thousands)** | **2022** | **2023** | **2024** |
| Amazon.com | $866029 | $1209267 | $1579056 |
| Amazon marketplaces, international | 50077 | 59744 | 102396 |
| Other online marketplaces and channels  | 54043 | 78384 | 94197 |
| SaaS, consulting and other revenue | 20386 | 19022 | 20512 |
| Revenues | $990535 | $1366417 | $1796161 |

---

The following table presents the Company's revenues disaggregated by geography:

---

| | | | |
|:---|:---|:---|:---|
| | **Year Ended December 31,** | **Year Ended December 31,** | **Year Ended December 31,** |
| **(in thousands)** | **2022** | **2023** | **2024** |
| U.S. | $903428 | $1276211 | $1662948 |
| International | 87107 | 90206 | 133213 |
| Revenues | $990535 | $1366417 | $1796161 |

---

The U.S. was the only individual country accounting for more than 10% of total revenue.

***Sales Return Allowances***

The Company generally accepts returns related to sales in accordance with the various online marketplaces' return policy. At the time of sale, a reserve is established for returns, based on historical experience and expected future returns, which is recorded as a reduction of sales and cost of goods sold. The following table summarizes the additions and deductions to the Company's sales return allowance:

---

| | | |
|:---|:---|:---|
| | **December 31,** | **December 31,** |
| **(in thousands)** | **2023** | **2024** |
| Balance, beginning of period | $3381 | $4679 |
| Increases to sales allowance | 54710 | 74831 |
| Customer returns | (53412) | (73166) |
| Balance, end of period | $4679 | $6344 |

---

The Company includes within inventory an asset, totaling $1.3 million and $1.6 million as of December 31, 2023 and 2024, respectively, associated with the right to recover product from customers related to the Company's liabilities for return allowances.

***Cost of Goods Sold***

Cost of goods sold primarily consists of the purchase price of inventory sold to customers. Shipping costs to receive products from the Company's brand partners and costs to ship products to third-party fulfillment centers are included in the Company's inventory and recognized as cost of goods sold upon sale of the products to customers.

------

**Confidential Treatment Requested by Pattern Group Inc.**

**Pursuant to 17 C.F.R. Section 200.83**

**Pattern Group Inc. and Subsidiaries** 

**Notes to Consolidated Financial Statements** 

***Operations, General and Administrative***

Operations, general and administrative expenses consist of third-party fulfillment costs; payroll and related expenses; warehousing costs; facilities and equipment, including depreciation and amortization, rent and other occupancy expenses; professional and legal fees; as well as costs associated with other general costs for corporate functions, including accounting, finance and human resources.

Fulfillment costs represent those costs incurred from third-party fulfillment centers and in operating and staffing the Company's fulfillment centers, including costs related to buying, receiving, inspecting and warehousing inventories, picking, packaging, and preparing customer orders for shipment. Fulfillment costs are included within operations, general and administrative in the consolidated statements of operations and were $171.4 million, $217.0 million and $272.3 million for the years ended December 31, 2022, 2023 and 2024, respectively.

***Sales and Marketing***

Sales and marketing expenses consist of third-party online marketplace commission fees, targeted online advertising and other marketing expenses, payroll and related expenses for personnel engaged in marketing and selling activities.

Advertising and other marketing expenses were $11.9 million, $16.4 million and $20.9 million for the years ended December 31, 2022, 2023 and 2024 respectively.

***Brand Partner Contracts***

The Company has agreements with brand partners that provide reimbursement for certain advertising, cooperative marketing efforts and promotions. The Company generally accounts for such consideration from brand partners as a reduction of the related expense.

***Research and Development***

Research and development costs include payroll and related expenses for employees involved in the research and development of Pattern's technology, development and design of Company websites and curation and display of products available on third-party marketplaces.

***Stock-Based Compensation***

The Company records compensation expense in connection with all stock-based awards based on the grant date fair value of the awards. The Company's stock-based awards generally have both a service-based and performance-based vesting condition. The Company has elected to account for forfeitures of awards as they occur. No stock-based compensation expense has been recognized related to the Company's equity plan as the performance condition was determined as not probable of being met. See Note 11—Stock-Based Compensation for more information.

***Earnings (loss) per share***

Basic earnings per share is calculated using the Company's weighted-average shares outstanding of common stock, Founder Voting Preferred Stock and Founder Non-Voting Preferred Stock. Diluted earnings per share is calculated using the Company's weighted-average shares outstanding of common stock, Founder Voting Preferred Stock and Founder Non-Voting Preferred Stock. The Founder Voting and Founder Non-Voting Preferred Stock are considered to be common stock equivalents for purposes of calculating earnings per share ("EPS") given that they share equally with common stock in the liquidation of the Company's net assets and do not contain an economic preference.

The dilutive effect of Founder Voting Preferred Stock, Founder Non-Voting Preferred Stock and Series A Preferred Stock is reflected in diluted earnings (loss) per share by application of the more dilutive of the two-class method and if-converted method (two-class method only applies for periods of net income). The dilutive effect of Series B Preferred Stock is reflected in diluted earnings (loss) per share under the if-converted method. The if-

------

**Confidential Treatment Requested by Pattern Group Inc.**

**Pursuant to 17 C.F.R. Section 200.83**

**Pattern Group Inc. and Subsidiaries** 

**Notes to Consolidated Financial Statements** 

converted method is calculated by assuming conversion at the beginning of the period or date of issuance, if later; and therefore, no dividend preference would accrue to the Series B Preferred Stock. Restricted stock units ("RSUs") subject to conditions other than service conditions are considered contingently issuable shares and are included in the computation of dilutive shares only to the extent that the underlying performance condition is satisfied prior to the end of the reporting period or would be considered satisfied if the end of the reporting period were the end of the related contingency period and the results would be dilutive (see Note 11—Stock-Based Compensation for more information).

The following table sets forth the computation of earnings (loss) per share attributable to common and preferred stockholders:

---

| | | | |
|:---|:---|:---|:---|
| | **Year Ended December 31,** | **Year Ended December 31,** | **Year Ended December 31,** |
| **(in thousands, except per share data)** | **2022** | **2023** | **2024** |
| Net income (loss) | $(2975) | $41264 | $67856 |
| Income allocable to participating Series A Preferred Stock |  | 3441 | 7373 |
| Series B Preferred Stock dividend - undeclared | 17992 | 17992 | 17992 |
| Net (loss) income attributable to common and preferred stockholders | $(20967) | $19831 | $42491 |
| Weighted-average shares outstanding: |  |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;Common shares | 3244 | 3367 | 3727 |
| &nbsp;&nbsp;&nbsp;&nbsp;Founder Voting Preferred Stock | 941 | 941 | 941 |
| &nbsp;&nbsp;&nbsp;&nbsp;Founder Non-Voting Preferred Stock | 86459 | 86459 | 86101 |
| &nbsp;&nbsp;&nbsp;&nbsp;Basic | 90644 | 90767 | 90769 |
| &nbsp;&nbsp;&nbsp;&nbsp;Diluted | 90644 | 90767 | 90769 |
| Earnings (loss) per share attributable to common and preferred stockholders |  |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;Basic | $(0.23) | $0.22 | $0.47 |
| &nbsp;&nbsp;&nbsp;&nbsp;Diluted | $(0.23) | $0.22 | $0.47 |

---

The following instruments outstanding as of period end were not reflected in diluted EPS as their effect for the periods presented would be anti-dilutive or are currently not exercisable for potential common shares:

---

| | | | |
|:---|:---|:---|:---|
| | **Year Ended December 31,** | **Year Ended December 31,** | **Year Ended December 31,** |
| **(in thousands)** | **2022** | **2023** | **2024** |
| Series B Preferred Stock  | 13,216 | 13,216 | 13,216 |
| RSUs | 12,801 | 15,149 | 17,589 |

---

***Cash and Cash Equivalents***

The Company considers all highly liquid investments purchased with an original maturity of 90 days or less to be cash equivalents. The Company's cash equivalents are carried at cost, which approximates fair value and are classified as Level 1 in the fair value hierarchy because they are valued using quoted market prices. As of December 31, 2024, the Company did not have any restricted cash balances.

***Accounts Receivable, net***

Accounts receivable are comprised of receivables from the various online marketplaces, brand partners and other receivables, including, consulting clients and business-to-business sales. Accounts receivable are stated at the invoiced amount and are non-interest-bearing.

------

**Confidential Treatment Requested by Pattern Group Inc.**

**Pursuant to 17 C.F.R. Section 200.83**

**Pattern Group Inc. and Subsidiaries** 

**Notes to Consolidated Financial Statements** 

The following table summarizes the Company's accounts receivable balance:

---

| | | |
|:---|:---|:---|
| | **December 31,** | **December 31,** |
| **(in thousands)** | **2023** | **2024** |
| Amazon.com | $33977 | $54246 |
| Brand partner receivables | 34468 | 43269 |
| Other receivables | 9692 | 11199 |
| Allowance for doubtful accounts | (2022) | (1788) |
| Accounts receivable, net | $76115 | $106926 |

---

Accounts receivable are reduced by an allowance for doubtful accounts due to collection risk related to these receivables. The Company estimates an allowance based on several factors, including past collection experience, age of the receivable balance and specific circumstances arising with individual customers. Accounts receivable deemed uncollectible are written off against the allowance for doubtful accounts when identified and the Company no longer actively pursues collection of the receivable.

The following table summarizes the additions and deductions to the Company's allowance for doubtful accounts:

---

| | | |
|:---|:---|:---|
| | **December 31,** | **December 31,** |
| **(in thousands)** | **2023** | **2024** |
| Balance, beginning of period | $2456 | $2022 |
| Net change in allowance | 248 | 667 |
| Write-offs | (682) | (901) |
| Balance, end of period | $2022 | $1788 |

---

***Inventory***

The Company's inventories represent finished good products that are available for sale. Inventory is accounted for using the average cost method and is stated at the lower of cost or net realizable value.

The Company periodically evaluates the composition of its inventory and recognizes adjustments when the cost of inventory is not expected to be fully recoverable. The market value of inventory is estimated by considering current and anticipated demand based on historical sales, buying trends and the method of disposal for aged inventory, such as through sales to individual customers, returns to brand partners, liquidations and expected recoverable values of each disposition category.

An inventory reserve to reduce the value of inventory by $7.4 million and $7.9 million was recorded within inventory on the consolidated balance sheets as of December 31, 2023 and 2024, respectively.

***Concentration Risks***

Financial instruments that potentially subject the Company to concentration of credit risk consist primarily of cash and cash equivalents and accounts receivable. The Company's cash and cash equivalents are held at high credit quality financial institutions, which at times may exceed federally insured amounts.

The Company primarily generates revenue from customers located in the U.S. and international markets who purchase the Company's products on third-party online marketplaces. The Company regularly reviews the financial condition of the online marketplaces to ensure their ability to collect funds from customers and remit these funds to the Company.

Additionally, the Company has receivables from brand partners and other customers. The Company conducts ongoing evaluations of customers and brand partners financial conditions and may require advance payment to mitigate potential credit risks.

------

**Confidential Treatment Requested by Pattern Group Inc.**

**Pursuant to 17 C.F.R. Section 200.83**

**Pattern Group Inc. and Subsidiaries** 

**Notes to Consolidated Financial Statements** 

No customer accounted for greater than 10% of the Company's accounts receivable or revenue as of and for the year ended December 31, 2023 and 2024. One online marketplace represented 45% and 51% of the Company's accounts receivable as of December 31, 2023 and 2024, respectively. The same online marketplace accounted for 92%, 93% and 94% of the Company's revenue for the years ended December 31, 2022, 2023 and 2024 respectively.

The Company relies on brand partners for its inventories. A significant disruption in the operations of certain of these brand partners could impact the Company's product sales for a substantial period of time, which may have a material adverse effect on the Company's business, financial condition and results of operations.

Two brand partners accounted for 16% and 11% of inventory purchases for the year ended December 31, 2023 and 17% and 11% for the year ended December 31, 2024.

***Property and Equipment, net***

Property and equipment are stated at historical cost less accumulated depreciation and amortization. Repairs and maintenance costs that do not extend the useful life or improve the related asset are expensed as incurred. Depreciation and amortization are computed using the straight-line method over the estimated useful life of the asset or the remaining lease term, if shorter. The estimated useful lives of property and equipment are as follows:

---

| | |
|:---|:---|
| | **Useful life** |
| Furniture and fixtures | 5 years |
| Leasehold improvements | Shorter of the lease term or estimated useful life |
| Machinery and equipment | 4-10 years |
| Computer equipment | 3 years |
| Internal-use software | 3 years |
| Buildings | 30 years |
| Vehicles | 4 years |

---

***Leases***

Leases arise from contractual obligations that convey the right to control the use of identified property, plant, or equipment for a period of time in exchange for consideration. The Company determines if an arrangement is, or contains, a lease at contract inception. The Company's operating leases are included in operating lease right-of-use assets, current portion of operating lease liabilities and operating lease liabilities, non-current in the accompanying consolidated balance sheets.

Operating lease right-of-use assets and operating lease liabilities are recognized at the lease commencement date based on the present value of lease payments over the applicable lease term discounted using the Company's IBR. Operating lease right-of-use assets include any lease payments made or incentives provided by the lessor. As the leases do not provide an implicit rate, the IBR used is estimated based on what the Company would have to pay on a collateralized basis over a similar term as the lease. Lease payments include fixed payments and any variable payments based on an index or rate and are recognized as lease expense on a straight-line basis over the term of the lease.

***Internal-Use Software***

Internal-use software costs include costs to develop software to be used to meet internal needs. Development costs are capitalized for these software applications once the preliminary project stage is complete, it is probable that the project will be completed and the software will be used to perform the function intended. Capitalized internal-use software costs, net of accumulated amortization is included in property and equipment, net in the consolidated balance sheets and was $12.1 million and $13.5 million as of December 31, 2023 and 2024, respectively.

------

**Confidential Treatment Requested by Pattern Group Inc.**

**Pursuant to 17 C.F.R. Section 200.83**

**Pattern Group Inc. and Subsidiaries** 

**Notes to Consolidated Financial Statements** 

***Impairment of Long-Lived Assets***

When there are indicators of potential impairment, the Company evaluates recoverability of the carrying values of property and equipment and right-of-use assets by comparing the carrying amount of the asset to the estimated undiscounted future cash flows expected to be generated by the asset. If the carrying amount of the asset exceeds the estimated undiscounted future cash flows, an impairment charge is recognized based on the amount by which the carrying value of the asset exceeds its fair value. In 2022, due to low sales volumes and poor financial performance, a decision was made to shutter the Company's Village reporting unit resulting in an impairment charge of $3.6 million for the various long-lived assets related to the Company's Village reporting unit. During 2023 and 2024, the Company did not identify any indicators of impairment, and no impairment charges were recorded.

***Business Combinations***

The results of businesses acquired in a business combination are included in the Company's consolidated financial statements from the date of the acquisition. Purchase accounting results in assets and liabilities of an acquired business being recorded at their estimated fair values on the acquisition date. Any excess consideration over the fair value of assets acquired and liabilities assumed is recognized as goodwill. Acquisition-related costs incurred by the Company are recognized as an expense in operations, general and administrative expenses within the consolidated statements of operations.

The Company uses its best estimates and assumptions to assign fair value to the tangible and intangible assets acquired and liabilities assumed at the acquisition date. The Company's estimates are inherently uncertain and subject to refinement within the measurement period.

During the measurement period, which may be up to one year from the acquisition date, and to the extent that the value was not previously finalized, the Company may record adjustments to the fair value of these tangible and intangible assets acquired and liabilities assumed, with the corresponding offset to goodwill. In addition, uncertain tax positions and tax-related valuation allowances are initially recorded in connection with a business combination as of the acquisition date. The Company continues to collect information about facts and circumstance that existed at the date of acquisition and reevaluates these estimates and assumptions and records any adjustments to the Company's preliminary estimates to goodwill, provided that it is within the measurement period. Upon the conclusion of the measurement period or final determination of the fair value of assets acquired or liabilities assumed, whichever comes first, any subsequent adjustments are recorded to the Company's consolidated statements of operations.

***Goodwill***

Goodwill represents the excess of the aggregate purchase consideration over the fair value of net assets acquired in a business combination. The Company performs an impairment analysis annually as of October 1<sup>st</sup>, or whenever events or circumstances indicate that the fair value of goodwill has been impaired. The Company performs goodwill impairment tests at the reporting unit level.

***Acquired Intangible Assets***

Identifiable acquired intangible assets consist primarily of acquisition-related trademarks, customer relationships and developed technology to enable the Company to serve brand partners more effectively. The appropriate useful life of intangible assets is determined by performing an analysis of expected cash flows of the

------

**Confidential Treatment Requested by Pattern Group Inc.**

**Pursuant to 17 C.F.R. Section 200.83**

**Pattern Group Inc. and Subsidiaries** 

**Notes to Consolidated Financial Statements** 

acquired assets. Intangible assets are recorded at cost and amortized on a straight-line basis over the estimated useful life:

---

| | |
|:---|:---|
|  | **Useful life** |
| Developed Technology | 5 years |
| Customer relationships | 3-10 years |
| Tradename | 8-10 years |
| Non-competition agreements | 2-3 years |
| Domain name | 15 years |

---

***Provision for Income Taxes***

Income tax expense includes U.S. (federal and state) and foreign income taxes. The Company operates in various tax jurisdictions and is subject to audit by various tax authorities.

Deferred income tax balances reflect the anticipated future effects of temporary differences between the carrying amounts of assets and liabilities and their tax basis and are stated at enacted tax rates expected to be in effect when taxes are actually paid or recovered.

Deferred tax assets are evaluated for future realization and reduced by a valuation allowance to the extent the Company believes it is more likely than not they will not be realized. The Company considers many factors when assessing the likelihood of future realization of deferred tax assets, including recent cumulative loss experience and expectation of future earnings, the carry-forward periods available for tax reporting purposes, reversal of temporary differences and other relevant factors.

The Company utilizes a two-step approach to recognizing and measuring uncertain income tax positions (tax contingencies). The first step is to evaluate the tax position for recognition by determining if the weight of available evidence indicates it is more likely than not the position will be sustained on audit, including resolution of related appeals or litigation processes. The second step is to measure the tax benefit as the largest amount which is more than 50% likely of being realized upon ultimate settlement. The Company considers many factors when evaluating its tax positions and estimating the related tax benefits, which may require periodic adjustment and which may not accurately forecast actual outcomes. The Company's policy for recording interest and penalties associated with uncertain tax positions is to record such items as a component of the income tax provision.

***Foreign Currency Translation***

The reporting currency of the Company is the U.S. dollar. The functional currency for the Company's subsidiaries is generally the same as the local currency. Foreign currency denominated monetary assets and liabilities are remeasured into U.S. dollars at exchange rates at the balance sheet date, and foreign currency denominated non-monetary assets and liabilities are remeasured into U.S. dollars at historical exchange rates. Revenue and expenses are translated at average rates prevailing throughout the period. Realized gains or losses from foreign currency transactions and settlements are included in other income (expense), net in the consolidated statements of operations. Net realized foreign exchange gains and losses were not material for the years ended December 31, 2022, 2023 and 2024. Unrealized gains or losses from foreign currency remeasurement are included in other comprehensive income.

***Fair Value Measurement***

The Company measures and reports certain assets and liabilities at fair value. Fair value is defined as the exchange price that would be received for an asset or paid to transfer a liability (an exit price) in the principal or most advantageous market for the asset or liability in an orderly transaction between market participants on the measurement date. To measure fair value, U.S. GAAP has established a hierarchy which requires an entity to maximize the use of observable inputs and minimize the use of unobservable inputs.

------

**Confidential Treatment Requested by Pattern Group Inc.**

**Pursuant to 17 C.F.R. Section 200.83**

**Pattern Group Inc. and Subsidiaries** 

**Notes to Consolidated Financial Statements** 

This hierarchy uses three levels of inputs to measure the fair value of assets and liabilities as follows:

Level 1 – Quoted prices in active markets for identical assets or liabilities.

Level 2 – Observable inputs other than Level 1 including quoted prices for similar assets or liabilities, quoted prices in less active markets, or other observable inputs that can be corroborated by observable market data.

Level 3 – Unobservable inputs supported by little or no market activity for financial instruments whose value is determined using pricing models, discounted cash flow methodologies, or similar techniques, as well as instruments for which the determination of fair value requires significant management judgment or estimation.

***Recent Accounting Pronouncements Not Yet Adopted***

In December 2023, the Financial Accounting Standards Board (the "FASB") issued Accounting Standards Update ("ASU") 2023-09, *Income Taxes (Topic 740): Improvements to Income Tax Disclosures*, amending existing income tax disclosure guidance, primarily requiring more detailed disclosure for income taxes paid and the effective tax rate reconciliation. ASU 2023-09 is effective for annual reporting periods beginning after December 15, 2024, with early adoption permitted and can be applied on either a prospective or retroactive basis. The Company is currently evaluating the impact that the adoption of this standard will have on its consolidated financial statements and related disclosures, but does not anticipate the impact will be material.

In November 2024, the FASB issued ASU 2024-03, *Income Statement - Reporting Comprehensive Income - Expense Disaggregation Disclosures (Subtopic 220-40): Disaggregation of Income Statement Expenses*, which requires disclosure of specific expense categories in the notes to the financial statements. ASU 2024-03 is effective for annual periods beginning after December 15, 2026, with early adoption permitted and can be applied on either a prospective or retroactive basis. The Company is currently evaluating the impact that the adoption of this standard will have on its consolidated financial statements and related disclosures.

***Recently adopted accounting pronouncements***

In November 2023, the FASB issued ASU 2023-07, *Segment Reporting (Topic 280): Improvements to Reportable Segment Disclosures*, which updates reportable segment disclosure requirements primarily through enhanced disclosures about significant segment expenses. ASU 2023-07 is effective for annual reporting periods beginning after December 15, 2023 and interim periods within fiscal years beginning after December 15, 2024. The Company adopted ASU 2023-07 during the year ended December 31, 2024 on a retroactive basis for all years presented. See Note 16—Segment Information in the accompanying notes to the consolidated financial statements for further detail.

------

**Confidential Treatment Requested by Pattern Group Inc.**

**Pursuant to 17 C.F.R. Section 200.83**

**Pattern Group Inc. and Subsidiaries** 

**Notes to Consolidated Financial Statements** 

**3. Property and Equipment, net**

Property and equipment consisted of the following:

---

| | | |
|:---|:---|:---|
|  | **December 31,** | **December 31,** |
| **(in thousands)** | **2023** | **2024** |
| Internal-use software | $22293 | $31353 |
| Machinery and equipment | 3160 | 6394 |
| Computer equipment | 3835 | 5435 |
| Leasehold improvements | 2948 | 4459 |
| Assets under construction | 1682 | 4147 |
| Land | 3984 | 3984 |
| Furniture and fixtures | 2030 | 2677 |
| Purchased software | 1076 | 1296 |
| Buildings |  | 334 |
| Vehicles | 19 | 56 |
| Total property and equipment | 41027 | 60135 |
| Less: accumulated depreciation and amortization | (15033) | (25100) |
| Property and equipment, net | $25994 | $35035 |

---

Depreciation and amortization expense related to property and equipment for the years ended December 31, 2022, 2023 and 2024 was $5.0 million, $8.4 million and $11.8 million, respectively.

**4. Goodwill & Intangible Assets**

***Goodwill***

In 2022, due to low sales volumes and poor financial performance a decision was made to shutter the Company's Village reporting unit. This included stopping manufacturing and liquidating the existing inventory of its Trophy Skin branded products resulting in goodwill impairment of $2.6 million for the year ended December 31, 2022. The Village reporting unit's carrying value was written down to zero, its estimated fair value. The accumulated impairment balance was $2.6 million as of December 31, 2022, 2023 and 2024.

***Intangible Assets, net***

Intangible assets, net consisted of the following:

---

| | | | | |
|:---|:---|:---|:---|:---|
| | **December 31, 2023** | **December 31, 2023** | **December 31, 2023** | **December 31, 2023** |
| **(in thousands, except for years data)** | **Gross Carrying Value** | **Accumulated Amortization** | **Net Book Value** | **Weighted Average Remaining Useful Life** <br>**(in years)** |
| Developed technology | $7284 | $(2568) | $4716 | 3.3 |
| Customer relationships | 3900 | (1722) | 2178 | 4.8 |
| Tradenames | 3111 | (1373) | 1738 | 5.0 |
| Non-competition agreements | 2503 | (1337) | 1166 | 1.5 |
| Domain names | 234 | (74) | 160 | 10.3 |
| Total intangible assets, net | $17032 | $(7074) | $9958 |  |

---

------

**Confidential Treatment Requested by Pattern Group Inc.**

**Pursuant to 17 C.F.R. Section 200.83**

**Pattern Group Inc. and Subsidiaries** 

**Notes to Consolidated Financial Statements** 

---

| | | | | |
|:---|:---|:---|:---|:---|
| | **December 31, 2024** | **December 31, 2024** | **December 31, 2024** | **December 31, 2024** |
| **(in thousands, except for years data)** | **Gross Carrying Value** | **Accumulated Amortization** | **Net Book Value** | **Weighted Average Remaining Useful Life** <br>**(in years)** |
| Developed technology | $7284 | $(4026) | $3258 | 2.3 |
| Customer relationships | 3619 | (1893) | 1726 | 3.8 |
| Tradenames | 3111 | (1705) | 1406 | 4.0 |
| Non-competition agreements | 1907 | (1535) | 372 | 0.5 |
| Domain names | 234 | (90) | 144 | 9.3 |
| Total intangible assets, net | $16155 | $(9249) | $6906 |  |

---

Amortization expense recorded for intangible assets was approximately $4.6 million, $3.7 million and $3.1 million for the years ended December 31, 2022, 2023 and 2024, respectively.

The expected future amortization expense for intangible assets as of December 31, 2024 is as follows:

---

| | |
|:---|:---|
| **(in thousands)** | **Amount** |
| &nbsp;&nbsp;&nbsp;&nbsp;2025 | $2603 |
| &nbsp;&nbsp;&nbsp;&nbsp;2026 | 2239 |
| &nbsp;&nbsp;&nbsp;&nbsp;2027 | 1145 |
| &nbsp;&nbsp;&nbsp;&nbsp;2028 | 570 |
| &nbsp;&nbsp;&nbsp;&nbsp;2029 | 156 |
| &nbsp;&nbsp;&nbsp;&nbsp;Thereafter | 193 |
| Total amortization expense | $6906 |

---

**5. Other Assets and Liabilities**

***Other Non-Current Assets***

Other non-current assets consisted of the following:

---

| | | |
|:---|:---|:---|
| | **December 31,** | **December 31,** |
| **(in thousands)** | **2023** | **2024** |
| Deferred tax asset, net | $6680 | $7976 |
| Security deposits | 382 | 2605 |
| Other assets | 11 | 3 |
| Other non-current assets | $7073 | $10584 |

---

***Other Non-Current Liabilities***

Other non-current liabilities consisted of the following:

---

| | | |
|:---|:---|:---|
| | **December 31,** | **December 31,** |
| **(in thousands)** | **2023** | **2024** |
| Payroll liabilities | $7817 | $4885 |
| Tax liabilities | 410 | 418 |
| Other non-current liabilities | $8227 | $5303 |

---

------

**Confidential Treatment Requested by Pattern Group Inc.**

**Pursuant to 17 C.F.R. Section 200.83**

**Pattern Group Inc. and Subsidiaries** 

**Notes to Consolidated Financial Statements** 

**6. Operating Leases**

The Company has entered into various non-cancelable operating lease agreements, primarily for the use of office and warehouse space, expiring at various dates through 2037. The Company's right-of-use assets and lease liability include options to extend or terminate the lease when it is reasonably certain they will be exercised. The Company considers these options in determining the lease term on a lease-by-lease basis. The Company separately accounts for lease components and non-lease components. None of the Company's lease agreements contain material non-lease components, residual value guarantees or restrictive covenants. The Company has elected an accounting policy to not recognize short-term leases, which have a lease term of twelve months or less, on the consolidated balance sheets. The Company does not have any material short-term lease cost or leases with variable lease costs. Lease expense primarily related to operating lease costs and were included within operations, general and administrative and sales and marketing expenses in the consolidated statements of operations. The Company recorded lease expense of $5.8 million, $5.6 million and $7.1 million for the years ended December 31, 2022, 2023 and 2024, respectively.

***Lease Term and Discount Rate***

The weighted-average remaining lease term (in years) and discount rate related to the operating leases were as follows:

---

| | | |
|:---|:---|:---|
| | **December 31,** | **December 31,** |
| | **2023** | **2024** |
| Weighted-average remaining lease term | 3.1 | 7.8 |
| Weighted-average discount rate | 3.26% | 6.13% |

---

***Maturity of Lease Liabilities***

The present value of the Company's operating lease liabilities as of December 31, 2024 is as follows:

---

| | |
|:---|:---|
| **(in thousands)** | **Amount** |
| 2025 | $7950 |
| 2026 | 7042 |
| 2027 | 4189 |
| 2028 | 2131 |
| 2029 | 2006 |
| Thereafter | 12308 |
| &nbsp;&nbsp;&nbsp;&nbsp;Total undiscounted lease payments | 35626 |
| Less: imputed interest | 5501 |
| &nbsp;&nbsp;&nbsp;&nbsp;Present value of lease liabilities | 30125 |
| Operating lease liabilities | 8030 |
| Operating lease liabilities, non-current | 22095 |
| &nbsp;&nbsp;&nbsp;&nbsp;Total | $30125 |

---

The following table provides a summary of other information related to leases:

---

| | | | |
|:---|:---|:---|:---|
| | **As of December 31,** | **As of December 31,** | **As of December 31,** |
| **(in thousands)** | **2022** | **2023** | **2024** |
| Cash payments included in operating cash flows for lease arrangements | $4955 | $6119 | $7410 |
| Right-of-use assets obtained in exchange for new operating lease liabilities | $4227 | $1013 | $17372 |

---

------

**Confidential Treatment Requested by Pattern Group Inc.**

**Pursuant to 17 C.F.R. Section 200.83**

**Pattern Group Inc. and Subsidiaries** 

**Notes to Consolidated Financial Statements** 

**7. Credit Facilities**

The outstanding balance under the Company's revolving line of credit facility was $0 as of December 31, 2023 and 2024 and the amount available to draw to was $50.0 million as of December 31, 2023 and 2024. The revolving line of credit has a maturity date in March 2027 and will bear interest at a variable base rate plus an applicable margin ranging from 0.75% to 2.50%. The commitment fees on the unused portion range from 0.20% to 0.35%.

The Company's credit agreement contains various financial, affirmative and negative covenants. As of December 31, 2024, the Company was in compliance with all covenants outlined in the agreement.

**8. Fair Value Measurements**

The following table summarizes by level, within the fair value hierarchy, the Company's assets and liabilities measured at fair value on a recurring basis:

---

| | | | |
|:---|:---|:---|:---|
| | **December 31, 2023** | **December 31, 2023** | **December 31, 2023** |
| **(in thousands)** | **Level 1** | **Level 2** | **Level 3** |
| Assets: |  |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;Cash equivalents | $88000 | $— | $— |

---

---

| | | | |
|:---|:---|:---|:---|
| | **December 31, 2024** | **December 31, 2024** | **December 31, 2024** |
| **(in thousands)** | **Level 1** | **Level 2** | **Level 3** |
| Assets: |  |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;Cash equivalents | $139500 | $— | $— |

---

The Company's remaining liabilities measured at fair value on a recurring basis were immaterial for the periods presented.

**9. Convertible Preferred Stock**

In May 2020, 15,750,477 shares of Series A Preferred Stock were issued at an issuance price and liquidation preference of $3.32 per share, subject to an accruing preferred dividend of 17.5% per annum. Proceeds, net of issuance costs, totaled $52.1 million.

In September 2021, the Company issued 13,215,614 shares of Series B Preferred Stock at $17.01 per share (the "Series B Original Issue Price"). Proceeds, net of issuance costs, totaled $218.5 million.

In connection with the Series B Preferred Stock financing, the Company amended and restated its Certificate of Incorporation ("Certificate"). As a result of the modification of the Certificate, the dividend rights of the Series A Preferred Stock were terminated and the issue price was modified from $3.32 per share to $7.44 per share (the "Series A Adjusted Issue Price"). The Company accounted for these changes as a modification of the existing Series A Preferred Stock given the nature of the amendment and designs of the parties to have a value for value exchange of terms.

The Series A and Series B Preferred stock (collectively, the "convertible preferred stock") outstanding consisted of the following:

---

| | | | | | |
|:---|:---|:---|:---|:---|:---|
| | **December 31, 2023** | **December 31, 2023** | **December 31, 2023** | **December 31, 2023** | **December 31, 2023** |
| **(in thousands, except per share data)** | **Shares authorized** | **Shares issued and outstanding** | **Issuance price per share** | **Aggregate liquidation preference** | **Net carrying value** |
| Series A Preferred Stock | 15750 | 15750 | $7.44 | $117184 | $52073 |
| Series B Preferred Stock | 13222 | 13216 | 17.01 | 265340 | 218528 |
| Total | 28972 | 28966 |  | $382524 | $270601 |

---

------

**Confidential Treatment Requested by Pattern Group Inc.**

**Pursuant to 17 C.F.R. Section 200.83**

**Pattern Group Inc. and Subsidiaries** 

**Notes to Consolidated Financial Statements** 

---

| | | | | | |
|:---|:---|:---|:---|:---|:---|
| | **December 31, 2024** | **December 31, 2024** | **December 31, 2024** | **December 31, 2024** | **December 31, 2024** |
| **(in thousands, except per share data)** | **Shares authorized** | **Shares issued and outstanding** | **Issuance price per share** | **Aggregate liquidation preference** | **Net carrying value** |
| Series A Preferred Stock | 15750 | 15750 | $7.44 | $117184 | $52073 |
| Series B Preferred Stock | 13222 | 13216 | 17.01 | 283332 | 218528 |
| Total | 28972 | 28966 |  | $400516 | $270601 |

---

Following the issuance of the Series B Preferred Stock, the Series A and Series B Preferred Stock contained the following terms:

***Dividends***

The holders of Series B Preferred Stock are entitled to cumulative dividends at a rate of 8.0% of the Series B Original Issue Price per share, if and when declared by the Company's board of directors. The holders of Series B Preferred Stock are entitled to receive dividends on a pari passu basis, prior to and in preference to any dividends to common stockholders. The Series B Preferred Stock had $40.4 million and $58.4 million of cumulative undeclared dividends for the year ended December 31, 2023 and 2024, respectively.

In connection with the amended Certificate dated September 7, 2021, the terms for the Series A Preferred Stock were amended, and the right to receive cumulative dividends was terminated. Accordingly, the Series A Preferred Stock had no cumulative undeclared dividends as of December 31, 2023 and 2024. The holders of Series A Preferred Stock are entitled to receive any dividends on a pari passu basis to any dividends to common stockholders as may be declared by the board of directors.

There were no dividends declared or paid during the years ended December 31, 2022, 2023 or 2024.

***Liquidation Preference***

In the event of (i) any liquidation, dissolution or winding up of the Company, (ii) the consummation of certain mergers or consolidations, (iii) certain change of control transactions, including an initial public offering, (each, a "Deemed Liquidation Event"), the holders of Series A and Series B Preferred Stock are entitled to receive a liquidation preference, on a pari passu basis, and prior and in preference to the holders of Founding Voting Preferred Stock, Founding Non-Voting Preferred Stock and common stock.

The holders of the Series A Preferred Stock are entitled to receive an amount equal to (i) (a) for the holders of the Series A Preferred Stock, an amount per share equal the Series A Adjusted Issue Price plus dividends declared but unpaid thereon, (b) for the holders of the Series B Preferred Stock, an amount per share equal to the Series B Original Issue Price per share, plus any dividends accrued but unpaid, whether or not declared, together with any other dividends declared but unpaid or (ii) such amount per share as would have been payable had all shares of Series A and Series B Preferred Stock been converted into common stock immediately prior a Deemed Liquidation Event. If the assets available for distribution are insufficient to pay such amounts, then the available assets will be distributed ratably among the holders of Series A and Series B Preferred Stock in proportion to the full amount each holder is otherwise entitled to receive.

After payment to the holders of the Series A and Series B Preferred Stock, the remaining assets of the Company legally available for distribution shall be distributed among the holders of the Founding Voting Preferred Stock, Founding Non-Voting Preferred Stock and common stock in an amount per share equal to its full preferential amount plus all declared and unpaid dividends.

***Voting Rights***

The holders of each share of Series A and Series B Preferred Stock are entitled to one vote per each share of common stock on an as-converted basis.

------

**Confidential Treatment Requested by Pattern Group Inc.**

**Pursuant to 17 C.F.R. Section 200.83**

**Pattern Group Inc. and Subsidiaries** 

**Notes to Consolidated Financial Statements** 

The holders of Series A Preferred Stock, voting as a separate class, have the right to elect one director. The holders of Series B Preferred Stock, voting as a separate class, have the right to elect two directors. The holders of record of the shares of Founder Voting Preferred Stock, exclusively and as a separate class, have the right to elect nine directors. The holders of record of the shares of common stock and of any other class or series of voting stock (including the Series A Preferred Stock, Series B Preferred Stock and Founder Voting Preferred Stock), exclusively and voting together as a single class, shall be entitled to elect the balance of the total number of directors of the Company.

***Conversion Rights***

The holders of each share of convertible preferred stock have the option to convert each share of preferred stock at any time into a number of shares of common stock determined by dividing, for the Series A Preferred Stock, the Series A Adjusted Issue Price by the Series A Preferred Stock conversion price, and in the case of Series B Preferred Stock, the Series B Original Issue Price by the Series B Preferred Stock conversion price in effect at the time of conversion. The Series A Adjusted Issue Price and the Series B Original Issue Price are subject to adjustments for certain dilutive issuances, splits, combinations and other recapitalizations or reorganizations.

In addition, the Series B Preferred Stock have a special conversion ratio in connection with closing an initial public offering, direct listing or special purpose acquisition company transaction (any such transaction, an "Offering"). Each share of Series B Preferred Stock shall be convertible, at the option of the holder, in connection with an Offering, into a number of shares of common stock determined by dividing the Series B Original Issue Price by the lesser of (a) the Series B Preferred Stock conversion price then in effect and (b) the price per share of the Company's common stock sold in any such Offering (before discounts and commissions), multiplied by a percentage determined as the difference between 100% and the computed discount rate. As of January 1, 2023, the discount rate equaled 25% and increases 5% every six months thereafter, until December 31, 2026.

***Redemption***

The Series A and Series B Preferred Stock is contingently redeemable upon a Deemed Liquidation Events or sale of substantially all the assets of the Company. The convertible preferred stock is not mandatorily redeemable, but since a Deemed Liquidation Event would constitute a redemption event outside of the Company's control, all shares of the convertible preferred stock have been presented in mezzanine equity on the consolidated balance sheets.

In the event of a Deemed Liquidation Event, the Company is required to redeem shares of Series A and Series B Preferred Stock at the Series A Adjusted Issue Price and Series B Original Issue Price, respectively, (as adjusted for any dilutive issuances, splits, combinations and other recapitalizations or reorganizations). The carrying values of convertible preferred stock have not been adjusted to their liquidation preferences as these events have not occurred as of December 31, 2024. Carrying values will be adjusted to their liquidation preferences, inclusive of the Series B Preferred Stock preferred return, if and when it becomes probable that such events will occur.

**10. Stockholders' Equity**

***Common Stock***

The Company has one class of common stock with a par value of $0.001. Each share of common stock is entitled to one vote. Holders of common stock are entitled to receive any dividends as may be declared by the board of directors.

***Preferred Stock***

As of December 31, 2024, 940,855 shares of Founder Voting Preferred Stock, $0.001 par value, were issued and outstanding and 85,851,519 shares of Founder Non-Voting Preferred Stock, $0.001 par value, were issued and outstanding (collectively, the "preferred stock"). Holders of the preferred stock are entitled to receive any dividends as may be declared by the board of directors on an as-converted basis with common stockholders. Each share of preferred stock has liquidation preferences similar to those of one share of common stock. Each holder of

------

**Confidential Treatment Requested by Pattern Group Inc.**

**Pursuant to 17 C.F.R. Section 200.83**

**Pattern Group Inc. and Subsidiaries** 

**Notes to Consolidated Financial Statements** 

outstanding shares of Founder Voting Preferred Stock shall be entitled to 1,000 votes for each share of Founder Voting Preferred Stock held, voting together with holders of Series A and Series B Preferred Stock and common stock as a single class. The holders of record of the shares of Founder Voting Preferred Stock, exclusively and as a separate class, shall be entitled to elect nine directors of the Corporation. Each single share of Founder Voting Preferred Stock shall be convertible, at the option of the holder thereof, at any time and from time to time and without the payment of additional consideration by the holder thereof, into one fully paid and non-assessable share of common stock or Founder Non-Voting Preferred Stock. Each share of Founder Non-Voting Preferred Stock shall be convertible, at the option of the holder thereof, at any time and from time to time and without the payment of additional consideration by the holder thereof, into one fully paid and non-assessable share of common stock.

***Common Stock Authorized, Issued and Reserved***

The Company has reserved the following shares of common stock, on an as-converted basis for future issuance:

---

| | | |
|:---|:---|:---|
| | **December 31,** | **December 31,** |
| **(in thousands)** | **2023** | **2024** |
| Convertible preferred stock | 116366 | 115758 |
| Outstanding RSUs | 15149 | 17589 |
| Shares available under the 2019 Equity Incentive Plan | 1810 | 2109 |
| Total shares of common stock reserved | 133325 | 135456 |
| Common shares outstanding | 3373 | 3799 |
| Authorized but not reserved | 849 | 1032 |
| Total common shares authorized | 137547 | 140287 |

---

**11. Stock-Based Compensation**

***2018 and 2019 Stock Plans***

In September 2018, the board of directors adopted the 2018 Equity Incentive Plan (the "2018 Plan"). Under the 2018 Plan, the board of directors may grant stock options, restricted stock, RSUs, stock appreciation rights or a dividend equivalent to eligible employees, officers, non-employee directors and consultants. On January 28, 2019, the stockholders of Pattern Inc. contributed all shares of Pattern Inc. to Pattern Group Inc. in exchange for shares in Pattern Group Inc. As a result of this contribution and exchange, all outstanding RSUs were transferred to Pattern Group Inc. and the 2018 Plan was terminated. In January 2019, Pattern Group Inc. adopted the 2019 Equity Incentive Plan (as amended, the "2019 Plan"). Common stock purchased under the 2019 Plan is subject to certain restrictions, including the right of first refusal by the Company for sale or transfer of shares to outside parties.

***Restricted Stock Units***

The Company grants RSUs to its employees, directors and advisors under the 2019 Plan. These RSUs include both service-based and performance-based vesting conditions. The service-based vesting condition for these awards is generally satisfied by rendering continuous service, generally for 4 years, during which time a quarter of the award vest annually. The performance-based vesting condition is satisfied upon the sale of the Company's common stock upon the consummation of a firm commitment underwritten initial public offering pursuant to an effective registration statement under the Securities Act or a sale event, which constitutes a change in the ownership or effective control of the Company or in the ownership of a substantial portion of the assets ("Liquidity Event").

The Company records stock-based compensation expense in connection with these RSUs based on the fair market value of its common stock on the grant date using the accelerated attribution method when it is probable the performance-based vesting condition will be achieved. As of December 31, 2024, no stock-based compensation expense was recognized for the RSUs as a Liquidity Event had not occurred. The total unrecognized stock-based compensation expense related to these awards was $85.9 million as of December 31, 2024. If the performance-based vesting condition had been satisfied on December 31, 2024, the Company would have recognized stock-based

------

**Confidential Treatment Requested by Pattern Group Inc.**

**Pursuant to 17 C.F.R. Section 200.83**

**Pattern Group Inc. and Subsidiaries** 

**Notes to Consolidated Financial Statements** 

compensation expense of $36.8 million, and unrecognized stock-based compensation expense of $49.1 million would have been recognized over a weighted-average remaining requisite service period of 2.4 years.

The following table summarizes the RSU activity:

---

| | | |
|:---|:---|:---|
| **(in thousands, except per share fair values)** | **RSUs** | **Weighted-Average Grant Date Fair Value** |
| Outstanding at December 31, 2021  | 10458 | $1.25 |
| Granted | 3290 | 4.92 |
| Cancelled/Forfeited | (947) | 1.67 |
| Outstanding at December 31, 2022  | 12801 | $2.16 |
| Granted | 3100 | 7.67 |
| Cancelled/Forfeited | (752) | 2.85 |
| Outstanding at December 31, 2023  | 15149 | $3.26 |
| Granted | 3399 | 12.94 |
| Cancelled/Forfeited | (959) | 7.72 |
| Outstanding at December 31, 2024  | 17589 | $4.88 |

---

The valuation of RSUs granted under the 2019 Plan, was determined in accordance with the guidance provided by the American Institute of American Institute of Certified Public Accountants in its Accounting & Valuation Guide. An equity value was estimated using a weighted average of the guideline public company method and the backsolve method (market approaches). These methods considered information from a selection of comparable publicly traded companies and the Company's recent Series A and Series B Preferred Stock transactions. For the public company method, valuation multiples are calculated from selected company operating data to provide an indication of how much a current investor in the marketplace is willing to pay for a company with characteristics similar to the Company. These valuation multiples are evaluated and adjusted based on the strengths and weaknesses of the Company relative to those of the selected guideline companies. The multiples are applied to the Company's operating data to arrive at a relative indication of fair value. Enterprise value is next allocated to differing security holders in the capitalization schedule using the Option Pricing Method (the "OPM"). The OPM utilizes breakpoints based on various terms of the stockholder agreements upon liquidation of the enterprise, the level of seniority among the securities, dividend policy, conversion ratios and cash allocations. Estimated volatility ranged from 55% to 60% and the discount for lack of marketability ranged from 14.8% to 20.0%.

Application involves the use of estimates, judgment and assumptions that are highly complex and subjective, such as those regarding expected future revenue and EBITDA, market multiples, the selection of comparable companies, the lack of marketability of the Company's common stock, precedent transactions involving the Company's shares, market performance of comparable publicly traded companies, U.S. and global capital market conditions and the probability of possible future events. Changes in any or all of these estimates and assumptions or the relationships between those assumptions impact the valuations as of each valuation date and may have a material impact on the valuation of the Company's common stock.

**12. Provision for Income Taxes**

The Company is taxed as a C-corporation and recognizes deferred tax assets and liabilities for future tax consequences attributable to the differences between the financial statement carrying value of existing assets and liabilities and their respective tax bases. Deferred tax assets and liabilities are measured using enacted tax rates in effect for the fiscal year in which those temporary differences are expected to be recovered or settled. Valuation allowances are established when necessary to reduce deferred tax assets to the amount expected to be realized.

The Organization for Economic Co-operation and Development (the "OECD") has introduced a framework to implement a global minimum corporate tax of 15%, referred to as Pillar Two. Many aspects of Pillar Two became effective beginning in calendar year 2024 and other aspects will be effective beginning in calendar year 2025. While it is uncertain whether the U.S. will adopt Pillar Two, certain countries in which the Company operates have either

------

**Confidential Treatment Requested by Pattern Group Inc.**

**Pursuant to 17 C.F.R. Section 200.83**

**Pattern Group Inc. and Subsidiaries** 

**Notes to Consolidated Financial Statements** 

adopted legislation or are in the process of introducing legislation to implement Pillar Two. While the Company does not expect Pillar Two to have a material impact on its effective tax rate, the Company's analysis is ongoing as the OECD releases additional guidance and countries implement additional legislation.

The Company files income tax returns in the U.S., including various state and local jurisdictions. The Company's subsidiaries file income tax returns in the United Kingdom, Australia, Germany, Hong Kong, Serbia, India, Singapore, Japan, Poland, China, United Arab Emirates and Canada. The Company is subject to federal income tax as well as income tax of multiple state and foreign jurisdictions.

Income tax provision (benefit) consisted of the following:

---

| | | | |
|:---|:---|:---|:---|
|  | **Year Ended December 31,** | **Year Ended December 31,** | **Year Ended December 31,** |
| **(in thousands)** | **2022** | **2023** | **2024** |
| Current: |  |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;U.S. Federal | $4233 | $11640 | $19279 |
| &nbsp;&nbsp;&nbsp;&nbsp;U.S. State | 1160 | 3381 | 4993 |
| &nbsp;&nbsp;&nbsp;&nbsp;International | 107 | 307 | 378 |
| Total current provision | 5500 | 15328 | 24650 |
| Deferred: |  |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;U.S. Federal | (3289) | (37) | (921) |
| &nbsp;&nbsp;&nbsp;&nbsp;U.S. State | (618) | (112) | (95) |
| &nbsp;&nbsp;&nbsp;&nbsp;International | (309) | (102) | (255) |
| Total deferred provision (benefit) | (4216) | (251) | (1271) |
| Income tax provision | $1284 | $15077 | $23379 |

---

U.S. and international components of income before income taxes are as follows:

---

| | | | |
|:---|:---|:---|:---|
|  | **Year Ended December 31,** | **Year Ended December 31,** | **Year Ended December 31,** |
| **(in thousands)** | **2022** | **2023** | **2024** |
| U.S. Federal & State | $5311 | $62229 | $98640 |
| International | (7002) | (5888) | (7405) |
| Income (loss) before income taxes | $(1691) | $56341 | $91235 |

---

The items accounting for differences between income taxes computed at the federal statutory rate and the provision recorded for income taxes are as follows:

---

| | | | |
|:---|:---|:---|:---|
|  | **Year Ended December 31,** | **Year Ended December 31,** | **Year Ended December 31,** |
| **(in thousands)** | **2022** | **2023** | **2024** |
| Income taxes computed at the federal statutory rate | $(355) | $11819 | $19160 |
| &nbsp;&nbsp;&nbsp;&nbsp;Effect of:  |  |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Tax impact of foreign earnings | (28) | (236) | (490) |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;State taxes, net of federal benefits | 299 | 2566 | 3822 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Permanent differences | 308 | (61) | (554) |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Change in valuation allowance | 1365 | 1828 | 2092 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Uncertain tax positions | 49 | 184 | (15) |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Research & development tax credit | (333) | (663) | (608) |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Provision to return adjustments | (21) | (360) | (28) |
| Income tax provision | $1284 | $15077 | $23379 |

---

------

**Confidential Treatment Requested by Pattern Group Inc.**

**Pursuant to 17 C.F.R. Section 200.83**

**Pattern Group Inc. and Subsidiaries** 

**Notes to Consolidated Financial Statements** 

Deferred income tax assets consisted of the following as of:

---

| | | |
|:---|:---|:---|
| | **December 31,** | **December 31,** |
| **(in thousands)** | **2023** | **2024** |
| Deferred tax assets: |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;Net operating losses | $4804 | $7303 |
| &nbsp;&nbsp;&nbsp;&nbsp;Operating lease liabilities | 206 | 5387 |
| &nbsp;&nbsp;&nbsp;&nbsp;Section 174 capitalization | 3483 | 4929 |
| &nbsp;&nbsp;&nbsp;&nbsp;Inventory (UNICAP) | 3445 | 4248 |
| &nbsp;&nbsp;&nbsp;&nbsp;Accrued liabilities | 3757 | 3132 |
| &nbsp;&nbsp;&nbsp;&nbsp;Research & development credits | 584 | 710 |
| &nbsp;&nbsp;&nbsp;&nbsp;Other |  | 10 |
| &nbsp;&nbsp;&nbsp;&nbsp;Valuation allowance | (5090) | (7505) |
| Deferred tax assets | 11189 | 18214 |
| Deferred tax liabilities: |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;Operating lease right-of-use asset |  | (5048) |
| &nbsp;&nbsp;&nbsp;&nbsp;Depreciation and amortization | (4421) | (5046) |
| &nbsp;&nbsp;&nbsp;&nbsp;Prepaid expenses and other | (88) | (175) |
| Deferred tax liabilities | (4509) | (10269) |
| Net deferred tax assets | $6680 | $7945 |

---

The Company recorded a valuation allowance of $5.1 million and $7.5 million as of December 31, 2023 and 2024, respectively, to reduce its deferred tax assets related to foreign net operating losses and Utah state research and development tax credits to their net realizable value. The Company has determined that as a result of uncertainty related to the usability of the net operating loss and research and development benefits a valuation allowance was required. Changes in the valuation allowance is detailed in the table below:

---

| | | |
|:---|:---|:---|
| | **December 31,** | **December 31,** |
| **(in thousands)** | **2023** | **2024** |
| Beginning balance | $2568 | $5090 |
| Additions to valuation allowance | 2522 | 2415 |
| Ending balance | $5090 | $7505 |

---

The Company has net operating loss carryovers by jurisdiction as follows:

---

| | | |
|:---|:---|:---|
| | **December 31, 2024** | **December 31, 2024** |
| **(in thousands)** | **Amount** | **Expiration (year)** |
| U.S. State | $1036 | 2036 |
| China | $4292 | 2025 |
| United Kingdom | $10336 | N/A |
| Germany | $8703 | N/A |
| Singapore | $2173 | N/A |
| Hong Kong | $1977 | N/A |
| Japan | $66 | N/A |
| Other | $45 | N/A |

---

------

**Confidential Treatment Requested by Pattern Group Inc.**

**Pursuant to 17 C.F.R. Section 200.83**

**Pattern Group Inc. and Subsidiaries** 

**Notes to Consolidated Financial Statements** 

The Company has the following tax credit carryover:

---

| | | |
|:---|:---|:---|
| | **December 31, 2024** | **December 31, 2024** |
| **(in thousands)** | **Amount** | **Expiration (year)** |
| Utah research & development | $1058 | 2033 |

---

The Company recognizes tax benefits from uncertain tax positions when it is more likely than not, based on the technical merits, that the position will be sustained upon examination. The following table summarizes the activity related to unrecognized tax benefits:

---

| | | |
|:---|:---|:---|
| | **December 31,** | **December 31,** |
| **(in thousands)** | **2023** | **2024** |
| Beginning balance | $282 | $505 |
| Increase (decrease) to unrecognized tax benefits taken in prior years | 96 | 24 |
| Increase to unrecognized tax benefits related to the current year | 127 | 116 |
| Decrease due to lapse of statute of limitations |  | (132) |
| Ending balance | $505 | $513 |

---

The total amount of unrecognized tax benefits that, if recognized, would affect the effective tax rate were $0.3 million, $0.5 million and $0.5 million for the years ended December 31, 2022, 2023 and 2024, respectively. The Company records interest and penalties associated with unrecognized tax benefits as a component of income tax expense. The amount of accrued penalties and interest included in the total balance of unrecognized tax benefits is insignificant in 2023 and 2024. The Company is generally no longer subject to income tax examinations by federal jurisdictions for years before 2021, state and local years before 2020 and foreign years before 2019.

**13. Commitments and Contingencies**

***Purchase Commitments***

As of December 31, 2024, the Company did not have any future payments under non-cancelable purchase obligations.

***Legal Matters***

From time to time, the Company may become involved in legal proceedings arising in the ordinary course of business. Loss contingencies are recorded when it is probable that a liability has been incurred and the amount of the loss can be reasonably estimated. Material contingencies are disclosed when it is believed a loss is not probable but reasonably possible. Accounting for contingencies requires the use of judgment related to both the likelihood of a loss and the estimate of the amount or range of loss. The Company is not presently a party to any legal proceedings, that if determined adversely to the Company, would individually or in the aggregate have a materially adverse effect on the business, results of operations, financial condition or cash flows.

***Indemnification***

In the ordinary course of business, the Company may provide indemnifications of varying scope and terms to customers, brand partners, lessors, investors, directors, officers, employees and other parties with respect to certain matters. Indemnification may include losses from the breach of such agreements, services the Company provides or third-party intellectual property infringement claims. These indemnifications may survive termination of the underlying agreement and the maximum potential amount of future indemnification payments may not be subject to a cap.

**14. Benefit Plan** 

The Company has an employee retirement benefit plan (the "Plan") under Section 401(k) of the Internal Revenue Code. The Plan covers employees who are U.S. citizens, are at least 21 years of age and have been

------

**Confidential Treatment Requested by Pattern Group Inc.**

**Pursuant to 17 C.F.R. Section 200.83**

**Pattern Group Inc. and Subsidiaries** 

**Notes to Consolidated Financial Statements** 

employed by the Company longer than 90 days. The Company contributes a safe harbor match in an amount equal to employee contributions up to 3% of the participating employee's compensation and matches an amount equal to half of the employee contributions between 3% and 5%. These contributions are subject to ERISA requirements. Total contributions by the Company to the Plan were $1.4 million, $2.0 million and $2.5 million during the years ended December 31, 2022, 2023 and 2024, respectively.

**15. Related-Party Lease Agreement**

***iServe Investments, LLC***

The Company leases certain office and warehouse space from a related party, iServe Investments, LLC, which is wholly owned by two majority stockholders. Total lease cost and related expenses for the lease was not material for the years ended December 31, 2022, 2023 and 2024.

**16. Segment Information** 

The Company manages its business on a consolidated basis and operates as a single operating and reportable segment. The Company primarily derives its revenue in the United States by selling products to customers via online marketplaces. The accounting policies of the reportable segment is the same as those described in Note 2—Summary of Significant Accounting Policies.

The Company's chief operating decision maker ("CODM") is the Company's Chief Executive Officer, who reviews financial information on a consolidated basis. The CODM uses consolidated net income to assess financial performance and allocate resources. Net income is used by the CODM to make key operating decisions. The CODM does not review assets in evaluating the results of the reportable segment.

The following table presents selected financial information with respect to the Company's single operating and reportable segment for the years ended December 31, 2022, 2023 and 2024:

---

| | | | |
|:---|:---|:---|:---|
| | **Year Ended December 31,** | **Year Ended December 31,** | **Year Ended December 31,** |
| **(in thousands)** | **2022** | **2023** | **2024** |
| Revenues | $990535 | $1366417 | $1796161 |
| Significant expenses: |  |  |  |
| &nbsp;&nbsp;&nbsp;Cost of goods sold | 561620 | 765203 | 1014812 |
| &nbsp;&nbsp;&nbsp;Fulfillment<sup>(1)</sup> | 171355 | 217003 | 272288 |
| &nbsp;&nbsp;&nbsp;Marketplace commissions<sup>(2)</sup> | 141066 | 194753 | 257915 |
| &nbsp;&nbsp;&nbsp;Sales, general and administrative<sup>(3)</sup> | 98332 | 116368 | 138345 |
| &nbsp;&nbsp;&nbsp;Technology<sup>(4)</sup> | 14041 | 20305 | 25619 |
| &nbsp;&nbsp;&nbsp;Interest income |  | (2882) | (6164) |
| &nbsp;&nbsp;&nbsp;Interest expense | 502 | 33 | 98 |
| &nbsp;&nbsp;&nbsp;Other income (expense), net | 5310 | (707) | 2013 |
| &nbsp;&nbsp;&nbsp;Provision for income taxes | 1284 | 15077 | 23379 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Net (loss) income | $(2975) | $41264 | $67856 |

---

_____________

(1) Fulfillment costs include costs incurred from third-party fulfillment centers and cost to operate and staff the Company's fulfillment centers.

(2) Marketplace Commissions includes referral fees charged by the various online marketplaces.

(3) Sales, general and administrative relate to employee headcount and other selling and general administrative costs.

(4) Technology represents items included in research in development within the Consolidated Statement of Operations and the amortization of capitalized internally developed software costs.

See Note 2—Summary of Significant Accounting Policies for additional information about revenue disaggregation.

------

**Confidential Treatment Requested by Pattern Group Inc.**

**Pursuant to 17 C.F.R. Section 200.83**

**Pattern Group Inc. and Subsidiaries** 

**Notes to Consolidated Financial Statements** 

The Company's long-lived tangible assets, as well as the Company's operating lease right-of-use assets recognized on the Consolidated Balance Sheets were located as follows:

---

| | | |
|:---|:---|:---|
| | **December 31,** | **December 31,** |
| **(in thousands)** | **2023** | **2024** |
| U.S. | $34288 | $53399 |
| International | 8720 | 9513 |

---

**17. Subsequent Events**

During the first quarter of 2025, the Company awarded performance-based restricted stock units to its CEO with vesting subject to the satisfaction of certain service-based, liquidity-based and milestone-based requirements. The value of this award is expected to be material.

------

**Confidential Treatment Requested by Pattern Group Inc.**

**Pursuant to 17 C.F.R. Section 200.83**

**Pattern Group Inc. and Subsidiaries** 

**Condensed Consolidated Statements of Operations (Unaudited)**

(in thousands, expect per share data)

---

| | | |
|:---|:---|:---|
| | **Three Months Ended March 31,**  | **Three Months Ended March 31,**  |
| | **2024** | **2025** |
| Revenues | $410672 | $540406 |
| Operating expenses: |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;Cost of goods sold | 226935 | 304600 |
| &nbsp;&nbsp;&nbsp;&nbsp;Operations, general and administrative | 80686 | 100076 |
| &nbsp;&nbsp;&nbsp;&nbsp;Sales and marketing | 75624 | 100679 |
| &nbsp;&nbsp;&nbsp;&nbsp;Research and development | 4112 | 5643 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Total operating expenses | 387357 | 510998 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Operating income | 23315 | 29408 |
| &nbsp;&nbsp;&nbsp;&nbsp;Interest income, net | 1226 | 1517 |
| &nbsp;&nbsp;&nbsp;&nbsp;Other expense, net | (819) | (161) |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Income before income taxes | 23722 | 30764 |
| Provision for income taxes | 6065 | 7962 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Net income | $17657 | $22802 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Income allocable to participating Series A Preferred Stock | 1949 | 2720 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Series B Preferred Stock dividend - undeclared | 4474 | 4436 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Net income attributable to common and preferred stockholders | $11234 | $15646 |
| Net earnings per share attributable to common and preferred stockholder (Note 2): |  |  |
| Basic | $0.12 | $0.17 |
| Diluted | $0.12 | $0.17 |
| Weighted-average common and preferred shares outstanding: |  |  |
| Basic | 90773 | 90591 |
| Diluted | 90773 | 90591 |

---

See accompanying notes to condensed consolidated financial statements.

------

**Confidential Treatment Requested by Pattern Group Inc.**

**Pursuant to 17 C.F.R. Section 200.83**

**Pattern Group Inc. and Subsidiaries** 

**Condensed Consolidated Statements of Comprehensive Income (Unaudited)** 

(in thousands)

---

| | | |
|:---|:---|:---|
| | **Three Months Ended March 31,** | **Three Months Ended March 31,** |
| | **2024** | **2025** |
| Net income | $17657 | $22802 |
| Other comprehensive income (loss): |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;Unrealized gain (loss) on foreign currency translation | 482 | (8) |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Total other comprehensive income (loss) | 482 | (8) |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Comprehensive income | $18139 | $22794 |

---

See accompanying notes to condensed consolidated financial statements.

------

**Confidential Treatment Requested by Pattern Group Inc.**

**Pursuant to 17 C.F.R. Section 200.83**

**Pattern Group Inc. and Subsidiaries** 

**Condensed Consolidated Statements of Cash Flows (Unaudited)**

(in thousands)

---

| | | |
|:---|:---|:---|
| | **Three Months Ended March 31,** | **Three Months Ended March 31,** |
| | **2024** | **2025** |
| **Cash flows from operating activities:** |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;Net income | $17657 | $22802 |
| &nbsp;&nbsp;&nbsp;&nbsp;Adjustments to reconcile net income to net cash provided by operating activities: |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Depreciation and amortization | 3405 | 4045 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Changes in operating assets and liabilities: |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Accounts receivable, net of allowance | 11162 | 22715 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Inventory | (6312) | 21930 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Prepaid expenses and other current assets | 2640 | (5261) |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Other non-current assets | (1543) | (654) |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Operating leases, net | 208 | (2) |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Accounts payable | 10291 | (27612) |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Accrued expenses | 2234 | 9303 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Other liabilities | 138 | 1134 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Net cash provided by operating activities | 39880 | 48400 |
| **Cash flows from investing activities:**  |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;Purchases of property and equipment | (5547) | (5228) |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Net cash used in investing activities | (5547) | (5228) |
| **Cash flows from financing activities:** |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Net cash used in financing activities |  |  |
| Effect of exchange rates on cash and cash equivalents | 484 | (7) |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Net change in cash and cash equivalents | 34817 | 43165 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Cash and cash equivalents at beginning of the year | 127233 | 175615 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Cash and cash equivalents at end of the year | $162050 | $218780 |
| **Supplemental disclosure of cash flow information:**  |  |  |
| Cash paid for interest | $26 | $43 |
| Cash paid for income taxes | 172 | 314 |

---

See accompanying notes to condensed consolidated financial statements.

------

**Confidential Treatment Requested by Pattern Group Inc.**

**Pursuant to 17 C.F.R. Section 200.83**

**Pattern Group Inc. and Subsidiaries**

**Condensed Consolidated Balance Sheets (Unaudited)**

(in thousands, expect per share data)

---

| | | |
|:---|:---|:---|
| | **December 31, 2024** | **March 31,<br>2025** |
| **<u>Assets</u>** | | |
| Current Assets: |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;Cash and cash equivalents | $175615 | $218780 |
| &nbsp;&nbsp;&nbsp;&nbsp;Accounts receivable, net of allowance | 106926 | 84211 |
| &nbsp;&nbsp;&nbsp;&nbsp;Inventory | 264103 | 242173 |
| &nbsp;&nbsp;&nbsp;&nbsp;Prepaid expenses and other current assets | 11438 | 16698 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Total current assets | 558082 | 561862 |
| Property and equipment, net | 35035 | 36639 |
| Intangible assets, net | 6906 | 6190 |
| Goodwill | 25938 | 25938 |
| Operating lease right-of-use assets | 27877 | 27141 |
| Other non-current assets | 10584 | 11238 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Total assets | $664422 | $669008 |
| **<u>Liabilities, Convertible Preferred Stock and Stockholders' Equity</u>** |  |  |
| Current Liabilities: |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;Accounts payable | $211558 | $183651 |
| &nbsp;&nbsp;&nbsp;&nbsp;Accrued expenses | 37845 | 47148 |
| &nbsp;&nbsp;&nbsp;&nbsp;Operating lease liabilities, current | 8030 | 8336 |
| &nbsp;&nbsp;&nbsp;&nbsp;Other current liabilities | 266 | 401 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Total current liabilities | 257699 | 239536 |
| Operating lease liabilities, non-current | 22095 | 21049 |
| Other non-current liabilities | 5303 | 6304 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Total liabilities | 285097 | 266889 |
| Commitments and contingencies (Note 11) |  |  |
| &nbsp;&nbsp;Convertible Preferred stock, $0.001 par value: 28,972 shares authorized; <br>28,966 shares issued and outstanding;<br>refer to Note 7 for aggregate liquidation preference | 270601 | 270601 |
| Stockholders' equity: |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;Common stock, $0.001 par value: 140,287 and 149,100 shares authorized; 3,373 and 3,799 shares issued and outstanding, respectively | 4 | 4 |
| &nbsp;&nbsp;&nbsp;&nbsp;Preferred stock, $0.001 par value: 88,869 shares authorized; <br>87,400 and 86,792 shares issued and outstanding, respectively | 86 | 86 |
| &nbsp;&nbsp;&nbsp;&nbsp;Additional paid-in capital | 2764 | 2764 |
| &nbsp;&nbsp;&nbsp;&nbsp;Accumulated other comprehensive loss | (985) | (993) |
| &nbsp;&nbsp;&nbsp;&nbsp;Retained earnings | 106855 | 129657 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Total stockholders' equity | 108724 | 131518 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Total liabilities, convertible preferred stock and stockholders' equity | $664422 | $669008 |

---

See accompanying notes to condensed consolidated financial statements.

------

**Confidential Treatment Requested by Pattern Group Inc.**

**Pursuant to 17 C.F.R. Section 200.83**

**Pattern Group Inc. and Subsidiaries** 

**Condensed Consolidated Statements of Changes in Convertible Preferred Stock and Stockholders' Equity (Unaudited)**

(in thousands)

---

| | | | | | | | | | | |
|:---|:---|:---|:---|:---|:---|:---|:---|:---|:---|:---|
| | **Convertible Preferred**  | **Convertible Preferred**  | **Common Stock** | **Common Stock** | **Preferred Stock** | **Preferred Stock** | **Additional Paid-in Capital** | **Accumulated Other Comprehensive (Loss) Income** | **Retained Earnings** | **Total Stockholders' Equity**  |
| | **Shares Issued** | **Amount** | **Shares Issued** | **Amount** | **Shares Issued** | **Amount** | **Additional Paid-in Capital** | **Accumulated Other Comprehensive (Loss) Income** | **Retained Earnings** | **Total Stockholders' Equity**  |
| Balance, December 31, 2023 | 28966 | $270601 | 3373 | $4 | 87400 | $87 | $5664 | $(2354) | $38999 | $42400 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Total other comprehensive income |  |  |  |  |  |  |  | 482 |  | 482 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Net income |  |  |  |  |  |  |  |  | 17657 | 17657 |
| Balance, March, 31, 2024 | 28966 | $270601 | 3373 | $4 | 87400 | $87 | $5664 | $(1872) | $56656 | $60539 |
| Balance, December 31, 2024 | 28966 | 270601 | 3799 | 4 | 86792 | 86 | 2764 | (985) | 106855 | 108724 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Total other comprehensive loss |  |  |  |  |  |  |  | (8) |  | (8) |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Net income |  |  |  |  |  |  |  |  | 22802 | 22802 |
| Balance, March 31, 2025 | 28966 | $270601 | 3799 | $4 | 86792 | $86 | $2764 | $(993) | $129657 | $131518 |

---

See accompanying notes to condensed consolidated financial statements.

------

**Confidential Treatment Requested by Pattern Group Inc.**

**Pursuant to 17 C.F.R. Section 200.83**

**Pattern Group Inc. and Subsidiaries** 

**Notes to Unaudited Condensed Consolidated Financial Statements** 

**1. Organization and Description of Business** 

***Description of Business***

Pattern Inc. was incorporated in Utah in January 2013. Pattern Group Inc. ("Pattern" or the "Company") was incorporated in Utah in January 2019, and subsequently converted to a Delaware corporation in May 2020. Following the Company's incorporation, the stockholders of Pattern Inc. contributed all shares of Pattern Inc. to the Company in exchange for shares in the Company, and Pattern Inc. continued as a wholly-owned subsidiary of the Company.

Pattern, an ecommerce accelerator, uses its technology platform, data science and a team of global experts to drive growth for brands. The Company acquires inventory from brand partners to sell to consumers, enabling full control over content, pricing, logistics and customer service. Brand partners that contract with the Company operate in various industries including health and wellness, beauty and personal care, home and lifestyle, pet, sports and outdoors and consumer electronics.

**2. Summary of Significant Accounting Policies**

***Unaudited Interim Financial Information***

The accompanying unaudited condensed consolidated financial statements are those of Pattern and its wholly-owned subsidiaries. The accompanying condensed consolidated financial statements have been prepared pursuant to the rules and regulations of the Securities and Exchange Commission (the "SEC") for interim financial reporting. These condensed consolidated financial statements are unaudited and, in our opinion, include all adjustments, consisting of normal recurring adjustments and accruals necessary for a fair presentation of our consolidated cash flows, operating results, and balance sheets for the periods presented. All intercompany accounts and transactions have been eliminated. Operating results for the periods presented are not necessarily indicative of the results that may be expected for 2025 due to seasonal and other factors. Certain information and footnote disclosures normally included in financial statements prepared in accordance with accounting principles generally accepted in the United States ("GAAP") have been condensed or omitted in accordance with the rules and regulations of the SEC. These condensed consolidated financial statements should be read in conjunction with the audited consolidated financial statements and accompanying notes.

***Use of Estimates***

The preparation of financial statements in accordance with U.S. GAAP requires management to make estimates and assumptions in the Company's consolidated financial statements and accompanying notes. On an ongoing basis, management evaluates these estimates and judgements.

Estimates are used for, but not limited to, determining the net realizable value and demand for inventory, allowance for sales returns, allowance for doubtful accounts, valuation allowances with respect to deferred tax assets, fair value of reporting units used in evaluation of goodwill impairment, the fair value of assets acquired and liabilities assumed in business combinations, the valuation of stock-based awards, the fair value of common stock and the incremental borrowing rate ("IBR") used to measure operating lease liabilities. The Company bases these estimates on historical and anticipated results, trends and various other assumptions that it believes are reasonable under the circumstances, including assumptions as to future events. Actual results could differ from these estimates and any such differences may be material to the Company's consolidated financial statements.

------

**Confidential Treatment Requested by Pattern Group Inc.**

**Pursuant to 17 C.F.R. Section 200.83**

**Pattern Group Inc. and Subsidiaries** 

**Notes to Unaudited Condensed Consolidated Financial Statements** 

***Revenue***

The following table presents the Company's revenues disaggregated by source of revenue:

---

| | | |
|:---|:---|:---|
| | **Three Months Ended March 31,** | **Three Months Ended March 31,** |
| **(in thousands)** | **2024** | **2025** |
| Amazon.com | $364355 | $478788 |
| Amazon marketplaces, international | 18542 | 29135 |
| Other online marketplaces and channels  | 22534 | 27322 |
| SaaS, consulting and other revenue | 5241 | 5161 |
| Revenues | $410672 | $540406 |

---

The following table presents the Company's revenues disaggregated by geography:

---

| | | |
|:---|:---|:---|
| | **Three Months Ended March 31,** | **Three Months Ended March 31,** |
| **(in thousands)** | **2024** | **2025** |
| U.S. | $384430 | $503516 |
| International | 26242 | 36890 |
| Revenues | $410672 | $540406 |

---

The U.S. was the only individual country accounting for more than 10% of total revenue.

***Earnings per share***

Basic earnings per share is calculated using the Company's weighted-average shares outstanding of common stock, Founder Voting Preferred Stock and Founder Non-Voting Preferred Stock. Diluted earnings per share is calculated using the Company's weighted-average shares outstanding of common stock, Founder Voting Preferred Stock and Founder Non-Voting Preferred Stock. The Founder Voting and Founder Non-Voting Preferred Stock are considered to be common stock equivalents for purposes of calculating earnings per share ("EPS") given that they share equally with common stock in the liquidation of the Company's net assets and do not contain an economic preference.

The dilutive effect of Founder Voting Preferred Stock, Founder Non-Voting Preferred Stock and Series A Preferred Stock is reflected in diluted earnings per share by application of the more dilutive of the two-class method and if-converted method (two-class method only applies for periods of net income). The dilutive effect of Series B Preferred Stock is reflected in diluted earnings per share under the if-converted method. The if-converted method is calculated by assuming conversion at the beginning of the period or date of issuance, if later; and therefore, no dividend preference would accrue to the Series B Preferred Stock. Restricted stock units ("RSUs") subject to conditions other than service conditions are considered contingently issuable shares and are included in the computation of dilutive shares only to the extent that the underlying performance condition is satisfied prior to the end of the reporting period or would be considered satisfied if the end of the reporting period were the end of the related contingency period and the results would be dilutive (see Note 9—Stock-Based Compensation for more information).

------

**Confidential Treatment Requested by Pattern Group Inc.**

**Pursuant to 17 C.F.R. Section 200.83**

**Pattern Group Inc. and Subsidiaries** 

**Notes to Unaudited Condensed Consolidated Financial Statements** 

The following table sets forth the computation of earnings per share attributable to common and preferred stockholders:

---

| | | |
|:---|:---|:---|
| | **Three Months Ended March 31,** | **Three Months Ended March 31,** |
| **(in thousands, except per share data)** | **2024** | **2025** |
| Net income | $17657 | $22802 |
| Income allocable to participating Series A Preferred Stock | 1949 | 2720 |
| Series B Preferred Stock dividend - undeclared | 4474 | 4436 |
| Net income attributable to common and preferred stockholders | $11234 | $15646 |
| Weighted-average shares outstanding: |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;Common shares | 3373 | 3799 |
| &nbsp;&nbsp;&nbsp;&nbsp;Founder Voting Preferred Stock | 941 | 941 |
| &nbsp;&nbsp;&nbsp;&nbsp;Founder Non-Voting Preferred Stock | 86459 | 85851 |
| &nbsp;&nbsp;&nbsp;&nbsp;Basic | 90773 | 90591 |
| &nbsp;&nbsp;&nbsp;&nbsp;Diluted | 90773 | 90591 |
| Earnings per share attributable to common and preferred stockholders |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;Basic | $0.12 | $0.17 |
| &nbsp;&nbsp;&nbsp;&nbsp;Diluted | $0.12 | $0.17 |

---

The following instruments outstanding as of period end were not reflected in diluted EPS as their effect for the periods presented would be anti-dilutive or are currently not exercisable for potential common shares:

---

| | | |
|:---|:---|:---|
| | **Three Months Ended March 31,** | **Three Months Ended March 31,** |
| **(in thousands)** | **2024** | **2025** |
| Series B Preferred Stock  | 13216 | 13216 |
| RSUs | 15092 | 27592 |

---

***Accounts Receivable, net***

Accounts receivable are comprised of receivables from the various online marketplaces, brand partners and other receivables, including, consulting clients and business-to-business sales. Accounts receivable are stated at the invoiced amount and are non-interest-bearing.

The following table summarizes the Company's accounts receivable balance:

---

| | | |
|:---|:---|:---|
| **(in thousands)** | **December 31, 2024** | **March 31,<br>2025** |
| Amazon.com | $54246 | $33765 |
| Brand partner receivables | 43269 | 40394 |
| Other receivables | 11199 | 12118 |
| Allowance for doubtful accounts | (1788) | (2066) |
| Accounts receivable, net | $106926 | $84211 |

---

***Recent Accounting Pronouncements Not Yet Adopted***

In December 2023, the Financial Accounting Standards Board (the "FASB") issued Accounting Standards Update ("ASU") 2023-09, *Income Taxes (Topic 740): Improvements to Income Tax Disclosures*, amending existing income tax disclosure guidance, primarily requiring more detailed disclosure for income taxes paid and the effective tax rate reconciliation. ASU 2023-09 is effective for annual reporting periods beginning after December 15, 2024, with early adoption permitted and can be applied on either a prospective or retroactive basis. The Company is

------

**Confidential Treatment Requested by Pattern Group Inc.**

**Pursuant to 17 C.F.R. Section 200.83**

**Pattern Group Inc. and Subsidiaries** 

**Notes to Unaudited Condensed Consolidated Financial Statements** 

currently evaluating the impact that the adoption of this standard will have on its consolidated financial statements and related disclosures, but does not anticipate the impact will be material.

In November 2024, the FASB issued ASU 2024-03, *Income Statement - Reporting Comprehensive Income - Expense Disaggregation Disclosures (Subtopic 220-40): Disaggregation of Income Statement Expenses*, which requires disclosure of specific expense categories in the notes to the financial statements. ASU 2024-03 is effective for annual periods beginning after December 15, 2026, and interim reporting periods within annual reporting periods beginning after December 15 2027, with early adoption permitted and can be applied on either a prospective or retroactive basis. The Company is currently evaluating the impact that the adoption of this standard will have on its consolidated financial statements and related disclosures.

**3. Property and Equipment, net**

Property and equipment consisted of the following:

---

| | | |
|:---|:---|:---|
| **(in thousands)** | **December 31, 2024** | **March 31,<br>2025** |
| Internal-use software | $31353 | $33943 |
| Machinery and equipment | 6394 | 6526 |
| Computer equipment | 5435 | 5924 |
| Leasehold improvements | 4459 | 5961 |
| Assets under construction | 4147 | 4210 |
| Land | 3984 | 3984 |
| Furniture and fixtures | 2677 | 2800 |
| Purchased software | 1296 | 1296 |
| Buildings | 334 | 334 |
| Vehicles | 56 | 56 |
| Total property and equipment | 60135 | 65034 |
| Less: accumulated depreciation and amortization | (25100) | (28395) |
| Property and equipment, net | $35035 | $36639 |

---

Depreciation and amortization expense related to property and equipment for the three months ended March 31, 2024 and 2025 was $2.6 million and $3.4 million, respectively.

**4. Other Assets and Liabilities**

***Other Non-Current Assets***

Other non-current assets consisted of the following:

---

| | | |
|:---|:---|:---|
| **(in thousands)** | **December 31, 2024** | **March 31,<br>2025** |
| Deferred tax asset, net | $7976 | $7976 |
| Security deposits | 2605 | 3259 |
| Other assets | 3 | 3 |
| Other non-current assets | $10584 | $11238 |

---

------

**Confidential Treatment Requested by Pattern Group Inc.**

**Pursuant to 17 C.F.R. Section 200.83**

**Pattern Group Inc. and Subsidiaries** 

**Notes to Unaudited Condensed Consolidated Financial Statements** 

***Other Non-Current Liabilities***

Other non-current liabilities consisted of the following:

---

| | | |
|:---|:---|:---|
| **(in thousands)** | **December 31, 2024** | **March 31,<br>2025** |
| Payroll liabilities | $4885 | $4885 |
| Other liabilities | 418 | 1419 |
| Other non-current liabilities | $5303 | $6304 |

---

**5. Operating Leases**

The following table provides a summary of other information related to leases:

---

| | | |
|:---|:---|:---|
| | **Three Months Ended March 31,** | **Three Months Ended March 31,** |
| **(in thousands)** | **2024** | **2025** |
| Cash payments included in operating cash flows for lease arrangements | $1556 | $2107 |
| Right-of-use assets obtained in exchange for new operating lease liabilities | $2470 | $1106 |

---

**6. Credit Facilities**

The outstanding balance under the Company's revolving line of credit facility was $0 as of December 31, 2024 and March 31, 2025 and the amount available to draw to was $50.0 million as of December 31, 2024 and March 31, 2025. The revolving line of credit has a maturity date in March 2027 and will bear interest at a variable base rate plus an applicable margin ranging from 0.75% to 2.50%. The commitment fees on the unused portion range from 0.20% to 0.35%.

The Company's credit agreement contains various financial, affirmative and negative covenants. As of March 31, 2025, the Company was in compliance with all covenants outlined in the agreement.

**7. Convertible Preferred Stock**

In May 2020, 15,750,477 shares of Series A Preferred Stock were issued at an issuance price and liquidation preference of $3.32 per share, subject to an accruing preferred dividend of 17.5% per annum. Proceeds, net of issuance costs, totaled $52.1 million.

In September 2021, the Company issued 13,215,614 shares of Series B Preferred Stock at $17.01 per share (the "Series B Original Issue Price"). Proceeds, net of issuance costs, totaled $218.5 million.

In connection with the Series B Preferred Stock financing, the Company amended and restated its Certificate of Incorporation ("Certificate"). As a result of the modification of the Certificate, the dividend rights of the Series A Preferred Stock were terminated and the issue price was modified from $3.32 per share to $7.44 per share (the "Series A Adjusted Issue Price"). The Company accounted for these changes as a modification of the existing Series A Preferred Stock given the nature of the amendment and designs of the parties to have a value for value exchange of terms.

------

**Confidential Treatment Requested by Pattern Group Inc.**

**Pursuant to 17 C.F.R. Section 200.83**

**Pattern Group Inc. and Subsidiaries** 

**Notes to Unaudited Condensed Consolidated Financial Statements** 

The Series A and Series B Preferred stock (collectively, the "convertible preferred stock") outstanding consisted of the following:

---

| | | | | | |
|:---|:---|:---|:---|:---|:---|
| | **December 31, 2024** | **December 31, 2024** | **December 31, 2024** | **December 31, 2024** | **December 31, 2024** |
| **(in thousands, except per share data)** | **Shares authorized** | **Shares issued and outstanding** | **Issuance price per share** | **Aggregate liquidation preference** | **Net carrying value** |
| Series A Preferred Stock | 15750 | 15750 | $7.44 | $117184 | $52073 |
| Series B Preferred Stock | 13222 | 13216 | 17.01 | 283332 | 218528 |
| Total | 28972 | 28966 |  | $400516 | $270601 |

---

---

| | | | | | |
|:---|:---|:---|:---|:---|:---|
| | **March 31, 2025** | **March 31, 2025** | **March 31, 2025** | **March 31, 2025** | **March 31, 2025** |
| **(in thousands, except per share data)** | **Shares authorized** | **Shares issued and outstanding** | **Issuance price per share** | **Aggregate liquidation preference** | **Net carrying value** |
| Series A Preferred Stock | 15750 | 15750 | $7.44 | $117184 | $52073 |
| Series B Preferred Stock | 13222 | 13216 | 17.01 | 287769 | 218528 |
| Total | 28972 | 28966 |  | $404953 | $270601 |

---

Following the issuance of the Series B Preferred Stock, the Series A and Series B Preferred Stock contained the following terms:

***Dividends***

The holders of Series B Preferred Stock are entitled to cumulative dividends at a rate of 8.0% of the Series B Original Issue Price per share, if and when declared by the Company's board of directors. The holders of Series B Preferred Stock are entitled to receive dividends on a pari passu basis, prior to and in preference to any dividends to common stockholders. The Series B Preferred Stock had $58.4 million and $62.9 million of cumulative undeclared dividends as of December 31, 2024 and March 31, 2025, respectively.

In connection with the amended Certificate dated September 7, 2021, the terms for the Series A Preferred Stock were amended, and the right to receive cumulative dividends was terminated. Accordingly, the Series A Preferred Stock had no cumulative undeclared dividends as of December 31, 2024 and March 31, 2025. The holders of Series A Preferred Stock are entitled to receive any dividends on a pari passu basis to any dividends to common stockholders as may be declared by the board of directors.

There were no dividends declared or paid during the three months ended March 31, 2024 or 2025.

***Liquidation Preference***

In the event of (i) any liquidation, dissolution or winding up of the Company, (ii) the consummation of certain mergers or consolidations, (iii) certain change of control transactions, including an initial public offering, (each, a "Deemed Liquidation Event"), the holders of Series A and Series B Preferred Stock are entitled to receive a liquidation preference, on a pari passu basis, and prior and in preference to the holders of Founding Voting Preferred Stock, Founding Non-Voting Preferred Stock and common stock.

The holders of the Series A Preferred Stock are entitled to receive an amount equal to (i) (a) for the holders of the Series A Preferred Stock, an amount per share equal the Series A Adjusted Issue Price plus dividends declared but unpaid thereon, (b) for the holders of the Series B Preferred Stock, an amount per share equal to the Series B Original Issue Price per share, plus any dividends accrued but unpaid, whether or not declared, together with any other dividends declared but unpaid or (ii) such amount per share as would have been payable had all shares of Series A and Series B Preferred Stock been converted into common stock immediately prior a Deemed Liquidation Event. If the assets available for distribution are insufficient to pay such amounts, then the available assets will be distributed ratably among the holders of Series A and Series B Preferred Stock in proportion to the full amount each holder is otherwise entitled to receive.

------

**Confidential Treatment Requested by Pattern Group Inc.**

**Pursuant to 17 C.F.R. Section 200.83**

**Pattern Group Inc. and Subsidiaries** 

**Notes to Unaudited Condensed Consolidated Financial Statements** 

After payment to the holders of the Series A and Series B Preferred Stock, the remaining assets of the Company legally available for distribution shall be distributed among the holders of the Founding Voting Preferred Stock, Founding Non-Voting Preferred Stock and common stock in an amount per share equal to its full preferential amount plus all declared and unpaid dividends.

***Voting Rights***

The holders of each share of Series A and Series B Preferred Stock are entitled to one vote per each share of common stock on an as-converted basis.

The holders of Series A Preferred Stock, voting as a separate class, have the right to elect one director. The holders of Series B Preferred Stock, voting as a separate class, have the right to elect two directors. The holders of record of the shares of Founder Voting Preferred Stock, exclusively and as a separate class, have the right to elect nine directors. The holders of record of the shares of common stock and of any other class or series of voting stock (including the Series A Preferred Stock, Series B Preferred Stock and Founder Voting Preferred Stock), exclusively and voting together as a single class, shall be entitled to elect the balance of the total number of directors of the Company.

***Conversion Rights***

The holders of each share of convertible preferred stock have the option to convert each share of preferred stock at any time into a number of shares of common stock determined by dividing, for the Series A Preferred Stock, the Series A Adjusted Issue Price by the Series A Preferred Stock conversion price, and in the case of Series B Preferred Stock, the Series B Original Issue Price by the Series B Preferred Stock conversion price in effect at the time of conversion. The Series A Adjusted Issue Price and the Series B Original Issue Price are subject to adjustments for certain dilutive issuances, splits, combinations and other recapitalizations or reorganizations.

In addition, the Series B Preferred Stock have a special conversion ratio in connection with closing an initial public offering, direct listing or special purpose acquisition company transaction (any such transaction, an "Offering"). Each share of Series B Preferred Stock shall be convertible, at the option of the holder, in connection with an Offering, into a number of shares of common stock determined by dividing the Series B Original Issue Price by the lesser of (a) the Series B Preferred Stock conversion price then in effect and (b) the price per share of the Company's common stock sold in any such Offering (before discounts and commissions), multiplied by a percentage determined as the difference between 100% and the computed discount rate. As of January 1, 2025, the discount rate equaled 45% and increases 5% every six months thereafter, until December 31, 2026.

***Redemption***

The Series A and Series B Preferred Stock is contingently redeemable upon a Deemed Liquidation Events or sale of substantially all the assets of the Company. The convertible preferred stock is not mandatorily redeemable, but since a Deemed Liquidation Event would constitute a redemption event outside of the Company's control, all shares of the convertible preferred stock have been presented in mezzanine equity on the consolidated balance sheets.

In the event of a Deemed Liquidation Event, the Company is required to redeem shares of Series A and Series B Preferred Stock at the Series A Adjusted Issue Price and Series B Original Issue Price, respectively, (as adjusted for any dilutive issuances, splits, combinations and other recapitalizations or reorganizations). The carrying values of convertible preferred stock have not been adjusted to their liquidation preferences as these events have not occurred as of March 31, 2025. Carrying values will be adjusted to their liquidation preferences, inclusive of the Series B Preferred Stock preferred return, if and when it becomes probable that such events will occur.

------

**Confidential Treatment Requested by Pattern Group Inc.**

**Pursuant to 17 C.F.R. Section 200.83**

**Pattern Group Inc. and Subsidiaries** 

**Notes to Unaudited Condensed Consolidated Financial Statements** 

**8. Stockholders' Equity**

***Common Stock***

The Company has one class of common stock with a par value of $0.001. Each share of common stock is entitled to one vote. Holders of common stock are entitled to receive any dividends as may be declared by the board of directors.

***Preferred Stock***

As of March 31, 2025, 940,855 shares of Founder Voting Preferred Stock, $0.001 par value, were issued and outstanding and 85,851,519 shares of Founder Non-Voting Preferred Stock, $0.001 par value, were issued and outstanding (collectively, the "preferred stock"). Holders of the preferred stock are entitled to receive any dividends as may be declared by the board of directors on an as-converted basis with common stockholders. Each share of preferred stock has liquidation preferences similar to those of one share of common stock. Each holder of outstanding shares of Founder Voting Preferred Stock shall be entitled to 1,000 votes for each share of Founder Voting Preferred Stock held, voting together with holders of Series A and Series B Preferred Stock and common stock as a single class. The holders of record of the shares of Founder Voting Preferred Stock, exclusively and as a separate class, shall be entitled to elect nine directors of the Corporation. Each single share of Founder Voting Preferred Stock shall be convertible, at the option of the holder thereof, at any time and from time to time and without the payment of additional consideration by the holder thereof, into one fully paid and non-assessable share of common stock or Founder Non-Voting Preferred Stock. Each share of Founder Non-Voting Preferred Stock shall be convertible, at the option of the holder thereof, at any time and from time to time and without the payment of additional consideration by the holder thereof, into one fully paid and non-assessable share of common stock.

***Common Stock Authorized, Issued and Reserved***

The Company has reserved the following shares of common stock, on an as-converted basis for future issuance:

---

| | | |
|:---|:---|:---|
| **(in thousands)** | **December 31, 2024** | **March 31,<br>2025** |
| Convertible preferred stock | 115758 | 115758 |
| Outstanding RSUs | 17589 | 27592 |
| Shares available under the 2019 Equity Incentive Plan | 2109 | 919 |
| Total shares of common stock reserved | 135456 | 144269 |
| Common shares outstanding | 3799 | 3799 |
| Authorized but not reserved | 1032 | 1032 |
| Total common shares authorized | 140287 | 149100 |

---

**9. Stock-Based Compensation**

***2018 and 2019 Stock Plans***

In September 2018, the board of directors adopted the 2018 Equity Incentive Plan (the "2018 Plan"). Under the 2018 Plan, the board of directors may grant stock options, restricted stock, RSUs, stock appreciation rights or a dividend equivalent to eligible employees, officers, non-employee directors and consultants. On January 28, 2019, the stockholders of Pattern Inc. contributed all shares of Pattern Inc. to Pattern Group Inc. in exchange for shares in Pattern Group Inc. As a result of this contribution and exchange, all outstanding RSUs were transferred to Pattern Group Inc. and the 2018 Plan was terminated. In January 2019, Pattern Group Inc. adopted the 2019 Equity Incentive Plan (as amended, the "2019 Plan"). Common stock purchased under the 2019 Plan is subject to certain restrictions, including the right of first refusal by the Company for sale or transfer of shares to outside parties.

The Company grants RSUs to its employees, directors and advisors under the 2019 Plan. These RSUs include both service-based and performance-based vesting conditions. The service-based vesting condition for these awards is generally satisfied by rendering continuous service, generally for 4 years, during which time a quarter of the

------

**Confidential Treatment Requested by Pattern Group Inc.**

**Pursuant to 17 C.F.R. Section 200.83**

**Pattern Group Inc. and Subsidiaries** 

**Notes to Unaudited Condensed Consolidated Financial Statements** 

award vest annually. The performance-based vesting condition is satisfied upon the sale of the Company's common stock upon the consummation of a firm commitment underwritten initial public offering pursuant to an effective registration statement under the Securities Act or a sale event, which constitutes a change in the ownership or effective control of the Company or in the ownership of a substantial portion of the assets ("Liquidity Event").

***Executive Incentive Agreement***

In February 2025, the board of directors approved a stand-alone restricted stock unit agreement for the Company's Chief Executive Officer ("CEO"). This agreement grants the CEO 8,813,161 RSUs subject to certain performance and market conditions. The awards have a contractual term of the earlier of (a) December 31, 2026 if the Company's Initial Public Offering ("IPO") has not closed on or before such date, (b) the date that is 10 years following the grant date of the RSUs and (c) the date on which the recipient ceases to serve as the Company's CEO or Chairman of the Board. The RSUs contingently vest in one-seventh increments upon the achievement of the applicable milestones, which are detailed below:

Milestone One: The closing of the Company's IPO on or prior to December 31, 2026.

Milestone Two: Maintaining an average closing price per share for 120 consecutive trading days of 2x the Company's IPO price after at least 18 months from the IPO date.

Milestone Three: Maintaining an average closing price per share for 120 consecutive trading days of 3x the Company's IPO price after at least 18 months from the IPO date.

Milestone Four: Maintaining an average closing price per share for 120 consecutive trading days of 4x the Company's IPO price after at least 18 months from the IPO date.

Milestone Five: Maintaining an average closing price per share for 120 consecutive trading days of 5x the Company's IPO price after at least 18 months from the IPO date.

Milestone Six: Maintaining an average closing price per share for 120 consecutive trading days of 6x the Company's IPO price after at least 18 months from the IPO date.

Milestone Seven: Maintaining an average closing price per share for 120 consecutive trading days of 8x the Company's IPO price after at least 18 months from the IPO date.

The Company determined the fair values and derived service period (median time to vest) for each tranche of the February 2025 award using valuation techniques which considered the estimates of a Monte Carlo simulation which was computed with the assistance of a third-party valuation specialist.

The Monte Carlo simulation for the February 2025 award used an expected volatility of 70.0% and a risk-free interest rate of 4.0%. The enterprise value of the Company was determined using both the income and market approach valuation methodologies, taking into consideration prevailing market conditions. The income approach, specifically a discounted cash flow analysis ("DCF"), estimates the value based on the projected future cash flows the Company is expected to generate. These future cash flows are discounted to present value using a discount rate derived from the Company's cost of capital, which reflects its risk profile and stage of development.

The market approach estimates the value by comparing the Company to publicly traded peers operating in similar industries. From these comparable companies, representative market multiples were selected and applied to the Company's financial metrics to derive an estimate of enterprise value.

The resulting equity values derived from both approaches were then allocated among the various share classes using a hybrid method that incorporates both the Scenario-Based Method ("SBM"), also known as the Probability-Weighted Expected Return Method ("PWERM"), and the Option Pricing Method ("OPM"). This hybrid methodology was selected to reflect potential future outcomes, including a scenario in which the Company completes an initial public offering ("IPO") and another in which it remains privately held.

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**Confidential Treatment Requested by Pattern Group Inc.**

**Pursuant to 17 C.F.R. Section 200.83**

**Pattern Group Inc. and Subsidiaries** 

**Notes to Unaudited Condensed Consolidated Financial Statements** 

Under the PWERM, equity values are estimated based on an analysis of potential future enterprise values in an IPO scenario, taking into account the expected timing and pricing of such an event. For each scenario, equity value is allocated to the share classes under the assumption that each class will act to maximize its economic value with respect to conversion. The scenario-based values are then weighted according to the estimated probability of each scenario occurring and discounted to present value.

The OPM is used to estimate the value of the equity classes assuming the Company remains private. This method treats common equity as call options on the Company's enterprise value, with exercise prices based on the liquidation preferences of the Series A and Series B Preferred Stock. Under this framework, common equity has value only to the extent that the total equity value exceeds the aggregate liquidation preferences at the time of a liquidity event. Once the liquidation preferences are met, any excess value is shared among the equity holders according to their economic rights, including the impact of conversion features. The analysis also considers the impact of outstanding RSUs.

After the equity values are allocated to the respective share classes, discounts for lack of marketability ("DLOM") are applied to arrive at the fair value of the common equity. The DLOM reflects the reduced liquidity of private company stock and incorporates factors such as limited transferability, expected holding periods, transaction costs, and market volatility, all of which contribute to a lower fair value compared to a freely tradable security. Estimated volatility ranged from 41% to 46%, and the discount for lack of marketability ranged from 6% to 14%.

***Restricted Stock Units***

The Company records stock-based compensation expense in connection with RSUs based on the fair market value of its common stock on the grant date using the accelerated attribution method when it is probable the performance-based vesting condition will be achieved. As of March 31, 2025, no stock-based compensation expense was recognized for the RSUs as a Liquidity Event had not occurred. The total unrecognized stock-based compensation expense related to these awards was $150.1 million as of March 31, 2025. If the performance-based vesting condition had been satisfied on March 31, 2025, the Company would have recognized stock-based compensation expense of $86.2 million, and unrecognized stock-based compensation expense of $63.9 million would have been recognized over a weighted-average remaining requisite service period of 3.21 years.

The following table summarizes the RSU activity:

---

| | | |
|:---|:---|:---|
| **(in thousands, except per share fair values)** | **RSUs** | **Weighted-Average Grant Date Fair Value** |
| Outstanding at December 31, 2023  | 15149 | $3.26 |
| Granted | 262 | 9.69 |
| Cancelled/Forfeited | (317) | 6.30 |
| Outstanding at March 31, 2024  | 15094 | $3.30 |

---

---

| | | |
|:---|:---|:---|
| **(in thousands, except per share fair values)** | **RSUs** | **Weighted-Average Grant Date Fair Value** |
| Outstanding at December 31, 2024  | 17589 | $4.88 |
| Granted | 10057 | 6.43 |
| Cancelled/Forfeited | (54) | 8.66 |
| Outstanding at March 31, 2025 | 27592 | $5.44 |

---

**10. Provision for Income Taxes**

The Company calculated the year-to-date income tax provision by applying the estimated annual effective tax rate to the year-to-date pre-tax income for each applicable jurisdiction and adjusted for discrete tax items in the period. The Company's income tax expense was $6.1 million and $8.0 million for the three months ended March 31, 2024 and 2025, respectively.

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**Confidential Treatment Requested by Pattern Group Inc.**

**Pursuant to 17 C.F.R. Section 200.83**

**Pattern Group Inc. and Subsidiaries** 

**Notes to Unaudited Condensed Consolidated Financial Statements** 

Valuation allowances are provided when it is more-likely-than-not that some or all of the deferred income tax assets may not be realized. In assessing the need for a valuation allowance, the Company has considered its historical levels of income, expectations of future taxable income and ongoing tax planning strategies. The Company has determined that for various foreign jurisdictions in which it operates, that a full valuation allowance is required for the foreign net deferred tax assets in those countries, which are comprised mostly of net operating loss carryforwards. Realization of the deferred tax assets in those historical loss foreign jurisdictions is dependent primarily upon future taxable income in each.

**11. Commitments and Contingencies**

***Purchase Commitments***

As of March 31, 2025, the Company did not have any future payments under non-cancelable purchase obligations.

***Legal Matters***

From time to time, the Company may become involved in legal proceedings arising in the ordinary course of business. Loss contingencies are recorded when it is probable that a liability has been incurred and the amount of the loss can be reasonably estimated. Material contingencies are disclosed when it is believed a loss is not probable but reasonably possible. Accounting for contingencies requires the use of judgment related to both the likelihood of a loss and the estimate of the amount or range of loss. The Company is not presently a party to any legal proceedings, that if determined adversely to the Company, would individually or in the aggregate have a materially adverse effect on the business, results of operations, financial condition or cash flows.

***Indemnification***

In the ordinary course of business, the Company may provide indemnifications of varying scope and terms to customers, brand partners, lessors, investors, directors, officers, employees and other parties with respect to certain matters. Indemnification may include losses from the breach of such agreements, services the Company provides or third-party intellectual property infringement claims. These indemnifications may survive termination of the underlying agreement and the maximum potential amount of future indemnification payments may not be subject to a cap.

**12. Related-Party Lease Agreement**

***iServe Investments, LLC***

The Company leases certain office and warehouse space from a related party, iServe Investments, LLC, which is wholly owned by two majority stockholders. Total lease cost and related expenses for the lease was not material for the three months ended March 31, 2024 and 2025.

**13. Segment Information** 

The Company manages its business on a consolidated basis and operates as a single operating and reportable segment. The Company primarily derives its revenue in the United States by selling products to customers via online marketplaces.

The Company's chief operating decision maker ("CODM") is the Company's Chief Executive Officer, who reviews financial information on a consolidated basis. The CODM uses consolidated net income to assess financial performance and allocate resources. Net income is used by the CODM to make key operating decisions. The CODM does not review assets in evaluating the results of the reportable segment.

The following table presents selected financial information with respect to the Company's single operating and reportable segment:

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**Confidential Treatment Requested by Pattern Group Inc.**

**Pursuant to 17 C.F.R. Section 200.83**

**Pattern Group Inc. and Subsidiaries** 

**Notes to Unaudited Condensed Consolidated Financial Statements** 

---

| | | |
|:---|:---|:---|
| | **Three Months Ended March 31,** | **Three Months Ended March 31,** |
| **(in thousands)** | **2024** | **2025** |
| Revenues | $410672 | $540406 |
| Significant expenses: |  |  |
| &nbsp;&nbsp;&nbsp;Cost of goods sold | 226935 | 304600 |
| &nbsp;&nbsp;&nbsp;Fulfillment<sup>(1)</sup> | 63915 | 80730 |
| &nbsp;&nbsp;&nbsp;Marketplace commissions<sup>(2)</sup> | 58004 | 77553 |
| &nbsp;&nbsp;&nbsp;Sales, general and administrative<sup>(3)</sup> | 32649 | 40342 |
| &nbsp;&nbsp;&nbsp;Technology<sup>(4)</sup> | 5854 | 7773 |
| &nbsp;&nbsp;&nbsp;Interest income | (1249) | (1559) |
| &nbsp;&nbsp;&nbsp;Interest expense | 23 | 42 |
| &nbsp;&nbsp;&nbsp;Other income, net | 819 | 161 |
| &nbsp;&nbsp;&nbsp;Provision for income taxes | 6065 | 7962 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Net income | $17657 | $22802 |

---

_____________

(1) Fulfillment costs include costs incurred from third-party fulfillment centers and cost to operate and staff the Company's fulfillment centers.

(2) Marketplace Commissions includes referral fees charged by the various online marketplaces.

(3) Sales, general and administrative relate to employee headcount and other selling and general administrative costs.

(4) Technology represents items included in research in development within the Consolidated Statement of Operations and the amortization of capitalized internally developed software costs.

See Note 2—Summary of Significant Accounting Policies for additional information about revenue disaggregation.

The Company's long-lived tangible assets, as well as the Company's operating lease right-of-use assets recognized on the Consolidated Balance Sheets were located as follows:

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| | | |
|:---|:---|:---|
| **(in thousands)** | **December 31, 2024** | **March 31,<br>2025** |
| U.S. | $53399 | $54459 |
| International | 9513 | 9321 |

---

**14. Subsequent Events**

Subsequent events have been evaluated through June 2, 2025, the date the financial statements were available to be issued.

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**Confidential Treatment Requested by Pattern Group Inc.**

**Pursuant to 17 C.F.R. Section 200.83**

 **&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;** Shares

![patternlogoa.jpg](patternlogoa.jpg)

**Pattern Group Inc.**

**Series A Common Stock**

Preliminary Prospectus

---

| | |
|:---|:---|
| **Goldman Sachs & Co. LLC\*** | **J.P. Morgan\*** |

---

---

| | |
|:---|:---|
| **Evercore ISI** | **Jefferies** |

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| | | | | | |
|:---|:---|:---|:---|:---|:---|
| **Baird** | **BMO Capital Markets** | **KeyBanc Capital Markets** | **Needham & Company** | **Stifel** | **William Blair** |

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**\*In alphabetical order. &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;** 

**, 2025**

**Through and including&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; , 2025 (the 25**<sup>th</sup> **day after the date of this prospectus), all dealers effecting transactions in these securities, whether or not participating in this offering, may be required to deliver a prospectus. This is in addition to the dealers' obligation to deliver a prospectus when acting as underwriters and with respect to their unsold allotments or subscriptions.**

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**Confidential Treatment Requested by Pattern Group Inc.**

**Pursuant to 17 C.F.R. Section 200.83**

**PART II**

**INFORMATION NOT REQUIRED IN PROSPECTUS**

**Item 13. Other Expenses of Issuance and Distribution.**

The following table sets forth all expenses to be paid by us, other than underwriting discounts and commissions, in connection with this offering. All amounts shown are estimates except for the SEC registration fee, the FINRA filing fee and the&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;listing fee.

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| | |
|:---|:---|
| | **Amount** |
| SEC registration fee | $&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; \* |
| FINRA filing fee | \* |
| Listing fee | \* |
| Printing and engraving | \* |
| Legal fees and expenses | \* |
| Accounting fees and expenses | \* |
| Transfer agent and registrar fees | \* |
| Miscellaneous | \* |
| Total | $&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; \* |

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__________________

\*To be provided by amendment.

**Item 14. Indemnification of Directors and Officers.**

Section 145 of the DGCL authorizes a corporation's board of directors to grant, and authorizes a court to award, indemnity to officers, directors and other corporate agents.

We expect to adopt an amended and restated certificate of incorporation in connection with this offering, which will become effective immediately prior to the completion of this offering, and which will contain provisions that limit the liability of our directors and officers for monetary damages to the fullest extent permitted by Delaware law. Consequently, our directors and officers will not be personally liable to us or our stockholders for monetary damages for any breach of fiduciary duties as directors and officers, except liability for the following:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• any breach of their duty of loyalty to our company or our stockholders;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• any act or omission not in good faith or that involves intentional misconduct or a knowing violation of law;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• for our directors, unlawful payments of dividends or unlawful stock repurchases, or redemptions as provided in Section 174 of the DGCL; or

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• any transaction from which they derived an improper personal benefit; or

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• for our officers, any derivative action by or in the right of the corporation.

Any amendment to, or repeal of, these provisions will not eliminate or reduce the effect of these provisions in respect of any act, omission or claim that occurred or arose prior to that amendment or repeal. If the DGCL is amended to provide for further limitations on the personal liability of directors and officers of corporations, then the personal liability of our directors and officers will be further limited to the greatest extent permitted by the DGCL.

In addition, we expect to adopt amended and restated bylaws in connection with this offering, which will become effective immediately prior to the completion of this offering and which will provide that we will indemnify, to the fullest extent permitted by law, any person who is or was a party or is threatened to be made a party to any action, suit or proceeding by reason of the fact that he or she is or was one of our directors or officers or is or was serving at our request as a director or officer of another corporation, partnership, joint venture, trust or other enterprise. Our amended and restated bylaws are expected to provide that we may indemnify to the fullest extent permitted by law any person who is or was a party or is threatened to be made a party to any action, suit or

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**Confidential Treatment Requested by Pattern Group Inc.**

**Pursuant to 17 C.F.R. Section 200.83**

proceeding by reason of the fact that he or she is or was one of our employees or agents or is or was serving at our request as an employee or agent of another corporation, partnership, joint venture, trust or other enterprise. Our amended and restated bylaws will also provide that we must advance expenses incurred by or on behalf of a director or officer in advance of the final disposition of any action or proceeding, subject to very limited exceptions.

Further, prior to the completion of this offering, we expect to enter into indemnification agreements with each of our directors and executive officers that may be broader than the specific indemnification provisions contained in the DGCL. These indemnification agreements will require us, among other things, to indemnify our directors and executive officers against liabilities that may arise by reason of their status or service. These indemnification agreements will also require us to advance all expenses incurred by the directors and executive officers in investigating or defending any such action, suit or proceeding. We believe that these agreements are necessary to attract and retain qualified individuals to serve as directors and executive officers.

The limitation of liability and indemnification provisions that are expected to be included in our amended and restated certificate of incorporation, amended restated bylaws and in indemnification agreements that we enter into with our directors and executive officers may discourage stockholders from bringing a lawsuit against our directors and executive officers for breach of their fiduciary duties. They may also reduce the likelihood of derivative litigation against our directors and executive officers, even though an action, if successful, might benefit us and other stockholders. Further, a stockholder's investment may be harmed to the extent that we pay the costs of settlement and damage awards against directors and executive officers as required by these indemnification provisions. At present, we are not aware of any pending litigation or proceeding involving any person who is or was one of our directors, officers, employees or other agents or is or was serving at our request as a director, officer, employee or agent of another corporation, partnership, joint venture, trust or other enterprise, for which indemnification is sought, and we are not aware of any threatened litigation that may result in claims for indemnification.

We have obtained insurance policies under which, subject to the limitations of the policies, coverage is provided to our directors and executive officers against losses arising from claims made by reason of breach of fiduciary duty or other wrongful acts as a director or executive officer, including claims relating to public securities matters, and to us with respect to payments that may be made by us to these directors and executive officers pursuant to our indemnification obligations or otherwise as a matter of law.

The underwriting agreement to be filed as Exhibit 1.1 to this registration statement provides for indemnification by the underwriters of the Registrant and its officers and directors for certain liabilities arising under the Securities Act and otherwise.

**Item 15. Recent Sales of Unregistered Securities.**

Since January 1, 2022, we made sales of the following unregistered securities:

***Restricted Stock Unit Issuances***

Since January 1, 2022, we granted to our employees, consultants and other service providers RSUs representing an aggregate of&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; shares of common stock under our 2019 Plan and Milestone RSUs representing an aggregate of 8,813,161 shares of common stock pursuant to a Stand-Alone Restricted Stock Unit Award Agreement.

Since January 1, 2022, we issued and sold to our employees, consultants and other service providers an aggregate of&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; shares of common stock upon the vesting and settlement of RSUs granted under our 2019 Plan.

We believe these transactions were exempt from registration under the Securities Act in reliance upon Section 4(a)(2) of the Securities Act or Regulation D promulgated thereunder or Rule 701 promulgated under Section 3(b) of the Securities Act ("Rule 701") as transactions by an issuer not involving any public offering or pursuant to benefit plans and contracts relating to compensation as provided under Rule 701. The recipients of the securities in each of these transactions acquired the securities for investment only and not with a view to or for sale in connection with any distribution thereof, and appropriate legends were placed upon the stock certificates issued in these transactions.

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**Confidential Treatment Requested by Pattern Group Inc.**

**Pursuant to 17 C.F.R. Section 200.83**

All recipients had adequate access, in each transaction or through their relationships with us, to information about Pattern.

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**Confidential Treatment Requested by Pattern Group Inc.**

**Pursuant to 17 C.F.R. Section 200.83**

**Item 16. Exhibits and Financial Statement Schedules.**

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a)Exhibits.

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| | |
|:---|:---|
| **Exhibit Number** | **Exhibit Title** |
| 1.1\*\*\* | Form of Underwriting Agreement. |
| 3.1\*\* | Amended and Restated Certificate of Incorporation of the Registrant, as currently in effect. |
| 3.2\*\* | Certificate of Amendment to the Amended and Restated Certificate of Incorporation of the Registrant, as filed on January 31, 2024, as currently in effect. |
| 3.3\*\* | Second Certificate of Amendment to the Amended and Restated Certificate of Incorporation of the Registrant, as filed on November 27, 2024, as currently in effect. |
| 3.4\*\* | Certificate of Amendment to the Amended and Restated Certificate of Incorporation of the Registrant, as filed on February 25, 2025, as currently in effect. |
| 3.5\* | Certificate of Amendment to the Amended and Restated Certificate of Incorporation of the Registrant, as filed on May 28, 2025, as currently in effect. |
| 3.6\*\*\* | Form of Amended and Restated Certificate of Incorporation of the Registrant, to be in effect immediately prior to the completion of this offering. |
| 3.7\*\* | Bylaws of the Registrant, as currently in effect. |
| 3.8\*\*\* | Form of Amended and Restated Bylaws of the Registrant, to be in effect immediately prior to the completion of this offering. |
| 4.1\*\*\* | Form of Series A common stock certificate of the Registrant. |
| 4.2\*\* | Amended and Restated Investors' Rights Agreement, dated September 28, 2021, by and among the Registrant and certain of its stockholders. |
| 5.1\*\*\* | Opinion of Goodwin Procter LLP. |
| 10.1\*\*\* | Form of Indemnification Agreement between the Registrant and each of its directors and executive officers. |
| 10.2#\*\* | 2019 Equity Incentive Plan, as amended, and forms of award agreements thereunder. |
| 10.3#\*\*\* | 2025 Stock Option and Incentive Plan, and forms of award agreements thereunder. |
| 10.4#\*\*\* | 2025 Employee Stock Purchase Plan. |
| 10.5#\*\* | Offer Letter, dated November 19, 2020, by and between the Registrant and Jason Beesley. |
| 10.6†\*\* | Third Amended and Restated Credit Agreement, dated July 16, 2019, by and among the Registrant, JPMorgan Chase Bank, N.A., as Administrative Agent, and the Lenders named therein. |
| 10.7\*\* | First Amendment to Third Amended and Restated Credit Agreement, dated November 8, 2019, by and among the Registrant, JPMorgan Chase Bank, N.A., as Administrative Agent, and the Lenders named therein. |
| 10.8\*\* | Second Amendment to Third Amended and Restated Credit Agreement, dated April 13, 2020, by and among the Registrant, JPMorgan Chase Bank, N.A., as Administrative Agent, and the Lenders named therein. |
| 10.9\*\* | Third Amendment to Third Amended and Restated Credit Agreement, dated June 3, 2020, by and among the Registrant, JPMorgan Chase Bank, N.A., as Administrative Agent, and the Lenders named therein. |
| 10.10†\*\* | Fourth Amendment to Third Amended and Restated Credit Agreement, dated March 31, 2021, by and among the Registrant, JPMorgan Chase Bank, N.A., as Administrative Agent, and the Lenders named therein. |
| 10.11\*\* | Fifth Amendment to Third Amended and Restated Credit Agreement, dated September 27, 2021, by and among the Registrant, JPMorgan Chase Bank, N.A., as Administrative Agent, and the Lenders named therein. |

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**Confidential Treatment Requested by Pattern Group Inc.**

**Pursuant to 17 C.F.R. Section 200.83**

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| | |
|:---|:---|
| 10.12†\* | Sixth Amendment to Third Amended and Restated Credit Agreement, dated March 17, 2022, by and among the Registrant, JPMorgan Chase Bank, N.A., as Administrative Agent, and the Lenders named therein. |
| 10.13†\*\* | Seventh Amendment to Third Amended and Restated Credit Agreement, dated January 24, 2023, by and among the Registrant, JPMorgan Chase Bank, N.A., as Administrative Agent, and the Lenders named therein. |
| 10.14†\*\* | Eighth Amendment to Third Amended and Restated Credit Agreement, dated March 28, 2024, by and among the Registrant, JPMorgan Chase Bank, N.A., as Administrative Agent, and the Lenders named therein. |
| 10.15†\*\* | Lease by and between the Registrant and Innovation Pointe Three, LLC, dated May 5, 2020; First Amendment to Lease Agreement, dated February 16, 2021; Second Amendment to Lease Agreement, dated July 27, 2023.  |
| 10.16†\*\* | Sublease by and between the Registrant and Route App, Inc., dated July 27, 2023. |
| 10.17\*\* | Lease by and between the Registrant and Dugan Financing LLC, dated July 24, 2020; First Lease Amendment, dated March 3, 2021. |
| 10.18†\*\* | Standard Industrial Lease Agreement by and between the Registrant and Columbia Nevada Carey Industrial, LLC, dated June 19, 2024. |
| 21.1\*\*\* | Subsidiaries of the Registrant. |
| 23.1\*\*\* | Consent of Deloitte & Touche LLP, independent registered public accounting firm. |
| 23.2\*\*\* | Consent of Goodwin Procter LLP (included in Exhibit 5.1). |
| 24.1\*\*\* | Power of Attorney (included on signature page to this Registration Statement on Form S-1). |
| 107\*\*\* | Filing Fee Table. |

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__________________

\*Filed herewith.

\*\*&nbsp;&nbsp;&nbsp;&nbsp; Previously filed.

\*\*\* To be filed by amendment.

#Indicates management contract or compensatory plan, contract or agreement.

†&nbsp;&nbsp;&nbsp;&nbsp; Certain schedules and exhibits to this agreement have been omitted pursuant to Item 601(a)(5) of Regulation S-K. A copy of any omitted schedule and/or exhibit will be furnished supplementally to the SEC upon request.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b)Financial Statement Schedules.

All schedules are omitted because the required information is either not present, not present in material amounts or is presented within the consolidated financial statements included in the prospectus that is part of this registration statement.

**Item 17. Undertakings.**

The undersigned Registrant hereby undertakes to provide to the underwriters at the closing specified in the underwriting agreement certificates in such denominations and registered in such names as required by the underwriters to permit prompt delivery to each purchaser.

Insofar as indemnification by the Registrant for liabilities arising under the Securities Act may be permitted to directors, officers and controlling persons of the Registrant pursuant to the foregoing provisions, or otherwise, the Registrant has been advised that in the opinion of the Securities and Exchange Commission such indemnification is against public policy as expressed in the Securities Act and is, therefore, unenforceable. In the event that a claim for indemnification against such liabilities (other than the payment by the Registrant of expenses incurred or paid by a director, officer or controlling person of the Registrant in the successful defense of any action, suit or proceeding) is asserted by such director, officer or controlling person in connection with the securities being registered, the Registrant will, unless in the opinion of its counsel the matter has been settled by controlling precedent, submit to a court of appropriate jurisdiction the question whether such indemnification by it is against public policy as expressed in the Securities Act and will be governed by the final adjudication of such issue.

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**Confidential Treatment Requested by Pattern Group Inc.**

**Pursuant to 17 C.F.R. Section 200.83**

The undersigned Registrant hereby undertakes that:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(i)For purposes of determining any liability under the Securities Act, the information omitted from the form of prospectus filed as part of this registration statement in reliance upon Rule 430A and contained in a form of prospectus filed by the Registrant pursuant to Rule 424(b)(1) or (4) or 497(h) under the Securities Act shall be deemed to be part of this registration statement as of the time it was declared effective.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(ii)For the purpose of determining any liability under the Securities Act, each post-effective amendment that contains a form of prospectus shall be deemed to be a new registration statement relating to the securities offered therein, and the offering of such securities at that time shall be deemed to be the initial bona fide offering thereof.

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**Confidential Treatment Requested by Pattern Group Inc.**

**Pursuant to 17 C.F.R. Section 200.83**

**SIGNATURES**

Pursuant to the requirements of the Securities Act of 1933, as amended, the Registrant has duly caused this Registration Statement to be signed on its behalf by the undersigned, thereunto duly authorized, in Lehi, Utah on&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; , 2025.

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| | |
|:---|:---|
| **PATTERN GROUP INC.** | **PATTERN GROUP INC.** |
| By: |  |
| Name: | David Wright |
| Title: | Chief Executive Officer |

---

**POWER OF ATTORNEY**

KNOW ALL PERSONS BY THESE PRESENTS, that each person whose signature appears below constitutes and appoints David Wright, Melanie Alder, Jason Beesley and Benjamin M. Craven, and each of them, as his or her true and lawful attorneys-in-fact and agents, with full power of substitution and resubstitution, for him or her and in his or her name, place and stead, in any and all capacities, to sign the Registration Statement on Form S-1 of Pattern Group Inc., any or all amendments (including post-effective amendments) thereto and any new registration statement with respect to the offering contemplated thereby filed pursuant to Rule 462(b) of the Securities Act of 1933, as amended, and to file the same, with all exhibits thereto, and other documents in connection therewith, with the Securities and Exchange Commission, granting unto said attorneys-in-fact and agents full power and authority to do and perform each and every act and thing requisite or necessary to be done in connection therewith and about the premises, as fully to all intents and purposes as he or she might or could do in person, hereby ratifying and confirming all that said attorneys-in-fact and agents, or their, his or her substitute or substitutes, may lawfully do or cause to be done by virtue hereof.

Pursuant to the requirements of the Securities Act of 1933, as amended, this registration statement on Form S-1 has been signed by the following persons in the capacities and on the dates indicated.

---

| | | |
|:---|:---|:---|
| **Signature** | **Title** | **Date** |
| | Co-founder, Chief Executive Officer and Director<br>*(Principal Executive Officer)* | |
| David Wright | Co-founder, Chief Executive Officer and Director<br>*(Principal Executive Officer)* | |
| | Co-founder, Chief Strategy Officer and Director | |
| Melanie Alder | Co-founder, Chief Strategy Officer and Director | |
| | Chief Financial Officer<br>*(Principal Financial and Accounting Officer)* | |
| Jason Beesley | Chief Financial Officer<br>*(Principal Financial and Accounting Officer)* | |
| | Director | |
| Daniel Gay | Director | |
| | Director | |
| John Bailey | Director | |
| | Director | |
| Scott Hilton | Director | |
| | Director | |
| Susan Taylor | | |

---

## Exhibit 3.5

**Exhibit 3.5**

---

| | |
|:---|:---|
| <u>Delaware</u> | |
| <u>Delaware</u> | Page 1 |
| <u>Delaware</u> | |

---

The First State

***I, CHARUNI PATIBANDA-SANCHEZ, SECRETARY OF STATE OF THE STATE OF DELAWARE, DO HEREBY CERTIFY THE ATTACHED IS A TRUE AND CORRECT COPY OF THE CERTIFICATE OF AMENDMENT OF "PATTERN GROUP INC.", FILED IN THIS OFFICE ON THE TWENTY-EIGHTH DAY OF MAY, A.D. 2025, AT 3:48 O`CLOCK P.M.***

![logoandsignaturea.jpg](logoandsignaturea.jpg)

------

**CERTIFICATE OF AMENDMENT**

**OF THE**

**AMENDED AND RESTATED**

**CERTIFICATE OF INCORPORATION**

**OF**

**PATTERN GROUP INC.**

(Pursuant to Sections 242 of the

General Corporation Law of the State of Delaware)

Pattern Group Inc., a corporation organized and existing under the laws of the State of Delaware (the *"'Corporation "),* does hereby certify that:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**1.&nbsp;&nbsp;&nbsp;&nbsp;**The Amended and Restated Certificate of Incorporation of the Corporation

has been amended as follows by replacing the first sentence of Article FOURTH as it now exists with the following:

The total number of shares of all classes of stock which the Corporation shall have authority to issue is (i) 154,100,109 shares of Common Stock, $0,001 par value per share **("Common Stock")** and (ii) 117,840,936 shares of Preferred Stock, $0,001 par value per share **("Preferred Stock").**

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**2.&nbsp;&nbsp;&nbsp;&nbsp;**This Certificate of Amendment has been duly adopted by the board of directors and stockholders of the Corporation in accordance with the applicable provisions of Sections 228 and 242 of the General Corporation Law of the State of Delaware.

IN WITNESS WHEREOF, this Certificate of Amendment has been executed by the President and Chief Executive Officer of the Corporation this 28th day of May, 2025.

---

| | |
|:---|:---|
| **PATTERN GROUP INC.** | **PATTERN GROUP INC.** |
| By: | /s/ David Wright |
| Name: | David Wright |
| Title: | President and CEO |

---

## Exhibit 10.12

**Exhibit 10.12**

**SIXTH AMENDMENT TO**

**THIRD AMENDED AND RESTATED CREDIT AGREEMENT**

THIS **SIXTH AMENDMENT** to Third Amended and Restated Credit Agreement (this "**Amendment**") is entered into as of March 17, 2022, by and between Covalent Group, Inc., a Delaware corporation (the "**Parent Borrower**"), Pattern Inc. (f/k/a iServe Products, Inc.), a Utah corporation (the "**Initial Borrower**"), and Borderless Distribution, LLC, a Utah limited liability company ("**Borderless Distribution**" and collectively with Parent Borrower and the Initial Borrower, the "**Borrowers**"), the other Loan Parties party hereto, the Lenders party hereto and JPMORGAN CHASE BANK, N.A., as Administrative Agent (in such capacity, "**Administrative Agent**").

**RECITALS**

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**A.&nbsp;&nbsp;&nbsp;&nbsp;**Administrative Agent, Lenders, the Loan Parties and Borrowers have entered into that certain Third Amended and Restated Credit Agreement dated as of July 16, 2019 (as amended by that certain First Amendment to Third Amended and Restated Credit Agreement dated November 8, 2019, by that certain Second Amendment to Third Amended and Restated Credit Agreement dated as of April 13, 2020, by that certain Third Amendment to Third Amended and Restated Credit Agreement dated as of June 3, 2020, by that certain Fourth Amendment to Third Amended and Restated Credit Agreement dated as of March 31, 2021, by that certain Fifth Amendment to Third Amended and Restated Credit Agreement dated as of September 27, 2021 and as amended from time to time, the "**Credit Agreement**").

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**B.&nbsp;&nbsp;&nbsp;&nbsp;**Lenders have extended credit to Borrowers for the purposes permitted in the Credit Agreement.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**C.&nbsp;&nbsp;&nbsp;&nbsp;**The Borrowers have requested that the Lenders increase the Revolving Commitment up to an aggregate principal amount of $100,000,000 and terminate the Term A Loan Commitment existing prior to giving effect to this Amendment.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**D.&nbsp;&nbsp;&nbsp;&nbsp;**Borrowers, the Loan Parties, the Administrative Agent and the Lenders have agreed to amend certain provisions of the Credit Agreement, but only to the extent, in accordance with the terms, subject to the conditions and in reliance upon the representations and warranties set forth below.

**AGREEMENT**

**NOW, THEREFORE,** in consideration of the foregoing recitals and other good and valuable consideration, the receipt and adequacy of which is hereby acknowledged, and intending to be legally bound, the parties hereto agree as follows:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**1.&nbsp;&nbsp;&nbsp;&nbsp;Definitions.** Capitalized terms used but not defined in this Amendment shall have the meanings given to them in the Credit Agreement.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**2.&nbsp;&nbsp;&nbsp;&nbsp;Limited Waiver**. Effective as of the date of this Amendment, the Administrative Agent and the Lenders hereby waive the Events of Default arising under Articles VII(c), (d) and (e) (as applicable) of the Credit Agreement as a result of the breach of (a) Section 5.12(a) of the Credit Agreement caused by the failure of the Loan Parties to cause Borderless Freight LLC, a Utah limited liability company ("**Borderless Freight**") and AMP Media Systems, Inc., a Delaware corporation ("**AMP Media**") to become Loan Parties by executing a Joinder Agreement, (b) Section 5.12(b) of the Credit Agreement caused by the failure of the Loan Parties to (a) cause 100% of the issued and outstanding voting stock of Borderless Freight and AMP Media and (b) 65% of the issued and outstanding Equity Interests entitled to vote and 100% of the issued and outstanding Equity Interests not entitled to vote of the Foreign Subsidiaries of Initial Borrower listed on <u>Schedule 1</u> to this Amendment to be subject at all times to a first priority, perfected Lien in favor of the Administrative Agent, (c) Section 6.04 of the Credit Agreement caused by the failure to comply with clauses (b), (c), (d), (e), (k), (l) and (m) of the definition of "Permitted Acquisition" in the Credit Agreement in connection with the acquisition of AMP Media by Parent Borrower, (d) Section 3.13(a)(ii) of the Security Agreement caused by the failure of Parent Borrower to deliver a stock certificate of AMP Media to the Administrative Agent, (e) Section 5.11 of the Credit Agreement caused by the Initial Borrower's maintenance of deposit accounts with depository banks other than the Administrative Agent, (f) Section 6.01 and 6.02 of the Credit

------

Agreement caused by the Loan Parties' incurrence of purchase money loans and liens with respect to with respect to the acquisition of certain Inventory, (g) Section 6.04(d), (e) and (f) of the Credit Agreement caused by the Loan Parties making of certain Investments in Foreign Subsidiaries in an amount exceeding $1,000,000 and (h) certain representations and warranties set forth in the Credit Agreement and the Security Agreement caused by the inaccuracy of the certain schedules to the Credit Agreement and the Security Agreement (which schedules are being updated in connection with this Amendment) (the "**Designated Defaults**"). The waiver contained herein shall be limited precisely as written and, except as expressly provided herein, shall not be deemed or otherwise construed to constitute a waiver of any Default or Event of Default now existing or hereafter arising (other than the Designated Defaults) or any other provision or to prejudice any right, power or remedy which the Administrative Agent or any Lender may now have or may have in the future under or in connection with the Credit Agreement or any other Loan Document, all of which rights, powers and remedies are hereby expressly reserved by the Administrative Agent and each Lender and shall not constitute a custom or course of dealing among the parties hereto.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**3.&nbsp;&nbsp;&nbsp;&nbsp;Sixth Amendment Revolving Commitments.**

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**3.1&nbsp;&nbsp;&nbsp;&nbsp;**On the Sixth Amendment Effective Date, all Revolving Loans and Term A Loans outstanding immediately prior to the Sixth Amendment Effective Date will be repaid in full by the Borrowers from cash on hand, which repayment will be accompanied by accrued interest on the Revolving Loans and Term A Loans being repaid and any costs incurred by any Lender in accordance with Section 2.16 of the Credit Agreement (in effect prior to the Sixth Amendment Effective Date). The credit facilities described in the Credit Agreement existing prior the Sixth Amendment Effective Date, shall be amended, supplemented, modified and restated in their entirety by the facilities described herein and in the Credit Agreement after giving effect to the Sixth Amendment.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**4.&nbsp;&nbsp;&nbsp;&nbsp;Amendments to Credit Agreement and to Schedules to Security Agreement.** The Credit Agreement is, effective as of the Sixth Amendment Effective Date (as defined below), hereby amended (a) to delete the red or green stricken text (indicated textually in the same manner as the following examples: stricken text and stricken text) and (b) to add the blue or green double-underlined text (indicated textually in the same manner as the following examples: <u>double-underlined text</u> and <u>double-underlined text</u>), in each case, as set forth in the marked copy of the Credit Agreement (and to the extent provided in <u>Annex A</u> hereto, the exhibits, schedules and appendices to the Credit Agreement) attached hereto as <u>Annex A</u> and made a part hereof for all purposes. Annex B hereto contains updated versions of certain schedules to the Security Agreement, which updated schedules shall replace the relevant schedules to the Security Agreement existing on the date hereof.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**5.&nbsp;&nbsp;&nbsp;&nbsp;Limitation of Amendments.**

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**5.1&nbsp;&nbsp;&nbsp;&nbsp;**The amendments set forth in **Section 4** above, are effective for the purposes set forth herein and shall be limited precisely as written and shall not be deemed to (a) be a consent to any amendment, waiver or modification of any other term or condition of any Loan Document, (b) otherwise prejudice any right or remedy which Administrative Agent or any Lender may now have or may have in the future under or in connection with any Loan Document or (c) constitute a course of conduct or dealing among the parties.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**5.2&nbsp;&nbsp;&nbsp;&nbsp;**This Amendment shall be construed in connection with and as part of the Loan Documents and all terms, conditions, representations, warranties, covenants and agreements set forth in the Loan Documents, except as herein amended, are hereby ratified and confirmed and shall remain in full force and effect.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**6.&nbsp;&nbsp;&nbsp;&nbsp;Representations and Warranties.** To induce Administrative Agent and Lenders to enter into this Amendment, Borrowers and each Loan Party hereby represents and warrants to Administrative Agent and Lenders as follows:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**6.1&nbsp;&nbsp;&nbsp;&nbsp;**Immediately after giving effect to this Amendment (a) the representations and warranties contained in the Loan Documents are true, accurate and complete in all material respects as of the date hereof (except to the extent such representations and warranties relate to an earlier date, in which case they are true and correct as of such date), (b) no Event of Default has occurred and is continuing and (c) the Borrowers are in compliance (on a pro forma basis) with the covenants contained in Section 6.12 of the Credit Agreement;

------

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**6.2&nbsp;&nbsp;&nbsp;&nbsp;**Borrowers and each Loan Party have the power and authority to execute and deliver this Amendment and to perform its obligations under the Credit Agreement, as amended by this Amendment;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**6.3&nbsp;&nbsp;&nbsp;&nbsp;**The organizational documents of Borrowers and each Loan Party delivered to Administrative Agent and Lenders on the Effective Date, or subsequent thereto, remain true, accurate and complete and have not been amended, supplemented or restated and are and continue to be in full force and effect;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**6.4&nbsp;&nbsp;&nbsp;&nbsp;**The execution and delivery by Borrowers and each Loan Party of this Amendment and the performance by Borrowers and each Loan Party of its obligations under the Credit Agreement, as amended by this Amendment, have been duly authorized;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**6.5&nbsp;&nbsp;&nbsp;&nbsp;**The execution and delivery by Borrowers and each Loan Party of this Amendment and the performance by Borrowers and each Loan Party of its obligations under the Credit Agreement, as amended by this Amendment, do not and will not contravene in any material respects (a) any law or regulation binding on or affecting Borrowers or any Loan Party, (b) any contractual restriction with a Person binding on Borrowers or any Loan Party, (c) any order, judgment or decree of any court or other governmental or public body or authority, or subdivision thereof, binding on Borrowers or any Loan Party, or (d) the organizational documents of Borrowers or any Loan Party;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**6.6&nbsp;&nbsp;&nbsp;&nbsp;**The execution and delivery by Borrowers and each Loan Party of this Amendment and the performance by Borrowers and each Loan Party of its obligations under the Credit Agreement, as amended by this Amendment, do not require any order, consent, approval, license, authorization or validation of, or filing, recording or registration with, or exemption by any governmental or public body or authority, or subdivision thereof, binding on Borrowers or any Loan Party, except where the failure to do so, individually or in the aggregate, could not reasonably be expected to result in a Material Adverse Effect; and

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**6.7&nbsp;&nbsp;&nbsp;&nbsp;**This Amendment has been duly executed and delivered by Borrowers and each Loan Party and is the binding obligation of Borrowers and each Loan Party, enforceable against Borrowers and such Loan Party in accordance with its terms, except as such enforceability may be limited by bankruptcy, insolvency, reorganization, liquidation, moratorium or other similar laws of general application and equitable principles relating to or affecting creditors' rights.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**7.&nbsp;&nbsp;&nbsp;&nbsp;Counterparts.** This Amendment may be executed in any number of counterparts and all of such counterparts taken together shall be deemed to constitute one and the same instrument.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**8.&nbsp;&nbsp;&nbsp;&nbsp;Effectiveness.** This Amendment shall become effective as of the date first written above only upon satisfaction in full in the discretion of the Administrative Agent of each of the following conditions (the "**Sixth Amendment Effective Date**"):

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**8.1&nbsp;&nbsp;&nbsp;&nbsp;**The Administrative Agent shall have received a copy of this Amendment duly executed and delivered by the Borrowers, each other Loan Party, each Lender and the Administrative Agent;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**8.2&nbsp;&nbsp;&nbsp;&nbsp;**The representations and warranties of or on behalf of the Loan Parties in this Amendment are true, accurate and complete (except to the extent such representations and warranties relate to an earlier date, in which case they are true and correct as of such date) on and as of the Sixth Amendment Effective Date;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**8.3&nbsp;&nbsp;&nbsp;&nbsp;**A written opinion of the Borrowers' counsel, addressed to the Administrative Agent, the Issuing Bank and the Lenders and reasonably acceptable to the Administrative Agent;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**8.4&nbsp;&nbsp;&nbsp;&nbsp;**The Loan Parties shall have paid all outstanding costs and expenses owed to the Administrative Agent pursuant to Section 9.03 of the Credit Agreement, including, without limitation, all reasonable fees, charges and disbursements of counsel for the Administrative Agent in an amount not to exceed $25,000;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**8.5&nbsp;&nbsp;&nbsp;&nbsp;**The execution of a Joinder Agreement by AMP Media and Borderless Freight;

------

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**8.6&nbsp;&nbsp;&nbsp;&nbsp;**the Administrative Agent shall have received (i) one or more certificates of the Loan Parties, including AMP Media and Borderless Freight, dated the Sixth Amendment Effective Date and executed by an appropriate officer, which shall (A) certify the resolutions of the Boards of Directors of each Loan Party, members or other body authorizing the execution, delivery and performance of the Loan Documents to which such Loan Party is a party, (B) identify by name and title and bear the signatures of the officers of each Loan Party authorized to sign the Loan Documents to which it is a party and, in the case of the Parent Borrower, its Financial Officers, and (C) contain appropriate attachments, including the charter, articles or certificate of organization or incorporation of each Loan Party certified by the relevant authority of the jurisdiction of organization of such Loan Party and a true and correct copy of its bylaws or operating, management or partnership agreement, or other organizational or governing documents, and (ii) a good standing certificate for each Loan Party from its jurisdiction of organization;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**8.7&nbsp;&nbsp;&nbsp;&nbsp;**the Administrative Agent shall have received the results of a recent lien search in the jurisdiction of organization of each of AMP Media and Borderless Freight and each jurisdiction where assets of such entities are located, and such search shall reveal no Liens on any of the assets of AMP Media or Borderless Freight except for liens permitted by Section 6.02; and

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**8.8&nbsp;&nbsp;&nbsp;&nbsp;**The Administrative Agent shall have received all other documents or materials requested by the Administrative Agent, in each case, in form and substance reasonably acceptable to the Agent.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**9.&nbsp;&nbsp;&nbsp;&nbsp;Ratification, etc**. Except as expressly amended or otherwise modified hereby, the Credit Agreement, each other Loan Document and all documents, instruments and agreements related thereto are hereby ratified and confirmed in all respects and shall continue in full force and effect. This Amendment shall constitute a Loan Document. The Loan Parties hereby ratify and reaffirm the validity and enforceability of all of the Liens and security interests heretofore granted and pledged by the Loan Parties pursuant to the Loan Documents to which it is a party to the Administrative Agent, on behalf and for the benefit of the Lenders, as collateral security for the Secured Obligations, and acknowledge that all of such Liens and security interests, granted, pledged or otherwise created as security for the Secured Obligations continue to be and remain collateral security for the Secured Obligations from and after the Sixth Amendment Effective Date.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**10.&nbsp;&nbsp;&nbsp;&nbsp;Reference to and Effect on the Credit Agreement**.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**10.1&nbsp;&nbsp;&nbsp;&nbsp;**Upon the effectiveness of this Amendment, (A) each reference in the Credit Agreement to "this Agreement", "hereunder", "hereof", "herein" or words of like import shall mean and be a reference to the Credit Agreement as amended or otherwise modified hereby and (B) each reference in any other document, instrument or agreement executed and/or delivered in connection with the Credit Agreement shall mean and be a reference to the Credit Agreement as amended or otherwise modified hereby.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**10.2&nbsp;&nbsp;&nbsp;&nbsp;**Except as specifically waived, amended or otherwise modified above, the terms and conditions of the Credit Agreement and any other documents, instruments and agreements executed and/or delivered in connection therewith, shall remain in full force and effect and are hereby ratified and confirmed.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**10.3&nbsp;&nbsp;&nbsp;&nbsp;**The execution, delivery and effectiveness of this Amendment shall not, except as expressly provided herein, operate as a waiver of any right, power or remedy of any Lender under the Credit Agreement or any other document, instrument or agreement executed in connection therewith, nor constitute a waiver of any provision contained therein, in each case except as specifically set forth herein.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**10.4&nbsp;&nbsp;&nbsp;&nbsp;**Except as expressly stated herein, the Administrative Agent and Lenders reserve all rights, privileges and remedies under the Loan Documents and applicable law.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**10.5&nbsp;&nbsp;&nbsp;&nbsp;**Delivery of an executed counterpart of a signature page of this Amendment by fax, emailed pdf. or any other electronic means that reproduces an image of the actual executed signature page shall be effective as delivery of a manually executed counterpart of this Amendment. The words "execution," "signed," "signature," "delivery," and words of like import in or relating to any document to be signed in connection with this Amendment and the transactions contemplated hereby or thereby shall be deemed to include Electronic Signatures,

------

deliveries or the keeping of records in electronic form, each of which shall be of the same legal effect, validity or enforceability as a manually executed signature, physical delivery thereof or the use of a paper-based recordkeeping system, as the case may be, to the extent and as provided for in any applicable law, including the Federal Electronic Signatures in Global and National Commerce Act, the New York State Electronic Signatures and Records Act, or any other similar state laws based on the Uniform Electronic Transactions Act.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**11.&nbsp;&nbsp;&nbsp;&nbsp;Governing Law**. This Amendment shall be governed by and construed in accordance with the internal laws of the State of New York, but giving effect to federal laws applicable to national banks.

**[*Balance of Page Intentionally Left Blank*]**

------

**IN WITNESS WHEREOF,** the parties hereto have caused this Amendment to be duly executed and delivered as of the date first written above.

---

| |
|:---|
| BORROWERS: |
| COVALENT GROUP, INC., as Parent Borrower<br>PATTERN INC. (f/k/a IServe Products, Inc.), as a Borrower<br>BORDERLESS DISTRIBUTION, LLC, as a Borrower |
| By: <u>/s/ Jason Beesley</u> |
| Name: Jason Beesley |
| Title: Chief Financial Officer |
| GUARANTORS: |
| FORMULA 5 LLC |
| By: <u>/s/ Jason Beesley</u> |
| Name: Jason Beesley |
| Title: Chief Financial Officer |
| TROPHY SKIN PRODUCTS LLC |
| By: <u>/s/ Jason Beesley</u> |
| Name: Jason Beesley |
| Title: Chief Financial Officer |
| AMP MEDIA SYSTEMS, INC. |
| By: <u>/s/ Jason Beesley</u> |
| Name: Jason Beesley |
| Title: Chief Financial Officer |
| ENLISTED VENTURES, LLC |
| By: <u>/s/ Jason Beesley</u> |
| Name: Jason Beesley |
| Title: Chief Financial Officer |
| BORDERLESS FREIGHT LLC |
| By: <u>/s/ Jason Beesley</u> |
| Name: Jason Beesley |
| Title: Chief Financial Officer |
| CG VERTEX LLC |
| By: <u>/s/ Jason Beesley</u> |
| Name: Jason Beesley |
| Title: Chief Financial Officer |

---

***[Signature Page to Sixth Amendment to Credit Agreement]***

------

---

| |
|:---|
| JPMORGAN CHASE BANK, N.A., individually, and as Administrative Agent and Issuing Bank |
| By: <u>/s/ Grace Mahood&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</u>  |
| Name: <u>Grace Mahood&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</u>  |
| Title: <u>Vice President&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</u>  |
| JPMORGAN CHASE BANK, N.A., as a Lender |
| By: <u>/s/ Grace Mahood&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</u>  |
| Name: <u>Grace Mahood&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</u>  |
| Title: <u>Vice President&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</u>  |

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**[*Signature Page to Sixth Amendment to Credit Agreement*]**

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<u>Schedule</u> <u>1</u>

<u>List</u> <u>of</u> <u>Foreign</u> <u>Subsidiaries</u>

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ANNEX A

<u>Conformed Copy of Credit Agreement</u>

See attached.

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**<u>Conformed through Sixth Amendment</u>**

J.P.Morgan

THIRD AMENDED AND RESTATED CREDIT AGREEMENT

dated as of

July 16, 2019

among

COVALENT GROUP, INC.

PATTERN INC. (F/K/A ISERVE PRODUCTS, INC.)

BORDERLESS DISTRIBUTION, LLC,

as Borrowers

The Lenders Party Hereto

and

JPMORGAN CHASE BANK, N.A.,

as Administrative Agent

___________________________

JPMORGAN CHASE BANK, N.A.,

as Sole Bookrunner and Sole Lead Arranger

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| | |
|:---|:---|
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<u>**Table of Contents**</u> | &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<u>**Table of Contents**</u> |
| | &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<u>Page</u> |

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| | | | |
|:---|:---|:---|:---|
| ARTICLE I | Definitions | Definitions | 1 |
| Section 1.01. | Section 1.01. | Defined Terms | 1 |
| Section 1.02. | Section 1.02. | Classification of Loans and Borrowings | 35 |
| Section 1.03. | Section 1.03. | Terms Generally | 35 |
| Section 1.04. | Section 1.04. | Accounting Terms; GAAP | 36 |
| Section 1.05. | Section 1.05. | Pro Forma Adjustments for Acquisitions and Dispositions | 36 |
| Section 1.06. | Section 1.06. | Interest Rates; LIBOR Notification | 36 |
| Section 1.07. | Section 1.07. | Status of Obligations | 37 |
| Section 1.08. | Section 1.08. | Divisions | 38 |
| ARTICLE II | The Credits | The Credits | 38 |
| Section 2.01. | Section 2.01. | Revolving Commitments | 38 |
| Section 2.02. | Section 2.02. | Loans and Borrowings | 38 |
| Section 2.03. | Section 2.03. | Requests for Borrowings | 39 |
| Section 2.04. | Section 2.04. | [Section Intentionally Omitted] | 40 |
| Section 2.05. | Section 2.05. | Swingline Loans<u>[Section Intentionally Omitted]</u> | 40 |
| Section 2.06. | Section 2.06. | Letters of Credit | 41 |
| Section 2.07. | Section 2.07. | Funding of Borrowings | 46 |
| Section 2.08. | Section 2.08. | Interest Elections | 46 |
| Section 2.09. | Section 2.09. | Termination and Reduction of Commitments; Increase in Term A Loan<u>Revolving</u> Commitment | 47 |
| Section 2.10. | Section 2.10. | Repayment and Amortization of Loans; Evidence of Debt | 49 |
| Section 2.11. | Section 2.11. | Prepayment of Loans | 51 |
| Section 2.12. | Section 2.12. | Fees | 52 |
| Section 2.13. | Section 2.13. | Interest | 53 |
| Section 2.14. | Section 2.14. | Alternate Rate of Interest | 54 |
| Section 2.15. | Section 2.15. | Increased Costs | 57 |
| Section 2.16. | Section 2.16. | Break Funding Payments | 59 |
| Section 2.17. | Section 2.17. | Taxes | 59 |
| Section 2.18. | Section 2.18. | Payments Generally; Allocation of Proceeds; Sharing of Set-offs | 63 |
| Section 2.19. | Section 2.19. | Mitigation Obligations; Replacement of Lenders | 65 |
| Section 2.20. | Section 2.20. | Defaulting Lenders | 66 |
| Section 2.21. | Section 2.21. | Returned Payments | 68 |
| Section 2.22. | Section 2.22. | Banking Services and Swap Agreements | 68 |

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i

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<u>**Table of Contents**</u>

(continued)

<u>Page</u>

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| | | | |
|:---|:---|:---|:---|
| ARTICLE III | Representations and Warranties | Representations and Warranties | 68 |
| Section 3.01. | Section 3.01. | Organization; Powers | 68 |
| Section 3.02. | Section 3.02. | Authorization; Enforceability | 68 |
| Section 3.03. | Section 3.03. | Governmental Approvals; No Conflicts | 69 |
| Section 3.04. | Section 3.04. | Financial Condition; No Material Adverse Change | 69 |
| Section 3.05. | Section 3.05. | Properties, etc | 69 |
| Section 3.06. | Section 3.06. | Litigation and Environmental Matters | 69 |
| Section 3.07. | Section 3.07. | Compliance with Laws and Agreements; No Default | 70 |
| Section 3.08. | Section 3.08. | Investment Company Status | 70 |
| Section 3.09. | Section 3.09. | Taxes | 70 |
| Section 3.10. | Section 3.10. | ERISA | 70 |
| Section 3.11. | Section 3.11. | Disclosure | 70 |
| Section 3.12. | Section 3.12. | Material Agreements | 71 |
| Section 3.13. | Section 3.13. | Solvency | 71 |
| Section 3.14. | Section 3.14. | Insurance | 71 |
| Section 3.15. | Section 3.15. | Capitalization and Subsidiaries | 71 |
| Section 3.16. | Section 3.16. | Security Interest in Collateral | 71 |
| Section 3.17. | Section 3.17. | Employment Matters | 72 |
| Section 3.18. | Section 3.18. | Federal Reserve Regulations | 72 |
| Section 3.19. | Section 3.19. | Use of Proceeds | 72 |
| Section 3.20. | Section 3.20. | No Burdensome Restrictions | 72 |
| Section 3.21. | Section 3.21. | Anti-Corruption Laws and Sanctions | 72 |
| Section 3.22. | Section 3.22. | Beneficial Ownership Certification | 72 |
| ARTICLE IV | Conditions | Conditions | 72 |
| Section 4.01. | Section 4.01. | Effective Date | 72 |
| Section 4.02. | Section 4.02. | Each Credit Event | 75 |
| ARTICLE V | Affirmative Covenants | Affirmative Covenants | 76 |
| Section 5.01. | Section 5.01. | Financial Statements and Other Information | 76 |
| Section 5.02. | Section 5.02. | Notices of Material Events | 77 |
| Section 5.03. | Section 5.03. | Existence; Conduct of Business | 78 |
| Section 5.04. | Section 5.04. | Payment of Obligations | 78 |
| Section 5.05. | Section 5.05. | Maintenance of Properties | 78 |
| Section 5.06. | Section 5.06. | Books and Records; Inspection Rights | 78 |

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ii

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<u>**Table of Contents**</u>

(continued)

<u>Page</u>

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| | | | |
|:---|:---|:---|:---|
| | Section 5.07. | Compliance with Laws and Material Contractual Obligations | 78 |
| | Section 5.08. | Use of Proceeds | 79 |
| | Section 5.09. | Accuracy of Information | 79 |
| | Section 5.10. | Insurance | 79 |
| | Section 5.11. | Depository Banks | 80 |
| | Section 5.12. | Additional Collateral; Further Assurances | 80 |
| | Section 5.13. | Post-Closing Requirements | 81 |
| ARTICLE VI | Negative Covenants | Negative Covenants | 81 |
|  | Section 6.01. | Indebtedness | 81 |
|  | Section 6.02. | Liens | 83 |
|  | Section 6.03. | Fundamental Changes | 84 |
|  | Section 6.04. | Investments, Loans, Advances, Guarantees and Acquisitions | 84 |
|  | Section 6.05. | Asset Sales | 86 |
|  | Section 6.06. | Sale and Leaseback Transactions | 86 |
|  | Section 6.07. | Swap Agreements | 87 |
|  | Section 6.08. | Restricted Payments; Certain Payments of Subordinated Indebtedness | 87 |
|  | Section 6.09. | Transactions with Affiliates | 87 |
|  | Section 6.10. | Restrictive Agreements | 88 |
|  | Section 6.11. | Amendment of Material Documents | 88 |
|  | Section 6.12. | Financial Covenants | 88 |
| ARTICLE VII | Events of Default | Events of Default | 89 |
| ARTICLE VIII | The Administrative Agent | The Administrative Agent | 91 |
|  | Section 8.01. | Appointment | 91 |
|  | Section 8.02. | Rights as a Lender | 92 |
|  | Section 8.03. | Duties and Obligations | 92 |
|  | Section 8.04. | Reliance | 93 |
|  | Section 8.05. | Actions through Sub-Agents | 93 |
|  | Section 8.06. | Resignation | 93 |
|  | Section 8.07. | Non-Reliance | 94 |
|  | Section 8.08. | Other Agency Titles<u>[Section Intentionally Omitted]</u> | 95 |
|  | Section 8.09. | Not Partners or Co-Venturers; Administrative Agent as Representative of the Secured Parties | 95 |
|  | Section 8.10. | Credit Bidding | 95 |

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iii

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<u>**Table of Contents**</u>

(continued)

<u>Page</u>

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| | | | |
|:---|:---|:---|:---|
| ARTICLE IX | Miscellaneous | Miscellaneous | 97 |
| Section 9.01. | Section 9.01. | Notices | 97 |
| Section 9.02. | Section 9.02. | Waivers; Amendments | 99 |
| Section 9.03. | Section 9.03. | Expenses; Indemnity; Damage Waiver | 101 |
| Section 9.04. | Section 9.04. | Successors and Assigns | 103 |
| Section 9.05. | Section 9.05. | Survival | 106 |
| Section 9.06. | Section 9.06. | Counterparts; Integration; Effectiveness; Electronic Execution | 107 |
| Section 9.07. | Section 9.07. | Severability | 107 |
| Section 9.08. | Section 9.08. | Right of Setoff | 108 |
| Section 9.09. | Section 9.09. | Governing Law; Jurisdiction; Consent to Service of Process | 108 |
| Section 9.10. | Section 9.10. | WAIVER OF JURY TRIAL | 108 |
| Section 9.11. | Section 9.11. | Headings | 109 |
| Section 9.12. | Section 9.12. | Confidentiality | 109 |
| Section 9.13. | Section 9.13. | Several Obligations; Nonreliance; Violation of Law | 109 |
| Section 9.14. | Section 9.14. | USA PATRIOT Act | 109 |
| Section 9.15. | Section 9.15. | Disclosure | 110 |
| Section 9.16. | Section 9.16. | Appointment for Perfection | 110 |
| Section 9.17. | Section 9.17. | Interest Rate Limitation | 110 |
| Section 9.18. | Section 9.18. | Marketing Consent | 110 |
| Section 9.19. | Section 9.19. | Amendment and Restatement of Existing Credit Agreement; No Novation; Joint and Several Obligations | 110 |
| Section 9.20. | Section 9.20. | Acknowledgement and Consent to Bail-In of EEA Financial Institutions | 112 |
| Section 9.21. | Section 9.21. | Acknowledgement Regarding Any Supported QFCs | 112 |
| ARTICLE X | Loan Guaranty | Loan Guaranty | 113 |
| Section 10.01. | Section 10.01. | Guaranty | 113 |
| Section 10.02. | Section 10.02. | Guaranty of Payment | 114 |
| Section 10.03. | Section 10.03. | No Discharge or Diminishment of Loan Guaranty | 114 |
| Section 10.04. | Section 10.04. | Defenses Waived | 114 |
| Section 10.05. | Section 10.05. | Rights of Subrogation | 115 |
| Section 10.06. | Section 10.06. | Reinstatement; Stay of Acceleration | 115 |
| Section 10.07. | Section 10.07. | Information | 115 |
| Section 10.08. | Section 10.08. | Termination | 115 |
| Section 10.09. | Section 10.09. | Taxes | 116 |

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iv

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<u>**Table of Contents**</u>

(continued)

<u>Page</u>

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| | | | |
|:---|:---|:---|:---|
| | Section 10.10. | Maximum Liability | 116 |
| | Section 10.11. | Contribution | 116 |
| | Section 10.12. | Liability Cumulative | 117 |
| | Section 10.13. | Keepwell | 117 |
| ARTICLE XI | The Borrower Representative | The Borrower Representative | 117 |
|  | Section 11.01. | Appointment; Nature of Relationship | 117 |
|  | Section 11.02. | Powers | 117 |
|  | Section 11.03. | Employment of Agents | 118 |
|  | Section 11.04. | Notices | 118 |
|  | Section 11.05. | Successor Borrower Representative | 118 |
|  | Section 11.06. | Execution of Loan Documents | 118 |
|  | Section 11.07. | Reporting | 118 |

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<u>SCHEDULES</u>:

Commitment Schedule

Schedule 3.05 – Properties, etc.

Schedule 3.06 – Disclosed Matters

Schedule 3.12 – Material Agreements

Schedule 3.14 – Insurance

Schedule 3.15 – Capitalization and Subsidiaries

Schedule 3.22 – Affiliate Transactions

Schedule 6.01 – Existing Indebtedness

Schedule 6.02 – Existing Liens

Schedule 6.04 – Existing Investments

Schedule 6.10 – Existing Restrictions

<u>EXHIBITS</u>:

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| | |
|:---|:---|
| Exhibit A – | Form of Assignment and Assumption |
| Exhibit B – | Form of Notes |
| Exhibit C – | Form of Borrowing Request |
| Exhibit D-1 – | Form of U.S. Tax Compliance Certificate (For Foreign Lenders That Are<br>Not Partnerships For U.S. Federal Income Tax Purposes) |
| Exhibit D-2 – | Form of U.S. Tax Compliance Certificate (For Foreign Participants That Are Not Partnerships For U.S. Federal Income Tax Purposes) |
| Exhibit D-3 – | Form of U.S. Tax Compliance Certificate (For Foreign Participants That Are Partnerships For U.S. Federal Income Tax Purposes) |
| Exhibit D-4 – | Form of U.S. Tax Compliance Certificate (For Foreign Lenders That Are Partnerships For U.S. Federal Income Tax Purposes) |
| Exhibit E – | Form of Compliance Certificate |
| Exhibit F – | Form of Joinder Agreement |

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v

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THIRD AMENDED AND RESTATED CREDIT AGREEMENT dated as of July 16, 2019 (as it may be amended, restated, supplemented or otherwise modified from time to time, this "<u>Agreement</u>"), among COVALENT GROUP, INC., a Utah Delaware corporation (the "<u>Parent Borrower</u>"), PATTERN INC. (F/K/A ISERVE PRODUCTS, INC.), a Utah corporation (the "<u>Initial Borrower</u>") and BORDERLESS DISTRIBUTION, LLC, a Utah limited liability company ("Borderless Distribution" and collectively with Parent Borrower and the Initial Borrower, the "<u>Borrowers</u>"), the other Loan Parties party hereto, the Lenders party hereto, and JPMORGAN CHASE BANK, N.A., as Administrative Agent.

WHEREAS, the Initial Borrower, the Lenders party thereto and the Administrative Agent, are parties to that certain Amended and Restated Credit Agreement dated as of September 27, 2018 (the "<u>Prior Credit Agreement</u>");

WHEREAS, the Borrowers, the Lenders party thereto and the Administrative Agent, are parties to that certain Second Amended and Restated Credit Agreement dated as of January 22, 2019 (the "<u>Existing Credit Agreement</u>"); and

WHEREAS, in order to continue the existing indebtedness of the Borrowers and to make certain accommodations as further described herein, the Borrowers have requested that the Existing Credit Agreement be amended and restated in its entirety and the Lenders party thereto are willing to do so on the terms and conditions set forth herein.

NOW, THEREFORE, in consideration of the premises and the agreements, provisions and covenants herein contained, the parties hereto agree as follows:

ARTICLE I

<u>Definitions</u>

SECTION 1.01. <u>Defined Terms</u>. As used in this Agreement, the following terms have the meanings specified below:

"<u>ABR</u>", when used in reference to any Loan or Borrowing, refers to whether such Loan, or the Loans comprising such Borrowing, is bearing interest at a rate determined by reference to the Alternate Base Rate.

"<u>ABR Borrowing</u>" or "<u>ABR Loan</u>" means a Loan bearing interest based on ABR.

"<u>Account</u>" has the meaning assigned to such term in the Security Agreement.

"<u>Account Debtor</u>" means any Person obligated on an Account.

"<u>Acquisition</u>" means any transaction, or any series of related transactions, consummated on or after the Effective Date, by which any Loan Party (a) acquires any going business or all or substantially all of the assets of any Person, whether through purchase of assets, merger or otherwise or (b) directly or indirectly acquires (in one transaction or as the most recent transaction in a series of transactions) at least a majority (in number of votes) of the Equity Interests of a Person which has ordinary voting power for the election of directors or other similar management personnel of a Person (other than Equity Interests having such power only by reason of the happening of a contingency) or a majority of the outstanding Equity Interests of a Person.

<u>"Adjusted Daily Simple SOFR" means an interest rate per annum equal to (a) the Daily Simple</u> <u>SOFR, plus (b) 0.10%;</u> *<u>provided that</u>* <u>if the Adjusted Daily Simple SOFR as so determined would be less</u> <u>than the Floor, such rate shall be deemed to be equal to the Floor for the</u> <u>purposes of this Agreement.</u>

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"<u>Adjusted</u> <u>LIBO</u><u>Term SOFR</u> <u>Rate</u>" means, with respect to any Eurodollar Borrowing for any Interest Period or for any ABR Borrowing, an interest rate per annum (rounded upwards, if necessary, to the next 1/16 of 1%) equal to (a) the LIBO<u>Term SOFR</u> Rate for such Interest Period multiplied by (b) the Statutory Reserve Rate<u>,</u> *<u>plus</u>* <u>(b) 0.10%; provided that if the Adjusted Term SOFR Rate</u> <u>as so determined</u> <u>would be less than</u> <u>the Floor, such rate shall be deemed</u> <u>to be equal to the</u> <u>Floor</u> <u>for the purposes of this</u> <u>Agreement</u>.

"<u>Administrative Agent</u>" means JPMorgan Chase Bank, N.A., in its capacity as administrative agent for the Lenders hereunder.

"<u>Administrative Questionnaire</u>" means an Administrative Questionnaire in a form supplied by the Administrative Agent.

"<u>Affiliate</u>" means, with respect to a specified Person, another Person that directly, or indirectly through one or more intermediaries, Controls or is Controlled by or is under common Control with the specified Person.

"<u>Aggregate Credit Exposure</u>" means, at any time, the aggregate Credit Exposure of all the Lenders at such time.

"<u>Aggregate Revolving Exposure</u>" means, at any time, the aggregate Revolving Exposure of all the Lenders at such time (with the Swingline Exposure of each Lender calculated assuming that all of the Lenders have funded their participations in all Swingline Loans outstanding at such time).

"<u>Alternate Base Rate</u>" means, for any day, a rate per annum equal to the greatest of (a) the Prime Rate in effect on such day, (b) the NYFRB Rate in effect on such day plus ½ of 1%<u>,</u> and (c) the Adjusted LIBO<u>Term SOFR</u> Rate for a one month<u>one-month</u> Interest Period on<u>as published two (2) U.S.</u> <u>Government Securities Business Days prior to</u> such day (or if such day is not a Business Day, the immediately preceding Business Day) plus 1%, provided that<u>,</u> for the purpose of this definition, the Adjusted LIBO<u>Term SOFR</u> Rate for any day shall be based on the LIBO Screen Rate (or if the LIBO Screen Rate is not available for such one month Interest Period, the Interpolated Rate)<u>Term SOFR</u> <u>Reference Rate</u> at approximately 11:00<u>5:00</u> a.m. London<u>Chicago</u> time on such day <u>(or any amended</u> <u>publication time for the Term SOFR Reference Rate, as specified by the CME Term SOFR Administrator</u> <u>in the Term SOFR Reference Rate methodology)</u>. Any change in the Alternate Base Rate due to a change in the Prime Rate, the NYFRB Rate or the Adjusted LIBO<u>Term SOFR</u> Rate shall be effective from and including the effective date of such change in the Prime Rate, the NYFRB Rate or the Adjusted LIBO<u>Term SOFR</u> Rate, respectively. If the Alternate Base Rate is being used as an alternate rate of interest pursuant to Section 2.14 (for the avoidance of doubt, only until the Benchmark Replacement has been determined pursuant to Section 2.14<u>(b)</u>), then the Alternate Base Rate shall be the greater of clause (a) and (b) above and shall be determined without reference to clause (c) above. For the avoidance of doubt, if the Alternate Base Rate shall<u>as determined pursuant to the foregoing would</u> be less than zero<u>1.00%</u> , such rate shall be deemed to be zero<u>1.00%</u> for purposes of this Agreement. "<u>Anti-Corruption</u> <u>Laws</u>" means all laws, rules, and regulations of any jurisdiction applicable to the Borrowers or any of its Affiliates from time to time concerning or relating to bribery or corruption.

"<u>Applicable Percentage</u>" means, with respect to any Lender, (a) with respect to Revolving Loans, or LC Exposure, or Swingline Loans, a percentage equal to a fraction the numerator of which is such Lender's Revolving Commitment and the denominator of which is the aggregate Revolving Commitments (provided that, if the Revolving Commitments have terminated or expired, the Applicable Percentages shall be determined based upon such Lender's share of the Aggregate Revolving Exposure at that time), and (b) with respect to the Term A Loans (including, after the Delayed Draw Term Loan

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Expiration Date, the Delayed Draw Term Loans) a percentage equal to a fraction the numerator of which is the aggregate outstanding principal amount of the Term A Loans and Delayed Draw Term Loans of such Lender and the denominator of which is the aggregate outstanding principal amount of the Term A Loans and Delayed Draw Term Loans of all Term A Lenders and Delayed Draw Term Loan Lenders, respectively, <u>provided</u> that, in accordance with Section 2.20, so long as any Lender shall be a Defaulting Lender, such Defaulting Lender's Commitment shall be disregarded in the calculations under clause (a) above.

"<u>Applicable Rate</u>" means, for any day, with respect to any Loan, or with respect to the commitment fees payable hereunder, as the case may be, the applicable rate per annum set forth below under the caption "Revolving Commitment ABR Spread", "Revolving Commitment Eurodollar Spread" "Term A Loan/DDTL ABRS Spread", "Term A Loan/DDTL Eurodollar Spread<u>Term Benchmark/RFR</u> <u>Spread</u>" or "Commitment Fee Rate", as the case may be, based upon the Borrower's Total Leverage Ratio as of the most recent determination date, <u>provided</u> that until the delivery to the Administrative Agent, pursuant to Section 5.01, of the Borrowers' consolidated financial information for the Borrowers' fiscal quarter ending September 30<u>March 31</u>, 2019<u>2022</u>, the "Applicable Rate" shall be the applicable rates per annum set forth below in Category 2<u>4</u>:

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| | | | | | |
|:---|:---|:---|:---|:---|:---|
| Total Leverage <u>Ratio</u> | <u>Revolving</u> <u>Commitment</u> <u>ABR Spread</u> | <u>Revolving</u> <u>Commitment</u> <u>Eurodollar</u><br> <u>Spread</u> | <u>Term A</u> <u>Loan/DD</u> <u>TL</u><br><u>ABR</u> <u>Spread</u> | <u>Revolving</u> <u>Commitment</u> <u>Term</u> <u>A Loan</u><br><u>/DDTL</u> <u>Eurodollar</u><u>Bench mark/RFR</u><br><u>Spread</u> | <u>Commitment Fee</u> <u>Rate</u> |
| <u>Category 1</u><br>≥ 2.25 to 1.0 | 2.00<u>1.50</u>% | 3.00% | 2.00% | 3.00<u>2.50</u>% | 0.35% |
| <u>Category 2</u><br>< 2.25 to 1.0 but<br>≥ 1.00 to 1.0 | 1.75<u>1.25</u>% | 2.75% | 1.75% | 2.75<u>2.25</u>% | 0.25% |
| <u>Category 3</u><br><<u>> 0.50 to</u> 1.0<br><u>but</u><br><u>< 1.00</u> to 1.0 | 1.50<u>1.00</u>% | 2.50% | 1.50% | 2.50<u>2.00</u>% | 0.20% |
| <u>Category 4<br>≤ 0.50</u> | <u>0.75%</u> | <u>0.75%</u> | <u>0.75%</u> | <u>1.75%</u> | <u>0.20%</u> |

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For purposes of the foregoing, (a) the Applicable Rate shall be determined as of the end of each fiscal quarter of the Company, based upon the Company's annual or quarterly consolidated financial statements delivered pursuant to Section 5.01 and (b) each change in the Applicable Rate resulting from a change in the Total Leverage Ratio shall be effective during the period commencing on and including the date of delivery to the Administrative Agent of such consolidated financial statements indicating such change and ending on the date immediately preceding the effective date of the next such change, <u>provided</u> that (A) at any time that an Event of Default has occurred and is continuing or (B) at the option of the Administrative Agent or at the request of the Required Lenders, if the Borrowers fail to deliver the annual or quarterly consolidated financial statements required to be delivered by it pursuant to Section 5.01, the

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Total Leverage Ratio shall be deemed to be in Category 1 during the period from the expiration of the time for delivery thereof until such consolidated financial statements are delivered.

If at any time the Administrative Agent determines that the financial statements upon which the Applicable Rate was determined were incorrect (whether based on a restatement, fraud or otherwise), the Borrowers shall be required to retroactively pay any additional amount that the Borrowers would have been required to pay if such financial statements had been accurate at the time they were delivered.

"<u>Approved Fund</u>" has the meaning assigned to the term in Section 9.04(b).

"<u>Assignment and Assumption</u>" means an assignment and assumption agreement entered into by a Lender and an assignee (with the consent of any party whose consent is required by Section 9.04), and accepted by the Administrative Agent, substantially in the form of <u>Exhibit A</u> or any other form approved by the Administrative Agent.

"<u>Availability</u>" means, at any time, an amount equal to (a) the aggregate Revolving Commitments minus (b) the Aggregate Revolving Exposure (calculated, with respect to any Defaulting Lender, as if such Defaulting Lender had funded its Applicable Percentage of all outstanding Borrowings).

"<u>Availability Period</u>" means the period from and including the Effective Date to but excluding the earlier of the Revolving Credit Maturity Date and the date of termination of the Revolving Commitments.

"<u>Available Tenor</u>" means, as of any date of determination and with respect to the then-current Benchmark, as applicable, any tenor for such Benchmark <u>(or component thereof)</u> or payment period for interest calculated with reference to such Benchmark <u>(or component thereof)</u>, as applicable, that is or may be used for determining the length of an Interest Period <u>for any term rate or otherwise, for determining</u> <u>any frequency of making payments of interest calculated</u> pursuant to this Agreement as of such date and not including, for the avoidance of doubt, any tenor for such Benchmark that is then- removed from the definition of "Interest Period" pursuant to clause (g<u>e</u>) of Section 2.14.

"<u>Bail-In Action</u>" means the exercise of any Write-Down and Conversion Powers by the applicable EEA Resolution Authority in respect of any liability of an EEA Financial Institution.

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

"<u>Banking Services</u>" means each and any of the following bank services provided to any Loan Party or any Subsidiary by any Lender or any of its Affiliates: (a) credit cards for commercial customers (including, without limitation, "commercial credit cards" and purchasing cards), (b) stored value cards, (c) merchant processing services, and (d) treasury management services (including, without limitation, controlled disbursement, automated clearinghouse transactions, return items, any direct debit scheme or arrangement, overdrafts and interstate depository network services).

"<u>Banking Services Obligations</u>" means any and all obligations of the Loan Parties or their Subsidiaries, whether absolute or contingent and howsoever and whensoever created, arising, evidenced or acquired (including all renewals, extensions and modifications thereof and substitutions therefor) in connection with Banking Services.

"<u>Bankruptcy Event</u>" means, with respect to any Person, when such Person becomes the subject of a bankruptcy or insolvency proceeding, or has had a receiver, conservator, trustee, administrator,

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custodian, assignee for the benefit of creditors or similar Person charged with the reorganization or liquidation of its business appointed for it, or, in the good faith determination of the Administrative Agent, has taken any action in furtherance of, or indicating its consent to, approval of, or acquiescence in, any such proceeding or appointment, <u>provided</u> that a Bankruptcy Event shall not result solely by virtue of any ownership interest, or the acquisition of any ownership interest, in such Person by a Governmental Authority or instrumentality thereof, unless such ownership interest results in or provides such Person with immunity from the jurisdiction of courts within the U.S. or from the enforcement of judgments or writs of attachment on its assets or permits such Person (or such Governmental Authority or instrumentality) to reject, repudiate, disavow or disaffirm any contracts or agreements made by such Person.

"<u>Benchmark</u>" means, initially, LIBO<u>with respect to any (i) RFR Loan, the Daily Simple SOFR or</u> <u>(ii) Term Benchmark Loan, the Term SOFR</u> Rate; provided that if a Benchmark Transition Event, a Term SOFR Transition Event or an Early Opt-in Election, as applicable, and its <u>and the</u> related Benchmark Replacement Date have occurred with respect to LIBO<u>the Daily Simple SOFR or Term SOFR</u> Rate<u>, as</u> <u>applicable,</u> or the then-current Benchmark, then "Benchmark" means the applicable Benchmark Replacement to the extent that such Benchmark Replacement has replaced such prior benchmark rate pursuant to clause (c) or clause (d<u>b</u>) of Section 2.14.

"<u>Benchmark Replacement</u>" means, for any Available Tenor, the first alternative set forth in the order below that can be determined by the Administrative Agent for the applicable Benchmark Replacement Date:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(1)&nbsp;&nbsp;&nbsp;&nbsp;the sum of (a) Term SOFR and (b) the related Benchmark Replacement Adjustment;

(2<u>1</u>)&nbsp;&nbsp;&nbsp;&nbsp;the sum of (a)<u>Adjusted</u> Daily Simple SOFR and (b) the related Benchmark Replacement Adjustment;

(3<u>2</u>)&nbsp;&nbsp;&nbsp;&nbsp;the sum of: (a) the alternate benchmark rate that has been selected by the Administrative Agent and the Borrower Representative as the replacement for the then-current Benchmark for the applicable Corresponding Tenor giving due consideration to (i) any selection or recommendation of a replacement benchmark rate or the mechanism for determining such a rate by the Relevant Governmental Body or (ii) any evolving or then-prevailing market convention for determining a benchmark rate as a replacement for the then-current Benchmark for dollar-denominated syndicated credit facilities at such time <u>in the United States</u> and (b) the related Benchmark Replacement Adjustment;<u>.</u>

provided that, in the case of clause (1), such Unadjusted Benchmark Replacement is displayed on a screen or other information service that publishes such rate from time to time as selected by the Administrative Agent in its reasonable discretion; provided further that, notwithstanding anything to the contrary in this Agreement or in any other Loan Document, upon the occurrence of a Term SOFR Transition Event, and the delivery of a Term SOFR Notice, on the applicable Benchmark Replacement Date the "Benchmark Replacement" shall revert to and shall be deemed to be the sum of (a) Term SOFR and (b) the related Benchmark Replacement Adjustment, as set forth in clause (1) of this definition (subject to the first proviso above).

If the Benchmark Replacement as determined pursuant to clause (1), <u>or</u> (2) or (3) above would be less than the Floor, the Benchmark Replacement will be deemed to be the Floor for the purposes of this Agreement and the other Loan Documents.

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"<u>Benchmark Replacement Adjustment</u>" means, with respect to any replacement of the then-current Benchmark with an Unadjusted Benchmark Replacement for any applicable Interest Period and Available Tenor for any setting of such Unadjusted Benchmark Replacement:

<u>," the spread adjustment, or method for calculating or determining such</u> <u>spread adjustment, (which may be a positive or negative value or zero) that has been</u> <u>selected by</u> (1) for purposes of clauses (1) and (2) of the definition of "Benchmark Replacement," the first alternative set forth in the order below that can be determined by the Administrative Agent:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a) the spread adjustment, or method for calculating or determining such spread adjustment, (which may be a positive or negative value or zero) as of the Reference Time such Benchmark Replacement is first set for such Interest Period that has been selected or recommended by the Relevant Governmental Body for the replacement of such Benchmark with the applicable Unadjusted Benchmark Replacement for the applicable Corresponding Tenor;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b) the spread adjustment (which may be a positive or negative value or zero) as of the Reference Time such Benchmark Replacement is first set for such Interest Period that would apply to the fallback rate for a derivative transaction referencing the ISDA Definitions to be effective upon an index cessation event with respect to such Benchmark for the applicable Corresponding Tenor; and

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(2) for purposes of clause (3) of the definition of "Benchmark Replacement," the spread adjustment, or method for calculating or determining such spread adjustment, (which may be a positive or negative value or zero) that has been selected by the<u>the</u> Administrative Agent and the Borrower Representative for the applicable Corresponding Tenor giving due consideration to (i) any selection or recommendation of a spread adjustment, or method for calculating or determining such spread adjustment, for the replacement of such Benchmark with the applicable Unadjusted Benchmark Replacement by the Relevant Governmental Body on the applicable Benchmark Replacement Date <u>and/</u>or (ii) any evolving or then-prevailing market convention for determining a spread adjustment, or method for calculating or determining such spread adjustment, for the replacement of such Benchmark with the applicable Unadjusted Benchmark Replacement for dollar-denominated syndicated credit facilities; <u>at</u> <u>such time.</u>

provided that, in the case of clause (1) above, such adjustment is displayed on a screen or other information service that publishes such Benchmark Replacement Adjustment from time to time as selected by the Administrative Agent in its reasonable discretion.

"<u>Benchmark Replacement Conforming Changes</u>" means, with respect to any Benchmark Replacement <u>and/or any Term Benchmark Loan</u>, any technical, administrative or operational changes (including changes to the definition of "Alternate Base Rate," the definition of "<u>Business Day," the</u> <u>definition of "U.S. Government Securities</u> Business Day," the definition of "Interest Period," timing and frequency of determining rates and making payments of interest, timing of borrowing requests or prepayment, conversion or continuation notices, length of lookback periods, the applicability of breakage provisions, and other technical, administrative or operational matters) that the Administrative Agent decides in its reasonable discretion may be appropriate to reflect the adoption and implementation of such Benchmark Replacement and to permit the administration thereof by the Administrative Agent in a manner substantially consistent with market practice (or, if the Administrative Agent decides that adoption of any portion of such market practice is not administratively feasible or if the Administrative

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Agent determines that no market practice for the administration of such Benchmark Replacement exists, in such other manner of administration as the Administrative Agent decides is reasonably necessary in connection with the administration of this Agreement and the other Loan Documents).

"<u>Benchmark Replacement Date</u>" means<u>, with respect to any Benchmark,</u> the earliest to occur of the following events with respect to the then current<u>such then-current</u> Benchmark:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(1)&nbsp;&nbsp;&nbsp;&nbsp;in the case of clause (1) or (2) of the definition of "Benchmark Transition Event," the later of (a) the date of the public statement or publication of information referenced therein and (b) the date on which the administrator of such Benchmark (or the published component used in the calculation thereof) permanently or indefinitely ceases to provide all Available Tenors of such Benchmark (or such component thereof); <u>or</u>

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(2)&nbsp;&nbsp;&nbsp;&nbsp;in the case of clause (3) of the definition of "Benchmark Transition Event," the <u>first</u> date of the public <u>on which such Benchmark (or the published component used in the</u> <u>calculation</u> <u>thereof) has been determined and announced by the regulatory supervisor for the administrator of such</u> <u>Benchmark (or such component thereof) to be no longer representative; provided, that such non-representativeness will be</u> <u>determined by reference to the</u> <u>most recent</u> statement or publication of information referenced therein;<u>in such clause (3) and even if any</u> <u>Available Tenor of such Benchmark (or</u> <u>such component thereof) continues to be provided on such date.</u>

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(3) in the case of a Term SOFR Transition Event, the date that is thirty (30) days after the date a Term SOFR Notice is provided to the Lenders and the Borrower pursuant to Section 2.14(d); or

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(4) in the case of an Early Opt-in Election, the sixth (6th) Business Day after the date notice of such Early Opt-in Election is provided to the Lenders, so long as the Administrative Agent has not received, by 5:00 p.m. (New York City time) on the fifth (5th) Business Day after the date notice of such Early Opt-in Election is provided to the Lenders, written notice of objection to such Early Opt-in Election from Lenders comprising the Required Lenders.

For the avoidance of doubt, (i) if the event giving rise to the Benchmark Replacement Date occurs on the same day as, but earlier than, the Reference Time in respect of any determination, the Benchmark Replacement Date will be deemed to have occurred prior to the Reference Time for such determination and (ii) the "Benchmark Replacement Date" will be deemed to have occurred in the case of clause (1) or (2) with respect to any Benchmark upon the occurrence of the applicable event or events set forth therein with respect to all then-current Available Tenors of such Benchmark (or the published component used in the calculation thereof).

"<u>Benchmark Transition Event</u>" means the occurrence of one or more of the following events with respect to the<u>such</u> then-current Benchmark:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(1) a public statement or publication of information by or on behalf of the administrator of such Benchmark (or the published component used in the calculation thereof) announcing that such administrator has ceased or will cease to provide all Available Tenors of such Benchmark (or such component thereof), permanently or indefinitely, provided that, at the time of such statement or publication, there is no successor administrator that will continue to provide any Available Tenor of such Benchmark (or such component thereof);

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(2) a public statement or publication of information by the regulatory supervisor for the administrator of such Benchmark (or the published component used in the calculation thereof), the Federal Reserve Board, the NYFRB, <u>the CME Term SOFR Administrator,</u> an insolvency official with jurisdiction over the administrator for such Benchmark (or such component), a resolution authority with

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jurisdiction over the administrator for such Benchmark (or such component) or a court or an entity with similar insolvency or resolution authority over the administrator for such Benchmark (or such component), <u>in each case,</u> which states that the administrator of such Benchmark (or such component) has ceased or will cease to provide all Available Tenors of such Benchmark (or such component thereof) permanently or indefinitely, provided that, at the time of such statement or publication, there is no successor administrator that will continue to provide any Available Tenor of such Benchmark (or such component thereof); or

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(3) a public statement or publication of information by the regulatory supervisor for the administrator of such Benchmark (or the published component used in the calculation thereof) announcing that all Available Tenors of such Benchmark (or such component thereof) are no longer<u>, or as</u> <u>of a specified future date will no longer be,</u> representative.

For the avoidance of doubt, a "Benchmark Transition Event" will be deemed to have occurred with respect to any Benchmark if a public statement or publication of information set forth above has occurred with respect to each then-current Available Tenor of such Benchmark (or the published component used in the calculation thereof).

"<u>Benchmark Unavailability Period</u>" means<u>, with respect to any Benchmark,</u> the period (if any) (x) beginning at the time that a Benchmark Replacement Date pursuant to clauses (1) or (2) of that definition has occurred if, at such time, no Benchmark Replacement has replaced the<u>such</u> then-current Benchmark for all purposes hereunder and under any Loan Document in accordance with Section 2.14 and (y) ending at the time that a Benchmark Replacement has replaced the<u>such</u> then-current Benchmark for all purposes hereunder and under any Loan Document in accordance with Section 2.14.

"<u>Beneficial Owner</u>" means, with respect to any U.S. federal withholding Tax, the beneficial owner, for U.S. federal income tax purposes, to whom such Tax relates.

"<u>Beneficial Ownership Certification</u>" shall mean a certification regarding beneficial ownership as required by the Beneficial Ownership Regulation.

"<u>Beneficial Ownership Regulation</u>" shall mean 31 C.F.R. § 1010.230.

"<u>Board</u>" means the Board of Governors of the Federal Reserve System of the U.S.

"<u>Borrower Representative</u>" has the meaning assigned to such term in Section 11.01.

"<u>Borrowers</u>" has the meaning assigned to such term in the Preamble hereto.

"<u>Borrowing</u>" means (a) Revolving Loans of the same Type, made, converted or continued on the same date and, in the case of Eurodollar<u>Term Benchmark</u> Loans, as to which a single Interest Period is in effect, (b) Term A Loans of the same Type made on the Effective Date, (c) Delayed Draw Term Loans of the same Type made during the Delayed Draw Term Loan Availability Period, and in the case of Term A Loans and Delayed Draw Term Loans, thereafter converted or continued on the same date and, in the case of Eurodollar Loans, as to which a single Interest Period is in effect and (d) Swingline Loans.<u>.</u>

"<u>Borrowing Request</u>" means a request by the Parent Borrower for a Borrowing in accordance with Section 2.03.

"<u>Burdensome Restrictions</u>" means any consensual encumbrance or restriction of the type described in clause (a) or (b) of Section 6.10.

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"<u>Business Day</u>" means any day that is not<u>(other than</u> a Saturday, <u>or a</u> Sunday or other day<u>)</u> on which commercial banks <u>are open for business</u> in New York City are authorized or required by law to remain closed<u>or Chicago</u>; provided that, when used in connection with a Eurodollar Loan, the term "Business Day" shall also exclude any day on which banks are not open for general business in London.<u>in</u> <u>relation to RFR Loans and any interest rate settings, fundings,</u> <u>disbursements, settlements or payments of</u> <u>any such RFR Loan, or any other dealings of such RFR</u> <u>Loan, any such day that is only an U.S.</u> <u>Government Securities Business Day.</u>

"<u>Capital Expenditures</u>" means, without duplication, any expenditure or commitment to expend money for any purchase or other acquisition of any asset which would be classified as a fixed or capital asset on a consolidated balance sheet of the Parent Borrower and its Subsidiaries prepared in accordance with GAAP.

<u>"Capitalized Software Expenditures" shall mean, for any period, the aggregate of all expenditures</u> <u>(whether paid in cash or accrued as liabilities) by a Person and its Subsidiaries during such period in</u> <u>respect of purchased software or internally developed software and software enhancements that, in</u> <u>conformity with GAAP, are or are required to be reflected as capitalized costs on the consolidated balance</u> <u>sheet of a Person and its Subsidiaries.</u>

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

"<u>CARES Act</u>" means the Coronavirus Aid, Relief, and Economic Security Act, and applicable rules and regulations.

"<u>CARES Allowable Uses</u>" means "allowable uses" of proceeds of an SBA PPP Loan as described in Section 1102 of the CARES Act.

"<u>Change in Control</u>" means (a) the acquisition of ownership, directly or indirectly, beneficially or of record, by any Person or group (within the meaning of the Securities Exchange Act of 1934 and the rules of the SEC thereunder as in effect on the date hereof) other than the Permitted Holders, of Equity Interests representing more than 50.1% of the aggregate ordinary voting power represented by the issued and outstanding Equity Interests of the Parent Borrower; (b) occupation at any time of a majority of the seats (other than vacant seats) on the board of directors of the Parent Borrower by Persons who were neither (i) directors of the Parent Borrower on the date of this Agreement nor (ii) nominated or appointed by the board of directors of the Parent Borrower; (c) the acquisition of direct or indirect Control of the Parent Borrower by any Person or group; (d) Parent Borrower shall cease to own, free and clear of all Liens or other encumbrances, 100% of the outstanding voting Equity Interests of each other Borrower on a fully diluted basis or (e) any Borrower shall cease to own, directly or indirectly, free and clear of all Liens or other encumbrances, 100% of the outstanding voting Equity Interests of each Subsidiary of such Borrower on a fully diluted basis.

"<u>Change in Law</u>" means the occurrence after the date of this Agreement (or, with respect to any Lender, such later date on which such Lender becomes a party to this Agreement) of any of the following: (a) the adoption of or taking effect of any law, rule, regulation or treaty, (b) any change in any law, rule, regulation or treaty or in the administration, interpretation or application thereof by any Governmental Authority or (c) compliance by any Lender or the Issuing Bank (or, for purposes of Section 2.15(b), by any lending office of such Lender or by such Lender's or the Issuing Bank's holding company, if any)

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with any request, guideline, requirement or directive (whether or not having the force of law) of any Governmental Authority made or issued after the date of this Agreement; provided that, notwithstanding anything herein to the contrary, (x) the Dodd-Frank Wall Street Reform and Consumer Protection Act and all requests, rules, guidelines, requirements or directives thereunder or issued in connection therewith or in the implementation thereof, and (y) all requests, rules, guidelines, requirements or directives promulgated by the Bank for International Settlements, the Basel Committee on Banking Supervision (or any successor or similar authority) or the U.S. or foreign regulatory authorities, in each case pursuant to Basel III, shall in each case be deemed to be a "Change in Law", regardless of the date enacted, adopted, issued or implemented.

"<u>Charges</u>" has the meaning assigned to such term in Section 9.17.

"<u>Class</u>", when used in reference to (a) any Loan or Borrowing, refers to whether such Loan, or the Loans comprising such Borrowing, are Revolving Loans, a Term A Loan or a Delayed Draw Term Loan, (b) any Commitment, refers to whether such Commitment is a Revolving Commitment, a Term A Loan Commitment or a Delayed Draw Term Loan Commitment and (c) any Lender, refers to whether such Lender has a Loan or Commitment of a particular Class.

<u>"CME Term SOFR Administrator" means CME Group Benchmark Administration Limited as</u> <u>administrator of the forward-looking term SOFR (or a successor administrator).</u>

"<u>Code</u>" means the Internal Revenue Code of 1986, as amended from time to time.

"<u>Collateral</u>" means any and all property owned, leased or operated by a Person covered by the Collateral Documents and any and all other property of any Loan Party, now existing or hereafter acquired, that may at any time be, become or intended to be, subject to a security interest or Lien in favor of the Administrative Agent, on behalf of itself and the Lenders and other Secured Parties, to secure the Secured Obligations.

"<u>Collateral Access Agreement</u>" has the meaning assigned to such term in the Security Agreement.

"<u>Collateral Documents</u>" means, collectively, the Security Agreement, the UK Pledge Agreement, the IP Security Agreement and any other agreements, instruments and documents executed in connection with this Agreement that are intended to create, perfect or evidence Liens to secure the Secured Obligations, including, without limitation, all other security agreements, pledge agreements, mortgages, deeds of trust, loan agreements, notes, guarantees, subordination agreements, pledges, powers of attorney, consents, assignments, contracts, fee letters, notices, leases, financing statements and all other written matter whether theretofore, now or hereafter executed by any Loan Party and delivered to the Administrative Agent.

"<u>Commitment</u>" means, with respect to each Lender, the sum of such Lender's Revolving Commitment, Term A Loan Commitments and Delayed Draw Term Loan Commitments. The initial amount of each Lender's Commitment is set forth on the <u>Commitment Schedule</u>, or in the Assignment and Assumption pursuant to which such Lender shall have assumed its Commitment, as applicable.

"<u>Commitment Schedule</u>" means the Schedule attached hereto identified as such.

"<u>Commodity Exchange Act</u>" means the Commodity Exchange Act (7 U.S.C. § 1 et seq.), as amended from time to time, and any successor statute.

"<u>Communications</u>" has the meaning assigned to such term in Section 9.01(d).

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"<u>Connection Income Taxes</u>" means Other Connection Taxes that are imposed on or measured by net income (however denominated) or that are franchise Taxes or branch profits Taxes.

<u>"Consolidated Revenue" means, as of any date of determination thereof, total revenue of the</u> <u>Borrowers and their Subsidiaries calculated in accordance with GAAP on a consolidated basis as of such</u> date.

<u>"Consolidated Total Assets" means,</u> <u>as of the date of</u> <u>any determination thereof, total assets of</u> <u>the</u> <u>Borrowers and their Subsidiaries</u> <u>calculated in accordance with GAAP on a consolidated basis as of such</u> <u>date.</u>

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

"<u>Corresponding Tenor</u>" with respect to any Available Tenor means, as applicable, either a tenor (including overnight) or an interest payment period having approximately the same length (disregarding business day adjustment) as such Available Tenor.

"<u>Credit Exposure</u>" means, as to any Lender at any time, the sum of (a) such Lender's Revolving Exposure at such time plus (b) the aggregate principal amount of its Term A Loans (including outstanding Delayed Draw Term Loans) outstanding at such time plus (c) an amount equal to such Lender's undrawn portion of the Delayed Draw Term Loan Commitment during the Delayed Draw Term Loan Availability Period.<u>.</u>

"<u>Credit Party</u>" means the Administrative Agent, the Issuing Bank, the Swingline Lender or any other Lender.

"<u>Daily Simple SOFR</u>" means, for any day, <u>(a "</u><u>SOFR</u>, with the conventions for this rate (which will include a lookback) being established by the Administrative Agent in accordance with the conventions for this rate selected or recommended by the Relevant Governmental Body for determining "Daily Simple SOFR" for business loans; provided, that if the Administrative Agent decides that any such convention is not administratively feasible for the Administrative Agent, then the Administrative Agent may establish another convention in its reasonable discretion. <u>Rate Day"), a rate per annum equal to</u> <u>SOFR for the day (such day "SOFR Determination Date") that is five (5) U.S. Government Securities</u> <u>Business Days prior to (i) if such SOFR Rate Day is a U.S. Government Securities Business Day, such</u> <u>SOFR Rate Day or (ii) if such SOFR Rate Day is not a U.S. Government Securities Business Day, the</u> <u>U.S. Government Securities Business Day immediately preceding such SOFR Rate Day, in each case, as</u> <u>such SOFR is published by the SOFR Administrator on the SOFR Administrator's Website. Any change</u> <u>in Daily Simple SOFR due to a change in SOFR shall be effective from and including the effective date</u> <u>of such change in SOFR without notice to the Borrower.</u>

"<u>Default</u>" means any event or condition which constitutes an Event of Default or which upon notice, lapse of time or both would, unless cured or waived, become an Event of Default.

"<u>Defaulting Lender</u>" means any Lender that (a) has failed, within two Business Days of the date required to be funded or paid, to (i) fund any portion of its Loans, (ii) fund any portion of its participations in Letters of Credit or Swingline Loans or (iii) pay over to any Credit Party any other amount required to be paid by it hereunder, unless, in the case of clause (i) above, such Lender notifies the Administrative Agent in writing that such failure is the result of such Lender's good faith determination that a condition precedent to funding (specifically identified and including the particular

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default, if any) has not been satisfied, (b) has notified the Parent Borrower or any Credit Party in writing, or has made a public statement to the effect, that it does not intend or expect to comply with any of its funding obligations under this Agreement (unless such writing or public statement indicates that such position is based on such Lender's good faith determination that a condition precedent (specifically identified and including the particular default, if any) to funding a Loan under this Agreement cannot be satisfied) or generally under other agreements in which it commits to extend credit, (c) has failed, within three Business Days after request by a Credit Party, acting in good faith, to provide a certification in writing from an authorized officer of such Lender that it will comply with its obligations (and is financially able to meet such obligations) to fund prospective Loans and participations in then outstanding Letters of Credit and Swingline Loans under this Agreement, provided that such Lender shall cease to be a Defaulting Lender pursuant to this clause (c) upon such Credit Party's receipt of such certification in form and substance satisfactory to it and the Administrative Agent, or (d) has become the subject of (i) a Bankruptcy Event or (ii) a Bail-In Action.

"<u>Delayed Draw Term Loan</u>" means a Loan made pursuant to Section 2.01(c).

"<u>Delayed Draw Term Loan Availability Period</u>" means the period from the Effective Date through but excluding January 16, 2021 (or such earlier date on which the aggregate Delayed Draw Term Loan Commitments have been reduced to zero).

"<u>Delayed Draw Term Loan Borrowing</u>" means a Borrowing during the Delayed Draw Term Loan Availability Period consisting of a Delayed Draw Term Loan.

"<u>Delayed Draw Term Loan Commitment</u>" means, with respect to each Delayed Draw Term Loan Lender, the commitment, if any, of such Lender to make Delayed Draw Term Loans, expressed as an amount representing the maximum principal amount of the Delayed Draw Term Loan to be made by such Lender, as such commitment may be reduced or increased from time to time during the Delayed Draw Term Loan Availability Period pursuant to (a) Section 2.09 and (b) assignments by or to such Lenders pursuant to Section 9.04. The initial amount of each Lender's Delayed Draw Term Loan Commitment is set forth on the Commitment Schedule or in the Assignment and Assumption pursuant to which such Lender shall have assumed its Delayed Draw Term Loan Commitment, as applicable. The aggregate amount of the Lenders' Delayed Draw Term Loan Commitment on the Effective Date is $20,000,000.

"<u>Delayed Draw Term Loan Effective Date</u>" means the date on which the conditions specified in Section 4.02 are satisfied (or waived in accordance with Section 9.02).

"<u>Delayed Draw Term Loan Expiration Date</u>" means the last Business Day during the Delayed Draw Term Loan Availability Period.

"<u>Delayed Draw Term Loan Lender</u>" means a Lender having a Delayed Draw Term Loan Commitment or an outstanding Delayed Draw Term Loan.

"<u>Delayed Draw Term Loan Maturity Date</u>" means July 16, 2024.

"<u>Disclosed Matters</u>" means the actions, suits, proceedings and environmental matters disclosed in <u>Schedule 3.06</u>.

<u>"Dividing Person</u><u>" has the meaning assigned to</u> <u>it in the definition of "Division."</u>

<u>"Division" means the division of the assets, liabilities and/or obligations of a Person (the</u> <u>"Dividing Person") among two or more Persons (whether pursuant to a "plan of division" or similar</u> 

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<u>arrangement), which may or may not include the Dividing Person and pursuant to which the Dividing</u> <u>Person may or may not survive.</u>

<u>"Division Successor" means any Person that, upon the consummation of a Division of a Dividing</u> <u>Person, holds</u> <u>all or any portion of</u> <u>the assets, liabilities and/or obligations previously held by such</u> <u>Dividing Person immediately prior to the consummation of such Division. A Dividing Person which</u> <u>retains any of its assets, liabilities and/or obligations after a Division shall be deemed a Division</u> <u>Successor upon the occurrence of such Division.</u>

"<u>Document</u>" has the meaning assigned to such term in the Security Agreement.

"<u>Dollars</u>" or "<u>$</u>" refers to lawful money of the U.S.

"<u>Domestic Subsidiary</u>" means a Subsidiary organized under the laws of the United States or any state or territory thereof or the District of Columbia, other than any Foreign Holdco.

"<u>Early Opt-in Election</u>" means, if the then-current Benchmark is LIBO Rate, the occurrence of:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(1)&nbsp;&nbsp;&nbsp;&nbsp;a notification by the Administrative Agent to (or the request by the Borrower Representative to the Administrative Agent to notify) each of the other parties hereto that at least five currently outstanding dollar-denominated syndicated credit facilities at such time contain (as a result of amendment or as originally executed) a SOFR-based rate (including SOFR, a term SOFR or any other rate based upon SOFR) as a benchmark rate (and such syndicated credit facilities are identified in such notice and are publicly available for review), and

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(2)&nbsp;&nbsp;&nbsp;&nbsp;the joint election by the Administrative Agent and the Borrower Representative to trigger a fallback from LIBO Rate and the provision by the Administrative Agent of written notice of such election to the Lenders.

"<u>EBITDA</u>" means, for any period, Net Income for such period *plus* (a) without duplication and to the extent deducted in determining Net Income for such period, the sum of (i) Interest Expense for such period, (ii) income tax expense for such period net of tax refunds, (iii) all amounts attributable to depreciation and amortization expense for such period, (iv) any extraordinary non-cash charges for such period, (v) any other non-cash charges or expenses for such period (but excluding any non-cash charge in respect of an item that was included in Net Income in a prior period and any non-cash charge that relates to the write down or write off of inventory) and<u>,</u> (vi) any non-recurring fees, cash charges and other cash expenses made or incurred by the Borrowers in an aggregate amount not to exceed 5.0% of EBITDA for the period of four consecutive fiscal quarters ending on the last day of any fiscal quarter during the term hereof <u>and (vii) expenses, charges or costs incurred in connection with the initial public offering of any</u> <u>Credit Party in an aggregate amount not to exceed 10.0% of EBITDA for the period of four consecutive</u> <u>fiscal quarters ending on the last day of any fiscal quarter during the term hereof</u> <u>minus</u> (b) without duplication and to the extent included in Net Income, <u>(i)</u> any extraordinary gains and any non-cash items of income for <u>such period and (ii) all the amount of Capitalized Software Expenditures or costs during</u> such period, all calculated for the Parent Borrower and its Subsidiaries on a consolidated basis in accordance with GAAP.

"<u>ECP</u>" means an "eligible contract participant" as defined in Section 1(a)(18) of the Commodity Exchange Act or any regulations promulgated thereunder and the applicable rules issued by the Commodity Futures Trading Commission and/or the SEC.

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"<u>EEA Financial Institution</u>" means (a) any credit institution or investment firm established in any EEA Member Country which is subject to the supervision of an EEA Resolution Authority, (b) any entity established in an EEA Member Country which is a parent of an institution described in clause (a) of this definition, or (c) any financial institution established in an EEA Member Country which is a subsidiary of an institution described in clauses (a) or (b) of this definition and is subject to consolidated supervision with its parent.

"<u>EEA Member Country</u>" means any of the member states of the European Union, Iceland, Liechtenstein, and Norway.

"<u>EEA Resolution Authority</u>" means any public administrative authority or any Person entrusted with public administrative authority of any EEA Member Country (including any delegee) having responsibility for the resolution of any EEA Financial Institution.

"<u>Effective Date</u>" means the date on which the conditions specified in Section 4.01 are satisfied (or waived in accordance with Section 9.02).

"<u>Electronic Signature</u>" means an electronic sound, symbol, or process attached to, or associated with, a contract or other record and adopted by a Person with the intent to sign, authenticate or accept such contract or record.

"<u>Electronic System</u>" means any electronic system, including e-mail, e-fax, Intralinks®, ClearPar®, Debt Domain, Syndtrak and any other Internet or extranet-based site, whether such electronic system is owned, operated or hosted by the Administrative Agent and the Issuing Bank and any of its respective Related Parties or any other Person, providing for access to data protected by passcodes or other security system.

"<u>Environmental Laws</u>" means all laws, rules, regulations, codes, ordinances, orders, decrees, judgments, injunctions, notices or binding agreements issued, promulgated or entered into by any Governmental Authority, relating in any way to the environment, preservation or reclamation of natural resources, the management, Release or threatened Release of any Hazardous Material or to health and safety matters.

"<u>Environmental Liability</u>" means any liability, contingent or otherwise (including any liability for damages, costs of environmental remediation, fines, penalties or indemnities), of the Borrowers or any Subsidiary directly or indirectly resulting from or based upon (a) any violation of any Environmental Law, (b) the generation, use, handling, transportation, storage, treatment or disposal of any Hazardous Materials, (c) any exposure to any Hazardous Materials, (d) the Release or threatened Release of any Hazardous Materials into the environment or (e) any contract, agreement or other consensual arrangement pursuant to which liability is assumed or imposed with respect to any of the foregoing.

"<u>Equipment</u>" has the meaning assigned to such term in the Security Agreement.

"<u>Equity Interests</u>" means shares of capital stock, partnership interests, membership interests in a limited liability company, beneficial interests in a trust or other equity ownership interests in a Person, and any warrants, options or other rights entitling the holder thereof to purchase or acquire any of the foregoing.

"<u>ERISA</u>" means the Employee Retirement Income Security Act of 1974, as amended from time to time.

"<u>ERISA Affiliate</u>" means any trade or business (whether or not incorporated) that, together with the Borrowers, is treated as a single employer under Section 414(b) or (c) of the Code or, solely for

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purposes of Section 302 of ERISA and Section 412 of the Code, is treated as a single employer under Section 414 of the Code.

"<u>ERISA Event</u>" means (a) any "reportable event", as defined in Section 4043 of ERISA or the regulations issued thereunder, with respect to a Plan (other than an event for which the 30 day notice period is waived); (b) the failure to satisfy the "minimum funding standard" (as defined in Section 412 of the Code or Section 302 of ERISA), whether or not waived; (c) the filing pursuant to Section 412(c) of the Code or Section 302(c) of ERISA of an application for a waiver of the minimum funding standard with respect to any Plan; (d) the incurrence by the Parent Borrower or any ERISA Affiliate of any liability under Title IV of ERISA with respect to the termination of any Plan; (e) the receipt by the Parent Borrower or any ERISA Affiliate from the PBGC or a plan administrator of any notice relating to an intention to terminate any Plan or Plans or to appoint a trustee to administer any Plan; (f) the incurrence by the Parent Borrower or any ERISA Affiliate of any liability with respect to the withdrawal or partial withdrawal of the Parent Borrower or any ERISA Affiliate from any Plan or Multiemployer Plan; or (g) the receipt by the Parent Borrower or any ERISA Affiliate of any notice, or the receipt by any Multiemployer Plan from the Parent Borrower or any ERISA Affiliate of any notice, concerning the imposition upon the Parent Borrower or any ERISA Affiliate of Withdrawal Liability or a determination that a Multiemployer Plan is, or is expected to be, insolvent or in reorganization, within the meaning of Title IV of ERISA.

"<u>Estate Planning Affiliates</u>" means as to any natural Person, such Person's heirs, descendants, legatees, trusts, successor trusts, family trusts, family partnerships, family limited liability companies and other entities used for estate planning purposes, in each case, organized for the benefit of or controlled by one or more of the foregoing Persons or any Person controlled by, or any successor Person to, any of the foregoing.

"<u>EU Bail-In Legislation Schedule</u>" means the EU Bail-In Legislation Schedule published by the Loan Market Association (or any successor Person), as in effect from time to time.

"<u>Eurodollar</u>", when used in reference to any Loan or Borrowing, refers to whether such Loan, or the Loans comprising such Borrowing, bear interest at a rate determined by reference to the Adjusted LIBO Rate.

"<u>Eurodollar Borrowing</u>" or "<u>Eurodollar Loan</u>" means a Loan bearing interest based on the Eurodollar rate.

"<u>Event of Default</u>" has the meaning assigned to such term in Article VII.

<u>"Excluded Account" means (a) any accounts maintained by any Loan Party outside the United</u> <u>States in connection with the conduct of such Loan Parties' operations outside the United States</u> <u>in the</u> <u>ordinary course of business</u> <u>in an aggregate amount not to exceed ten percent (10%) of the Loan Parties'</u> <u>aggregate corporate deposits and (b) accounts maintained by non-Loan Party Subsidiaries outside the</u> <u>United States.</u>

"<u>Excluded Collateral</u>" has the meaning given to that term in the Security Agreement.

"<u>Excluded Swap Obligation</u>" means, with respect to any Guarantor, any Swap Obligation if, and to the extent that, all or a portion of the Guarantee of such Guarantor of, or the grant by such Guarantor of a security interest to secure, such Swap Obligation (or any Guarantee thereof) is or becomes illegal under the Commodity Exchange Act or any rule, regulation or order of the Commodity Futures Trading Commission (or the application or official interpretation of any thereof) by virtue of such Guarantor's failure for any reason to constitute an ECP at the time the Guarantee of such Guarantor or the grant of

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such security interest becomes or would become effective with respect to such Swap Obligation. If a Swap Obligation arises under a master agreement governing more than one swap, such exclusion shall apply only to the portion of such Swap Obligation that is attributable to swaps for which such Guarantee or security interest is or becomes illegal.

"<u>Excluded Taxes</u>" means any of the following Taxes imposed on or with respect to a Recipient or required to be withheld or deducted from a payment to a Recipient: (a) Taxes imposed on or measured by net income (however denominated), franchise Taxes, and branch profits Taxes, in each case, (i) imposed as a result of such Recipient being organized under the laws of, or having its principal office or, in the case of any Lender, its applicable lending office located in, the jurisdiction imposing such Tax (or any political subdivision thereof) or (ii) that are Other Connection Taxes, (b) in the case of a Lender, U.S. federal withholding Taxes imposed on amounts payable to or for the account of such Lender with respect to an applicable interest in a Loan, Letter of Credit or Commitment pursuant to a law in effect on the date on which (i) such Lender acquires such interest in the Loan, Letter of Credit or Commitment (other than pursuant to an assignment request by the Parent Borrower under Section 2.19(b)) or (ii) such Lender changes its lending office, except in each case to the extent that, pursuant to Section 2.17, amounts with respect to such Taxes were payable either to such Lender's assignor immediately before such Lender acquired the applicable interest in a Loan, Letter of Credit or Commitment or to such Lender immediately before it changed its lending office, (c) Taxes attributable to such Recipient's failure to comply with Section 2.17(f) and (d) any Taxes imposed under FATCA.

"<u>Existing Credit Agreement</u>" shall have the meaning set forth in the Recitals.

"<u>FATCA</u>" means Sections 1471 through 1474 of the Code as of the date of this Agreement (or any amended or successor version that is substantively comparable and not materially more onerous to comply with), any current or future regulations or official interpretations thereof and any agreement entered into pursuant to Section 1471(b)(1) of the Code and any intergovernmental agreement entered into in connection with the implementation of such Sections of the Code and any fiscal or regulatory legislation, rules or practices adopted pursuant to such intergovernmental agreement.

"<u>Federal Funds Effective Rate</u>" means, for any day, the rate calculated by the NYFRB based on such day's federal funds transactions by depositary institutions (<u>,</u> as determined in such manner as the NYFRB shall <u>be</u> set forth on its public website<u>the NYFRB's Website</u> from time to time)<u>,</u> and published on the next succeeding Business Day by the NYFRB as the <u>effective</u> federal funds effective rate<u>, provided</u> <u>that, if</u> <u>the Federal Funds Effective Rate</u> <u>as so determined would be less than 0.00</u><u>%, such rate shall be</u> <u>deemed to be</u> <u>0.00% for the purposes of this Agreement</u>.

<u>"Federal Reserve Board" means the Board of Governors of the Federal Reserve System of the</u> <u>United States of America.</u>

"<u>Financial Officer</u>" means the chief financial officer, principal accounting officer, treasurer or controller of the Parent Borrower.

"<u>Financial Statements</u>" has the meaning assigned to such term in Section 5.01.

"<u>Fixed Charge Coverage Ratio</u>" means, for any period, the ratio of (a) EBITDA *<u>minus</u>* Capital Expenditures *<u>minus</u>* Restricted Payments made pursuant to Section 6.08(a) (excluding the Original Effective Date Distribution) to (b) Fixed Charges, all calculated for the Parent Borrower and its Subsidiaries on a consolidated basis in accordance with GAAP.

"<u>Fixed Charges</u>" means, for any period, without duplication, cash Interest Expense, *<u>plus</u>* scheduled principal payments on Indebtedness actually made in cash, *<u>plus</u>* expense for taxes paid in cash,

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all calculated for the Parent Borrower and its Subsidiaries on a consolidated basis in accordance with GAAP.

"<u>Fixtures</u>" has the meaning assigned to such term in the Security Agreement.

"<u>Floor</u>" means the benchmark rate floor, if any, provided in this Agreement initially (as of the execution of this Agreement, the modification, amendment or renewal of this Agreement or otherwise) with respect to LIBO Rate.<u>the Adjusted Term SOFR Rate or the Adjusted Daily Simple SOFR, as</u> <u>applicable</u><u>. For the avoidance of doubt, the</u> <u>initial Floor for each of Adjusted Term SOFR Rate or</u> <u>Adjusted Daily Simple SOFR shall be 0.00%.</u>

"<u>Foreign Holdco</u>" means a Subsidiary with no material assets other than Equity Interests (including, for this purpose, any debt or other instrument treated as equity for U.S. federal income tax purposes) in one or more Foreign Subsidiaries or Foreign Holdcos.

"<u>Foreign Lender</u>" means (a) if the Borrower is a U.S. Person, a Lender that is not a U.S. Person, and (b) if the Borrower is not a U.S. Person, a Lender that is resident or organized under the laws of a jurisdiction other than that in which the Borrower is resident for tax purposes.

"<u>Foreign Subsidiary</u>" means (a) any Subsidiary which is not a Domestic Subsidiary and (b) any Domestic Subsidiary of any Subsidiary described in the foregoing clause (a).

"<u>Fourth Amendment</u>" means that certain Fourth Amendment to Third Amended and Restated Credit Agreement dated as of the Fourth Amendment Effective Date.

"<u>Fourth Amendment Effective Date</u>" has the meaning assigned to the term in the Fourth Amendment.

"<u>Funded Indebtedness</u>" means any Indebtedness described in clauses (a), (b), (c), (e), (g), (h), and (i) of the defined term "Indebtedness" (limited, in the case of clause (g), to Guarantees of Indebtedness of the kind described in clauses (a), (b), (c), (h) and (i) of such defined term).

"<u>Funding Account</u>" has the meaning assigned to such term in Section 4.01(g).

"<u>GAAP</u>" means generally accepted accounting principles in the U.S.

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

"<u>Guarantee</u>" of or by any Person (the "<u>guarantor</u>") means any obligation, contingent or otherwise, of the guarantor guaranteeing or having the economic effect of guaranteeing any Indebtedness or other obligation of any other Person (the "<u>primary obligor</u>") in any manner, whether directly or indirectly, and including any obligation of the guarantor, direct or indirect, (a) to purchase or pay (or advance or supply funds for the purchase or payment of) such Indebtedness or other obligation or to purchase (or to advance or supply funds for the purchase of) any security for the payment thereof, (b) to purchase or lease property, securities or services for the purpose of assuring the owner of such Indebtedness or other obligation of the payment thereof, (c) to maintain working capital, equity capital or any other financial statement condition or liquidity of the primary obligor so as to enable the primary obligor to pay such Indebtedness or other obligation or (d) as an account party in respect of any letter of credit or letter of

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guaranty issued to support such Indebtedness or obligation; <u>provided</u> that the term Guarantee shall not include endorsements for collection or deposit in the ordinary course of business.

"<u>Guaranteed Obligations</u>" has the meaning assigned to such term in Section 10.01.

"<u>Guarantors</u>" means all Loan Guarantors and all non-Loan Parties who have delivered an Obligation Guaranty, and the term "Guarantor" means each or any one of them individually.

"<u>Hazardous Materials</u>" means: (a) any substance, material, or waste that is included within the definitions of "hazardous substances," "hazardous materials," "hazardous waste," "toxic substances," "toxic materials," "toxic waste," or words of similar import in any Environmental Law; (b) those substances listed as hazardous substances by the United States Department of Transportation (or any successor agency) (49 C.F.R. 172.101 and amendments thereto) or by the Environmental Protection Agency (or any successor agency) (40 C.F.R. Part 302 and amendments thereto); and (c) any substance, material, or waste that is petroleum, petroleum-related, or a petroleum by-product, asbestos or asbestos-containing material, polychlorinated biphenyls, flammable, explosive, radioactive, freon gas, radon, or a pesticide, herbicide, or any other agricultural chemical.

"<u>Impacted Interest Period</u>" has the meaning assigned to such term in the definition of "LIBO Rate".

<u>"Immaterial Foreign Subsidiary" means each Foreign Subsidiary so long as such Foreign</u> <u>Subsidiary individually and all Immaterial Foreign Subsidiaries in the aggregate do not contribute greater</u> <u>than either five percent (5%) of Consolidated Revenue or five percent (5%) of Consolidated Total Assets,</u> <u>as of the most recent calendar quarter of the Company, for the period of twelve (12) consecutive calendar</u> <u>months then ended, for which financial statements have been delivered pursuant to Section</u> 5.01(b).

"<u>Indebtedness</u>" of any Person means, without duplication, (a) all obligations of such Person for borrowed money or with respect to deposits or advances of any kind, (b) all obligations of such Person evidenced by bonds, debentures, notes or similar instruments, (c) all obligations of such Person upon which interest charges are customarily paid, (d) all obligations of such Person under conditional sale or other title retention agreements relating to property acquired by such Person, (e) all obligations of such Person in respect of the deferred purchase price of property or services (excluding current accounts payable incurred in the ordinary course of business, but, including earn-outs or similar deferred payments that are not contingent and are actually due and payable), (f) all Indebtedness of others secured by (or for which the holder of such Indebtedness has an existing right, contingent or otherwise, to be secured by) any Lien on property owned or acquired by such Person, whether or not the Indebtedness secured thereby has been assumed, (g) all Guarantees by such Person of Indebtedness of others, (h) all Capital Lease Obligations of such Person, (i) all obligations, contingent or otherwise, of such Person as an account party in respect of letters of credit and letters of guaranty, (j) all obligations, contingent or otherwise, of such Person in respect of bankers' acceptances, (k) obligations, whether absolute or contingent and howsoever and whensoever created, arising, evidenced or acquired (including all renewals, extensions and modifications thereof and substitutions therefor), under (i) any and all Swap Agreements, and (ii) any and all cancellations, buy backs, reversals, terminations or assignments of any Swap Agreement transaction. The Indebtedness of any Person shall include the Indebtedness of any other entity (including any partnership in which such Person is a general partner) to the extent such Person is liable therefor as a result of such Person's ownership interest in or other relationship with such entity, except to the extent the terms of such Indebtedness provide that such Person is not liable therefor. The obligations of the Person in respect of any Swap Agreement at any time shall be the maximum aggregate amount (giving effect to any netting agreements) that such Person would be required to pay if such Swap Agreement were terminated at such time.

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

"<u>Indemnitee</u>" has the meaning assigned to such term in Section 9.03(b).

"<u>Ineligible Institution</u>" has the meaning assigned to such term in Section 9.04(b).

"<u>Information</u>" has the meaning assigned to such term in Section 9.12.

"<u>Interest Election Request</u>" means a request by the Parent Borrower to convert or continue a Borrowing in accordance with Section 2.08.

"<u>Interpolated Rate</u>" means, at any time, for any Interest Period, the rate per annum (rounded to the same number of decimal places as the LIBO Screen Rate) determined by the Lender (which determination shall be conclusive and binding absent manifest error) to be equal to the rate that results from interpolating on a linear basis between: (a) the LIBO Screen Rate for the longest period (for which the LIBO Screen Rate is available) that is shorter than the Impacted Interest Period and (b) the LIBO Screen Rate for the shortest period (for which the LIBO Screen Rate is available) that exceeds the Impacted Interest Period, in each case, at such time; provided, that, if any Interpolated Rate shall be less than 0%, such rate shall be deemed to be 0% for purposes of this Agreement.

"<u>Interest Expense</u>" means, with reference to any period, total interest expense (including that attributable to Capital Lease Obligations) of the Parent Borrower and its Subsidiaries for such period with respect to all outstanding Indebtedness of the Parent Borrower and its Subsidiaries (including all commissions, discounts and other fees and charges owed with respect to letters of credit and bankers' acceptances and net costs under Swap Agreements in respect of interest rates, to the extent such net costs are allocable to such period in accordance with GAAP), calculated for the Parent Borrower and its Subsidiaries on a consolidated basis for such period in accordance with GAAP.

"<u>Interest Payment Date</u>" means (a) with respect to any ABR Loan, the first Business Day of each calendar quarter and the Revolving Credit Maturity Date, the Term A Maturity Date or the Delayed Draw Term Loan Maturity Date, as applicable, (b) with respect to any Eurodollar <u>RFR Loan, (1) each date that</u> <u>is on the numerically corresponding day in each calendar month that is one month after the Borrowing of</u> <u>such Loan (or, if there is no such numerically corresponding day in such month, then the last day of such</u> <u>month) and (2)</u> <u>the Revolving Credit Maturity Date</u><u>,</u> <u>and (c) with respect to any</u> <u>Term Benchmark</u> Loan, the last day of the<u>each</u> Interest Period applicable to the Borrowing of which such Loan is a part and, in the case of a Eurodollar<u>Term Benchmark</u> Borrowing with an Interest Period of more than three months' duration, each day prior to the last day of such Interest Period that occurs at intervals of three months' duration after the first day of such Interest Period and the Revolving Credit Maturity Date, the Term A Maturity Date or the Delayed Draw Term Loan Maturity Date, as applicable and (c) with respect to any Swingline Loan, the day that such Loan is required to be repaid and the Revolving Credit Maturity Date.

"<u>Interest Period</u>" means with respect to any Eurodollar<u>Term Benchmark</u> Borrowing, the period commencing on the date of such Eurodollar Borrowing and ending on the numerically corresponding day in the calendar month that is one, three or six months thereafter, <u>as the Parent Borrower (in each case,</u> <u>subject to the availability for the Benchmark applicable to the relevant Loan or (Commitment), as the</u> as the Parent Borrower may elect; provided that (i) if any Interest Period would end on a day other than a Business Day, such Interest Period shall be extended to the next succeeding Business Day unless such next succeeding Business Day would fall in the next calendar month, in which case such Interest Period shall end on the next preceding Business Day and<u>,</u> (ii) any Interest Period that commences on the last

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Business Day of a calendar month (or on a day for which there is no numerically corresponding day in the last calendar month of such Interest Period) shall end on the last Business Day of the last calendar month of such Interest Period<u>, and (iii) no tenor that has been removed from this definition pursuant to Section</u> <u>2.14(e) shall be available for specification in such Borrowing Request or Interest Election Request</u>. For purposes hereof, the date of a Borrowing initially shall be the date on which such Borrowing is made and thereafter shall be the effective date of the most recent conversion or continuation of such Borrowing.

"<u>Interpolated Rate</u>" means, at any time, for any Interest Period, the rate per annum (rounded to the same number of decimal places as the LIBO Screen Rate) determined by the Administrative Agent (which determination shall be conclusive and binding absent manifest error) to be equal to the rate that results from interpolating on a linear basis between: (a) the LIBO Screen Rate for the longest period (for which the LIBO Screen Rate is available) that is shorter than the Impacted Interest Period and (b) the LIBO Screen Rate for the shortest period (for which the LIBO Screen Rate is available) that exceeds theImpacted Interest Period, in each case, at such time.

"<u>Inventory</u>" has the meaning assigned to such term in the Security Agreement.

"<u>IP Security Agreement</u>" means that certain Intellectual Property Security Agreement (including any and all supplements thereto), dated as of Original Effective Date, among the Initial Borrower and the Administrative Agent, for the benefit of the Administrative Agent and the other Secured Parties, as the same may be amended, restated, supplemented or otherwise modified from time to time.

"<u>IRS</u>" means the United States Internal Revenue Service.

"<u>Issuing Bank</u>" means, JPMorgan, in its capacity as the issuer of Letters of Credit hereunder. The Issuing Bank may, in its discretion, arrange for one or more Letters of Credit to be issued by its Affiliates, in which case the term "Issuing Bank" shall include any such Affiliate with respect to Letters of Credit issued by such Affiliate (it being agreed that the Issuing Bank shall, or shall cause such Affiliate to, comply with the requirements of Section 2.06 with respect to such Letters of Credit). At any time there is more than one Issuing Bank, all singular references to the Issuing Bank shall mean any Issuing Bank, either Issuing Bank, each Issuing Bank, the Issuing Bank that has issued the applicable Letter of Credit, or both (or all) Issuing Banks, as the context may require.

"<u>Issuing Bank Sublimit</u>" means, as of the Effective Date, $5,000,000<u>10,000,000</u>; provided that the Issuing Bank shall be permitted at any time to increase its Issuing Bank Sublimit upon providing five (5) days' prior written notice thereof to the Administrative Agent and the Parent Borrower.

"<u>Joinder Agreement</u>" means a Joinder Agreement in substantially the form of <u>Exhibit F</u>.

"<u>JPMorgan</u>" means JPMorgan Chase Bank, N.A., a national banking association, in its individual capacity, and its successors.

"<u>LC Collateral Account</u>" has the meaning assigned to such term in Section 2.06(j).

"<u>LC Disbursement</u>" means any payment made by an Issuing Bank pursuant to a Letter of Credit.

"<u>LC Exposure</u>" means, at any time, the sum of (a) the aggregate undrawn amount of all standby Letters of Credit outstanding at such time plus (b) the aggregate amount of all LC Disbursements relating to standby Letters of Credit that have not yet been reimbursed by or on behalf of the Parent Borrower at such time. The LC Exposure of any Revolving Lender at any time shall be its Applicable Percentage of the aggregate LC Exposure at such time.

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"<u>Lenders</u>" means the Persons listed on the <u>Commitment Schedule</u> and any other Person that shall have become a Lender hereunder pursuant to Section 9.02 or an Assignment and Assumption, other than any such Person that ceases to be a Lender hereunder pursuant to an Assignment and Assumption. Unless the context otherwise requires, the term "Lenders" includes the Issuing Bank.

"<u>Letters of Credit</u>" means the letters of credit issued pursuant to this Agreement, and the term "<u>Letter of Credit</u>" means any one of them or each of them singularly, as the context may require.

"<u>LIBO Rate</u>" means, with respect to any Eurodollar Borrowing for any Interest Period, the LIBO Screen Rate at approximately 11:00 a.m., London time, two Business Days prior to the commencement of such Interest Period; <u>provided</u> that if the LIBO Screen Rate shall not be available at such time for such Interest Period (an "<u>Impacted Interest Period</u>") then the LIBO Rate shall be the Interpolated Rate, subject to Section 2.14 in the event that the Administrative Agent shall conclude that it shall not be possible to determine such Interpolated Rate (which conclusion shall be conclusive and binding absent manifest error). Notwithstanding the above, to the extent that "LIBO Rate" or "Adjusted LIBO Rate" is used in connection with an ABR Borrowing, such rate shall be determined as modified by the definition of Alternate Base Rate.

"<u>LIBO Screen</u> <u>Rate</u>" means, for any day and time, with respect to any Eurodollar Borrowing for any Interest Period, the London interbank offered rate as administered by ICE Benchmark Administration (or any other Person that takes over the administration of such rate for Dollars for a period equal in length to such Interest Period as displayed on such day and time on pages LIBOR01 or LIBOR02 of the Reuters screen that displays such rate (or, in the event such rate does not appear on a Reuters page or screen, on any successor or substitute page on such screen that displays such rate, or on the appropriate page of such other information service that publishes such rate from time to time as selected by the Administrative Agent in its reasonable discretion, <u>provided</u> that if the LIBO Screen Rate shall be less than zero, such rate shall be deemed to zero for the purposes of this Agreement.

"<u>Lien</u>" means, with respect to any asset, (a) any mortgage, deed of trust, lien, pledge, hypothecation, encumbrance, charge or security interest in, on or of such asset, (b) the interest of a vendor or a lessor under any conditional sale agreement, capital lease or title retention agreement (or any financing lease having substantially the same economic effect as any of the foregoing) relating to such asset and (c) in the case of securities, any purchase option, call or similar right of a third party with respect to such securities.

"<u>Loan Documents</u>" means, collectively, this Agreement, each promissory note issued pursuant to this Agreement, any Letter of Credit application, each Collateral Document, the Loan Guaranty, any Obligation Guaranty and each other agreement, instrument, document and certificate identified in Section 4.01 executed and delivered to, or in favor of, the Administrative Agent or any Lender and including each other pledge, power of attorney, consent, assignment, contract, notice, letter of credit agreement, letter of credit applications and any agreements between the Parent Borrower and the Issuing Bank regarding the Issuing Bank's Issuing Bank Sublimit or the respective rights and obligations between the Parent Borrower and the Issuing Bank in connection with the issuance of Letters of Credit, and each other written matter whether heretofore, now or hereafter executed by or on behalf of any Loan Party, or any employee of any Loan Party, and delivered to the Administrative Agent or any Lender in connection with this Agreement or the transactions contemplated hereby. Any reference in this Agreement or any other Loan Document to a Loan Document shall include all appendices, exhibits or schedules thereto, and all amendments, restatements, supplements or other modifications thereto, and shall refer to this Agreement or such Loan Document as the same may be in effect at any and all times such reference becomes operative.

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"<u>Loan Guarantor</u>" means each Loan Party.

"<u>Loan Guaranty</u>" means <u>Article X</u> of this Agreement.

"<u>Loan Parties</u>" means, collectively, each Borrower, each Borrower's Domestic Subsidiaries and any other Person who becomes a party to this Agreement pursuant to a Joinder Agreement and their successors and assigns, and the term "Loan Party" shall mean any one of them or all of them individually, as the context may require.

"<u>Loans</u>" means the loans and advances made by the Lenders pursuant to this Agreement, including Swingline Loans.

"<u>Material Adverse Effect</u>" means a material adverse effect on (a) the business, assets, operations, prospects or financial condition or otherwise, of the Borrowers or the Parent Borrower and its Subsidiaries taken as a whole, (b) the ability of any Loan Party to perform any of its obligations under the Loan Documents to which it is a party, (c) the Collateral, or the Administrative Agent's Liens (on behalf of itself and the other Secured Parties) on the Collateral or the priority of such Liens, or (d) the rights of or benefits available to the Administrative Agent, the Issuing Bank or the Lenders under any of the Loan Documents.

"<u>Material Agreements</u>" means, with respect to any Person, each contract or agreement to which such Person or any of its Subsidiaries is a party involving aggregate consideration payable to or by such Person or such Subsidiary equal to or greater than 10% of Parent Borrower's and its Subsidiaries' total revenues (other than purchase orders in the ordinary course of the business of such Person or such Subsidiary and other than contracts that by their terms may be terminated by such Person or Subsidiary in the ordinary course of its business upon less than 60 days' notice without penalty or premium).

"<u>Material Indebtedness</u>" means Indebtedness (other than the Loans and Letters of Credit), or obligations in respect of one or more Swap Agreements, of any one or more of the Loan Parties in an aggregate principal amount exceeding $1,000,000<u>10,000,000</u>. For purposes of determining Material Indebtedness, the "principal amount" of the obligations of Parent Borrower or any Subsidiary in respect of any Swap Agreement at any time shall be the maximum aggregate amount (giving effect to any netting agreements) that Parent Borrower or such Subsidiary would be required to pay if such Swap Agreement were terminated at such time.

"<u>Maximum Rate</u>" has the meaning assigned to such term in Section 9.17.

"<u>Moody's</u>" means Moody's Investors Service, Inc.

"<u>Multiemployer Plan</u>" means a multiemployer plan as defined in Section 4001(a)(3) of ERISA.

"<u>Net Income</u>" means, for any period, the consolidated net income (or loss) determined for the Parent Borrower and its Subsidiaries, on a consolidated basis in accordance with GAAP; <u>provided</u> that there shall be excluded (a) the income (or deficit) of any Person accrued prior to the date it becomes a Subsidiary or is merged into or consolidated with the Parent Borrower or any Subsidiary, (b) the income (or deficit) of any Person (other than a Subsidiary) in which the Parent Borrower or any Subsidiary has an ownership interest, except to the extent that any such income is actually received by the Parent Borrower or such Subsidiary in the form of dividends or similar distributions and (c) the undistributed earnings of any Subsidiary to the extent that the declaration or payment of dividends or similar distributions by such Subsidiary is not at the time permitted by the terms of any contractual obligation (other than under any Loan Document) or Requirement of Law applicable to such Subsidiary.

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"<u>Net Proceeds</u>" means, with respect to any event, (a) the cash proceeds received in respect of such event including (i) any cash received in respect of any non-cash proceeds (including any cash payments received by way of deferred payment of principal pursuant to a note or installment receivable or purchase price adjustment receivable or otherwise, but excluding any interest payments), but only as and when received, (ii) in the case of a casualty, insurance proceeds and (iii) in the case of a condemnation or similar event, condemnation awards and similar payments, *<u>minus</u>* (b) the sum of (i) all reasonable fees and out-of-pocket expenses paid to third parties (other than Affiliates) in connection with such event, (ii) in the case of a sale, transfer or other disposition of an asset (including pursuant to a sale and leaseback transaction or a casualty or a condemnation or similar proceeding), the amount of all payments required to be made as a result of such event to repay Indebtedness (other than Loans) secured by such asset or otherwise subject to mandatory prepayment as a result of such event and (iii) the amount of all taxes paid (or reasonably estimated to be payable) and the amount of any reserves established to fund contingent liabilities reasonably estimated to be payable, in each case during the year that such event occurred or the next succeeding year and that are directly attributable to such event (as determined reasonably and in good faith by a Financial Officer).

"<u>Non-Consenting Lender</u>" has the meaning assigned to such term in Section 9.02(d).

"<u>NYFRB</u>" means the Federal Reserve Bank of New York.

"<u>NYFRB Rate</u>" means, for any day, the greater of (a) the Federal Funds Effective Rate in effect on such day and (b) the Overnight Bank Funding Rate in effect on such day(or for any day that is not a Banking<u>Business</u> Day, for the immediately preceding Banking<u>Business</u> Day); provided that if none of such rates are published for any day that is a Business Day, the term "NYFRB Rate" means the rate for a federal funds transaction quoted at 11:00 a.m. on such day received to<u>by</u> the Administrative Agent from a Federal<u>federal</u> funds broker of recognized standing selected by it; provided, further, that if any of the aforesaid rates shall<u>as so determined would</u> be less than zero<u>0.00%</u>, such rate shall be deemed to be zero<u>0.00%</u> for purposes of this Agreement.

"<u>NYFRB's Website</u>" means the website of the NYFRB at http://www.newyorkfed.org, or any successor source.

"<u>Obligated Party</u>" has the meaning assigned to such term in Section 10.02.

"<u>Obligation Guaranty</u>" means any Guarantee of all or any portion of the Secured Obligations executed and delivered to the Administrative Agent for the benefit of the Secured Parties by a guarantor who is not a Loan Party.

"<u>Obligations</u>" means all unpaid principal of and accrued and unpaid interest on the Loans, all LC Exposure, all accrued and unpaid fees and all expenses, reimbursements, indemnities and other obligations and indebtedness (including interest and fees accruing during the pendency of any bankruptcy, insolvency, receivership or other similar proceeding, regardless of whether allowed or allowable in such proceeding), obligations and liabilities of any of the Loan Parties to any of the Lenders, the Administrative Agent, the Issuing Bank or any indemnified party, individually or collectively, existing on the Effective Date or arising thereafter, direct or indirect, joint or several, absolute or contingent, matured or unmatured, liquidated or unliquidated, secured or unsecured, arising by contract, operation of law or otherwise, in each case to the extent arising or incurred under this Agreement or any of the other Loan Documents or in respect of any of the Loans made or reimbursement or other obligations incurred or any of the Letters of Credit or other instruments at any time evidencing any thereof.

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"<u>OFAC</u>" means the Office of Foreign Assets Control of the United States Department of the Treasury.

"<u>Original Effective Date</u>" means September 27, 2018.

"<u>Original Effective Date Distribution</u>" means a one-time special distribution made on the Original Effective Date to the equity holders of the Initial Borrower in an aggregate amount not to exceed $8,301,140.

"<u>Other Connection Taxes</u>" means, with respect to any Recipient, Taxes imposed as a result of a present or former connection between such Recipient and the jurisdiction imposing such Taxes (other than a connection arising from such Recipient having executed, delivered, become a party to, performed its obligations under, received payments under, received or perfected a security interest under, engaged in any other transaction pursuant to, or enforced, any Loan Document), or sold or assigned an interest in any Loan, Letter of Credit, or any Loan Document.

"<u>Other Taxes</u>" means all present or future stamp, court or documentary, intangible, recording, filing or similar Taxes that arise from any payment made under, from the execution, delivery, performance, enforcement or registration of, from the receipt or perfection of a security interest under, or otherwise with respect to, any Loan Document, except any such Taxes that are Other Connection Taxes imposed with respect to an assignment (other than an assignment made pursuant to Section 2.19).

"<u>Overnight Bank Funding Rate</u>" means, for any day, the rate comprised of both overnight federal funds and overnight Eurodollar borrowings<u>eurodollar transactions denominated in Dollars</u> by U.S.- managed banking offices of depository institutions (as such composite rate shall be determined by the NYFRB as set forth on its public website<u>the NYFRB's Website</u> from time to time) and published on the next succeeding Business Day by the NYFRB as an overnight bank funding rate (from and after such date as the NYFRB shall commence to publish such composite rate).

"<u>Paid in Full</u>" or "<u>Payment in Full</u>" means, (i) the payment in full in cash of all outstanding Loans and LC Disbursements, together with accrued and unpaid interest thereon, (ii) the termination, expiration, or cancellation and return of all outstanding Letters of Credit (or alternatively, with respect to each such Letter of Credit, the furnishing to the Administrative Agent of a cash deposit, or at the discretion of the Administrative Agent a backup standby letter of credit satisfactory to the Administrative Agent and the Issuing Bank, in an amount equal to 105% of the LC Exposure as of the date of such payment), (iii) the payment in full in cash of the accrued and unpaid fees, (iv) the payment in full in cash of all reimbursable expenses and other Secured Obligations (in each case, other than Unliquidated Obligations for which no claim has been made and other obligations expressly stated to survive such payment and termination of this Agreement), together with accrued and unpaid interest thereon, (v) the termination of all Revolving Commitments, and (vi) the termination (or cash collateralization in an amount acceptable to the Administrative Agent in its commercially reasonable discretion) of the Swap Agreement Obligations and the Banking Services Obligations.

"<u>Parent</u>" means, with respect to any Lender, any Person as to which such Lender is, directly or indirectly, a subsidiary.

"<u>Participant</u>" has the meaning assigned to such term in Section 9.04(c).

"<u>Participant Register</u>" has the meaning assigned to such term in Section 9.04(c).

"<u>Payment</u>" has the meaning assigned to it in Section 8.11(a).

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"<u>Payment Notice</u>" has the meaning assigned to it in Section 8.11(b).

"<u>PBGC</u>" means the Pension Benefit Guaranty Corporation referred to and defined in ERISA and any successor entity performing similar functions.

"<u>Permitted Acquisition</u>" means an Acquisition by the Parent Borrower in a transaction that satisfies each of the following requirements:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a)&nbsp;&nbsp;&nbsp;&nbsp;such Acquisition is not a hostile or contested acquisition;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b)&nbsp;&nbsp;&nbsp;&nbsp;the business acquired in connection with such Acquisition is (i) primarily located in the U.S., (ii) organized under applicable U.S. and state laws, and (iii) not engaged, directly or indirectly, in any line of business other than the businesses in which the Loan Parties are engaged on the Effective Date and any business activities that are substantially similar, related, or incidental thereto;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c)&nbsp;&nbsp;&nbsp;&nbsp;both immediately before and immediately after giving effect to such Acquisition and the Loans (if any) requested to be made in connection therewith, each of the representations and warranties in the Loan Documents is true and correct in all material respects and no Default exists, will exist, or would result therefrom;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(d)&nbsp;&nbsp;&nbsp;&nbsp;as soon as available, but not less than thirty (30) days prior to such Acquisition, the Parent Borrower has provided the Administrative Agent (i) notice of such Acquisition and (ii) a copy of all business and financial information reasonably requested by the Administrative Agent including pro forma financial statements, statements of cash flow, and Availability projections;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(e)&nbsp;&nbsp;&nbsp;&nbsp;if such Acquisition is an acquisition of the Equity Interests of a Person, such Acquisition is structured so that the acquired Person shall become a wholly-owned Subsidiary of the Parent Borrower and a Loan Party pursuant to the terms of this Agreement;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(f)&nbsp;&nbsp;&nbsp;&nbsp;if such Acquisition is an acquisition of assets, such Acquisition is structured so that the Parent Borrower or another Loan Party shall acquire such assets;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(g)&nbsp;&nbsp;&nbsp;&nbsp;if such Acquisition is an acquisition of Equity Interests, such Acquisition will not result in any violation of Regulation U;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(h)&nbsp;&nbsp;&nbsp;&nbsp;if such Acquisition involves a merger or a consolidation involving the Parent Borrower or any other Loan Party, the Parent Borrower or such Loan Party, as applicable, shall be the surviving entity;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(i)&nbsp;&nbsp;&nbsp;&nbsp;no Loan Party shall, as a result of or in connection with any such Acquisition, assume or incur any direct or contingent liabilities (whether relating to environmental, tax, litigation, or other matters) that could reasonably be expected to have a Material Adverse Effect;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(j)&nbsp;&nbsp;&nbsp;&nbsp;in connection with an Acquisition of the Equity Interests of any Person, all Liens on property of such Person shall be terminated unless the Administrative Agent and the Lenders in their sole discretion consent otherwise, and in connection with an Acquisition of the assets of any Person, all Liens on such assets shall be terminated (in each case except for Liens permitted by Section 6.02);

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(k)&nbsp;&nbsp;&nbsp;&nbsp;the Parent Borrower shall certify to the Administrative Agent and the Lenders (and provide the Administrative Agent and the Lenders with a pro forma calculation in form and substance reasonably satisfactory to the Administrative Agent and the Lenders) that, after giving effect to the completion of such Acquisition, on a Pro Forma Basis and at all times during the 12-month period prior to the consummation of such Acquisition, the Total Leverage Ratio is less than the level required

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pursuant to Section 6.12(a) less 0.50x; provided that if the Total Leverage Ratio exceeds such limit then, notwithstanding foregoing, the Parent Borrower shall not be required to make such certifications and instead shall certify to the Administrative Agent and the Lenders that the purchase price of (i) all Acquisitions in any fiscal year shall not exceed $10,000,000 and (ii) for all Acquisitions made during the term of this Agreement shall not exceed $25,000,000;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(l)&nbsp;&nbsp;&nbsp;&nbsp;all actions required to be taken with respect to any newly acquired or formed wholly-owned Subsidiary of the Parent Borrower or a Loan Party, as applicable, required under Section 5.12 shall have been taken; and

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(m)&nbsp;&nbsp;&nbsp;&nbsp;the Parent Borrower shall have delivered to the Administrative Agent the final executed material documentation relating to such Acquisition within 5 days following the consummation thereof.

"<u>Permitted Encumbrances</u>" means:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a)&nbsp;&nbsp;&nbsp;&nbsp;Liens imposed by law for Taxes that are not yet due or are being contested in compliance with Section 5.04;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b)&nbsp;&nbsp;&nbsp;&nbsp;carriers', landlord's, warehousemen's, mechanics', materialmen's, repairmen's and other like Liens imposed by law, arising in the ordinary course of business and securing obligations that are not overdue by more than thirty (30) days or are being contested in compliance with Section 5.04;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c)&nbsp;&nbsp;&nbsp;&nbsp;pledges and deposits made in the ordinary course of business in compliance with workers' compensation, unemployment insurance and other social security laws or regulations;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(d)&nbsp;&nbsp;&nbsp;&nbsp;deposits to secure the performance of bids, trade contracts, leases, statutory obligations, surety and appeal bonds, performance bonds and other obligations of a like nature, in each case in the ordinary course of business;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(e)&nbsp;&nbsp;&nbsp;&nbsp;judgment Liens in respect of judgments that do not constitute an Event of Default under clause (k) of Article VII;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(f)&nbsp;&nbsp;&nbsp;&nbsp;easements, zoning or other restrictions, rights-of-way, charges, defects in title, prior rights of other persons and similar encumbrances on real property imposed by law or arising in the ordinary course of business that do not secure any monetary obligations and do not materially detract from the value of the affected property or interfere with the ordinary conduct of business of the Parent Borrower or any Subsidiary;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(g)&nbsp;&nbsp;&nbsp;&nbsp;non-exclusive licenses and sub-licenses incurred in the ordinary course of business that do not materially detract from the value of the property subject thereto or materially interfere with the ordinary conduct of the business of the Parent Borrower or any of its Subsidiaries;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(h)&nbsp;&nbsp;&nbsp;&nbsp;any interest or title of a lessor (and any interest of any Person in any interest or title of a lessor) under any operating lease;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(i)&nbsp;&nbsp;&nbsp;&nbsp;rights of setoff and reserves against accounts receivable, payment intangibles and rights of payment held by account debtors, credit card processors, on-line marketplaces or other payment remitters in the ordinary course of business; and

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&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(j)&nbsp;&nbsp;&nbsp;&nbsp;Liens on property of the Parent Borrower or a Subsidiary of the Parent Borrower (other than Accounts and Inventory) securing obligations (other than Indebtedness for borrowed money), in an aggregate principal amount not to exceed $250,000.

"<u>Permitted Holders</u>" means each of David Wright, Melanie Alder and/or their respective Estate Planning Affiliates.

"<u>Permitted Investments</u>" means:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a)&nbsp;&nbsp;&nbsp;&nbsp;cash denominated in Dollars;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b)&nbsp;&nbsp;&nbsp;&nbsp;direct obligations of, or obligations the principal of and interest on which are unconditionally guaranteed by, the U.S. (or by any agency thereof to the extent such obligations are backed by the full faith and credit of the U.S.), in each case maturing within one year from the date of acquisition thereof;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c)&nbsp;&nbsp;&nbsp;&nbsp;investments in commercial paper maturing within 270 days from the date of acquisition thereof and having, at such date of acquisition, the highest credit or next to highest rating obtainable from S&P or from Moody's;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(d)&nbsp;&nbsp;&nbsp;&nbsp;investments in certificates of deposit, bankers' acceptances and time deposits maturing within 180 days from the date of acquisition thereof issued or guaranteed by or placed with, and money market deposit accounts issued or offered by, any domestic office of any commercial bank organized under the laws of the U.S. or any state thereof which has a combined capital and surplus and undivided profits of not less than $500,000,000;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(e)&nbsp;&nbsp;&nbsp;&nbsp;fully collateralized repurchase agreements with a term of not more than 30 days for securities described in clause (b) above and entered into with a financial institution satisfying the criteria described in clause (d) above; and

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(f)&nbsp;&nbsp;&nbsp;&nbsp;money market funds that (i) comply with the criteria set forth in Securities and Exchange Commission Rule 2a-7 under the Investment Company Act of 1940, (ii) are rated AAA by S&P and Aaa by Moody's and (iii) have portfolio assets of at least $2,000,000,000.

"<u>Permitted Liens</u>" means Liens permitted by Section 6.02.

"<u>Person</u>" means any natural person, corporation, limited liability company, trust, joint venture, association, company, partnership, Governmental Authority or other entity.

"<u>Plan</u>" means any employee pension benefit plan (other than a Multiemployer Plan) subject to the provisions of Title IV of ERISA or Section 412 of the Code or Section 302 of ERISA, and in respect of which the Parent Borrower or any ERISA Affiliate is (or, if such plan were terminated, would under Section 4069 of ERISA be deemed to be) an "employer" as defined in Section 3(5) of ERISA.

"<u>Platform</u>" means Debt Domain, Intralinks, Syndtrak or a substantially similar electronic transmission system.

"<u>Practicology</u>" means Practicology Ltd., an English private limited company with company number 06994603.

"<u>Practicology Acquisition</u>" means the Acquisition by the Initial Borrower of the outstanding Equity Interests of Practicology and its Subsidiaries, pursuant to and subject to the terms and conditions of, the Practicology Acquisition Documents.

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"<u>Practicology Acquisition Documents</u>" means that certain Share Purchase Agreement regarding all shares in Practicology dated on or about September 28, 2018, by and among Initial Borrower, the sellers party thereto and Practicology, together with all schedules and exhibits thereto, and all disclosure letters, agreements and instruments executed or delivered in connection therewith; all in form and content acceptable to Administrative Agent in its sole discretion.

"<u>Prepayment Event</u>" means:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a) any sale, transfer or other disposition (including pursuant to a sale and leaseback transaction) of any property or asset of any Loan Party or any Subsidiary, other than dispositions described in Section 6.05; or

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b) any casualty or other insured damage to, or any taking under power of eminent domain or by condemnation or similar proceeding of, any property or asset of any Loan Party; or

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c) the incurrence by any Loan Party of any Indebtedness, other than Indebtedness permitted under Section 6.01.

"<u>Prime Rate</u>" means the rate of interest per annum publicly announced from time to time by JPMorgan as its prime rate in effect at its principal offices in New York City<u>last quoted by The Wall</u> <u>Street Journal as the "Prime Rate" in the U.S. or, if The Wall Street Journal ceases to quote such rate, the</u> <u>highest per annum interest rate published by the Federal Reserve Board in Federal Reserve Statistical</u> <u>Release H.15 (519) (Selected Interest Rates) as the "bank prime loan" rate or, if such rate is no longer</u> <u>quoted therein, any similar rate quoted therein (as determined by the Administrative Agent) or any similar</u> <u>release by the Federal Reserve Board (as determined by the Administrative Agent)</u>. Each change in the Prime Rate shall be effective from and including the date such change is publicly announced <u>or quoted</u> as being effective.

"<u>Prior Credit Agreement</u>" shall have the meaning set forth in the Recitals.

"<u>Pro Forma Basis</u>" means, for any acquisition or disposition of all or substantially all of the Equity Interests or assets of a Person, each such transaction shall be deemed to have occurred on and as of the first day of the relevant period.

"<u>Projections</u>" has the meaning assigned to such term in Section 5.01(g).

"<u>Qualified ECP Guarantor</u>" means, in respect of any Swap Obligation, each Loan Party that has total assets exceeding $10,000,000 at the time the relevant Loan Guaranty or grant of the relevant security interest becomes or would become effective with respect to such Swap Obligation or such other person as constitutes an "eligible contract participant" under the Commodity Exchange Act or any regulations promulgated thereunder and can cause another person to qualify as an "eligible contract participant" at such time by entering into a keepwell under Section 1a(18)(A)(v)(II) of the Commodity Exchange Act.

"<u>Recipient</u>" means, as applicable, (a) the Administrative Agent, (b) any Lender and (c) the Issuing Bank, or any combination thereof (as the context requires).

"<u>Reference Time</u>" with respect to any setting of the then-current Benchmark means (1) if such Benchmark is LIBO<u>the Term SOFR</u> Rate, 11:00<u>5:00</u> a.m. (London<u>Chicago</u> time) on the day that is two London banking days<u>(2) Business Days</u> preceding the date of such setting, and (2<u>) if the RFR for such</u> <u>Benchmark is Daily Simple SOFR, then four (4) Business Days prior to such setting or (3</u>) if such Benchmark is not LIBO<u>none of the Term SOFR</u> Rate <u>or Daily Simple SOFR</u>, the time determined by the Administrative Agent in its reasonable discretion.

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"<u>Refinance Indebtedness</u>" has the meaning assigned to such term in Section 6.01(f).

"<u>Register</u>" has the meaning assigned to such term in Section 9.04.

"<u>Related Parties</u>" means, with respect to any specified Person, such Person's Affiliates and the respective directors, officers, partners, members, trustees, employees, agents, administrators, managers, representatives and advisors of such Person and such Person's Affiliates.

"<u>Release</u>" means any releasing, spilling, leaking, pumping, pouring, emitting, emptying, discharging, injecting, escaping, leaching, migrating, disposing, or dumping of any substance into the environment.

"<u>Relevant Governmental Body</u>" means the Federal Reserve Board <u>and/</u>or the NYFRB<u>, the CME</u> <u>Term SOFR Administrator, as applicable</u>, or a committee officially endorsed or convened by the Federal Reserve Board <u>and/</u>or the NYFRB, or<u>, in each case,</u> any successor thereto.

<u>"Relevant Rate" means (i) with respect to any Term Benchmark Borrowing, the Adjusted Term</u> <u>SOFR Rate or (ii) with respect to any RFR Borrowing, the Adjusted Daily Simple SOFR, as applicable.</u>

"<u>Report</u>" means reports prepared by the Administrative Agent or another Person showing the results of appraisals, field examinations or audits pertaining to the assets of the Loan Parties from information furnished by or on behalf of the Parent Borrower, after the Administrative Agent has exercised its rights of inspection pursuant to this Agreement, which Reports may be distributed to the Lenders by the Administrative Agent.

"<u>Required Lenders</u>" means, at any time, Lenders (other than Defaulting Lenders) having Credit Exposure and unused Commitments representing more than sixty-six percent (66%) of the sum of the Aggregate Credit Exposure and unused Commitments and <u>if there are more than two (2) unaffiliated</u> <u>Lenders at such time Required Lenders</u> shall include at least two (2) unaffiliated Lenders at such time; <u>provided</u> that, for purposes of declaring the Loans to be due and payable pursuant to Article VII, and for all purposes after the Loans become due and payable pursuant to Article VII or the Commitments expire or terminate, then, as to each Lender, clause (a) of the definition of Swingline Exposure shall only be applicable for purposes of determining its Revolving Exposure to the extent such Lender shall have funded its participation in the outstanding Swingline Loans.<u>.</u>

"<u>Requirement of Law</u>" means, with respect to any Person, (a) the charter, articles or certificate of organization or incorporation and bylaws or operating, management or partnership agreement, or other organizational or governing documents of such Person and (b) any statute, law (including common law), treaty, rule, regulation, code, ordinance, order, decree, writ, judgment, injunction or determination of any arbitrator or court or other Governmental Authority (including Environmental Laws), in each case applicable to or binding upon such Person or any of its property or to which such Person or any of its property is subject.

"<u>Restricted Payment</u>" means any dividend or other distribution (whether in cash, securities or other property) with respect to any Equity Interest in the Parent Borrower or any Subsidiary, or any payment (whether in cash, securities or other property), including any sinking fund or similar deposit, on account of the purchase, redemption, retirement, acquisition, cancellation or termination of any such Equity Interests or any option, warrant or other right to acquire any such Equity Interests.

"<u>Revolving Commitment</u>" means, with respect to each Lender, the commitment, if any, of such Lender to make Revolving Loans and to acquire participations in Letters of Credit and Swingline Loans hereunder, expressed as an amount representing the maximum aggregate permitted amount of such

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Lender's Revolving Exposure hereunder, as such commitment may be reduced or increased from time to time pursuant to (a) Section 2.09 and (b) assignments by or to such Lender pursuant to Section 9.04. The initial amount of each Lender's Revolving Commitment is set forth on the <u>Commitment Schedule</u>, or in the Assignment and Assumption pursuant to which such Lender shall have assumed its Revolving Commitment, as applicable. The aggregate amount of the Lenders' Revolving Commitments is $45,000,000<u>100,000,000</u> as of the Fourth<u>Sixth</u> Amendment Effective Date.

"<u>Revolving Credit Maturity Date</u>" means July 16, 2024 (if the same is a Business Day, or if not then the immediately next succeeding Business Day)<u>March 17, 2027</u>, or any earlier date on which the Revolving Commitments are reduced to zero or otherwise terminated pursuant to the terms hereof.

"<u>Revolving Exposure</u>" means, with respect to any Lender, at any time, the sum of the aggregate outstanding principal amount of such Lender's Revolving Loans and its LC Exposure and Swingline Exposure at such time.

"<u>Revolving Lender</u>" means, as of any date of determination, a Lender with a Revolving Commitment or, if the Revolving Commitments have terminated or expired, a Lender with Revolving Exposure.

"<u>Revolving Loan</u>" means a Loan made pursuant to Section 2.01(a).

<u>"RFR Loan" means a Loan that bears interest at a rate based on the Adjusted Daily Simple</u> SOFR.

<u>"RFR Borrowing" means, as to any Borrowing, the RFR Loans comprising such Borrowing.</u>

"<u>S&P</u>" means Standard & Poor's Ratings Services, a Standard & Poor's Financial Services LLC business.

"<u>Sale and Leaseback Transaction</u>" has the meaning assigned to such term in Section 6.06.

"<u>Sanctioned Country</u>" means, at any time, a country<u>, region</u> or territory which is itself the subject or target of any Sanctions <u>(at the time of this Agreement, the so-called Donetsk People's Republic, the so-called Luhansk People's Republic, the Crimea Region of Ukraine, Cuba, Iran, North Korea and Syria)</u>.

"<u>Sanctioned Person</u>" means, at any time, (a) any Person listed in any Sanctions-related list of designated Persons maintained by the Office of Foreign Assets Control of the U.S. Department of the Treasury, the U.S. Department of State or by the United Nations Security Council, the European Union or any European Union member state, or Her Majesty's Treasury of the United Kingdom or other relevant sanctions authority, (b) any Person operating, organized or resident in a Sanctioned Country or (c) any Person owned or controlled by any such Person or Persons described in the foregoing clauses (a) or (b).

"<u>Sanctions</u>" means all economic or financial sanctions or trade embargoes imposed, administered or enforced from time to time by (a) the U.S. government, including those administered by the Office of Foreign Assets Control of the U.S. Department of the Treasury or the U.S. Department of State, or (b) the United Nations Security Council, the European Union, any European Union member state or Her Majesty's Treasury of the United Kingdom or other relevant sanctions authority.

"<u>SBA</u>" means the U.S. Small Business Administration.

"<u>SBA PPP Loan</u>" means a loan incurred by the Borrower under 15 U.S.C. 636(a)(36) (as added to the Small Business Act by Section 1102 of the CARES Act).

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"<u>SBA PPP Loan Date</u>" means the date on which the Borrower receives the proceeds of the SBA PPP Loan.

"<u>SEC</u>" means the Securities and Exchange Commission of the U.S.

"<u>Secured Obligations</u>" means all Obligations, together with all (i) Banking Services Obligations and (ii) Swap Agreement Obligations owing to one or more Lenders or their respective Affiliates; <u>provided</u>, <u>however</u>, that the definition of "Secured Obligations" shall not create any guarantee by any Guarantor of (or grant of security interest by any Guarantor to support, as applicable) any Excluded Swap Obligations of such Guarantor for purposes of determining any obligations of any Guarantor.

"<u>Secured Parties</u>" means (a) the Administrative Agent, (b) the Lenders, (c) each Issuing Bank, (d) each provider of Banking Services, to the extent the Banking Services Obligations in respect thereof constitute Secured Obligations, (e) each counterparty to any Swap Agreement, to the extent the obligations thereunder constitute Secured Obligations, (f) the beneficiaries of each indemnification obligation undertaken by any Loan Party under any Loan Document, and (g) the successors and assigns of each of the foregoing.

"<u>Security Agreement</u>" means that certain Second Amended and Restated Pledge and Security Agreement (including any and all supplements thereto), dated as of the date hereof, among the Loan Parties and the Administrative Agent, for the benefit of the Administrative Agent and the other Secured Parties, and any other pledge or security agreement entered into, after the date of this Agreement by any other Loan Party (as required by this Agreement or any other Loan Document) or any other Person for the benefit of the Administrative Agent and the other Secured Parties, as the same may be amended, restated, supplemented or otherwise modified from time to time.

<u>"Sixth Amendment Effective Date" is March 17, 2022.</u>

"<u>Small Business Act</u>" means the Small Business Act (15 U.S. Code Chapter 14A – Aid to Small Business).

"<u>SOFR</u>" means, with respect to any Business Day, a rate per annum equal to the secured overnight financing rate for such Business Day published<u>as administered</u> by the SOFR Administrator on the SOFR Administrator's Website at approximately 8:00 a.m. (New York City time) on the immediately succeeding Business Day.<u>.</u>

"<u>SOFR Administrator</u>" means the NYFRB (or a successor administrator of the secured overnight financing rate).

"<u>SOFR Administrator's Website</u>" means the NYFRB's Website<u>website</u>, currently at http://www.newyorkfed.org, or any successor source for the secured overnight financing rate identified as such by the SOFR Administrator from time to time.

<u>"SOFR Determination Date" has the meaning specified in the definition of "Daily Simple</u> <u>SOFR".</u>

<u>"SOFR Rate Day" has the meaning specified in the definition of "Daily Simple SOFR".</u>

"<u>Statement</u>" has the meaning assigned to such term in Section 2.18(g).

"<u>Statutory Reserve Rate</u>" means a fraction (expressed as a decimal), the numerator of which is the number one and the denominator of which is the number one minus the aggregate of the maximum reserve percentage (including any marginal, special, emergency or supplemental reserves) established by

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the Board to which the Administrative Agent is subject with respect to the Adjusted LIBO Rate, for eurocurrency funding (currently referred to as "Eurocurrency Liabilities" in Regulation D of the Board). Such reserve percentages shall include those imposed pursuant to such Regulation D of the Board. Eurodollar Loans shall be deemed to constitute eurocurrency funding and to be subject to such reserve requirements without benefit of or credit for proration, exemptions or offsets that may be available from time to time to any Lender under such Regulation D of the Board or any comparable regulation. The Statutory Reserve Rate shall be adjusted automatically on and as of the effective date of any change in any reserve percentage.

"<u>Subordinated Indebtedness</u>" of a Person means any Indebtedness of such Person, the payment of which is subordinated to payment of the Secured Obligations to the written satisfaction of the Administrative Agent.

"<u>subsidiary</u>" means, with respect to any Person (the "parent") at any date, any corporation, limited liability company, partnership, association or other entity, the accounts of which would be consolidated with those of the parent in the parent's consolidated financial statements if such financial statements were prepared in accordance with GAAP as of such date, as well as any other corporation, limited liability company, partnership, association or other entity of which securities or other ownership interests representing more than 50% of the equity or more than 50% of the ordinary voting power or, in the case of a partnership, more than 50% of the general partnership interests are, as of such date, owned, controlled or held.

"<u>Subsidiary</u>" means any direct or indirect subsidiary of the Parent Borrower or a Loan Party, as applicable.

"<u>Swap Agreement</u>" means any agreement with respect to any swap, forward, spot, future, credit default or derivative transaction or option or similar agreement involving, or settled by reference to, one or more rates, currencies, commodities, equity or debt instruments or securities, or economic, financial or pricing indices or measures of economic, financial or pricing risk or value or any similar transaction or any combination of these transactions; <u>provided</u> that no phantom stock or similar plan providing for payments only on account of services provided by current or former directors, officers, employees or consultants of the Parent Borrower or its Subsidiaries shall be a Swap Agreement.

"<u>Swap Agreement Obligations</u>" means any and all obligations of the Loan Parties and their Subsidiaries, whether absolute or contingent and howsoever and whensoever created, arising, evidenced or acquired (including all renewals, extensions and modifications thereof and substitutions therefor), under (a) any Swap Agreement permitted hereunder with a Lender or an Affiliate of a Lender, and (b) any cancellations, buy backs, reversals, terminations or assignments of any Swap Agreement transaction permitted hereunder with a Lender or an Affiliate of a Lender.

"<u>Swap Obligation</u>" means, with respect to any Guarantor, any obligation to pay or perform under any agreement, contract or transaction that constitutes a "swap" within the meaning of section 1a(47) of the Commodity Exchange Act or any rules or regulations promulgated thereunder.

"<u>Swingline Commitment</u>" means the amount set forth opposite JPMorgan's name on the Commitment Schedule as Swingline Commitment. The initial aggregate amount of the Swingline Lender's Swingline Commitments is $5,000,000.

"<u>Swingline Exposure</u>" means, at any time, the aggregate principal amount of all Swingline Loans outstanding at such time. The Swingline Exposure of any Revolving Lender at any time shall be the sum of (a) its Applicable Percentage of the total Swingline Exposure at such time other than with respect to any Swingline Loans made by such Revolving Lender in its capacity as the Swingline Lender and (b) the

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principal amount of all Swingline Loans made by such Revolving Lender in its capacity as the Swingline Lender outstanding at such time (less the amount of participations funded by the other Lenders in such Swingline Loans).

"<u>Swingline Lender</u>" means JPMorgan, in its capacity as lender of Swingline Loans hereunder. Any consent required of the Administrative Agent or the Issuing Bank shall be deemed to be required of the Swingline Lender and any consent given by JPMorgan in its capacity as Administrative Agent or Issuing Bank shall be deemed given by JPMorgan in its capacity as Swingline Lender as well.

"<u>Swingline Loan</u>" means a Loan made pursuant to Section 2.05.

"<u>Taxes</u>" means any and all present or future taxes, levies, imposts, duties, deductions, withholdings (including backup withholding), value added taxes, or any other goods and services, use or sales taxes, assessments, similar fees or other similar charges imposed by any Governmental Authority, including any interest, additions to tax or penalties applicable thereto.

"<u>Term A Loan</u>" means a Loan made pursuant to Section 2.01(b).

"<u>Term A Loan Borrowing</u>" means a Borrowing consisting of a Term A Loan.

<u>"Term Benchmark"</u> <u>when used in reference to any Loan or Borrowing, refers to whether such</u> <u>Loan, or the Loans comprising such Borrowing,</u> <u>are bearing</u> <u>interest at a rate determined by reference to</u> <u>the Adjusted</u> <u>Term SOFR Rate.</u>

<u>"Term SOFR Determination Day" has the meaning assigned to it under the definition of Term</u> <u>SOFR Reference Rate.</u>

"<u>Term</u> <u>A Loan Commitment</u><u>SOFR Rate</u>" means, with respect to each<u>any</u> Term A Loan Lender, the commitment, if any, of such Lender to make Term A Loans on the Effective Date, expressed as an amount representing the maximum principal amount of the Term A Loans to be made by such Lender, as such commitment may be reduced or increased from time to time pursuant to assignments by or to such Lenders pursuant to Section 9.04. The amount of each Lender's initial Term A Loan Commitment as of the Effective Date is set forth on the Commitment Schedule or in the Assignment and Assumption pursuant to which such Lender shall have assumed its Term A Loan Commitment, as applicable. The aggregate amount of the Lenders' Term A Loan Commitment as of the Effective Date is $20,000,000. <u>Benchmark Borrowing and for any tenor comparable to the applicable Interest Period, the Term SOFR</u> <u>Reference Rate at approximately 5:00 a.m., Chicago time, two (2) U.S. Government Securities</u> <u>Business</u> <u>Days prior to the commencement of such</u> <u>tenor comparable to the applicable Interest Period, as such rate</u> <u>is published by the CME Term SOFR Administrator.</u>

<u>"Term SOFR Reference</u> <u>Rate" means, for any day and time</u> <u>(such day, the "Term SOFR</u> <u>Determination Day"), and for any tenor comparable to the applicable</u> <u>Interest Period, the rate per annum</u> <u>determined by the Administrative Agent</u> <u>as the forward-looking term rate based on SOFR. If by 5:00 pm</u> <u>(New York City time) on</u> <u>such Term SOFR Determination Day, the "Term SOFR Reference Rate" for the</u> <u>applicable tenor has not been published by the CME Term SOFR Administrator and a Benchmark</u> <u>Replacement Date with respect to the Term SOFR Rate has not occurred, then the Term SOFR Reference</u> <u>Rate for such Term SOFR Determination Day will be the Term SOFR Reference Rate as published in</u> <u>respect of the first preceding U.S. Government Securities Business Day for which such Term SOFR</u> <u>Reference Rate was published by the CME Term SOFR Administrator, so long as such first preceding</u> <u>Business Day is not more than five (5) Business Days prior to such Term SOFR Determination Day.</u>

"<u>Term A Loan Lender</u>" means a Lender having a Term A Loan Commitment or an outstanding Term A Loan.

"<u>Term A Maturity Date</u>" means July 16, 2024.

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"<u>Term SOFR</u>" means, for the applicable Corresponding Tenor as of the applicable Reference Time, the forward-looking term rate based on SOFR that has been selected or recommended by the Relevant Governmental Body.

"<u>Term SOFR Notice</u>" means a notification by the Administrative Agent to the Lenders and the Borrower Representative of the occurrence of a Term SOFR Transition Event.

"<u>Term SOFR Transition Event</u>" means the determination by the Administrative Agent that (a) Term SOFR has been recommended for use by the Relevant Governmental Body, (b) the administration of Term SOFR is administratively feasible for the Administrative Agent and (c) a Benchmark Transition Event or an Early Opt-in Election, as applicable, has previously occurred resulting in a Benchmark Replacement in accordance with Section 2.14 that is not Term SOFR.

"<u>Total Indebtedness</u>" means, at any date, the aggregate principal amount of all Funded Indebtedness of the Parent Borrower and its Subsidiaries on a consolidated basis at such date, in accordance with GAAP.

<u>Total Leverage Ratio</u>" means, on any date, the ratio of (a) Total Indebtedness on such date, minus Unrestricted Cash on such date to (b) EBITDA for the period of four consecutive fiscal quarters ended on or most recently prior to such date.

"<u>Transactions</u>" means the execution, delivery and performance by the Borrowers of this Agreement and the other Loan Documents, the borrowing of Loans and other credit extensions, the use of the proceeds thereof and the issuance of Letters of Credit hereunder.

"<u>Type</u>", when used in reference to any Loan or Borrowing, refers to whether the rate of interest on such Loan, or on the Loans comprising such Borrowing, is determined by reference to the Adjusted LIBO<u>Term SOFR</u> Rate, <u>the Adjusted Daily Simple SOFR</u> or the Alternate Base Rate.

"<u>UCC</u>" means the Uniform Commercial Code as in effect from time to time in the State of New York or in any other state, the laws of which are required to be applied in connection with the issue of perfection of security interests.

"<u>UK Pledge Agreement</u>" means that certain Share Pledge, dated as of November 2, 2018, between the Initial Borrower and the Administrative Agent, with respect to the 65% of the Equity Interests of Practicology, in forma and substance reasonably acceptable to the Administrative Agent.

"<u>Unadjusted Benchmark Replacement</u>" means the applicable Benchmark Replacement excluding the related Benchmark Replacement Adjustment; provided that, if the Unadjusted Benchmark Replacement as so determined would be less than 0%, the Unadjusted Benchmark Replacement will be deemed to be 0% for the purposes of this Agreement.

"<u>Unliquidated Obligations</u>" means, at any time, any Secured Obligations (or portion thereof) that are contingent in nature or unliquidated at such time, including any Secured Obligation that is: (i) an obligation to reimburse a bank for drawings not yet made under a letter of credit issued by it; (ii) any other obligation (including any guarantee or indemnification obligation) that is contingent in nature at such time; or (iii) an obligation to provide collateral to secure any of the foregoing types of obligations.

"<u>Unrestricted Cash</u>" shall mean unrestricted cash and Permitted Investments of the Borrowers up to $25,000,000, so long as such cash and Permitted Investments is held in domestic deposit accounts or domestic securities accounts maintained with the Administrative Agent or otherwise subject to an account control agreement in form and substance satisfactory to the Administrative Agent.

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"<u>U.S.</u>" means the United States of America.

<u>"U.S. Government Business Day" means any day except for (i) a Saturday, (ii) a Sunday or (iii) a</u> <u>day on which the Securities Industry and Financial Markets Association recommends that the fixed</u> <u>income departments of its members be closed for the entire day for purposes of trading in United States</u> <u>government securities.</u>

"<u>U.S. Person</u>" means a "United States person" within the meaning of Section 7701(a)(30) of the Code.

"<u>U.S. Tax Compliance Certificate</u>" has the meaning assigned to such term in Section 2.17(f)(ii)(B)(3).

"<u>USA PATRIOT Act</u>" means the Uniting and Strengthening America by Providing Appropriate Tools Required to Intercept and Obstruct Terrorism Act of 2001.

"<u>Withdrawal Liability</u>" means liability to a Multiemployer Plan as a result of a complete or partial withdrawal from such Multiemployer Plan, as such terms are defined in Part I of Subtitle E of Title IV of ERISA.

"<u>Write-Down and Conversion Powers</u>" means, with respect to any EEA Resolution Authority, the write-down and conversion powers of such EEA Resolution Authority from time to time under the Bail-In Legislation for the applicable EEA Member Country, which write-down and conversion powers are described in the EU Bail-In Legislation Schedule.

SECTION 1.02. <u>Classification of Loans and Borrowings</u>. For purposes of this Agreement, Loans may be classified and referred to by Class (<u>e.g.</u>, a "Revolving Loan") or by Type (<u>e.g.</u>, a "Eurodollar<u>Term Benchmark Loan" or an "RFR</u> Loan") or by Class and Type (<u>e.g.</u>, a "Eurodollar<u>Term</u> <u>Benchmark Revolving Loan" or an "RFR</u> Revolving Loan"). Borrowings also may be classified and referred to by Class (<u>e.g.</u>, a "Revolving Borrowing") or by Type (<u>e.g.</u>, a "Eurodollar<u>Term Benchmark</u> <u>Borrowing" or an "RFR</u> Borrowing") or by Class and Type (<u>e.g.</u>, a "Eurodollar<u>Term Benchmark</u> <u>Revolving Borrowing" or an "RFR Loan</u> Revolving Borrowing").

SECTION 1.03. <u>Terms Generally</u>. The definitions of terms herein shall apply equally to the singular and plural forms of the terms defined. Whenever the context may require, any pronoun shall include the corresponding masculine, feminine and neuter forms. The words "include", "includes" and "including" shall be deemed to be followed by the phrase "without limitation". The word "law" shall be construed as referring to all statutes, rules, regulations, codes and other laws (including official rulings and interpretations thereunder having the force of law or with which affected Persons customarily comply) and all judgments, orders and decrees of all Governmental Authorities. The word "will" shall be construed to have the same meaning and effect as the word "shall". Unless the context requires otherwise (a) any definition of or reference to any agreement, instrument or other document herein shall be construed as referring to such agreement, instrument or other document as from time to time amended, restated, supplemented or otherwise modified (subject to any restrictions on such amendments, restatements, supplements or modifications set forth herein), (b) any definition of or reference to any statute, rule or regulation shall be construed as referring thereto as from time to time amended, supplemented or otherwise modified (including by succession of comparable successor laws), (c) any reference herein to any Person shall be construed to include such Person's successors and assigns (subject to any restrictions on assignments set forth herein) and, in the case of any Governmental Authority, any other Governmental Authority that shall have succeeded to any or all functions thereof, (d) the words "herein", "hereof" and "hereunder", and words of similar import, shall be construed to refer to this

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Agreement in its entirety and not to any particular provision hereof, (e) 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, (f) any reference in any definition to the phrase "at any time" or "for any period" shall refer to the same time or period for all calculations or determinations within such definition, and (g) the words "asset" and "property" shall be construed to have the same meaning and effect and to refer to any and all tangible and intangible assets and properties, including cash, securities, accounts and contract rights.

SECTION 1.04. <u>Accounting Terms; GAAP</u>. Except as otherwise expressly provided herein, all terms of an accounting or financial nature shall be construed in accordance with GAAP, as in effect from time to time; provided that, if after the date hereof there occurs any change in GAAP or in the application thereof on the operation of any provision hereof and the Parent Borrower notifies the Administrative Agent that the Parent Borrower requests an amendment to any provision hereof to eliminate the effect of such change in GAAP or in the application thereof (or if the Administrative Agent notifies the Parent Borrower that the Required Lenders request an amendment to any provision hereof for such purpose), regardless of whether any such notice is given before or after such change in GAAP or in the application thereof, then such provision shall be interpreted on the basis of GAAP as in effect and applied immediately before such change shall have become effective until such notice shall have been withdrawn or such provision amended in accordance herewith. Notwithstanding any other provision contained herein, all terms of an accounting or financial nature used herein shall be construed, and all computations of amounts and ratios referred to herein shall be made (i) without giving effect to any election under Financial Accounting Standards Board Accounting Standards Codification 825-10-25 (or any other Accounting Standards Codification or Financial Accounting Standard having a similar result or effect) to value any Indebtedness or other liabilities of the Parent Borrower or any Subsidiary at "fair value", as defined therein and (ii) without giving effect to any treatment of Indebtedness in respect of convertible debt instruments under Financial Accounting Standards Board Accounting Standards Codification 470-20 (or any other Accounting Standards Codification or Financial Accounting Standard having a similar result or effect) to value any such Indebtedness in a reduced or bifurcated manner as described therein, and such Indebtedness shall at all times be valued at the full stated principal amount thereof.

SECTION 1.05. <u>Pro Forma Adjustments for Acquisitions and Dispositions</u>. To the extent the Parent Borrower or any Subsidiary makes any acquisition permitted pursuant to Section 6.04 or disposition of assets outside the ordinary course of business permitted by Section 6.05 during the period of four fiscal quarters of the Parent Borrower most recently ended, the Total Leverage Ratio shall be calculated after giving pro forma effect thereto (including pro forma adjustments arising out of events which are directly attributable to the acquisition or the disposition of assets, are factually supportable and are expected to have a continuing impact, in each case as determined on a basis consistent with Article 11 of Regulation S-X of the Securities Act of 1933, as amended, as interpreted by the SEC, and as certified by a Financial Officer), as if such acquisition or such disposition (and any related incurrence, repayment or assumption of Indebtedness) had occurred in the first day of such four-quarter period.

SECTION 1.06. <u>Interest Rates</u><u>; LIBOR Notification</u><u>.</u> The interest rate on a Loan denominated in dollars or an Alternative Currency may be derived from an interest rate benchmark that <u>may be discontinued or</u> is, or may in the future become, the subject of regulatory reform. Regulators have signaled the need to use alternative benchmark reference rates for some of these interest rate benchmarks and, as a result, such interest rate benchmarks may cease to comply with applicable laws and regulations, may be permanently discontinued, and/or the basis on which they are calculated may change. The interest rate on Eurodollar Loans is determined by reference to the LIBO Rate, which is derived from the London interbank offered rate. The London interbank offered rate is intended to represent the rate at which

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contributing banks may obtain short-term borrowings from each other in the London interbank market. In July 2017, the U.K. Financial Conduct Authority announced that, after the end of 2021, it would no longer persuade or compel contributing banks to make rate submissions to the ICE Benchmark Administration (together with any successor to the ICE Benchmark Administrator, the "IBA") for purposes of the IBA setting the London interbank offered rate. As a result, it is possible that commencing in 2022, the London interbank offered rate may no longer be available or may no longer be deemed an appropriate reference rate upon which to determine the interest rate on Eurodollar Loans. In light of this eventuality, public and private sector industry initiatives are currently underway to identify new or alternative reference rates to be used in place of the London interbank offered rate. Upon the occurrence of a Benchmark Transition Event, a Term SOFR Transition Event or an Early Opt-in Election, Section 2.14(c<u>b</u>) and (d) provide the<u>provides a</u> mechanism for determining an alternative rate of interest. The Administrative Agent will promptly notify the Borrower Representative, pursuant to Section 2.14(f), of any change to the reference rate upon which the interest rate on Eurodollar Loans is based. However, the Administrative Agent does not warrant or accept any responsibility for, and shall not have any liability with respect to, the administration, submission<u>, performance</u> or any other matter related to the London interbank offered rate or other rates in the definition of "LIBO Rate"<u>any interest rate used in this</u> <u>Agreement,</u> or with respect to any alternative or successor rate thereto, or replacement rate thereof (including, without limitation, (i) any such alternative, successor or replacement rate implemented pursuant to Section 2.14(c) or (d), whether upon the occurrence of a Benchmark Transition Event, a Term SOFR Transition Event or an Early Opt-in Election, and (ii) the implementation of any Benchmark Replacement Conforming Changes pursuant to Section 2.14(e)),<u>,</u> including without limitation, whether the composition or characteristics of any such alternative, successor or replacement reference rate will be similar to, or produce the same value or economic equivalence of, the LIBO Rate<u>existing interest rate</u> <u>being replaced</u> or have the same volume or liquidity as did the London interbank offered<u>any existing</u> <u>interest</u> rate prior to its discontinuance or unavailability. <u>The Administrative Agent and its affiliates and/or other related entities may engage in transactions that affect the calculation of any interest rate used in</u> <u>this Agreement or any alternative, successor or alternative rate (including any Benchmark Replacement)</u> <u>and/or any relevant adjustments thereto, in each case, in a manner adverse to the Borrowers. The</u> <u>Administrative Agent may select information sources or services in its reasonable discretion to ascertain</u> <u>any interest rate used in this Agreement, any component thereof, or rates referenced in the definition</u> <u>thereof, in each case pursuant to the terms of this Agreement, and shall have no liability to any Borrower,</u> <u>any Lender or any other person or entity for damages of any kind, including direct or indirect, special,</u> <u>punitive, incidental or consequential damages, costs, losses or expenses (whether in tort, contract or</u> <u>otherwise and whether</u> <u>at law or in equity</u><u>), for any error or calculation of any such rate (or component</u> <u>thereof) provided by any such information source or service.</u>

SECTION 1.07. <u>Status of Obligations</u>. In the event that the Parent Borrower or any other Loan Party shall at any time issue or have outstanding any Subordinated Indebtedness, the Parent Borrower shall take or cause such other Loan Party to take all such actions as shall be necessary to cause the Secured Obligations to constitute senior indebtedness (however denominated) in respect of such Subordinated Indebtedness and to enable the Administrative Agent and the Lenders to have and exercise any payment blockage or other remedies available or potentially available to holders of senior indebtedness under the terms of such Subordinated Indebtedness. Without limiting the foregoing, the Secured Obligations are hereby designated as "senior indebtedness" and as "designated senior indebtedness" and words of similar import under and in respect of any indenture or other agreement or instrument under which such Subordinated Indebtedness is outstanding and are further given all such other designations as shall be required under the terms of any such Subordinated Indebtedness in order that the Lenders may have and exercise any payment blockage or other remedies available or potentially available to holders of senior indebtedness under the terms of such Subordinated Indebtedness.

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SECTION 1.08. <u>Divisions</u>. For all purposes under the Loan Documents, in connection with any division or plan of division under Delaware law (or any comparable event under a different jurisdiction's laws) if any asset, right, obligation or liability of any Person becomes the asset, right, obligation or liability of a different Person, then it shall be deemed to have been transferred from the original Person to the subsequent Person.

ARTICLE II

<u>The Credits</u>

SECTION 2.01. <u>Revolving Commitments</u>. Subject to the terms and conditions set forth herein, each Lender severally (and not jointly) agrees to make Revolving Loans to the Borrowers in Dollars from time to time during the Availability Period in an aggregate principal amount that will not result in (i) such Lender's Revolving Exposure exceeding such Lender's Revolving Commitment, or (ii) the Aggregate Revolving Exposure exceeding the aggregate Revolving Commitments. Within the foregoing limits and subject to the terms and conditions set forth herein, the Borrowers may borrow, prepay (without any penalty, premium or other prepayment fee, other than payment of any break funding expenses under Section 2.16) and reborrow Revolving Loans.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a)&nbsp;&nbsp;&nbsp;&nbsp;<u>Term A Loan Borrowings</u>. Subject to the terms and conditions set forth herein, each Term A Loan Lender severally (and not jointly) agrees to make a Term A Loan in Dollars to the Borrowers, in one advance on the Effective Date, in a principal amount not to exceed such Lender's Term A Loan Commitment. Amounts borrowed under this Section 2.01(b) and repaid or prepaid may not be reborrowed. Term A Loans may be ABR Loans or Eurodollar Loans, as further provided herein.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b)&nbsp;&nbsp;&nbsp;&nbsp;<u>Delayed Draw Term Loan Borrowings</u>. Subject to the terms and conditions set forth herein, including without limitation Section 4.02, each Delayed Draw Term Loan Lender severally (and not jointly) agrees to make a Delayed Draw Term Loan in Dollars to the Borrower on the Delayed Draw Term Loan Effective Date provided that (i) any such Delayed Draw Term Loan shall be in a minimum amount of $5,000,000, (ii) the Borrower Representative, on behalf of the Borrowers, may make a maximum of four (4) such requests, and (iii) after giving effect thereto, the sum of the total of the Delayed Draw Term Loans does not exceed the Delayed Draw Term Loan Commitment. All undrawn Delayed Draw Term Loan Commitments shall be cancelled on the Delayed Draw Term Loan Expiration Date. Amounts borrowed under this Section 2.01(c) and repaid or prepaid may not be reborrowed. Delayed Draw Term Loans may be ABR Loans or Eurodollar Loans, as further provided herein.

SECTION 2.02. <u>Loans and Borrowings</u>.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a)&nbsp;&nbsp;&nbsp;&nbsp;Each Loan (other than a Swingline Loan) shall be made as part of a Borrowing consisting of Loans of the same Class and Type made by the Lenders ratably in accordance with their respective Commitments of the applicable Class. The failure of any Lender to make any Loan required to be made by it shall not relieve any other Lender of its obligations hereunder; <u>provided</u> that the Commitments of the Lenders are several and no Lender shall be responsible for any other Lender's failure to make Loans as required. Any Swingline Loan shall be made in accordance with the procedures set forth in Section 2.05.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b)&nbsp;&nbsp;&nbsp;&nbsp;Subject to Section 2.14, each Revolving Borrowing, Term A Loan Borrowing and Delayed Draw Term Loan Borrowing shall be comprised entirely of ABR Loans or Eurodollar<u>, RFR</u> <u>Loans or Term Benchmark</u> Loans as the Parent Borrower may request in accordance herewith. Each Swingline Loan shall be an ABR Loan. <u>, provided that all Revolving Borrowings</u> <u>made on the Effective</u> <u>Date</u> <u>must be made as ABR Borrowings but may be converted into Term Benchmark Borrowings in</u> 

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<u>accordance with Section 2.08.</u> Each Lender at its option may make any Eurodollar Loan by causing any domestic or foreign branch or Affiliate of such Lender to make such Loan (and in the case of an Affiliate, the provisions of Sections 2.14, 2.15, 2.16 and 2.17 shall apply to such Affiliate to the same extent as to such Lender); provided that any exercise of such option shall not affect the obligation of the Borrowers to repay such Loan in accordance with the terms of this Agreement.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c)&nbsp;&nbsp;&nbsp;&nbsp;At the commencement of each Interest Period for any Eurodollar<u>Term</u> <u>Benchmark</u> Borrowing, such Borrowing shall be in an aggregate amount that is an integral multiple of $500,000 and not less than $500,000. At the time that each ABR Borrowing is made, such Borrowing shall be in an aggregate amount that is an integral multiple of $100,000 and not less than $100,000; provided that an ABR Borrowing may be in an aggregate amount that is equal to the entire unused balance of the total Revolving Commitments or that is required to finance the reimbursement of an LC Disbursement as contemplated by Section 2.06(e). Each Swingline Loan shall be in an amount that is an integral multiple of $100,000 and not less than $500,000. Borrowings of more than one Type and Class may be outstanding at the same time; <u>provided</u> that there shall not at any time be more than a total of 5 Eurodollar<u>Term Benchmark Borrowings or RFR</u> Borrowings outstanding.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(d)&nbsp;&nbsp;&nbsp;&nbsp;Notwithstanding any other provision of this Agreement, the Borrowers shall not be entitled to request, or to elect to convert or continue, any Borrowing if the Interest Period requested with respect thereto would end after the Revolving Credit Maturity Date, the Term A Maturity Date or the Delayed Draw Term Loan Maturity Date, as applicable.

SECTION 2.03. <u>Requests for Borrowings</u>. To request a Borrowing, the Parent Borrower shall notify the Administrative Agent of such request either in writing (delivered by hand, fax or electronic mail) substantially in the form attached hereto as <u>Exhibit C</u> and signed by the Parent Borrower or by telephone or through Electronic System, (a)<u>(i)</u> in the case of a Term A Loan Borrowing, not later than 10:00 a.m., Eastern time, on the Effective Date, (b) in the case of a Delayed Draw Term Loan<u>Benchmark</u> Borrowing, not later than 10:00 a.m., Eastern time, three Business Days before the date of the proposed Borrowing, <u>or</u> (c<u>ii</u>) in the case of a Eurodollar<u>an RFR</u> Borrowing denominated in Dollars, not later than 10:00 a.m., Eastern<u>Chicago</u> time, three<u>five (5)</u> Business Days before the date of the proposed Borrowing, or (d<u>b</u>) in the case of an ABR Borrowing, not later than noon, Eastern time, on the date of the proposed Borrowing; <u>provided</u> that any such notice of an ABR Revolving Borrowing to finance the reimbursement of an LC Disbursement as contemplated by Section 2.06(e) may be given not later than noon, Eastern time, on the date of the proposed Borrowing. Each such telephonic Borrowing Request shall be irrevocable and shall be confirmed promptly by hand delivery, fax or a communication through Electronic System to the Administrative Agent of a written Borrowing Request in a form approved by the Administrative Agent and signed by the Parent Borrower. Each such telephonic and written Borrowing Request shall specify the following information in compliance with Section 2.01:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(i)&nbsp;&nbsp;&nbsp;&nbsp;Whether such Borrowing is to be a Revolving Loan Borrowing, a Term A Loan Borrowing or a Delayed Draw Term Loan Borrowing;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<u>(i)</u>&nbsp;&nbsp;&nbsp;&nbsp;(ii) the Class of Borrowing, the aggregate amount of the requested Borrowing, and a breakdown of the separate wires comprising such Borrowing;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<u>(ii)</u>&nbsp;&nbsp;&nbsp;&nbsp;(iii) the date of such Borrowing, which shall be a Business Day;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<u>(iii)</u>&nbsp;&nbsp;&nbsp;&nbsp;(iv) whether such Borrowing is to be an ABR Borrowing or<u>,</u> a Eurodollar<u>Term</u> <u>Benchmark Borrowing or an RFR</u> Borrowing; and

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&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<u>(iv)</u>&nbsp;&nbsp;&nbsp;&nbsp;(v) in the case of a Eurodollar<u>Term Benchmark</u> Borrowing, the initial Interest Period to be applicable thereto, which shall be a period contemplated by the definition of the term "Interest Period."

If no election as to the Type of Borrowing is specified, then the requested Borrowing shall be an ABR Borrowing. If no Interest Period is specified with respect to any requested Eurodollar<u>Term Benchmark</u> Borrowing, then the Parent Borrower shall be deemed to have selected an Interest Period of one month's duration. Promptly following receipt of a Borrowing Request in accordance with this Section, the Administrative Agent shall advise each Lender of the details thereof and of the amount of such Lender's Loan to be made as part of the requested Borrowing.

SECTION 2.04. <u>[Section Intentionally Omitted]</u><u>.</u>

SECTION 2.05. <u>Swingline Loans</u><u>Section Intentionally Omitted</u>.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a)&nbsp;&nbsp;&nbsp;&nbsp;Subject to the terms and conditions set forth herein, from time to time during the Availability Period, the Swingline Lender agrees to make Swingline Loans to the Borrowers, in an aggregate principal amount at any time outstanding that will not result in (i) the aggregate principal amount of outstanding Swingline Loans exceeding the Swingline Lender's Swingline Commitment, (ii) the Swingline Lender's Revolving Exposure exceeding its Revolving Commitment, or (iii) the Aggregate Revolving Exposures exceeding the aggregate Revolving Commitments; <u>provided</u> that the Swingline Lender shall not be required to make a Swingline Loan to refinance an outstanding Swingline Loan. Within the foregoing limits and subject to the terms and conditions set forth herein, the Borrowers may borrow, prepay and reborrow Swingline Loans. To request a Swingline Loan, the Borrower Representative shall notify the Administrative Agent of such request by telephone (confirmed by fax) or through Electronic System, if arrangements for doing so have been approved by the Administrative Agent, not later than noon, Eastern time, on the day of a proposed Swingline Loan. Each such notice shall be irrevocable and shall specify the requested date (which shall be a Business Day) and amount of the requested Swingline Loan. The Administrative Agent will promptly advise the Swingline Lender of any such notice received from the Borrower Representative. The Swingline Lender shall make each Swingline Loan available to the Borrowers by means of a credit to the Funding Account (or, in the case of a Swingline Loan made to finance the reimbursement of an LC Disbursement as provided in Section 2.06(e), by remittance to the Issuing Bank, and in the case of repayment of another Loan or fees or expenses as provided by Section 2.18(c), by remittance to the Administrative Agent to be distributed to the Lenders) by 2:00 p.m., Eastern time, on the requested date of such Swingline Loan.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b)&nbsp;&nbsp;&nbsp;&nbsp;The Swingline Lender may by written notice given to the Administrative Agent require the Revolving Lenders to acquire participations on such Business Day in all or a portion of the Swingline Loans outstanding. Such notice shall specify the aggregate amount of Swingline Loans in which the Revolving Lenders will participate. Promptly upon receipt of such notice, the Administrative Agent will give notice thereof to each Revolving Lender, specifying in such notice such Lender's Applicable Percentage of such Swingline Loan or Loans. Each Revolving Lender hereby absolutely and unconditionally agrees, promptly upon receipt of such notice from the Administrative Agent (and in any event, if such notice is received by 11:00 a.m., Eastern time, on a Business Day no later than 4:00 p.m., Eastern time on such Business Day and if received after 11:00 a.m., Eastern time, "on a Business Day" shall mean no later than 9:00 a.m. Eastern time on the immediately succeeding Business Day), to pay to the Administrative Agent, for the account of the Swingline Lender, such Lender's Applicable Percentage of such Swingline Loan or Loans. Each Revolving Lender acknowledges and agrees that its obligation to acquire participations in Swingline Loans pursuant to this paragraph is absolute and unconditional and shall not be affected by any circumstance whatsoever, including the occurrence and continuance of a

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Default or reduction or termination of the Revolving Commitments, and that each such payment shall be made without any offset, abatement, withholding or reduction whatsoever. Each Revolving Lender shall comply with its obligation under this paragraph by wire transfer of immediately available funds, in the same manner as provided in Section 2.07 with respect to Loans made by such Lender (and Section 2.07 shall apply, <u>mutatis mutandis</u>, to the payment obligations of the Lenders), and the Administrative Agent shall promptly pay to the Swingline Lender the amounts so received by it from the Revolving Lenders. The Administrative Agent shall notify the Borrower Representative of any participations in any Swingline Loan acquired pursuant to this paragraph, and thereafter payments in respect of such Swingline Loan shall be made to the Administrative Agent and not to the Swingline Lender. Any amounts received by the Swingline Lender from the Borrowers (or other party on behalf of the Borrowers) in respect of a Swingline Loan after receipt by the Swingline Lender of the proceeds of a sale of participations therein shall be promptly remitted to the Administrative Agent; any such amounts received by the Administrative Agent shall be promptly remitted by the Administrative Agent to the Revolving Lenders that shall have made their payments pursuant to this paragraph and to the Swingline Lender, as their interests may appear; provided that any such payment so remitted shall be repaid to the Swingline Lender or to the Administrative Agent, as applicable, if and to the extent such payment is required to be refunded to the Borrowers for any reason. The purchase of participations in a Swingline Loan pursuant to this paragraph shall not relieve the Borrowers of any default in the payment thereof.

SECTION 2.06. <u>Letters of Credit</u>.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a)&nbsp;&nbsp;&nbsp;&nbsp;<u>General</u>. Subject to the terms and conditions set forth herein, the Parent Borrower may request the issuance of Letters of Credit denominated in Dollars as the applicant thereof for the support of the obligations of the Parent Borrower or any Subsidiary thereof, in a form reasonably acceptable to the Administrative Agent and the Issuing Bank, at any time and from time to time during the Availability Period, and the Issuing Bank may, but shall have no obligation, to issue such requested Letters of Credit pursuant to this Agreement. In the event of any inconsistency between the terms and conditions of this Agreement and the terms and conditions of any form of letter of credit application or other agreement submitted by the Parent Borrower to, or entered into by the Parent Borrower with, the Issuing Bank relating to any Letter of Credit, the terms and conditions of this Agreement shall control. The Borrowers unconditionally and irrevocably agree that, in connection with any Letter of Credit issued for the support of any Subsidiary's obligations as provided in the first sentence of this paragraph, the Borrowers will be fully responsible for the reimbursement of LC Disbursements in accordance with the terms hereof, the payment of interest thereon and the payment of fees due under Section 2.12(b) to the same extent as if it were the sole account party in respect of such Letter of Credit (the Borrowers hereby irrevocably waive any defenses that might otherwise be available to it as a guarantor or surety of the obligations of such Subsidiary that is an account party in respect of any such Letter of Credit). Notwithstanding anything herein to the contrary, the Issuing Bank shall have no obligation hereunder to issue, and shall not issue, any Letter of Credit (i) the proceeds of which would be made available to any Person (A) to fund any activity or business of or with any Sanctioned Person, or in any country or territory that, at the time of such funding, is the subject of any Sanctions or (B) in any manner that would result in a violation of any Sanctions by any party to this Agreement, (ii) if any order, judgment or decree of any Governmental Authority or arbitrator shall by its terms purport to enjoin or restrain the Issuing Bank from issuing such Letter of Credit, or any Requirement of Law relating to the Issuing Bank or any request or directive (whether or not having the force of law) from any Governmental Authority with jurisdiction over the Issuing Bank shall prohibit, or request that the Issuing Bank refrain from, the issuance of letters of credit generally or such Letter of Credit in particular or shall impose upon the Issuing Bank with respect to such Letter of Credit any restriction, reserve or capital requirement (for which the Issuing Bank is not otherwise compensated hereunder) not in effect on the Effective Date, or

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shall impose upon the Issuing Bank any unreimbursed loss, cost or expense which was not applicable on the Effective Date and which the Issuing Bank in good faith deems material to it, or (iii) if the issuance of such Letter of Credit would violate one or more policies of the Issuing Bank applicable to letters of credit generally; provided that, notwithstanding anything herein to the contrary, (x) the Dodd-Frank Wall Street Reform and Consumer Protection Act and all requests, rules, guidelines, requirements or directives thereunder or issued in connection therewith or in the implementation thereof, and (y) all requests, rules, guidelines, requirements or directives promulgated by the Bank for International Settlements, the Basel Committee on Banking Supervision (or any successor or similar authority) or the United States or foreign regulatory authorities, in each case pursuant to Basel III, shall in each case be deemed not to be in effect on the Effective Date for purposes of clause (ii) above, regardless of the date enacted, adopted, issued or implemented.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b)&nbsp;&nbsp;&nbsp;&nbsp;<u>Notice of Issuance, Amendment, Renewal, Extension; Certain Conditions</u>. To request the issuance of a Letter of Credit (or the amendment, renewal or extension of an outstanding Letter of Credit), the Parent Borrower shall hand deliver or fax (or transmit through Electronic System, if arrangements for doing so have been approved by the Issuing Bank) to the Issuing Bank and the Administrative Agent (reasonably in advance of the requested date of issuance, amendment, renewal or extension, but in any event no less than three Business Days or such shorter time period as agreed to by the Administrative Agent in its discretion) a notice requesting the issuance of a Letter of Credit, or identifying the Letter of Credit to be amended, renewed or extended, and specifying the date of issuance, amendment, renewal or extension (which shall be a Business Day), the date on which such Letter of Credit is to expire (which shall comply with paragraph (c) of this Section), the amount of such Letter of Credit, the name and address of the beneficiary thereof, and such other information as shall be necessary to prepare, amend, renew or extend such Letter of Credit. If requested by the Issuing Bank, the Parent Borrower also shall submit a letter of credit application on the Issuing Bank's standard form in connection with any request for a Letter of Credit. A Letter of Credit shall be issued, amended, renewed or extended only if (and upon issuance, amendment, renewal or extension of each Letter of Credit the Borrowers shall be deemed to represent and warrant that), after giving effect to such issuance, amendment, renewal or extension (i) the LC Exposure shall not exceed the Issuing Bank Sublimit, (ii) no Revolving Lender's Revolving Exposure shall exceed its Revolving Commitment and (iii) the Aggregate Revolving Exposure shall not exceed the lesser of the aggregate Revolving Commitments. Notwithstanding the foregoing or anything to the contrary contained herein, no Issuing Bank shall be obligated to issue or modify any Letter of Credit if, immediately after giving effect thereto, the outstanding LC Exposure in respect of all Letters of Credit issued by such Person and its Affiliates would exceed such Issuing Bank's Issuing Bank Sublimit. Without limiting the foregoing and without affecting the limitations contained herein, it is understood and agreed that the Parent Borrower may from time to time request that an Issuing Bank issue Letters of Credit in excess of its individual Issuing Bank Sublimit in effect at the time of such request, and each Issuing Bank agrees to consider any such request in good faith. Any Letter of Credit so issued by an Issuing Bank in excess of its individual Issuing Bank Sublimit then in effect shall nonetheless constitute a Letter of Credit for all purposes of this Agreement, and shall not affect the Issuing Bank Sublimit of any other Issuing Bank, subject to the limitations on the aggregate LC Exposure set forth in clause (i) of this Section 2.06(b).

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c)&nbsp;&nbsp;&nbsp;&nbsp;<u>Expiration Date</u>. Each Letter of Credit shall expire (or be subject to termination or non-renewal by notice from the Issuing Bank to the beneficiary thereof) at or prior to the close of business on the earlier of (i) the date one year after the date of the issuance of such Letter of Credit (or, in the case of any renewal or extension thereof, including, without limitation, any automatic renewal provision, one year after such renewal or extension) and (ii) the date that is five Business Days prior to the Revolving Credit Maturity Date.

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&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(d)&nbsp;&nbsp;&nbsp;&nbsp;<u>Participations</u>. By the issuance of a Letter of Credit (or an amendment to a Letter of Credit increasing the amount thereof) and without any further action on the part of the Issuing Bank or the Revolving Lenders, the Issuing Bank hereby grants to each Revolving Lender, and each Revolving Lender hereby acquires from the Issuing Bank, a participation in such Letter of Credit equal to such Lender's Applicable Percentage of the aggregate amount available to be drawn under such Letter of Credit. In consideration and in furtherance of the foregoing, each Revolving Lender hereby absolutely and unconditionally agrees to pay to the Administrative Agent, for the account of the Issuing Bank, such Lender's Applicable Percentage of each LC Disbursement made by the Issuing Bank and not reimbursed by the Borrowers on the date due as provided in paragraph (e) of this Section, or of any reimbursement payment required to be refunded to the Borrowers for any reason. Each Revolving Lender acknowledges and agrees that its obligation to acquire participations pursuant to this paragraph in respect of Letters of Credit is absolute and unconditional and shall not be affected by any circumstance whatsoever, including any amendment, renewal or extension of any Letter of Credit or the occurrence and continuance of a Default or reduction or termination of the Commitments, and that each such payment shall be made without any offset, abatement, withholding or reduction whatsoever.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(e)&nbsp;&nbsp;&nbsp;&nbsp;<u>Reimbursement</u>. If the Issuing Bank shall make any LC Disbursement in respect of a Letter of Credit, the Borrowers shall jointly and severally reimburse such LC Disbursement by paying to the Administrative Agent an amount equal to such LC Disbursement not later than 11:00 a.m., Eastern time, on the Business Day immediately following the day that the Parent Borrower receives such notice; <u>provided</u> that, if such LC Disbursement is greater than or equal to $2,000,000, the Borrowers may, subject to the conditions to borrowing set forth herein, request in accordance with Section 2.03 or 2.05 that such payment be financed with an ABR Revolving Borrowing or a Swingline Loan in an equivalent amount and, to the extent so financed, the Borrowers' obligation to make such payment shall be discharged and replaced by the resulting ABR Revolving Borrowing or Swingline Loan. If the Borrowers fail to make such payment when due, the Administrative Agent shall notify each Revolving Lender of the applicable LC Disbursement, the payment then due from the Borrowers in respect thereof, and such Lender's Applicable Percentage thereof. Promptly following receipt of such notice, each Revolving Lender shall pay to the Administrative Agent its Applicable Percentage of the payment then due from the Borrower, in the same manner as provided in Section 2.07 with respect to Loans made by such Lender (and Section 2.07 shall apply, <u>mutatis mutandis</u>, to the payment obligations of the Revolving Lenders), and the Administrative Agent shall promptly pay to the Issuing Bank the amounts so received by it from the Revolving Lenders. Promptly following receipt by the Administrative Agent of any payment from the Borrowers pursuant to this paragraph, the Administrative Agent shall distribute such payment to the Issuing Bank or, to the extent that Revolving Lenders have made payments pursuant to this paragraph to reimburse the Issuing Bank, then to such Lenders and the Issuing Bank, as their interests may appear. Any payment made by a Revolving Lender pursuant to this paragraph to reimburse the Issuing Bank for any LC Disbursement (other than the funding of ABR Revolving Loans or a Swingline Loan as contemplated above) shall not constitute a Loan and shall not relieve the Borrowers of their obligation to reimburse such LC Disbursement.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(f)&nbsp;&nbsp;&nbsp;&nbsp;<u>Obligations Absolute</u>. The Borrowers' joint and several obligation to reimburse LC Disbursements as provided in paragraph (e) of this Section shall be absolute, unconditional and irrevocable, and shall be performed strictly in accordance with the terms of this Agreement under any and all circumstances whatsoever and irrespective of (i) any lack of validity or enforceability of any Letter of Credit or this Agreement, or any term or provision therein or herein, (ii) any draft or other document presented under a Letter of Credit proving to be forged, fraudulent or invalid in any respect or any statement therein being untrue or inaccurate in any respect, (iii) any payment by the Issuing Bank under a Letter of Credit against presentation of a draft or other document that does not comply with the terms of

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such Letter of Credit, or (iv) any other event or circumstance whatsoever, whether or not similar to any of the foregoing, that might, but for the provisions of this Section, constitute a legal or equitable discharge of, or provide a right of setoff against, the Borrowers' obligations hereunder. None of the Administrative Agent, the Revolving Lenders or the Issuing Bank, or any of their Related Parties, shall have any liability or responsibility by reason of or in connection with the issuance or transfer of any Letter of Credit, or any payment or failure to make any payment thereunder (irrespective of any of the circumstances referred to in the preceding sentence), or any error, omission, interruption, loss or delay in transmission or delivery of any draft, notice or other communication under or relating to any Letter of Credit (including any document required to make a drawing thereunder), any error in interpretation of technical terms or any consequence arising from causes beyond the control of the Issuing Bank; <u>provided</u> that the foregoing shall not be construed to excuse the Issuing Bank from liability to the Borrowers to the extent of any direct damages (as opposed to special, indirect, consequential or punitive damages, claims in respect of which are hereby waived by the Borrowers to the extent permitted by applicable law) suffered by the Borrowers that are caused by the Issuing Bank's failure to exercise care when determining whether drafts and other documents presented under a Letter of Credit comply with the terms thereof. The parties hereto expressly agree that, in the absence of gross negligence or willful misconduct on the part of the Issuing Bank (as finally determined by a court of competent jurisdiction), the Issuing Bank shall be deemed to have exercised care in each such determination. In furtherance of the foregoing and without limiting the generality thereof, the parties agree that, with respect to documents presented which appear on their face to be in substantial compliance with the terms of a Letter of Credit, the Issuing Bank may, in its sole discretion, either accept and make payment upon such documents without responsibility for further investigation, regardless of any notice or information to the contrary, or refuse to accept and make payment upon such documents if such documents are not in strict compliance with the terms of such Letter of Credit.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(g)&nbsp;&nbsp;&nbsp;&nbsp;<u>Disbursement Procedures</u>. The Issuing Bank shall, promptly following its receipt thereof, examine all documents purporting to represent a demand for payment under a Letter of Credit. The Issuing Bank shall promptly notify the Administrative Agent and the Parent Borrower by telephone (confirmed by fax) of such demand for payment and whether the Issuing Bank has made or will make an LC Disbursement thereunder; <u>provided</u> that any failure to give or delay in giving such notice shall not relieve the Borrowers of their obligation to reimburse the Issuing Bank and the Revolving Lenders with respect to any such LC Disbursement.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(h)&nbsp;&nbsp;&nbsp;&nbsp;<u>Interim Interest</u>. If the Issuing Bank shall make any LC Disbursement, then, unless the Borrowers shall reimburse such LC Disbursement in full on the date such LC Disbursement is made, the unpaid amount thereof shall bear interest, for each day from and including the date such LC Disbursement is made to but excluding the date that the Borrowers reimburse such LC Disbursement, at the rate per annum then applicable to ABR Revolving Loans and such interest shall be due and payable on the date when such reimbursement is due; <u>provided</u> that, if the Borrowers fail to reimburse such LC Disbursement when due pursuant to paragraph (e) of this Section, then Section 2.13 (c) shall apply. Interest accrued pursuant to this paragraph shall be for the account of the Issuing Bank, except that interest accrued on and after the date of payment by any Revolving Lender pursuant to paragraph (e) of this Section to reimburse the Issuing Bank shall be for the account of such Lender to the extent of such payment.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(i)&nbsp;&nbsp;&nbsp;&nbsp;<u>Replacement of the Issuing Bank</u>. The Issuing Bank may be replaced at any time by written agreement among the Borrowers, the Administrative Agent, the replaced Issuing Bank and the successor Issuing Bank. The Administrative Agent shall notify the Revolving Lenders of any such replacement of the Issuing Bank. At the time any such replacement shall become effective, the Borrowers shall pay all unpaid fees accrued for the account of the replaced Issuing Bank pursuant to Section 2.12(b).

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From and after the effective date of any such replacement, (i) the successor Issuing Bank shall have all the rights and obligations of the Issuing Bank under this Agreement with respect to Letters of Credit to be issued thereafter and (ii) references herein to the term "Issuing Bank" shall be deemed to refer to such successor or to any previous Issuing Bank, or to such successor and all previous Issuing Banks, as the context shall require. After the replacement of an Issuing Bank hereunder, the replaced Issuing Bank shall remain a party hereto and shall continue to have all the rights and obligations of an Issuing Bank under this Agreement with respect to Letters of Credit then outstanding and issued by it prior to such replacement, but shall not be required to issue additional Letters of Credit.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(j)&nbsp;&nbsp;&nbsp;&nbsp;Subject to the appointment and acceptance of a successor Issuing Bank, the Issuing Bank may resign as an Issuing Bank at any time upon thirty days' prior written notice to the Administrative Agent, the Borrowers and the Lenders, in which case, such Issuing Bank shall be replaced in accordance with Section 2.06(i) above.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(k)&nbsp;&nbsp;&nbsp;&nbsp;<u>Cash Collateralization</u>. If any Event of Default shall occur and be continuing, on the Business Day that the Borrower receives notice from the Administrative Agent or the Required Lenders (or, if the maturity of the Loans has been accelerated, Revolving Lenders with LC Exposure representing greater than 25% of the aggregate LC Exposure) demanding the deposit of cash collateral pursuant to this paragraph, the Parent Borrower shall deposit in an account with the Administrative Agent, in the name of the Administrative Agent and for the benefit of the Revolving Lenders (the "<u>LC Collateral Account</u>"), an amount in cash equal to 105% of the amount of the LC Exposure as of such date plus accrued and unpaid interest thereon; <u>provided</u> that the obligation to deposit such cash collateral shall become effective immediately, and such deposit shall become immediately due and payable, without demand or other notice of any kind, upon the occurrence of any Event of Default with respect to the Borrowers described in clause (h) or (i) of Article VII. The Borrowers also shall deposit cash collateral in accordance with this paragraph as and to the extent required by Section 2.11(b) or 2.20. Each such deposit shall be held by the Administrative Agent as collateral for the payment and performance of the Secured Obligations. The Administrative Agent shall have exclusive dominion and control, including the exclusive right of withdrawal, over the LC Collateral Account and the Borrowers hereby grant the Administrative Agent a security interest in the LC Collateral Account and all moneys or other assets on deposit therein or credited thereto. Other than any interest earned on the investment of such deposits, which investments shall be made at the option and sole discretion of the Administrative Agent and at the Borrowers' risk and expense, such deposits shall not bear interest. Interest or profits, if any, on such investments shall accumulate in such account. Moneys in such account shall be applied by the Administrative Agent to reimburse the Issuing Bank for LC Disbursements for which it has not been reimbursed and, to the extent not so applied, shall be held for the satisfaction of the reimbursement obligations of the Borrowers for the LC Exposure at such time or, if the maturity of the Loans has been accelerated (but subject to the consent of Revolving Lenders with LC Exposure representing greater than 25% of the aggregate LC Exposure), be applied to satisfy other Secured Obligations. If the Borrowers are required to provide an amount of cash collateral hereunder as a result of the occurrence of an Event of Default, such amount (to the extent not applied as aforesaid) shall be returned to the Borrowers within three (3) Business Days after all such Events of Default have been cured or waived.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(l)&nbsp;&nbsp;&nbsp;&nbsp;<u>LC Exposure Determination</u>. For all purposes of this Agreement, the amount of a Letter of Credit that, by its terms or the terms of any document related thereto, provides for one or more automatic increases in the stated amount thereof shall be deemed to be the maximum stated amount of such Letter of Credit after giving effect to all such increases, whether or not such maximum stated amount is in effect at the time of determination.

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SECTION 2.07. <u>Funding of Borrowings</u>.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a)&nbsp;&nbsp;&nbsp;&nbsp;Each Lender shall make each Loan to be made by such Lender hereunder on the proposed date thereof solely by wire transfer of immediately available funds by 1:00 p.m., Eastern time, to the account of the Administrative Agent most recently designated by it for such purpose by notice to the Lenders in an amount equal to such Lender's Applicable Percentage; <u>provided</u> that Term A Loans (including Delayed Draw Term Loans) shall be made as provided in Sections 2.01(b), 2.01(c) and 2.02(b) and Swingline Loans shall be made as provided by Section 2.05. The Administrative Agent will make such Loans available to the Borrowers by promptly (or, as to any such funds received within the timeframe set forth in the preceding sentence, by 2:00 p.m., Eastern time, on the day of receipt) crediting the funds so received in the aforesaid account of the Administrative Agent to the Funding Account(s); <u>provided</u> that ABR Revolving Loans made to finance the reimbursement of an LC Disbursement as provided in Section 2.06(e) shall be remitted by the Administrative Agent to the Issuing Bank.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b)&nbsp;&nbsp;&nbsp;&nbsp;Unless the Administrative Agent shall have received notice from a Lender prior to the proposed date of any Borrowing that such Lender will not make available to the Administrative Agent such Lender's share of such Borrowing, the Administrative Agent may assume that such Lender has made such share available on such date in accordance with paragraph (a) of this Section and may, in reliance upon such assumption, make available to the Borrowers a corresponding amount. In such event, if a Lender has not in fact made its share of the Borrowing available to the Administrative Agent, then the applicable Lender and the Borrowers severally agree to pay to the Administrative Agent forthwith on demand such corresponding amount with interest thereon, for each day from and including the date such amount is made available to the Borrowers to but excluding the date of payment to the Administrative Agent, at (i) in the case of such Lender, the greater of the Federal Funds Effective<u>NYFRB</u> Rate and a rate determined by the Administrative Agent in accordance with banking industry rules on interbank compensation or (ii) in the case of the Borrowers, the interest rate applicable to ABR Revolving Loans. If such Lender pays such amount to the Administrative Agent, then such amount shall constitute such Lender's Loan included in such Borrowing.

SECTION 2.08. <u>Interest Elections</u>.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a)&nbsp;&nbsp;&nbsp;&nbsp;Each Borrowing initially shall be of the Type specified in the applicable Borrowing Request and, in the case of a Eurodollar<u>Term Benchmark</u> Borrowing, shall have an initial Interest Period as specified in such Borrowing Request. Thereafter, the Borrowers may elect to convert such Borrowing to a different Type or to continue such Borrowing and, in the case of a Eurodollar<u>Term</u> <u>Benchmark</u> Borrowing, may elect Interest Periods therefor, all as provided in this Section. The Borrowers may elect different options with respect to different portions of the affected Borrowing, in which case each such portion shall be allocated ratably among the Lenders holding the Loans comprising such Borrowing, and the Loans comprising each such portion shall be considered a separate Borrowing. This Section shall not apply to Swingline Borrowings, which may not be converted or continued.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b)&nbsp;&nbsp;&nbsp;&nbsp;To make an election pursuant to this Section, the Parent Borrower shall notify the Administrative Agent of such election by telephone or through Electronic System, if arrangements for doing so have been approved by the Administrative Agent, by the time that a Borrowing Request would be required under Section 2.03 if the Parent Borrower is requesting a Borrowing of the Type resulting from such election to be made on the effective date of such election. Each such telephonic Interest Election Request shall be irrevocable and shall be confirmed promptly by hand delivery, Electronic System or fax to the Administrative Agent of a written Interest Election Request in a form approved by the Administrative Agent and signed by the Parent Borrower.

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&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c)&nbsp;&nbsp;&nbsp;&nbsp;Each telephonic and written Interest Election Request (including requests submitted through Electronic System) shall specify the following information in compliance with Section 2.02:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(i)&nbsp;&nbsp;&nbsp;&nbsp;the name of the Borrower and the Borrowing to which such Interest Election Request applies and, if different options are being elected with respect to different portions thereof, the portions thereof to be allocated to each resulting Borrowing (in which case the information to be specified pursuant to clauses (iii) and (iv) below shall be specified for each resulting Borrowing);

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(ii)&nbsp;&nbsp;&nbsp;&nbsp;the effective date of the election made pursuant to such Interest Election Request, which shall be a Business Day;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(iii)&nbsp;&nbsp;&nbsp;&nbsp;whether the resulting Borrowing is to be an ABR Borrowing or a Eurodollar<u>Term</u> <u>Benchmark Borrowing or an RFR</u> Borrowing; and

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(iv)&nbsp;&nbsp;&nbsp;&nbsp;if the resulting Borrowing is a Eurodollar<u>Term Benchmark</u> Borrowing, the Interest Period to be applicable thereto after giving effect to such election, which shall be a period contemplated by the definition of the term "Interest Period".

If any such Interest Election Request requests a Eurodollar<u>Term Benchmark</u> Borrowing but does not specify an Interest Period, then the Borrowers shall be deemed to have selected an Interest Period of one month's duration.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(d)&nbsp;&nbsp;&nbsp;&nbsp;Promptly following receipt of an Interest Election Request, the Administrative Agent shall advise each Lender of the applicable Class of the details thereof and of such Lender's portion of each resulting Borrowing.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(e)&nbsp;&nbsp;&nbsp;&nbsp;If the Parent Borrower fails to deliver a timely Interest Election Request with respect to a Eurodollar<u>Term Benchmark</u> Borrowing prior to the end of the Interest Period applicable thereto, then, unless such Borrowing is repaid as provided herein, at the end of such Interest Period such Borrowing shall be converted to an ABR Borrowing. Notwithstanding any contrary provision hereof, if an Event of Default has occurred and is continuing and the Administrative Agent, at the request of the Required Lenders, so notifies the Parent Borrower, then, so long as such Event of Default is continuing (i) no outstanding Borrowing may be converted to or continued as a Eurodollar<u>Term Benchmark</u> Borrowing and (ii) unless repaid, <u>(A)</u> each Eurodollar<u>Term Benchmark Borrowing and (B) each RFR</u> Borrowing shall be converted to an ABR Borrowing at the end of the Interest Period applicable thereto.

SECTION 2.09. <u>Termination and Reduction of Commitments</u><u>; Increase in Term A Loan</u> <u>Commitment</u>.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a)&nbsp;&nbsp;&nbsp;&nbsp;Unless previously terminated, (i) the Term A Loan Commitments shall terminate at 5:00 p.m., Eastern time, on the Effective Date, (ii) all the Revolving Commitments shall terminate on the Revolving Credit Maturity Date and (iii) the Delayed Draw Term Loan Commitments shall terminate at 5:00 p.m., Eastern time, on the Delayed Draw Term Loan Expiration Date.<u>.</u>

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b)&nbsp;&nbsp;&nbsp;&nbsp;The Borrowers may at any time terminate the Revolving Commitments upon the Payment in Full of the Secured Obligations.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c)&nbsp;&nbsp;&nbsp;&nbsp;The Borrowers may from time to time reduce the Revolving Commitments; <u>provided</u> that (i) each reduction of the Revolving Commitments shall be in an amount that is an integral multiple of $500,000 and not less than $1,000,000 and (ii) the Borrowers shall not terminate or reduce the

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Revolving Commitments if, after giving effect to any concurrent prepayment of the Revolving Loans in accordance with Section 2.11, the Aggregate Revolving Exposure would exceed the aggregate Revolving Commitments.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(d)&nbsp;&nbsp;&nbsp;&nbsp;The Parent Borrower shall notify the Administrative Agent of any election to terminate or reduce the Revolving Commitments under paragraph (b) or (c) of this Section at least three (3) Business Days prior to the effective date of such termination or reduction (or such shorter time period as agreed to by the Administrative Agent in its discretion), specifying such election and the effective date thereof. Promptly following receipt of any notice, the Administrative Agent shall advise the Lenders of the contents thereof. Each notice delivered by the Parent Borrower pursuant to this Section shall be irrevocable; <u>provided</u> that a notice of termination of the Revolving Commitments delivered by the Parent Borrower may state that such notice is conditioned upon the effectiveness of other credit facilities or change of control transaction, in which case such notice may be revoked by the Parent Borrower (by notice to the Administrative Agent on or prior to the specified effective date) if such condition is not satisfied. Any termination or reduction of the Revolving Commitments shall be permanent. Each reduction of the Commitments shall be made ratably among the Lenders in accordance with their respective Revolving Commitments.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(e)&nbsp;&nbsp;&nbsp;&nbsp;The Borrowers shall have the right to increase the Term A Loan Commitments by obtaining additional Term A Loan Commitments and/or the Revolving Commitments by obtaining additional Revolving Commitments, either from one or more of the Lenders or another lending institution, provided that (i) any such request for an increase shall be in a minimum amount of $10,000,000, (ii) the Borrower Representative, on behalf of the Borrowers, may make a maximum of five (5) such requests, (iii) after giving effect thereto, the sum of the total of the additional Term A Loan Commitments and<u>increase to the</u> Revolving Commitments <u>under this Section 2.09(e)</u> does not exceed $50,000,000, (iv) the Administrative Agent shall have approved the identity of any such new Term A Loan Lender, and the Administrative Agent, the Swingline Lender and the Issuing Bank have approved the identity of any such new Revolving Lender, such approvals not to be unreasonably withheld, (v) any such new Lender assumes all of the rights and obligations of a "Lender" hereunder, and (vi) the procedure described in Section 2.09(f) have been satisfied. Nothing contained in this Section 2.09 shall constitute, or otherwise be deemed to be, a commitment on the part of any Term A Loan Lender or Revolving Lender to increase its Commitment hereunder at any time.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(f)&nbsp;&nbsp;&nbsp;&nbsp;Any amendment hereto for such an increase or addition shall be in form and substance satisfactory to the Administrative Agent and shall only require the written signatures of the Administrative Agent, the Borrowers, any Term A Loan Lender being added or increasing its Term A Loan Commitment and any Revolving Lender being added or increasing its Revolving Commitment, subject only to the approval of all Lenders if any such increase or addition would cause the Commitments to exceed $90,000,000<u>150,000,000</u>. As a condition precedent to such an increase or addition, the Borrowers shall deliver to the Administrative Agent (i) a certificate of each Loan Party signed by an authorized officer of such Loan Party (A) certifying and attaching the resolutions adopted by such Loan Party approving or consenting to such increase, and (B) in the case of the Borrowers, certifying that, before and after giving effect to such increase or addition, (1) the representations and warranties contained in Article III and the other Loan Documents are true and correct, except to the extent that such representations and warranties specifically refer to an earlier date, in which case they are true and correct as of such earlier date, (2) no Default or Event of Default exists or would result therefrom and (3) the Borrowers are in compliance (on a pro forma basis) with the covenants contained in Section 6.12 and (ii) legal opinions and documents consistent with those delivered on the Effective Date, to the extent requested by the Administrative Agent.

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&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(g)&nbsp;&nbsp;&nbsp;&nbsp;On the effective date of any such increase or addition of the Term Loan A Commitment, the Borrowers shall prepay any Term A Loans (and pay any additional amounts required pursuant to Section 2.16) to the extent necessary to keep the outstanding Term A Loans ratable with any revised Applicable Percentages arising from any nonratable increase in the Term A Loan Commitments.<u>Intentionally Omitted.</u> 

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(h)&nbsp;&nbsp;&nbsp;&nbsp;On the effective date of any such increase or addition, (i) any Lender increasing (or, in the case of any newly added Lender, extending) its Revolving Commitment shall make available to the Administrative Agent such amounts in immediately available funds as the Administrative Agent shall determine, for the benefit of the other Lenders, as being required in order to cause, after giving effect to such increase or addition and the use of such amounts to make payments to such other Lenders, each Lender's portion of the outstanding Revolving Loans of all the Lenders to equal its revised Applicable Percentage of such outstanding Revolving Loans, and the Administrative Agent shall make such other adjustments among the Lenders with respect to the Revolving Loans then outstanding and amounts of principal, interest, commitment fees and other amounts paid or payable with respect thereto as shall be necessary, in the opinion of the Administrative Agent, in order to effect such reallocation and (ii) the Borrowers shall be deemed to have repaid and reborrowed all outstanding Revolving Loans as of the date of any increase (or addition) in the Revolving Commitments (with such reborrowing to consist of the Types of Revolving Loans, with related Interest Periods if applicable, specified in a notice delivered by the Borrower Representative, in accordance with the requirements of Section 2.03). The deemed payments made pursuant to clause (ii) of the immediately preceding sentence shall be accompanied by payment of all accrued interest on the amount prepaid and, in respect of each Eurodollar Loan, shall be subject to indemnification by the Borrowers pursuant to the provisions of Section 2.16 if the deemed payment occurs other than on the last day of the related Interest Periods.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(i)&nbsp;&nbsp;&nbsp;&nbsp;With respect to clauses (g) and<u>clause</u> (h) above, within a reasonable time after the effective date of any increase or addition, the Administrative Agent shall, and is hereby authorized and directed to, revise the Commitment Schedule to reflect such increase or addition and shall distribute such revised Commitment Schedule to each of the Lenders and the Borrower Representative, whereupon such revised Commitment Schedule shall replace the old Commitment Schedule and become part of this Agreement.

SECTION 2.10. <u>Repayment and Amortization of Loans; Evidence of Debt</u>.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a)&nbsp;&nbsp;&nbsp;&nbsp;The Borrowers hereby jointly and severally unconditionally promise to pay (i) to the Administrative Agent for the account of each Revolving Lender the then unpaid principal amount of each Revolving Loan in Dollars on the Revolving Credit Maturity Date and (ii) to the Swingline Lender the then unpaid principal amount of each Swingline Loan on the earlier to the Revolving Credit Maturity Date and the fifth Business Day after such Swingline Loan is made; provided that on each date that a Revolving Loan is made, the Borrowers shall repay all Swingline Loans then outstanding and the proceeds of any such Revolving Loan shall be applied by the Administrative Agent to repay any Swingline Loans outstanding.<u>.</u>

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b)&nbsp;&nbsp;&nbsp;&nbsp;The Borrowers hereby jointly and severally unconditionally promise to pay to the Administrative Agent for the account of each Term A Loan Lender on each date set forth below the installments payments upon the Term A Loans as set forth below (as adjusted from time to time pursuant

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to Section 2.11(d) or 2.18(b) or in connection with the funding of any Delayed Draw Term Loans (as more fully described below)):

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| | |
|:---|:---|
| **Date** | **Installment Amount** |
| &nbsp;&nbsp;September 30, 2019 | $250000 |
| &nbsp;&nbsp;December 31, 2019 | $250000 |
| &nbsp;&nbsp;March 31, 2020 | $250000 |
| &nbsp;&nbsp;June 30, 2020 | $250000 |
| &nbsp;&nbsp;September 30, 2020 | $375000 |
| &nbsp;&nbsp;December 31, 2020 | $375000 |
| &nbsp;&nbsp;March 31, 2021 | $375000 |
| &nbsp;&nbsp;June 30, 2021 | $375000 |
| &nbsp;&nbsp;September 30, 2021 | $500000 |
| &nbsp;&nbsp;December 31, 2021 | $500000 |
| &nbsp;&nbsp;March 31, 2022 | $500000 |
| &nbsp;&nbsp;June 30, 2022 | $500000 |
| &nbsp;&nbsp;September 30, 2022 | $625000 |
| &nbsp;&nbsp;December 31, 2022 | $625000 |
| &nbsp;&nbsp;March 31, 2023 | $625000 |
| &nbsp;&nbsp;June 30, 2023 | $625000 |
| &nbsp;&nbsp;September 30, 2023 | $750000 |
| &nbsp;&nbsp;December 31, 2023 | $750000 |
| &nbsp;&nbsp;March 31, 2024 | $750000 |
| &nbsp;&nbsp;June 30, 2024 | $750000 |
| &nbsp;&nbsp;Term A Maturity Date | The entire unpaid |
|  | principal balance of all<br>Term A Loans |

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; provided if any date set forth above is not a Business Day, then payment shall be due and payable on the Business Day immediately preceding such date. To the extent not previously paid, all unpaid Term A Loans shall be paid in full in cash by the Borrowers on the Term A Maturity Date. Notwithstanding the foregoing, commencing with the first full fiscal quarter after the Delayed Draw Term Loan Expiration Date, the amount set forth above shall be increased to an amount necessary to cause the then unpaid portion of the funded Delayed Draw Term Loans to be entitled to scheduled amortization payments representing the same percentage of the principal amount of such Delayed Draw Term Loans as the amortization percentage that is applicable to the then outstanding Term A Loans prior to the Delayed Draw Term Loan Expiration Date, it being understood that (i) such amendment will be effected immediately upon written notice thereof by the Administrative Agent to the Borrower Representative and (ii) no such amendment shall result in the decrease of the amortization applicable to any Term A Loans outstanding prior to the Delayed Draw Term Loan Expiration Date. To the extent not previously paid, all unpaid Delayed Draw Term Loans shall be paid in full in cash by the Borrowers on the Delayed Draw Term Loan Maturity Date.

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

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&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<u>(c)</u>&nbsp;&nbsp;&nbsp;&nbsp;(d) The Administrative Agent shall maintain accounts in which it shall record (i) the amount of each Loan made hereunder, the Class and Type thereof and the Interest Period applicable thereto, if any, (ii) the amount of any principal or interest due and payable or to become due and payable from the Borrowers to each Lender hereunder and (iii) the amount of any sum received by the Administrative Agent hereunder for the account of the Lenders and each Lender's share thereof.

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

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<u>(e)</u>&nbsp;&nbsp;&nbsp;&nbsp;(f) Any Lender may request that Loans made by it be evidenced by a promissory note. In such event, the Borrowers shall prepare, execute and deliver to such Lender a promissory note payable to such Lender (or, if requested by such Lender, to such Lender and its registered assigns) and substantially in the form attached hereto as Exhibit B. Thereafter, the Loans evidenced by such promissory note and interest thereon shall at all times (including after assignment pursuant to Section 9.04) be represented by one or more promissory notes in such form.

SECTION 2.11. <u>Prepayment of Loans</u>.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a)&nbsp;&nbsp;&nbsp;&nbsp;The Borrowers shall have the right at any time and from time to time to prepay any Borrowing in whole or in part, subject to prior notice in accordance with paragraph (e) of this Section and, if applicable, payment of any break funding expenses under Section 2.16.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b)&nbsp;&nbsp;&nbsp;&nbsp;In the event and on such occasion that the Aggregate Revolving Exposure exceeds the aggregate Revolving Commitments, the Borrowers shall prepay the Revolving Loans, and/or LC Exposure and/or Swingline Loans (or, if no such Borrowings are outstanding, deposit cash collateral in the LC Collateral Account in an aggregate amount equal to such excess, in accordance with Section 2.06(j)).

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c)&nbsp;&nbsp;&nbsp;&nbsp;In the event and on each occasion that any Net Proceeds are received by or on behalf of any Loan Party or any Subsidiary in respect of any Prepayment Event, the Borrowers shall, immediately after such Net Proceeds are received by any Loan Party or Subsidiary, prepay the Obligations and cash collateralize the LC Exposure as set forth in Section 2.11(e)(i) below in an aggregate amount equal to 100% of such Net Proceeds, <u>provided</u> that, in the case of any event described in clause (a) or (b) of the definition of the term "Prepayment Event", if the Borrowers shall deliver to the Administrative Agent a certificate of a Financial Officer to the effect that the Loan Parties intend to apply the Net Proceeds from such event (or a portion thereof specified in such certificate), within 180 days after receipt of such Net Proceeds, to acquire (or replace or rebuild) real property, equipment or other tangible assets (excluding inventory) to be used in the business of the Loan Parties, and certifying that no Default has occurred and is continuing, then no prepayment shall be required pursuant to this paragraph in respect of the Net Proceeds specified in such certificate, <u>provided</u> that to the extent of any such Net Proceeds that have not been so applied by the end of such 180 day period, a prepayment shall be required at such time in an amount equal to such Net Proceeds that have not been so applied.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<u>(c)</u>&nbsp;&nbsp;&nbsp;&nbsp;(d) All prepayments required to be made pursuant to Sections 2.11(c) shall be applied, <u>first</u> to prepay any protective advances or overadvances that may be outstanding and <u>second</u> to prepay the Term A Loans, including, following the Delayed Draw Term Loan Expiration Date, the Delayed Draw Term Loans on a pro rata basis (and in the event Term A Loans or Delayed Draw Term Loans of more than one Class shall be outstanding at the time, shall be allocated among the Term A

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Loans and the Delayed Draw Term Loans pro rata based on the aggregate principal amounts of outstanding Term A Loans and Delayed Draw Term Loans, respectively, of each such Class) as so allocated, and shall be applied to reduce the subsequent scheduled installment payments of Term A Loans and Delayed Draw Term Loans of each Class to be made pursuant to Section 2.10 pro rata and <u>third</u> to prepay the Revolving Loans (including Swingline Loans) without a corresponding reduction in the Revolving Commitments and <u>fourth</u><u>third</u> to cash collateralize outstanding LC Exposure; provided that all prepayments required to be made pursuant to Section 2.11(c) with respect to Net Proceeds arising from any casualty or other insured damage to, or any taking under power of eminent domain or by condemnation or similar proceeding, to the extent they arise from casualties or losses to cash or Inventory shall be applied, <u>first</u>, to prepay the Revolving Loans (including Swingline Loans) with a corresponding reduction in the Revolving Commitments and <u>second</u>, to cash collateralize outstanding LC Exposure, and <u>third</u>, to prepay the Term A Loans including, following the Delayed Draw Term Loan Expiration Date, the Delayed Draw Term Loans on a pro rata basis (allocated and applied to subsequent scheduled installment payments as set forth above).<u>.</u>

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<u>(d)</u>&nbsp;&nbsp;&nbsp;&nbsp;(e) The Parent Borrower shall notify the Administrative Agent (and, in the case of prepayment of a Swingline Loan, the Swingline Lender) by telephone (confirmed by fax) or through Electronic System, if arrangements for doing so have been approved by the Administrative Agent, of any prepayment under this Section: (i) in the case of prepayment of a Eurodollar<u>Term Benchmark</u> Borrowing, not later than 10:00 a.m., Eastern time, three (3) Business Days before the date of prepayment, (ii) in the case of prepayment of an <u>RFR Revolving Borrowing, not later than five (5) Business Days before the date</u> <u>of</u> <u>prepayment or (iii) in the case of prepayment of an</u> ABR Borrowing, not later than 10:00 a.m., Eastern time, on the Business Day of prepayment or (iii) in the case of prepayment of an Swingline Loan, not later than 11:00 a.m., Eastern time, on the date of prepayment. Each such notice shall be irrevocable and shall specify the prepayment date and the principal amount of each Borrowing or portion thereof to be prepaid; <u>provided</u> that if a notice of prepayment is given in connection with a conditional notice of termination of the Revolving Commitments as contemplated by Section 2.09, then such notice of prepayment may be revoked if such notice of termination is revoked in accordance with Section 2.09. Promptly following receipt of any such notice, the Administrative Agent shall advise the Lenders of the contents thereof. Each partial prepayment of any Revolving Borrowing, Term A Loan or Delayed Draw Term Loan shall be in an amount that would be permitted in the case of an advance of a Borrowing of the same Type as provided in Section 2.02, except as necessary to apply fully the required amount of a mandatory prepayment. Each prepayment of a Borrowing shall be applied ratably to the Loans included in the prepaid Borrowing. Prepayments shall be accompanied by (i) accrued interest to the extent required by Section 2.13 and (ii) break funding payments pursuant to Section 2.16.

SECTION 2.12. <u>Fees</u>.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a)&nbsp;&nbsp;&nbsp;&nbsp;The Borrowers jointly and severally agree to pay to the Administrative Agent:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(i)&nbsp;&nbsp;&nbsp;&nbsp;a commitment fee for the account of each Revolving Lender, which shall accrue at the Applicable Rate on the daily amount of the undrawn portion of the Revolving Commitment of such Lender during the period from and including the Effective Date to but excluding the date on which the Lenders' Revolving Commitments terminate; it being understood that the LC Exposure of a Lender shall be included in the drawn portion of the Revolving Commitment of such Lender for purposes of calculating the commitment fee.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(ii)&nbsp;&nbsp;&nbsp;&nbsp;a commitment fee for the account of each Delayed Draw Term Loan Lender, which shall accrue at the Applicable Rate on the daily amount of the undrawn portion of the Delayed

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Draw Term Loan Commitment of such Lender during the period from and including the Effective Date to but excluding the Delayed Draw Term Loan Expiration Date.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<u>(b)</u>&nbsp;&nbsp;&nbsp;&nbsp;Accrued commitment fees shall be payable in arrears on the last day of March, June, September and December of each year and, as applicable, on the date on which the Revolving Commitments terminate and the Delayed Draw Term Loan Expiration Date, commencing on the first such date to occur after the date hereof. All commitment fees shall be computed on the basis of a year of 360 days and shall be payable for the actual number of days elapsed (including the first day but excluding the last day).

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<u>(c)</u>&nbsp;&nbsp;&nbsp;&nbsp;(b) The Borrowers agree to pay (i) to the Administrative Agent for the account of each Revolving Lender a participation fee with respect to its participations in Letters of Credit, which shall accrue at the same Applicable Rate used to determine the interest rate applicable to Eurodollar<u>Term</u> <u>Benchmark</u> Revolving Loans on the average daily amount of such Lender's LC Exposure (excluding any portion thereof attributable to unreimbursed LC Disbursements) during the period from and including the Effective Date to but excluding the later of the date on which such Lender's Revolving Commitment terminates and the date on which such Lender ceases to have any LC Exposure, and (ii) to the Issuing Bank a fronting fee, which shall accrue at the rate or rates per annum separately agreed upon between the Borrowers and the Issuing Bank on the average daily amount of the LC Exposure attributable to Letters of Credit issued by such Issuing Bank (excluding any portion thereof attributable to unreimbursed LC Disbursements) during the period from and including the Effective Date to but excluding the later of the date of termination of the Commitments and the date on which there ceases to be any LC Exposure, as well as the Issuing Bank's standard fees and commissions with respect to the issuance, amendment, cancellation, negotiation, transfer, presentment, renewal or extension of any Letter of Credit or processing of drawings thereunder. Participation fees and fronting fees accrued through and including the last day of March, June, September and December of each year shall be payable on the third Business Day following such last day, commencing on the first such date to occur after the Effective Date; <u>provided</u> that all such fees shall be payable on the date on which the Revolving Commitments terminate and any such fees accruing after the date on which the Revolving Commitments terminate shall be payable on demand. Any other fees payable to the Issuing Bank pursuant to this paragraph shall be payable within ten (10) days after demand. All participation fees and fronting fees shall be computed on the basis of a year of 360 days and shall be payable for the actual number of days elapsed (including the first day but excluding the last day).

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<u>(d)</u>&nbsp;&nbsp;&nbsp;&nbsp;<u>With respect to the Commitments existing as of the Sixth Amendment Effective</u> <u>Date, the Borrowers jointly and severally agree</u> <u>to pay to the Administrative Agent for</u> <u>its own account an</u> <u>upfront fee equal to $100,000, payable on the Sixth Amendment Effective Date.</u>

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<u>(e)</u>&nbsp;&nbsp;&nbsp;&nbsp;(c) All fees payable hereunder shall be paid on the dates due, in immediately available funds, to the Administrative Agent (or to the Issuing Bank, in the case of fees payable to it) for distribution, in the case of commitment fees and participation fees, to the Lenders entitled thereto. Fees paid shall not be refundable under any circumstances.

SECTION 2.13. <u>Interest</u>.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a)&nbsp;&nbsp;&nbsp;&nbsp;The Loans comprising each ABR Borrowing (including each Swingline Loan) shall bear interest at the Alternate Base Rate plus the Applicable Rate.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b)&nbsp;&nbsp;&nbsp;&nbsp;The Loans comprising each Eurodollar<u>Term Benchmark</u> Borrowing shall bear interest at the Adjusted LIBO<u>Term SOFR</u> Rate for the Interest Period in effect for such Borrowing plus

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the Applicable Rate. <u>Each RFR Loan shall bear interest at a rate per annum equal to the Adjusted Daily</u> <u>Simple SOFR plus the Applicable Rate.</u> 

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c)&nbsp;&nbsp;&nbsp;&nbsp;Notwithstanding the foregoing, during the occurrence and continuance of an Event of Default, the Administrative Agent or the Required Lenders may, at their option, by notice to the Parent Borrower (which notice may be revoked at the option of the Required Lenders notwithstanding any provision of Section 9.02 requiring the consent of "each Lender affected thereby" for reductions in interest rates), declare that (i) all Loans shall bear interest at 2% plus the rate otherwise applicable to such Loans as provided in the preceding paragraphs of this Section or (ii) in the case of any other amount outstanding hereunder, such amount shall accrue at 2% plus the rate applicable to such fee or other obligation as provided hereunder.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(d)&nbsp;&nbsp;&nbsp;&nbsp;Accrued interest on each Loan (for ABR Loans, accrued through the last day of the prior calendar month) shall be payable in arrears on each Interest Payment Date for such Loan and in the case of Revolving Loans, upon termination of the Revolving Commitments; <u>provided</u> that (i) interest accrued pursuant to paragraph (c) of this Section shall be payable on demand, (ii) in the event of any repayment or prepayment of any Loan (other than a prepayment of an ABR Revolving Loan prior to the end of the Availability Period), accrued interest on the principal amount repaid or prepaid shall be payable on the date of such repayment or prepayment and (iii) in the event of any conversion of any Eurodollar<u>Term Benchmark</u> Loan prior to the end of the current Interest Period therefor, accrued interest on such Loan shall be payable on the effective date of such conversion.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(e)&nbsp;&nbsp;&nbsp;&nbsp;All interest<u>Interest computed by reference to the Term SOFR Rate or Daily</u> <u>Simple SOFR</u> hereunder shall be computed on the basis of a year of 360 days, except that interest<u>. Interest</u> computed by reference to the Alternate Base Rate at times when the Alternate Base Rate is based on the Prime Rate shall be computed on the basis of a year of 365 days (or 366 days in a leap year), and in<u>. In</u> each case<u>, interest</u> shall be payable for the actual number of days elapsed (including the first day but excluding the last day). <u>All interest hereunder on any Loan shall be computed on a daily basis based upon</u> <u>the outstanding principal amount of such Loan as of the applicable date of determination.</u> The applicable Alternate Base Rate, Adjusted LIBO<u>Daily Simple SOFR, Daily Simple SOFR, Adjusted Term SOFR</u> Rate or LIBO<u>Term SOFR</u> Rate shall be determined by the Administrative Agent, and such determination shall be conclusive absent manifest error.

SECTION 2.14. Alternate Rate of Interest; Illegality.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a)&nbsp;&nbsp;&nbsp;&nbsp;Subject to clauses (<u>b), (</u>c), (d), (e), <u>and</u> (f), (g) and (h) of this Section 2.14, if prior to the commencement of any Interest Period for a Eurodollar Borrowing:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(i)&nbsp;&nbsp;&nbsp;&nbsp;the Administrative Agent determines (which determination shall be conclusive and binding absent manifest error) <u>(A) prior to commencement of any Interest</u> <u>Period for a Term Benchmark Borrowing,</u> that adequate and reasonable means do not exist for ascertaining the Adjusted LIBO<u>Term SOFR</u> Rate or the LIBO<u>Term SOFR</u> Rate, as applicable (including, without limitation, by means of an Interpolated Rate or because the LIBO Screen<u>Term SOFR Reference</u> Rate is not available or published on a current basis) for such Interest Period; provided that no Benchmark Transition Event shall have occurred at such time <u>or (B) at any time, that adequate and reasonable means do not exist</u> <u>for ascertaining the applicable Adjusted Daily Simple SOFR or Daily Simple SOFR</u>; or

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(ii)&nbsp;&nbsp;&nbsp;&nbsp;the Administrative Agent is advised by the Required Lenders that <u>(A)</u> <u>prior to the commencement of any Interest Period for a</u> <u>Term Benchmark Borrowing,</u> the Adjusted LIBO<u>Term SOFR</u> Rate or the LIBO Rate, as applicable, for such Interest Period

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will not adequately and fairly reflect the cost to such Lenders (or Lender) of making or maintaining their Loans (or Loan) included in such Borrowing for such Interest Period <u>or</u> <u>(B) at any time, the Adjusted Daily Simple SOFR will not adequately and fairly reflect</u> <u>the cost to such Lenders (or Lender) of making or maintaining their Loans (or Loan)</u> <u>included in such Borrowing</u>;

then the Administrative Agent shall give notice thereof to the Borrower Representative and the Lenders through Electronic System as provided in Section 9.01 as promptly as practicable thereafter and, until <u>(x)</u> the Administrative Agent notifies the Borrower Representative and the Lenders that the circumstances giving rise to such notice no longer exist <u>with respect to the relevant Benchmark</u> <u>and (y) the Borrower Representative delivers a new Interest Election Request in accordance with the</u> <u>terms of Section 2.08 or a new Borrowing Request in accordance with the terms of Section 2.03</u>, (A<u>1</u>) any Interest Election Request that requests the conversion of any Borrowing to, or continuation of any Borrowing as, a Eurodollar Borrowing shall be ineffective and any such Eurodollar Borrowing shall<u>Term</u> <u>Benchmark Borrowing and any Borrowing Request that requests a Term Benchmark Borrowing shall</u> <u>instead be deemed to be an Interest Election Request or a Borrowing Request, as applicable, for (x) an</u> <u>RFR Borrowing so long as the Adjusted Daily Simple SOFR is not also the subject of Section 2.14(a)(i)</u> <u>or (ii) above or (y)</u> be repaid or converted into an ABR Borrowing <u>if the Adjusted Daily Simple SOFR</u> <u>also is the subject of Section 2.14(a)(i) or (ii) above and (2) any Borrowing Request that requests an RFR</u> <u>Borrowing shall instead</u> <u>be deemed to be a</u> <u>Borrowing Request, as applicable, for an ABR Borrowing;</u> <u>provided that if the circumstances giving rise to such notice affect only one Type of Borrowings, then all</u> <u>other Types of Borrowings shall be permitted. Furthermore, if any Term Benchmark Loan or RFR Loan is</u> <u>outstanding on the date of the Borrowers' receipt of the notice from the Administrative Agent referred to</u> <u>in this Section 2.14(a) with respect to a Relevant Rate applicable to such Term Benchmark Loan or RFR</u> <u>Loan, then until (x) the Administrative Agent notifies the Borrower Representative</u> <u>and the Lenders that</u> <u>the</u> <u>circumstances giving rise to such notice no longer exist with respect to the relevant Benchmark and</u> <u>(y) the Borrower Representative delivers a new Interest Election Request</u> <u>in accordance with the terms of</u> <u>Section 2.08 or a new Borrowing Request</u> <u>in accordance with the terms</u> <u>of Section 2.03, (1) any Term</u> <u>Benchmark Loan shall</u> on the last day of the then current Interest Period applicable thereto, and (B) if any Borrowing Request requests a Eurodollar Borrowing, such Borrowing shall be made as <u>to such Loan (or</u> <u>the next succeeding Business Day if such day is not a Business Day), be converted</u> <u>by the Administrative</u> <u>Agent to</u><u>, and shall constitute, (x) an RFR Borrowing so long as the Adjusted Daily Simple SOFR is not</u> <u>also the subject of Section 2.14(a)(i) or (ii) above or (y) an ABR Loan if the Adjusted Daily Simple SOFR</u> <u>also is the subject of Section 2.14(a)(i) or (ii) above, on such day, and (2) any RFR Loan shall on and</u> <u>from such day be converted by the Administrative Agent to, and shall constitute</u> an ABR Borrowing<u>Loan</u>.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b)&nbsp;&nbsp;&nbsp;&nbsp;If any Lender determines that any Requirement of Law has made it unlawful, or if any Governmental Authority has asserted that it is unlawful, for any Lender or its applicable lending office to make, maintain, fund or continue any Eurodollar Borrowing, or any Governmental Authority has imposed material restrictions on the authority of such Lender to purchase or sell, or to take deposits of, dollars in the London interbank market, then, on notice thereof by such Lender to the Borrower Representative through the Administrative Agent, any obligations of such Lender to make, maintain, fund or continue Eurodollar Loans or to convert ABR Borrowings to Eurodollar Borrowings will be suspended until such Lender notifies the Administrative Agent and the Borrower Representative that the circumstances giving rise to such determination no longer exist. Upon receipt of such notice, the Borrowers will upon demand from such Lender (with a copy to the Administrative Agent), either prepay or convert all Eurodollar Borrowings of such Lender to ABR Borrowings, either on the last day of the Interest Period therefor, if such Lender may lawfully continue to maintain such Eurodollar Borrowings to such day, or immediately, if such Lender may not lawfully continue to maintain such Loans. Upon any

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such prepayment or conversion, the Borrowers will also pay accrued interest on the amount so prepaid or converted.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<u>(b)</u>&nbsp;&nbsp;&nbsp;&nbsp;(c) Notwithstanding anything to the contrary herein or in any other Loan Document, (and any Swap Agreement shall be deemed not to be a "Loan Document" for purposes of this Section 2.14), if a Benchmark Transition Event or an Early Opt-in Election, as applicable, and its related Benchmark Replacement Date have occurred prior to the Reference Time in respect of any setting of the then-current Benchmark, then (x) if a Benchmark Replacement is determined in accordance with clause (1) or (2) of the definition of "Benchmark Replacement" for such Benchmark Replacement Date, such Benchmark Replacement will replace such Benchmark for all purposes hereunder and under any Loan Document in respect of such Benchmark setting and subsequent Benchmark settings without any amendment to, or further action or consent of any other party to, this Agreement or any other Loan Document and (y) if a Benchmark Replacement is determined in accordance with clause (3<u>2</u>) of the definition of "Benchmark Replacement" for such Benchmark Replacement Date, such Benchmark Replacement will replace such Benchmark for all purposes hereunder and under any Loan Document in respect of any Benchmark setting at or after 5:00 p.m. (New York City time) on the fifth (5th) Business Day after the date notice of such Benchmark Replacement is provided to the Lenders without any amendment to, or further action or consent of any other party to, this Agreement or any other Loan Document so long as the Administrative Agent has not received, by such time, written notice of objection to such Benchmark Replacement from Lenders comprising the Required Lenders of each <u>affected</u> Class.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(d) Notwithstanding anything to the contrary herein or in any other Loan Document and subject to the proviso below in this paragraph, if a Term SOFR Transition Event and its related Benchmark Replacement Date have occurred prior to the Reference Time in respect of any setting of the then-current Benchmark, then the applicable Benchmark Replacement will replace the then-current Benchmark for all purposes hereunder or under any Loan Document in respect of such Benchmark setting and subsequent Benchmark settings, without any amendment to, or further action or consent of any other party to, this Agreement or any other Loan Document; provided that, this clause (d) shall not be effective unless the Administrative Agent has delivered to the Lenders and the Borrower Representative a Term SOFR Notice. For the avoidance of doubt, the Administrative Agent shall not be required to deliver a Term SOFR Notice after a Term SOFR Transition Event and may do so in its sole discretion.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<u>(c)</u>&nbsp;&nbsp;&nbsp;&nbsp;(e) In connection with the implementation of a Benchmark Replacement, <u>Notwithstanding anything to the contrary herein or in any other Loan Document</u><u>,</u> the Administrative Agent will have the right to make Benchmark Replacement Conforming Changes from time to time and, notwithstanding anything to the contrary herein or in any other Loan Document, any amendments implementing such Benchmark Replacement Conforming Changes will become effective without any further action or consent of any other party to this Agreement or any other Loan Document.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<u>(d)</u>&nbsp;&nbsp;&nbsp;&nbsp;(f) The Administrative Agent will promptly notify the Borrower Representative and the Lenders of (i) any occurrence of a Benchmark Transition Event, a Term SOFR Transition Event or an Early Opt-in Election, as applicable, and its related Benchmark Replacement Date, (ii) the implementation of any Benchmark Replacement, (iii) the effectiveness of any Benchmark Replacement Conforming Changes, (iv) the removal or reinstatement of any tenor of a Benchmark pursuant to clause (d<u>f</u>) below and (v) the commencement or conclusion of any Benchmark Unavailability Period. Any determination, decision or election that may be made by the Administrative Agent or, if applicable, any Lender (or group of Lenders) pursuant to this Section 2.14, including any determination with respect to a tenor, rate or adjustment or of the occurrence or non-occurrence of an event, circumstance or date and any decision to take or refrain from taking any action or any selection, will be conclusive and binding absent manifest error and may be made in its or their sole discretion and without consent from any other party to

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this Agreement or any other Loan Document, except, in each case, as expressly required pursuant to this Section 2.14.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<u>(e)</u>&nbsp;&nbsp;&nbsp;&nbsp;(g) Notwithstanding anything to the contrary herein or in any other Loan Document, at any time (including in connection with the implementation of a Benchmark Replacement), (i) if the then-current Benchmark is a term rate (including <u>the</u> Term SOFR or LIBO Rate) and either (A) any tenor for such Benchmark is not displayed on a screen or other information service that publishes such rate from time to time as selected by the Administrative Agent in its reasonable discretion or (B) the regulatory supervisor for the administrator of such Benchmark has provided a public statement or publication of information announcing that any tenor for such Benchmark is or will be no longer representative, then the Administrative Agent may modify the definition of "Interest Period" for any Benchmark settings at or after such time to remove such unavailable or non-representative tenor and (ii) if a tenor that was removed pursuant to clause (i) above either (A) is subsequently displayed on a screen or information service for a Benchmark (including a Benchmark Replacement) or (B) is not, or is no longer, subject to an announcement that it is or will no longer be representative for a Benchmark (including a Benchmark Replacement), then the Administrative Agent may modify the definition of "Interest Period" for all Benchmark settings at or after such time to reinstate such previously removed tenor.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<u>(f)</u>&nbsp;&nbsp;&nbsp;&nbsp;(h) Upon the Borrowers' receipt of notice of the commencement of a Benchmark Unavailability Period, the Borrowers may revoke any request for a Eurodollar<u>Term</u> <u>Benchmark</u> <u>Borrowing or RFR</u> Borrowing of, conversion to or continuation of Eurodollar<u>Term</u> <u>Benchmark</u> Loans to be made, converted or continued during any Benchmark Unavailability Period and, failing that, the Borrowers will be deemed to have converted <u>(1)</u> any such request <u>for a Term Benchmark</u> <u>Borrowing</u> into a request for a Borrowing of or conversion to ABR Loans<u>(A) an RFR Borrowing so long</u> <u>as the Adjusted</u> <u>Daily Simple SOFR is not the subject of</u> <u>a Benchmark Transition Event or</u> <u>(B) an ABR</u> <u>Borrowing if the</u> <u>Adjusted Daily Simple SOFR is the subject of a Benchmark Transition Event or (2) any</u> <u>such request for</u> <u>an RFR Borrowing into a request for an ABR Borrowing</u>. During any Benchmark Unavailability Period or at any time that a tenor for the then-current Benchmark is not an Available Tenor, the component of ABR based upon the then-current Benchmark or such tenor for such Benchmark, as applicable, will not be used in any determination of ABR. <u>Furthermore, if any Term Benchmark Loan</u> <u>or RFR Loan is</u> <u>outstanding on the date of the Borrower's receipt of notice of the commencement of a</u> <u>Benchmark</u> <u>Unavailability Period with respect to a Relevant Rate applicable to such Term Benchmark</u> <u>Loan or RFR</u> <u>Loan, then until such time as a Benchmark Replacement is implemented pursuant to this</u> <u>Section 2.14, (1)</u> <u>any Term Benchmark Loan shall on</u> <u>the last day of the Interest Period</u> <u>applicable to such</u> <u>Loan (or the next</u> <u>succeeding Business Day if such day</u> <u>is not a Business Day</u><u>), be converted</u> <u>by the</u> <u>Administrative Agent</u> <u>to</u><u>, and shall constitute, (x) an RFR Loan so long as the Adjusted Daily Simple</u> <u>SOFR is not the subject of</u> <u>a Benchmark Transition Event or (y) an ABR Loan if the Adjusted Daily</u> <u>Simple SOFR is the subject of a</u> <u>Benchmark Transition Event, on such day and (2) any RFR Loan shall on</u> <u>and from such day be converted</u> <u>by the Administrative Agent to</u><u>, and shall constitute an ABR Loan.</u>

SECTION 2.15. <u>Increased Costs</u>. (a) If any Change in Law shall:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(i)&nbsp;&nbsp;&nbsp;&nbsp;impose, modify or deem applicable any reserve, special deposit, liquidity or similar requirement (including any compulsory loan requirement, insurance charge or other assessment) against assets of, deposits with or for the account of, or credit extended by, any Lender (except any such reserve requirement reflected in the Adjusted LIBO<u>Term SOFR</u> Rate) or the Issuing Bank; or

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&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(ii)&nbsp;&nbsp;&nbsp;&nbsp;impose on any Lender or the Issuing Bank or the London<u>applicable offshore</u> interbank market any other condition, cost or expense (other than Taxes) affecting this Agreement or Loans made by such Lender or any Letter of Credit or participation therein; or

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

and the result of any of the foregoing shall be to increase the cost to such Lender or such other Recipient of making, continuing, converting into or maintaining any Loan (or of maintaining its obligation to make any such Loan) or to increase the cost to such Lender, the Issuing Bank or such other Recipient of participating in, issuing or maintaining any Letter of Credit or to reduce the amount of any sum received or receivable by such Lender, the Issuing Bank or such other Recipient hereunder (whether of principal, interest or otherwise), then, upon the request of such Lender, Issuing Bank or other Recipient, the Borrowers will pay to such Lender, the Issuing Bank or such other Recipient, as the case may be, such additional amount or amounts as will compensate such Lender, the Issuing Bank or such other Recipient, as the case may be, for such additional costs incurred or reduction suffered.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b)&nbsp;&nbsp;&nbsp;&nbsp;If any Lender or the Issuing Bank determines that any Change in Law regarding capital or liquidity requirements has or would have the effect of reducing the rate of return on such Lender's or the Issuing Bank's capital or on the capital of such Lender's or the Issuing Bank's holding company, if any, as a consequence of this Agreement, the Commitments of or the Loans made by, or participations in Letters of Credit or Swingline Loans held by, such Lender, or the Letters of Credit issued by the Issuing Bank, to a level below that which such Lender or the Issuing Bank or such Lender's or the Issuing Bank's holding company could have achieved but for such Change in Law (taking into consideration such Lender's or the Issuing Bank's policies and the policies of such Lender's or the Issuing Bank's holding company with respect to capital adequacy and liquidity), then from time to time the Borrowers will pay to such Lender or the Issuing Bank, as the case may be, such additional amount or amounts as will compensate such Lender or the Issuing Bank or such Lender's or the Issuing Bank's holding company for any such reduction suffered.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c)&nbsp;&nbsp;&nbsp;&nbsp;A certificate of a Lender or the Issuing Bank setting forth the amount or amounts necessary to compensate such Lender or the Issuing Bank or its holding company, as the case may be, as specified in paragraph (a) or (b) of this Section and delivered to the Parent Borrower, shall be conclusive absent manifest error. The Borrowers shall pay such Lender or the Issuing Bank, as the case may be, the amount shown as due on any such certificate within ten (10) days after receipt thereof.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(d)&nbsp;&nbsp;&nbsp;&nbsp;Failure or delay on the part of any Lender or the Issuing Bank to demand compensation pursuant to this Section shall not constitute a waiver of such Lender's or the Issuing Bank's right to demand such compensation; <u>provided</u> that the Borrowers shall not be required to compensate a Lender or the Issuing Bank pursuant to this Section for any increased costs incurred or reductions suffered more than 270 days prior to the date that such Lender or the Issuing Bank, as the case may be, notifies the Parent Borrower of the Change in Law giving rise to such increased costs or reductions and of such Lender's or the Issuing Bank's intention to claim compensation therefor; <u>provided further</u> that, if the Change in Law giving rise to such increased costs or reductions is retroactive, then the 270-day period referred to above shall be extended to include the period of retroactive effect thereof.

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<u>SECTION 2.16.</u> <u>Break Funding Payments.</u>

SECTION 2.16. <u>Break Funding Payments</u>. In<u>(a) With respect to Loans that are not RFR</u> <u>Loans, in</u> the event of (a) the payment of any principal of any Eurodollar<u>Term Benchmark</u> Loan other than on the last day of an Interest Period applicable thereto (including as a result of an Event of Default or as a result of any prepayment pursuant to Section 2.11), (b) the conversion of any Eurodollar<u>Term</u> <u>Benchmark</u> Loan other than on the last day of the Interest Period applicable thereto, (c) the failure to borrow, convert, continue or prepay any Eurodollar<u>Term Benchmark</u> Loan on the date specified in any notice delivered pursuant hereto (regardless of whether such notice may be revoked under Section 2.09(d) and is revoked in accordance therewith), or (d) the assignment of any Eurodollar<u>Term Benchmark</u> Loan other than on the last day of the Interest Period applicable thereto as a result of a request by the Parent Borrower <u>Representative</u> pursuant to Section 2.19 or 9.02(d), then, in any such event, the Borrowers shall compensate each Lender for the loss, cost and expense attributable to such event. In the case of a Eurodollar Loan, such loss, cost or expense to any Lender shall be deemed to include an amount determined by such Lender to be the excess, if any, of (i) the amount of interest which would have accrued on the principal amount of such Eurodollar Loan had such event not occurred, at the Adjusted LIBO Rate that would have been applicable to such Eurodollar Loan, for the period from the date of such event to the last day of the then current Interest Period therefor (or, in the case of a failure to borrow, convert or continue, for the period that would have been the Interest Period for such Eurodollar Loan), over (ii) the amount of interest which would accrue on such principal amount for such period at the interest rate which such Lender would bid were it to bid, at the commencement of such period, for Dollar deposits of a comparable amount and period from other banks in the eurodollar market. A certificate of any Lender setting forth any amount or amounts that such Lender is entitled to receive pursuant to this Section shall be delivered to the Parent Borrower <u>Representative</u> and shall be conclusive absent manifest error. The Borrowers shall pay such Lender the amount shown as due on any such certificate within ten (10) days after receipt thereof.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<u>(b)</u>&nbsp;&nbsp;&nbsp;&nbsp;<u>With respect to RFR Loans, in the event of (i) the payment of any principal of</u> <u>any RFR Loan other than on the Interest Payment Date applicable thereto (including as a result of an</u> <u>Event of Default or an optional or mandatory prepayment of Loans), (ii) the failure to borrow or prepay</u> <u>any RFR Loan on the date specified in any notice delivered pursuant hereto (regardless of whether such</u> <u>notice may be revoked under Section 2.11 and is revoked in accordance therewith) or (iii) the assignment</u> <u>of any RFR Loan other than on the Interest Payment Date applicable thereto as a result of a request by</u> <u>the</u> <u>Borrower pursuant to Section</u> <u>2.18, then, in any such event, the Borrower shall compensate each Lender</u> <u>for the loss, cost and expense attributable to such event. A certificate of any Lender setting forth any</u> <u>amount or amounts that such Lender is entitled to receive pursuant to this Section shall be delivered to the</u> <u>Borrower and shall be conclusive absent manifest error. The Borrower shall pay such Lender the amount</u> <u>shown as due on any such certificate within ten (10) days after receipt thereof.</u>

SECTION 2.17. <u>Taxes</u>.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a)&nbsp;&nbsp;&nbsp;&nbsp;<u>Withholding Taxes; Gross-Up; Payments Free of Taxes</u>. Any and all payments by or on account of any obligation of any Loan Party under any Loan Document shall be made without deduction or withholding for any Taxes, except as required by applicable law. If any applicable law (as determined in the good faith discretion of an applicable withholding agent) requires the deduction or withholding of any Tax from any such payment by a withholding agent, then the applicable withholding agent shall be entitled to make such deduction or withholding and shall timely pay the full amount deducted or withheld to the relevant Governmental Authority in accordance with applicable law and, if such Tax is an Indemnified Tax, then the sum payable by the applicable Loan Party shall be increased as necessary so that after such deduction or withholding has been made (including such deductions and

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withholdings applicable to additional sums payable under this Section 2.17), the applicable Recipient receives an amount equal to the sum it would have received had no such deduction or withholding been made.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b)&nbsp;&nbsp;&nbsp;&nbsp;<u>Payment of Other Taxes by the Loan Parties</u>. The Loan Parties shall timely pay to the relevant Governmental Authority in accordance with applicable law, or at the option of the Administrative Agent timely reimburse it for, Other Taxes.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c)&nbsp;&nbsp;&nbsp;&nbsp;<u>Evidence of Payment</u>. As soon as practicable after any payment of Taxes by any Loan Party to a Governmental Authority pursuant to this Section 2.17, such Loan Party shall deliver to the Administrative Agent the original or a certified copy of a receipt issued by such Governmental Authority evidencing such payment, a copy of the return reporting such payment, or other evidence of such payment reasonably satisfactory to the Administrative Agent.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(d)&nbsp;&nbsp;&nbsp;&nbsp;<u>Indemnification by the Loan Parties</u>. The Loan Parties shall jointly and severally indemnify each Recipient, within ten (10) days after demand therefor, for the full amount of any Indemnified Taxes (including Indemnified Taxes imposed or asserted on or attributable to amounts payable under this Section) payable or paid by such Recipient or required to be withheld or deducted from a payment to such Recipient and any reasonable expenses arising therefrom or with respect thereto, whether or not such Indemnified Taxes were correctly or legally imposed or asserted by the relevant Governmental Authority. A certificate as to the amount of such payment or liability delivered to the Parent Borrower by a Lender (with a copy to the Administrative Agent), or by the Administrative Agent on its own behalf or on behalf of a Lender, shall be conclusive absent manifest error.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(e)&nbsp;&nbsp;&nbsp;&nbsp;<u>Indemnification by the Lenders</u>. Each Lender shall severally indemnify the Administrative Agent, within ten (10) days after demand therefor, for (i) any Indemnified Taxes attributable to such Lender (but only to the extent that any Loan Party has not already indemnified the Administrative Agent for such Indemnified Taxes and without limiting the obligation of the Loan Parties to do so), (ii) any Taxes attributable to such Lender's failure to comply with the provisions of Section 9.04(c) relating to the maintenance of a Participant Register and (iii) any Excluded Taxes attributable to such Lender, in each case, that are payable or paid by the Administrative Agent in connection with any Loan Document, and any reasonable expenses arising therefrom or with respect thereto, whether or not such Taxes were correctly or legally imposed or asserted by the relevant Governmental Authority. A certificate as to the amount of such payment or liability delivered to any Lender by the Administrative Agent shall be conclusive absent manifest error. Each Lender hereby authorizes the Administrative Agent to set off and apply any and all amounts at any time owing to such Lender under any Loan Document or otherwise payable by the Administrative Agent to such Lender from any other source against any amount due to the Administrative Agent under this paragraph (e).

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(f)&nbsp;&nbsp;&nbsp;&nbsp;<u>Status of Lenders</u>.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(i)&nbsp;&nbsp;&nbsp;&nbsp;Any Lender that is entitled to an exemption from or reduction of withholding Tax with respect to payments made under any Loan Document shall deliver to the Parent Borrower and the Administrative Agent, at the time or times reasonably requested by the Parent Borrower or the Administrative Agent, such properly completed and executed documentation reasonably requested by the Parent Borrower or the Administrative Agent as will permit such payments to be made without withholding or at a reduced rate of withholding. In addition, any Lender, if reasonably requested by the Parent Borrower or the Administrative Agent, shall deliver such other documentation prescribed by applicable law or reasonably requested by the Parent Borrower or the Administrative Agent as will enable the Borrowers or the Administrative Agent to determine whether or not such Lender is subject to backup withholding or information

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reporting requirements. Notwithstanding anything to the contrary in the preceding two sentences, the completion, execution and submission of such documentation (other than such documentation set forth in Section 2.17(f)(ii)(A), (ii)(B) and (ii)(D) below) shall not be required if in the Lender's reasonable judgment such completion, execution or submission would subject such Lender to any material unreimbursed cost or expense or would materially prejudice the legal or commercial position of such Lender.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(ii)&nbsp;&nbsp;&nbsp;&nbsp;Without limiting the generality of the foregoing, in the event that a Borrower is a U.S. Person,

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

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(B)&nbsp;&nbsp;&nbsp;&nbsp;any Foreign Lender shall, to the extent it is legally entitled to do so, deliver to the Parent Borrower and the Administrative Agent (in such number of copies as shall be requested by the recipient) on or prior to the date on which such Foreign Lender becomes a Lender under this Agreement (and from time to time thereafter upon the reasonable request of the Parent Borrower or the Administrative Agent), whichever of the following is applicable:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(1)&nbsp;&nbsp;&nbsp;&nbsp;in the case of a Foreign Lender claiming the benefits of an income tax treaty to which the U.S. is a party (x) with respect to payments of interest under any Loan Document, an executed IRS Form W-8BEN or IRS Form W-8BEN-E, as applicable, establishing an exemption from, or reduction of, U.S. federal withholding Tax pursuant to the "interest" article of such tax treaty and (y) with respect to any other applicable payments under any Loan Document, IRS Form W-8BEN or IRS Form W-8BEN-E, as applicable, establishing an exemption from, or reduction of, U.S. federal withholding Tax pursuant to the "business profits" or "other income" article of such tax treaty;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(2)&nbsp;&nbsp;&nbsp;&nbsp;in the case of a Foreign Lender claiming that its extension of credit will generate U.S. effectively connected income, an executed IRS Form W-8ECI;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(3)&nbsp;&nbsp;&nbsp;&nbsp;in the case of a Foreign Lender claiming the benefits of the exemption for portfolio interest under Section 881(c) of the Code, (x) a certificate substantially in the form of <u>Exhibit D-1</u> to the effect that such Foreign Lender is not a "bank" within the meaning of Section 881(c)(3)(A) of the Code, a "10 percent shareholder" of a Borrower within the meaning of Section 881(c)(3)(B) of the Code, or a "controlled foreign corporation" described in Section 881(c)(3)(C) of the Code (a "<u>U.S. Tax Compliance Certificate</u>") and (y) an executed IRS Form W-8BEN or IRS Form W-8BEN-E, as applicable; or

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(4)&nbsp;&nbsp;&nbsp;&nbsp;to the extent a Foreign Lender is not the Beneficial Owner, an executed IRS Form W-8IMY, accompanied by IRS Form W-8ECI or IRS Form W-8BEN-E, as applicable, IRS Form W-8BEN, a U.S. Tax Compliance Certificate substantially in the form of <u>Exhibit D-2</u> or <u>Exhibit D-3</u>, IRS Form W- 9, and/or other certification documents from each Beneficial Owner, as

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applicable; <u>provided</u> that if the Foreign Lender is a partnership and one or more direct or indirect partners of such Foreign Lender are claiming the portfolio interest exemption, such Foreign Lender may provide a U.S. Tax Compliance Certificate substantially in the form of <u>Exhibit D-4</u> on behalf of each such direct and indirect partner;

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

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(D)&nbsp;&nbsp;&nbsp;&nbsp;if a payment made to a Lender under any Loan Document would be subject to U.S. federal withholding Tax imposed by FATCA if such Lender were to fail to comply with the applicable reporting requirements of FATCA (including those contained in Section 1471(b) or 1472(b) of the Code, as applicable), such Lender shall deliver to the Parent Borrower and the Administrative Agent at the time or times prescribed by law and at such time or times reasonably requested by the Parent Borrower or the Administrative Agent such documentation prescribed by applicable law (including as prescribed by Section 1471(b)(3)(C)(i) of the Code) and such additional documentation reasonably requested by the Parent Borrower or the Administrative Agent as may be necessary for the Borrowers and the Administrative Agent to comply with their obligations under FATCA and to determine that such Lender has complied with such Lender's obligations under FATCA or to determine the amount to deduct and withhold from such payment. Solely for purposes of this clause (D), "FATCA" shall include any amendments made to FATCA after the date of this Agreement.

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 Borrower and the Administrative Agent in writing of its legal inability to do so.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(g)&nbsp;&nbsp;&nbsp;&nbsp;<u>Treatment of Certain Refunds</u>. If any party determines, in its sole discretion exercised in good faith, that it has received a refund (or credit in lieu of a refund) of any Taxes as to which it has been indemnified pursuant to this Section 2.17 (including by the payment of additional amounts pursuant to this Section 2.17), it shall pay to the indemnifying party an amount equal to such refund (or credit in lieu of a refund, but only to the extent of indemnity payments made under this Section 2.17 with respect to the Taxes giving rise to such refund), net of all out-of-pocket expenses (including Taxes) of such indemnified party and without interest (other than any interest paid by the relevant Governmental Authority with respect to such refund (or credit in lieu of a refund)). Such indemnifying party, upon the request of such indemnified party, shall repay to such indemnified party the amount paid over pursuant to this paragraph (g) (plus any penalties, interest or other charges imposed by the relevant Governmental Authority) in the event that such indemnified party is required to repay such refund to such Governmental Authority. Notwithstanding anything to the contrary in this paragraph (g), in no event will the indemnified party be required to pay any amount to an indemnifying party pursuant to this paragraph (g) the payment of which would place the indemnified party in a less favorable net after-Tax position than

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the indemnified party would have been in if the Tax subject to indemnification and giving rise to such refund (or credit in lieu of a refund) had not been deducted, withheld or otherwise imposed and the indemnification payments or additional amounts giving rise to such refund had never been paid. This paragraph (g) shall not be construed to require any indemnified party to make available its Tax returns (or any other information relating to its Taxes that it deems confidential) to the indemnifying party or any other Person.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(h)&nbsp;&nbsp;&nbsp;&nbsp;<u>Survival</u>. Each party's obligations under this Section 2.17 shall survive the resignation or replacement of the Administrative Agent or any assignment of rights by, or the replacement of, a Lender, the termination of the Commitments and the repayment, satisfaction or discharge of all obligations under any Loan Document.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(i)&nbsp;&nbsp;&nbsp;&nbsp;<u>Defined Terms</u>. For purposes of this Section 2.17, the term "Lender" includes the Issuing Bank and the term "applicable law" includes FATCA.

SECTION 2.18. <u>Payments Generally; Allocation of Proceeds; Sharing of Set-offs</u>.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a)&nbsp;&nbsp;&nbsp;&nbsp;The Borrowers shall make each payment required to be made by it hereunder (whether of principal, interest, fees or reimbursement of LC Disbursements, or of amounts payable under Sections 2.15, 2.16 or 2.17, or otherwise) prior to 2:00 p.m., Eastern time, on the date when due, in immediately available funds, without set off or counterclaim. Any amounts received after such time on any date may, in the discretion of the Administrative Agent, be deemed to have been received on the next succeeding Business Day for purposes of calculating interest thereon. All such payments shall be made to the Administrative Agent at its offices at 10 South Dearborn, Floor L2, Suite 1L1-0480, Chicago, IL 60603-2300, except payments to be made directly to the Issuing Bank or Swingline Lender as expressly provided herein and except that payments pursuant to Sections 2.15, 2.16, 2.17 and 9.03 shall be made directly to the Persons entitled thereto. The Administrative Agent shall distribute any such payments received by it for the account of any other Person to the appropriate recipient promptly following receipt thereof. Unless otherwise provided for herein, if any payment hereunder shall be due on a day that is not a Business Day, the date for payment shall be extended to the next succeeding Business Day, and, in the case of any payment accruing interest, interest thereon shall be payable for the period of such extension. All payments hereunder shall be made in Dollars.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b)&nbsp;&nbsp;&nbsp;&nbsp;Any proceeds of Collateral received by the Administrative Agent (i) not constituting either (A) a specific payment of principal, interest, fees or other sum payable under the Loan Documents (which shall be applied as specified by the Parent Borrower), or (B) a mandatory prepayment (which shall be applied in accordance with Section 2.11) or (ii) after an Event of Default has occurred and is continuing and the Administrative Agent so elects or the Required Lenders so direct, shall be applied ratably <u>first</u>, to pay any fees, indemnities, or expense reimbursements including amounts then due to the Administrative Agent, the Swingline Lender and the Issuing Bank from the Borrowers (other than in connection with Banking Services Obligations or Swap Agreement Obligations), <u>second</u>, to pay any fees or expense reimbursements then due to the Lenders from the Borrowers (other than in connection with Banking Services Obligations or Swap Agreement Obligations), <u>third</u>, to pay interest then due and payable on the Loans ratably, <u>fourth</u>, to prepay principal on the Loans and unreimbursed LC Disbursements and to pay any amounts owing with respect to Swap Agreement Obligations up to and including the amount most recently provided to the Administrative Agent pursuant to Section 2.22, ratably (with amounts allocated to the Term A Loans and Delayed Draw Term Loans of any Class applied to reduce the subsequent scheduled installment payments of the Term A Loans and Delayed Draw Term Loans of such Class to be made pursuant to Section 2.10 in inverse order of maturity), <u>fifth</u>, to pay an amount to the Administrative Agent equal to one hundred five percent (105%) of the aggregate LC

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Exposure, to be held as cash collateral for such Obligations, and <u>sixth</u>, to the payment of any amounts owing in respect of Banking Services Obligations up to and including the amount most recently provided to the Administrative Agent pursuant to Section 2.22, and <u>seventh</u>, to the payment of any other Secured Obligation due to the Administrative Agent or any Lender from the Borrowers or any other Loan Party. Notwithstanding anything to the contrary contained in this Agreement, unless so directed by the Parent Borrower, or unless a Default is in existence, neither the Administrative Agent nor any Lender shall apply any payment which it receives to any Eurodollar<u>Term Benchmark</u> Loan of a Class, except (i) on the expiration date of the Interest Period applicable thereto, or (ii) in the event, and only to the extent, that there are no outstanding ABR Loans of the same Class and, in any such event, the Borrowers shall pay the break funding payment required in accordance with Section 2.16. The Administrative Agent and the Lenders shall have the continuing and exclusive right to apply and reverse and reapply any and all such proceeds and payments to any portion of the Secured Obligations.

Notwithstanding the foregoing, Secured Obligations arising under Banking Services Obligations or Swap Agreement Obligations shall be excluded from the application described above and paid in clause <u>seventh</u> if the Administrative Agent has not received written notice thereof, together with such supporting documentation as the Administrative Agent may have reasonably requested from the applicable provider of such Banking Services or Swap Agreements.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c)&nbsp;&nbsp;&nbsp;&nbsp;At the election of the Administrative Agent, all payments of principal, interest, LC Disbursements, fees, premiums, reimbursable expenses (including, without limitation, all reimbursement for fees, costs and expenses pursuant to Section 9.03), and other sums that are due and payable under the Loan Documents, may be paid from the proceeds of Borrowings made hereunder, whether made following a request by the Parent Borrower pursuant to Section 2.03 or a deemed request as provided in this Section or may be deducted from any deposit account of a Borrower maintained with the Administrative Agent. The Borrowers hereby irrevocably authorize (i) the Administrative Agent to make a Borrowing for the purpose of paying each payment of principal, interest and fees as it becomes due hereunder or any other amount due under the Loan Documents and agrees that all such amounts charged shall constitute Loans (including Swingline Loans), and that all such Borrowings shall be deemed to have been requested pursuant to Sections 2.03, and (ii) the Administrative Agent to charge any deposit account of a Borrower maintained with the Administrative Agent for each payment of principal, interest and fees as it becomes due hereunder or any other amount due under the Loan Documents.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(d)&nbsp;&nbsp;&nbsp;&nbsp;If, except as otherwise expressly provided herein, any Lender shall, by exercising any right of set-off or counterclaim or otherwise, obtain payment in respect of any principal of or interest on any of its Loans or participations in LC Disbursements resulting in such Lender receiving payment of a greater proportion of the aggregate amount of its Loans and participations in LC Disbursements and Swingline Loans and accrued interest thereon than the proportion received by any other similarly situated Lender, then the Lender receiving such greater proportion shall purchase (for cash at face value) participations in the Loans and participations in LC Disbursements and Swingline Loans of other Lenders to the extent necessary so that the benefit of all such payments shall be shared by all such Lenders ratably in accordance with the aggregate amount of principal of and accrued interest on their respective Loans and participations in LC Disbursements and Swingline Loans; <u>provided</u> that (i) if any such participations are purchased and all or any portion of the payment giving rise thereto is recovered, such participations shall be rescinded and the purchase price restored to the extent of such recovery, without interest, and (ii) the provisions of this paragraph shall not be construed to apply to any payment made by the Borrowers pursuant to and in accordance with the express terms of this Agreement or any payment obtained by a Lender as consideration for the assignment or sale of a participation in any of its Loans or participations in LC Disbursements and Swingline Loans to any assignee or participant, other than to the Borrowers or any Subsidiary or Affiliate thereof (as to which the provisions of this paragraph shall apply). The

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Borrowers consent to the foregoing and agrees, to the extent it may effectively do so under applicable law, that any Lender acquiring a participation pursuant to the foregoing arrangements may exercise against the Borrowers rights of set-off and counterclaim with respect to such participation as fully as if such Lender were a direct creditor of the Borrowers in the amount of such participation.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(e)&nbsp;&nbsp;&nbsp;&nbsp;Unless the Administrative Agent shall have received notice from the Parent Borrower prior to the date on which any payment is due to the Administrative Agent for the account of the Lenders or the Issuing Bank hereunder that the Borrowers will not make such payment, the Administrative Agent may assume that the Borrowers have made such payment on such date in accordance herewith and may, in reliance upon such assumption, distribute to the Lenders or the Issuing Bank, as the case may be, the amount due. In such event, if the Borrowers have not in fact made such payment, then each of the Lenders or the Issuing Bank, as the case may be, severally agrees to repay to the Administrative Agent forthwith on demand the amount so distributed to such Lender or Issuing Bank with interest thereon, for each day from and including the date such amount is distributed to it to but excluding the date of payment to the Administrative Agent, at the greater of the Federal Funds Effective Rate and a rate determined by the Administrative Agent in accordance with banking industry rules on interbank compensation<u>NYFRB Rate</u>.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(f)&nbsp;&nbsp;&nbsp;&nbsp;If any Lender shall fail to make any payment required to be made by it hereunder, then the Administrative Agent may, in its discretion (notwithstanding any contrary provision hereof), (i) apply any amounts thereafter received by the Administrative Agent for the account of such Lender for the benefit of the Administrative Agent, the Swingline Lender or the Issuing Bank to satisfy such Lender's obligations hereunder until all such unsatisfied obligations are fully paid and/or (ii) hold any such amounts in a segregated account as cash collateral for, and application to, any future funding obligations of such Lender hereunder. Application of amounts pursuant to (i) and (ii) above shall be made in such order as may be determined by the Administrative Agent in its sole discretion.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(g)&nbsp;&nbsp;&nbsp;&nbsp;The Administrative Agent may from time to time provide the Parent Borrower with account statements or invoices with respect to any of the Secured Obligations (the "Statements"). The Administrative Agent is under no duty or obligation to provide Statements, which, if provided, will be solely for the Borrowers' convenience. Statements may contain estimates of the amounts owed during the relevant billing period, whether of principal, interest, fees or other Secured Obligations. If the Borrowers pays the full amount indicated on a Statement on or before the due date indicated on such Statement, the Borrowers shall not be in default of payment with respect to the billing period indicated on such Statement; <u>provided</u>, that acceptance by the Administrative Agent, on behalf of the Lenders, of any payment that is less than the total amount actually due at that time (including but not limited to any past due amounts) shall not constitute a waiver of the Administrative Agent's or the Lenders' right to receive payment in full at another time.

SECTION 2.19. <u>Mitigation Obligations; Replacement of Lenders</u>.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a)&nbsp;&nbsp;&nbsp;&nbsp;If any Lender requests compensation under Section 2.15, or requires the Borrowers to pay any Indemnified Taxes or additional amounts to any Lender or any Governmental Authority for the account of any Lender pursuant to Section 2.17, then such Lender shall (either acting on its own initiative or at the request of the Parent Borrower) use reasonable efforts to designate a different lending office for funding or booking its Loans hereunder or to assign its rights and obligations hereunder to another of its offices, branches or affiliates, if, in the judgment of such Lender, such designation or assignment (i) would eliminate or reduce amounts payable pursuant to Sections 2.15 or 2.17, as the case may be, in the future and (ii) would not subject such Lender to any unreimbursed cost or expense and would not otherwise be disadvantageous to such Lender. The Borrowers hereby jointly and severally

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agree to pay all reasonable costs and expenses incurred by any Lender in connection with any such designation or assignment.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b)&nbsp;&nbsp;&nbsp;&nbsp;If any Lender requests compensation under Section 2.15, or if the Borrowers are required to pay any Indemnified Taxes or additional amounts to any Lender or any Governmental Authority for the account of any Lender pursuant to Section 2.17, or if any Lender is a Defaulting Lender or a Non-Consenting Lender, then the Borrowers may, at its sole expense and effort, upon notice to such Lender and the Administrative Agent, require such Lender to assign and delegate, without recourse (in accordance with and subject to the restrictions contained in, and consent required by, Section 9.04), all its interests, rights (other than its existing rights to payments pursuant to Sections 2.15 or 2.17) and obligations under this Agreement and other Loan Documents to an assignee that shall assume such obligations (which assignee may be another Lender, if a Lender accepts such assignment); <u>provided</u> that (i) the Borrowers shall have paid to the Administrative Agent the assignment fee (if any) specified in Section 9.04, (ii) such Lender shall have received payment of an amount equal to the outstanding principal of its Loans and funded participations in LC Disbursements and Swingline Loans, accrued interest thereon, accrued fees and all other amounts payable to it hereunder, from the assignee (to the extent of such outstanding principal and accrued interest and fees) or the Borrowers (in the case of all other amounts), (iii) in the case of any such assignment resulting from a claim for compensation under Section 2.15 or payments required to be made pursuant to Section 2.17, such assignment will result in a reduction in such compensation or payments thereafter, (iv) such assignment does not conflict with applicable law and (v) in the case of any assigning resulting from a Lender becoming a Non-Consenting Lender, the applicable assignee shall have consented to the applicable amendment, waiver or consent. A Lender shall not be required to make any such assignment or delegation if, prior thereto, as a result of a waiver by such Lender or otherwise, the circumstances entitling the Borrowers to require such assignment and delegation cease to apply.

SECTION 2.20. <u>Defaulting Lenders</u>.

Notwithstanding any provision of this Agreement to the contrary, if any Lender becomes a Defaulting Lender, then the following provisions shall apply for so long as such Lender is a Defaulting Lender:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a)&nbsp;&nbsp;&nbsp;&nbsp;fees shall cease to accrue on the Revolving Commitment of such Defaulting Lender pursuant to Section 2.12(a);

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b)&nbsp;&nbsp;&nbsp;&nbsp;such Defaulting Lender shall not have the right to vote on any issue on which voting is required (other than to the extent expressly provided in Section 9.02(b)) and the Commitment and Revolving Exposure and, if applicable, Delayed Draw Term Commitments, Delayed Draw Term Loans and Term A Loans of such Defaulting Lender shall not be included in determining whether the Required Lenders have taken or may take any action hereunder or under any other Loan Document; <u>provided</u> that, except as otherwise provided in Section 9.02, this clause (b) shall not apply to the vote of a Defaulting Lender in the case of an amendment, waiver or other modification requiring the consent of such Lender or each Lender directly affected thereby;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c)&nbsp;&nbsp;&nbsp;&nbsp;if any Swingline Exposure or LC Exposure exists at the time such Lender becomes a Defaulting Lender then:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(i)&nbsp;&nbsp;&nbsp;&nbsp;all or any part of the Swingline Exposure or LC Exposure of such Defaulting Lender (other than the portion of such Swingline Exposure referred to in clause (b) of the definition of such term) shall be reallocated among the non-Defaulting Lenders in accordance with their respective Applicable Percentages but only (x) to the extent that the conditions set forth in Section 4.03 are satisfied at the time of such reallocation (and, unless the Borrowers shall have

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otherwise notified the Administrative Agent at such time, the Borrowers shall be deemed to have represented and warranted that such conditions are satisfied at such time) and (y) to the extent that such reallocation does not, as to any non-Defaulting Lender, cause such non-Defaulting Lender's Revolving Exposure to exceed its Revolving Commitment;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(ii)&nbsp;&nbsp;&nbsp;&nbsp;if the reallocation described in clause (i) above cannot, or can only partially, be effected, the Borrowers shall within one (1) Business Day following notice by the Administrative Agent (x) first, prepay such Swingline Exposure and (y) second, cash collateralize, for the benefit of the Issuing Bank, the Borrowers' obligations corresponding to such Defaulting Lender's LC Exposure (after giving effect to any partial reallocation pursuant to clause (i) above) in accordance with the procedures set forth in Section 2.06(j) for so long as such LC Exposure is outstanding;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(iii)&nbsp;&nbsp;&nbsp;&nbsp;if the Borrowers cash collateralize any portion of such Defaulting Lender's LC Exposure pursuant to clause (ii) above, the Borrowers shall not be required to pay any fees to such Defaulting Lender pursuant to Section 2.12(b) with respect to such Defaulting Lender's LC Exposure during the period such Defaulting Lender's LC Exposure is cash collateralized;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(iv)&nbsp;&nbsp;&nbsp;&nbsp;if the LC Exposure of the non-Defaulting Lenders is reallocated pursuant to clause (i) above, then the fees payable to the Lenders pursuant to Sections 2.12(a) and 2.12(b) shall be adjusted in accordance with such non-Defaulting Lenders' Applicable Percentages; and

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(v)&nbsp;&nbsp;&nbsp;&nbsp;if all or any portion of such Defaulting Lender's LC Exposure is neither reallocated nor cash collateralized pursuant to clause (i) or (ii) above, then, without prejudice to any rights or remedies of the Issuing Bank or any other Lender hereunder, all letter of credit fees payable under Section 2.12(b) with respect to such Defaulting Lender's LC Exposure shall be payable to the Issuing Bank until and to the extent that such LC Exposure is reallocated and/or cash collateralized; and

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(d)&nbsp;&nbsp;&nbsp;&nbsp;so long as such Lender is a Defaulting Lender, the Swingline Lender shall not be required to fund any Swingline Loan and the Issuing Bank shall not be required to issue, amend, renew, extend or increase any Letter of Credit, unless it is satisfied that the related exposure and such Defaulting Lender's then outstanding LC Exposure will be 100% covered by the Commitments of the non-Defaulting Lenders and/or cash collateral will be provided by the Borrowers in accordance with Section 2.20(c), and Swingline Exposure related to any newly made Swingline Loan or LC Exposure related to any newly issued or increased Letter of Credit shall be allocated among non-Defaulting Lenders in a manner consistent with Section 2.20(c)(i) (and such Defaulting Lender shall not participate therein).

If (i) a Bankruptcy Event or a Bail-In Action with respect to the Parent of any Lender shall occur following the date hereof and for so long as such event shall continue or (ii) the Swingline Lender or the Issuing Bank has a good faith belief that any Lender has defaulted in fulfilling its obligations under one or more other agreements in which such Lender commits to extend credit, the Swingline Lender shall not be required to fund any Swingline Loan and the Issuing Bank shall not be required to issue, amend or increase any Letter of Credit, unless the Swingline Lender or the Issuing Bank, as the case may be, shall have entered into arrangements with the Borrowers or such Lender, satisfactory to the Issuing Bank to defease any risk to it in respect of such Lender hereunder.

In the event that each of the Administrative Agent, the Borrowers, the Swingline Lender and the Issuing Bank agrees<u>agree</u> that a Defaulting Lender has adequately remedied all matters that caused such Lender to be a Defaulting Lender, then the Swingline Exposure and LC Exposure of the Lenders shall be readjusted to reflect the inclusion of such Lender's Revolving Commitment and on the

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date of such readjustment such Lender shall purchase at par such of the Loans of the other Lenders (other than the Swingline Loans) as the Administrative Agent shall determine may be necessary in order for such Lender to hold such Loans in accordance with its Applicable Percentage.

SECTION 2.21. <u>Returned Payments</u>. If, after receipt of any payment which is applied to the payment of all or any part of the Obligations (including a payment effected through exercise of a right of setoff), the Administrative Agent or any Lender is for any reason compelled to surrender such payment or proceeds to any Person because such payment or application of proceeds is invalidated, declared fraudulent, set aside, determined to be void or voidable as a preference, impermissible setoff, or a diversion of trust funds, or for any other reason (including pursuant to any settlement entered into by the Administrative Agent or such Lender in its discretion), then the Obligations or part thereof intended to be satisfied shall be revived and continued and this Agreement shall continue in full force as if such payment or proceeds had not been received by the Administrative Agent or such Lender. The provisions of this Section 2.21 shall be and remain effective notwithstanding any contrary action which may have been taken by the Administrative Agent or any Lender in reliance upon such payment or application of proceeds. The provisions of this Section 2.21 shall survive the termination of this Agreement.

SECTION 2.22. <u>Banking Services and Swap Agreements</u>. Each Lender or Affiliate thereof providing Banking Services for, or having Swap Agreements with, any Loan Party or any Subsidiary or Affiliate of a Loan Party shall deliver to the Administrative Agent, promptly after entering into such Banking Services or Swap Agreements, written notice setting forth the aggregate amount of all Banking Services Obligations and Swap Agreement Obligations of such Loan Party or Subsidiary or Affiliate thereof to such Lender or Affiliate (whether matured or unmatured, absolute or contingent). In furtherance of that requirement, each such Lender or Affiliate thereof shall furnish the Administrative Agent, from time to time after a significant change therein or upon a request therefor, a summary of the amounts due or to become due in respect of such Banking Services Obligations and Swap Agreement Obligations. The most recent information provided to the Administrative Agent shall be used in determining which tier of the waterfall, contained in Section 2.18(b), such Banking Services Obligations and/or Swap Agreement Obligations will be placed.

ARTICLE III

<u>Representations and Warranties</u>

Each Loan Party represents and warrants to the Lenders that (and where applicable, agrees):

SECTION 3.01. <u>Organization; Powers</u>. Each Loan Party and each Subsidiary is duly organized, validly existing and in good standing under the laws of the jurisdiction of its organization, has all requisite power and authority to carry on its business as now conducted and except where failure to do so, individually or in the aggregate, could not reasonably be expected to result in a Material Adverse Effect, is qualified to do business in, and is in good standing in, every jurisdiction where such qualification is required.

SECTION 3.02. <u>Authorization; Enforceability</u>. The Transactions are within each Loan Party's organizational powers and have been duly authorized by all necessary organizational actions and, if required, actions by equity holders. Each Loan Document to which each Loan Party is a party has been duly executed and delivered by such Loan Party and constitutes a legal, valid and binding obligation of such Loan Party, enforceable in accordance with its terms, subject to applicable bankruptcy, insolvency, reorganization, moratorium or other laws affecting creditors' rights generally and subject to general principles of equity, regardless of whether considered in a proceeding in equity or at law.

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SECTION 3.03. <u>Governmental Approvals; No Conflicts</u>. The Transactions (a) do not require any consent or approval of, registration or filing with, or any other action by, any Governmental Authority, except such as have been obtained or made and are in full force and effect and except for filings necessary to perfect Liens created pursuant to the Loan Documents, (b) will not violate any Requirement of Law applicable to any Loan Party or any Subsidiary, (c) will not violate or result in a default under any material indenture, agreement or other material instrument binding upon any Loan Party or any Subsidiary or the assets of any Loan Party or any Subsidiary, or give rise to a right thereunder to require any payment to be made by any Loan Party or any Subsidiary, and (d) will not result in the creation or imposition of any Lien on any asset of any Loan Party or any Subsidiary, except Liens created pursuant to the Loan Documents.

SECTION 3.04. <u>Financial Condition; No Material Adverse Change</u>.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a)&nbsp;&nbsp;&nbsp;&nbsp;The Borrowers have heretofore furnished to the Lenders its consolidated balance sheet and statements of income, stockholders equity and cash flows (i) as of and for the fiscal year ended December 31, 2018<u>2020</u>, reported on by Tanner LLC, independent public accountants, and (ii) as of and for the fiscal month and the portion of the fiscal year ended May<u>December</u> 31, 2019<u>2021</u>, certified by its Financial Officer. Such financial statements present fairly, in all material respects, the financial position and results of operations and cash flows of the Initial Borrower and its consolidated Subsidiaries as of such dates and for such periods in accordance with GAAP, subject to normal year-end audit adjustments, all of which, when taken as a whole, would not be materially adverse, and the absence of footnotes in the case of the statements referred to in clause (ii) above.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b)&nbsp;&nbsp;&nbsp;&nbsp;No event, change or condition has occurred that has had, or could reasonably be expected to have, a Material Adverse Effect, since December 31, 2018<u>2020</u>.

SECTION 3.05. <u>Properties, etc</u>.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a)&nbsp;&nbsp;&nbsp;&nbsp;As of the date of this Agreement<u>the Sixth Amendment Effective Date</u>, <u>Schedule</u> <u>3.05</u> sets forth the address of each parcel of real property that is owned or leased by any Loan Party. Each of such leases and subleases is valid and enforceable in accordance with its terms and is in full force and effect, and no default by any party to any such lease or sublease exists. Each of the Loan Parties and each Subsidiary has good and indefeasible title to, or valid leasehold interests in, all of its real and personal property, free of all Liens other than those permitted by Section 6.02.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b)&nbsp;&nbsp;&nbsp;&nbsp;Each Loan Party and each Subsidiary owns, or is licensed to use, all trademarks, tradenames, copyrights, patents and other intellectual property necessary to its business as currently conducted, a correct and complete list of which as of the date of this Agreement<u>the Sixth Amendment</u> <u>Effective Date</u>, is set forth on Schedule 3.05, and, the use thereof by each Loan Party and each Subsidiary does not infringe in any material respect upon the rights of any other Person, and each Loan Party's and each Subsidiary's rights thereto are not subject to any licensing agreement or similar arrangement.

SECTION 3.06. <u>Litigation and Environmental Matters</u>.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a)&nbsp;&nbsp;&nbsp;&nbsp;There are no actions, suits or proceedings by or before any arbitrator or Governmental Authority pending against or, to the knowledge of any Loan Party, threatened against or affecting any Loan Party or any Subsidiary (i) as to which there is a reasonable possibility of an adverse determination and that, if adversely determined, could reasonably be expected, individually or in the aggregate, to result in a Material Adverse Effect (other than the Disclosed Matters set forth on Schedule 3.06 <u>as of the Sixth Amendment Effective Date</u>) or (ii) that involve any Loan Document or the Transactions.

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&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b)&nbsp;&nbsp;&nbsp;&nbsp;Except for the Disclosed Matters, (i) no Loan Party or any Subsidiary has received notice of any claim with respect to any Environmental Liability or knows of any basis for any Environmental Liability and (ii) except with respect to any other matters that, individually or in the aggregate, could not reasonably be expected to result in a Material Adverse Effect, no Loan Party or any Subsidiary (A) has failed to comply with any Environmental Law or to obtain, maintain or comply with any permit, license or other approval required under any Environmental Law (B) has become subject to any Environmental Liability, (C) has received notice of any claim with respect to any Environmental Liability or (D) knows of any basis for any Environmental Liability.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c)&nbsp;&nbsp;&nbsp;&nbsp;Since the date of this Agreement, there has been no change in the status of the Disclosed Matters that, individually or in the aggregate, has resulted in, or could reasonably be expected to result in a Material Adverse Effect.

SECTION 3.07. <u>Compliance with Laws and Agreements; No Default</u>. Except where the failure to do so, individually or in the aggregate, could not reasonably be expected to result in a Material Adverse Effect, each Loan Party and each Subsidiary is in compliance with (i) all Requirements of Law applicable to it or its property and (ii) all indentures, agreements and other instruments binding upon it or its property. No Default has occurred and is continuing.

SECTION 3.08. <u>Investment Company Status</u>. No Loan Party or any Subsidiary is an "investment company" as defined in, or subject to regulation under, the Investment Company Act of 1940.

SECTION 3.09. <u>Taxes</u>. Each Loan Party and each Subsidiary has timely filed or caused to be filed all Tax returns and reports required to have been filed and has paid or caused to be paid all Taxes required to have been paid by it, except (a) Taxes that are being contested in good faith by appropriate proceedings and for which such Loan Party or such Subsidiary, as applicable, has set aside on its books adequate reserves or (b) to the extent that the failure to do so could not be expected to result in a Material Adverse Effect. No tax liens have been filed and no claims are being asserted with respect to any such taxes.

SECTION 3.10. <u>ERISA</u>. No ERISA Event has occurred or is reasonably expected to occur that, when taken together with all other such ERISA Events for which liability is reasonably expected to occur, could reasonably be expected to result in a Material Adverse Effect. The present value of all accumulated benefit obligations under each Plan (based on the assumptions used for purposes of Statement of Financial Accounting Standards No. 87) did not, as of the date of the most recent financial statements reflecting such amounts, exceed the fair market value of the assets of such Plan.

SECTION 3.11.&nbsp;&nbsp;&nbsp;&nbsp;<u>Disclosure</u>. The Loan Parties have disclosed to the Lenders all agreements, instruments and corporate or other restrictions to which any Loan Party or any Subsidiary is subject, and all other matters known to it, that, individually or in the aggregate, could reasonably be expected to result in a Material Adverse Effect. None of the reports, financial statements, certificates or other information furnished by or on behalf of any Loan Party or any Subsidiary to the Administrative Agent or any Lender in connection with the negotiation of this Agreement or any other Loan Document (as modified or supplemented by other information so furnished), contains any material misstatement of fact or omits to state any material fact necessary to make the statements therein, in the light of the circumstances under which they were made, not misleading; <u>provided</u> that, with respect to projected financial information, the Loan Parties represent only that such information was prepared in good faith based upon assumptions believed to be reasonable at the time delivered.

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SECTION 3.12.&nbsp;&nbsp;&nbsp;&nbsp;<u>Material Agreements</u>. All Material Agreements to which any Loan Party is a party or is bound as of the date of this Agreement<u>the Sixth Amendment Effective Date</u> are listed on <u>Schedule 3.12</u>. No Loan Party is in default in the performance, observance or fulfillment of any of the obligations, covenants or conditions contained in (i) any Material Agreement to which it is a party or (ii) any agreement or instrument evidencing or governing Indebtedness.

SECTION 3.13. <u>Solvency</u>. Immediately after the consummation of the Transactions to occur on the Effective Date, (i) the fair value of the assets of each Loan Party, at a fair valuation, will exceed its debts and liabilities, subordinated, contingent or otherwise; (ii) the present fair saleable value of the property of each Loan Party will be greater than the amount that will be required to pay the probable liability of its debts and other liabilities, subordinated, contingent or otherwise, as such debts and other liabilities become absolute and matured; (iii) each Loan Party will be able to pay its debts and liabilities, subordinated, contingent or otherwise, as such debts and liabilities become absolute and matured; and (iv) no Loan Party will have unreasonably small capital with which to conduct the business in which it is engaged as such business is now conducted and is proposed to be conducted after the Effective Date.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a)&nbsp;&nbsp;&nbsp;&nbsp;No Loan Party intends to, nor will permit any Subsidiary to, and no Loan Party believes that it or any Subsidiary will, incur debts beyond its ability to pay such debts as they mature, taking into account the timing of and amounts of cash to be received by it or any such Subsidiary and the timing of the amounts of cash to be payable on or in respect of its Indebtedness or the Indebtedness of any such Subsidiary.

SECTION 3.14.&nbsp;&nbsp;&nbsp;&nbsp;<u>Insurance</u>. <u>Schedule 3.14</u> sets forth a description of all insurance maintained by or on behalf of the Loan Parties and their Subsidiaries as of the <u>Sixth Amendment</u> Effective Date. As of the Effective Date, all premiums in respect of such insurance have been paid. The Loan Parties believe that the insurance maintained by or on behalf of the Loan Parties and their Subsidiaries is adequate and is customary for companies engaged in the same or similar businesses operating in the same or similar locations.

SECTION 3.15. <u>Capitalization and Subsidiaries</u>. <u>As of the Sixth Amendment Effective</u> <u>Date,</u> <u>Schedule 3.15</u> sets forth (a) a correct and complete list of the name and relationship to the Parent Borrower of each Subsidiary, (b) a true and complete listing of each class of each of the Parent Borrower's authorized Equity Interests, of which all of such issued Equity Interests are validly issued, outstanding, fully paid and non-assessable, and owned beneficially and of record by the Persons identified on <u>Schedule 3.15</u>, and (c) the type of entity of the Parent Borrower and each Subsidiary. All of the issued and outstanding Equity Interests owned by any Loan Party have been (to the extent such concepts are relevant with respect to such ownership interests) duly authorized and issued and are fully paid and non-assessable.

SECTION 3.16. <u>Security Interest in Collateral</u>. The provisions of this Agreement and the other Loan Documents create legal and valid Liens on all the Collateral in favor of the Administrative Agent, for the benefit of the Secured Parties, and such Liens constitute perfected and continuing Liens on the Collateral, securing the Secured Obligations, enforceable against the applicable Loan Party and all third parties, and having priority over all other Liens on the Collateral except for (a) Permitted Liens, to the extent any such Permitted Liens would have priority over the Liens in favor of the Administrative Agent pursuant to any applicable law or (b) in the case of Liens perfected only by possession (including possession of any certificate of title), to the extent the Administrative Agent has not obtained or does not maintain possession of such Collateral.

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SECTION 3.17. <u>Employment Matters</u>. As of the Effective Date, there are no strikes, lockouts or slowdowns against any Loan Party or any Subsidiary pending or, to the knowledge of any Loan Party, threatened. The hours worked by and payments made to employees of the Loan Parties and their Subsidiaries have not been in violation of the Fair Labor Standards Act or any other applicable federal, state, local or foreign law dealing with such matters. All material payments due from any Loan Party or any Subsidiary, or for which any claim may be made against any Loan Party or any Subsidiary, on account of wages and employee health and welfare insurance and other benefits, have been paid or accrued as a liability on the books of such Loan Party or such Subsidiary.

SECTION 3.18.&nbsp;&nbsp;&nbsp;&nbsp;<u>Federal Reserve Regulations</u>. No part of the proceeds of any Loan or Letter of Credit has been used or will be used, whether directly or indirectly, for any purpose that entails a violation of any of the Regulations of the Board, including Regulations T, U and X.

SECTION 3.19.&nbsp;&nbsp;&nbsp;&nbsp;<u>Use of Proceeds</u>. The proceeds of the Loans have been used and will be used, whether directly or indirectly as set forth in Section 5.08.

SECTION 3.20.&nbsp;&nbsp;&nbsp;&nbsp;<u>No Burdensome Restrictions</u>. No Loan Party is subject to any Burdensome Restrictions except Burdensome Restrictions permitted under Section 6.10.

SECTION 3.21.&nbsp;&nbsp;&nbsp;&nbsp;<u>Anti-Corruption Laws and Sanctions</u>. Each Loan Party has implemented and maintains in effect policies and procedures designed to ensure compliance by such Loan Party, its Subsidiaries and their respective directors, officers, employees and agents with Anti-Corruption Laws and applicable Sanctions, and such Loan Party, its Subsidiaries and their respective officers and employees and, to the knowledge of such Loan Party, its directors and agents, are in compliance with Anti-Corruption Laws and applicable Sanctions in all material respects and are not knowingly engaged in any activity that would reasonably be expected to result in any Loan Party being designated as a Sanctioned Person. None of (a) any Loan Party, any Subsidiary or any of their respective directors, officers or employees, or (b) to the knowledge of any such Loan Party or Subsidiary, any agent of such Loan Party or any Subsidiary that will act in any capacity in connection with or benefit from the credit facility established hereby, is a Sanctioned Person. No Borrowing or Letter of Credit, use of proceeds, Transaction or other transaction contemplated by this Agreement or the other Loan Documents will violate Anti-Corruption Laws or applicable Sanctions.

SECTION 3.22.&nbsp;&nbsp;&nbsp;&nbsp;<u>Beneficial Ownership Certification</u>. The information included in the Beneficial Ownership Certification most recently delivered to Lenders is true and correct in all respects.

ARTICLE IV

<u>Conditions</u>

SECTION 4.01. <u>Effective Date</u>. The obligations of the Lenders to make Loans and of the Issuing Bank to issue Letters of Credit hereunder shall not become effective until the date on which each of the following conditions is satisfied (or waived in accordance with Section 9.02):

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a)&nbsp;&nbsp;&nbsp;&nbsp;<u>Credit Agreement and Loan Documents</u>. The Administrative Agent (or its counsel) shall have received (i) from each party hereto either (A) a counterpart of this Agreement signed on behalf of such party or (B) written evidence satisfactory to the Administrative Agent (which may include fax or other electronic transmission of a signed signature page of this Agreement) that such party has signed a counterpart of this Agreement and (ii) duly executed copies of the Loan Documents and such other certificates, documents, instruments and agreements as the Administrative Agent shall reasonably request in connection with the transactions contemplated by this Agreement and the other Loan Documents, including any promissory notes requested by a Lender pursuant to Section 2.10 payable to

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each such requesting Lender (which may include fax or other electronic transmission of a signed signature page of the Loan Documents and such other certificates, documents, instruments and agreements so long as original copies are delivered promptly thereafter) and a written opinion of the Loan Parties' counsel, addressed to the Administrative Agent, the Issuing Bank and the Lenders and reasonably acceptable to the Administrative Agent.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b)&nbsp;&nbsp;&nbsp;&nbsp;F<u>inancial Statements and Projections</u>. The Lenders shall have received (i) audited consolidated financial statements of the Borrowers for the December 31, 2018 fiscal year, (ii) audited consolidated financial statements of Practicology (except as to the financial results of Practicology's Hong Kong and Australian subsidiaries) for the December 31, 2018 fiscal year, (iii) unaudited interim consolidated financial statements of Borrower for each fiscal month and quarter ended after the date of the latest applicable financial statements delivered pursuant to clause (i) of this paragraph as to which such financial statements are available, and such financial statements shall not, in the reasonable judgment of the Administrative Agent, reflect any material adverse change in the consolidated (or, as to Practicology, combined) financial condition of Borrower and its Subsidiaries, as reflected in the financial statements described in clause (i) of this paragraph and (iv) satisfactory Projections through 2023.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c)&nbsp;&nbsp;&nbsp;&nbsp;<u>Closing Certificates; Certified Certificate of Incorporation; Good Standing</u> <u>Certificates</u>. The Administrative Agent shall have received (i) a certificate of each Loan Party, dated the Effective Date and executed by its Secretary or Assistant Secretary, which shall (A) certify the resolutions of its Board of Directors, members or other body authorizing the execution, delivery and performance of the Loan Documents to which it is a party, (B) identify by name and title and bear the signatures of the officers of such Loan Party authorized to sign the Loan Documents to which it is a party and, in the case of the Parent Borrower, its Financial Officers, and (C) contain appropriate attachments, including the charter, articles or certificate of organization or incorporation of each Loan Party certified by the relevant authority of the jurisdiction of organization of such Loan Party and a true and correct copy of its bylaws or operating, management or partnership agreement, or other organizational or governing documents, and (ii) a long form good standing certificate for each Loan Party from its jurisdiction of organization.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(d)&nbsp;&nbsp;&nbsp;&nbsp;<u>No Default Certificate</u>. The Administrative Agent shall have received a certificate, signed by a Financial Officer of Parent Borrower and each other Loan Party, dated as of the Effective Date (i) stating that no Default has occurred and is continuing, (ii) stating that the representations and warranties contained in the Loan Documents are true and correct as of such date and (iii) certifying as to any other factual matters as may be reasonably requested by the Administrative Agent.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(e)&nbsp;&nbsp;&nbsp;&nbsp;<u>Fees</u>. The Lenders, Sole Lead Arranger and the Administrative Agent shall have received all fees required to be paid, and all expenses required to be reimbursed for which invoices have been presented prior to the Effective Date (including the reasonable fees and expenses of legal counsel). All such amounts will be paid with proceeds of Loans made on the Effective Date and will be reflected in the funding instructions given by the Parent Borrower to the Administrative Agent on or before the Effective Date.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(f)&nbsp;&nbsp;&nbsp;&nbsp;<u>Lien Searches</u>. The Administrative Agent shall have received the results of a recent lien search in the jurisdiction of organization of each Loan Party and each jurisdiction where assets of the Loan Parties are located, and such search shall reveal no Liens on any of the assets of the Loan Parties except for liens permitted by Section 6.02 or discharged on or prior to the Effective Date pursuant to a payoff letter or other documentation satisfactory to the Administrative Agent.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(g)&nbsp;&nbsp;&nbsp;&nbsp;<u>Funding Account</u>. The Administrative Agent shall have received a notice setting forth the deposit account of the Borrowers (the "<u>Funding Account</u>") to which the Administrative Agent is

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authorized by the Borrowers to transfer the proceeds of any Borrowings requested or authorized pursuant to this Agreement.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(h)&nbsp;&nbsp;&nbsp;&nbsp;[<u>Intentionally Omitted</u>].

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(i)&nbsp;&nbsp;&nbsp;&nbsp;<u>Solvency</u>. The Administrative Agent shall have received a solvency certificate signed by a Financial Officer of the Parent Borrower dated the Effective Date.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(j)&nbsp;&nbsp;&nbsp;&nbsp;<u>Government and Third Party Consents</u>. All governmental and material third- party approvals necessary in connection with the Transactions and the continuing operations of the Parent Borrower and its Subsidiaries (including shareholder approvals, if any) shall have been obtained on terms satisfactory to the Administrative Agent and shall be in full force and effect.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(k)&nbsp;&nbsp;&nbsp;&nbsp;<u>Pledged Notes</u>. The Administrative Agent shall have received each promissory note (if any) pledged to the Administrative Agent pursuant to the Security Agreement endorsed (without recourse) in blank (or accompanied by an executed transfer form in blank) by the pledgor thereof.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(l)&nbsp;&nbsp;&nbsp;&nbsp;<u>Filings, Registrations and Recordings</u>. Each document (including any Uniform Commercial Code financing statement) required by the Collateral Documents or under law or reasonably requested by the Administrative Agent to be filed, registered or recorded in order to create in favor of the Administrative Agent, for the benefit of the Secured Parties, a perfected Lien on the Collateral described therein, prior and superior in right to any other Person (other than with respect to Liens expressly permitted by Section 6.02), shall be in proper form for filing, registration or recordation.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(m)&nbsp;&nbsp;&nbsp;&nbsp;<u>Insurance</u>. The Administrative Agent shall have received evidence of insurance coverage in form, scope, and substance reasonably satisfactory to the Administrative Agent and otherwise in compliance with the terms of Section 5.10 of this Agreement and Section 4.12 of the Security Agreement.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(n)&nbsp;&nbsp;&nbsp;&nbsp;<u>No Actions</u>. There shall exist no action, suit, investigation, litigation or proceeding affecting any Loan Party or any of its Subsidiaries pending or threatened before any Governmental Authority or arbitrator that (i) could be reasonably likely to have a Material Adverse Effect, purports to affect the Transactions or any portion thereof or the ability of the Borrowers or any other Loan Party to perform their respective obligations under the Loan Documents, or (ii) purports to affect the legality, validity or enforceability of any Loan Document or the consummation of the Transactions.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(o)&nbsp;&nbsp;&nbsp;&nbsp;<u>USA PATRIOT Act, Etc; Beneficial Ownership Regulation</u>. (I) The Administrative Agent and Lenders shall have received all documentation and other information required by bank regulatory authorities under applicable "know your customer" and anti-money laundering rules and regulations, including USA PATRIOT Act, and a properly completed and signed IRS Form W-8 or W-9, as applicable, for each Loan Party and (II) at least two (2) days prior to the Effective Date, any Borrower that qualifies as a "legal entity customer" under the Beneficial Ownership Regulation shall deliver a Beneficial Ownership Certification in relation to such Borrower to the Administrative Agent and each Lender that has requested a Beneficial Ownership Certification at least two (2) days prior to the Effective Date.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(p)&nbsp;&nbsp;&nbsp;&nbsp;<u>Other Documents</u>. The Administrative Agent shall have received such other documents as the Administrative Agent, the Issuing Bank, any Lender or their respective counsel may have reasonably requested.

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The Administrative Agent shall notify the Parent Borrower, the Lenders and the Issuing Bank of the Effective Date, and such notice shall be conclusive and binding. Notwithstanding the foregoing, the obligations of the Lenders to make Loans and of the Issuing Bank to issue Letters of Credit hereunder shall not become effective unless each of the foregoing conditions is satisfied (or waived pursuant to Section 9.02) at or prior to 2:00 p.m., Eastern time, on July 16, 2019 (and, in the event such conditions are not so satisfied or waived, the Commitments shall terminate at such time).

SECTION 4.02. <u>Each Credit Event</u>. The obligation of each Lender to make a Loan on the occasion of any Borrowing, and of the Issuing Bank to issue, amend, renew or extend any Letter of Credit, is subject to the satisfaction of the following conditions:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a)&nbsp;&nbsp;&nbsp;&nbsp;The representations and warranties of the Loan Parties set forth in the Loan Documents shall be true and correct in all material respects with the same effect as though made on and as of the date of such Borrowing or the date of issuance, amendment, renewal or extension of such Letter of Credit, as applicable (it being understood and agreed that any representation or warranty which by its terms is made as of a specified date shall be required to be true and correct in all material respects only as of such specified date, and that any representation or warranty which is subject to any materiality qualifier shall be required to be true and correct in all respects).

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b)&nbsp;&nbsp;&nbsp;&nbsp;At the time of and immediately after giving effect to such Borrowing or the issuance, amendment, renewal or extension of such Letter of Credit, as applicable, no Default shall have occurred and be continuing.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c)&nbsp;&nbsp;&nbsp;&nbsp;After giving effect to any Borrowing or the issuance, amendment, renewal or extension of any Letter of Credit, Availability shall not be less than zero.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(d)&nbsp;&nbsp;&nbsp;&nbsp;No event shall have occurred and no condition shall exist which has or could be reasonably expected to have a Material Adverse Effect.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(e)&nbsp;&nbsp;&nbsp;&nbsp;Parent Borrower shall have delivered a Borrowing Request to the Administrative Agent in accordance with Section 2.03.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(f)&nbsp;&nbsp;&nbsp;&nbsp;With respect to a Delayed Draw Term Loan Borrowing only, the Borrowers shall (i) have demonstrated to the reasonable satisfaction of the Administrative Agent that the Borrowers are in compliance (on a pro forma basis) with the covenants contained in Section 6.12 and (ii) use the proceeds of such Delayed Draw Term Loan solely to finance a Permitted Acquisition.<u>Intentionally Omitted.</u>

Each Borrowing and each issuance, amendment, renewal or extension of a Letter of Credit shall be deemed to constitute a representation and warranty by the Borrowers on the date thereof as to the matters specified in paragraphs (a) through (d) of this Section.

Notwithstanding the failure to satisfy the conditions precedent set forth in paragraphs (a) through (d) of this Section, unless otherwise directed by the Required Lenders, the Administrative Agent may, but shall have no obligation to, continue to make Loans and an Issuing Bank may, but shall have no obligation to, issue, amend, renew or extend, or cause to be issued, amended, renewed or extended, any Letter of Credit for the ratable account and risk of Lenders from time to time if the Administrative Agent believes that making such Loans or issuing, amending, renewing or extending, or causing the issuance, amendment, renewal or extension of, any such Letter of Credit is in the best interests of the Lenders.

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ARTICLE V

<u>Affirmative Covenants</u>

Until all of the Secured Obligations have been Paid in Full, each Loan Party executing this Agreement covenants and agrees, jointly and severally with all of the other Loan Parties, with the Lenders that:

SECTION 5.01. <u>Financial Statements and Other Information</u>. The Parent Borrower will furnish to the Administrative Agent (for the benefit of the Lenders):

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a)&nbsp;&nbsp;&nbsp;&nbsp;within one hundred and twenty (120) days after the end of each fiscal year of the Parent Borrower, its audited consolidated balance sheet and related statements of operations, stockholders' equity and cash flows as of the end of and for such year, setting forth in each case in comparative form the figures for the previous fiscal year, all reported on by independent public accountants of regional recognized standing or such other firm reasonably acceptable to the Administrative Agent (it being agreed that Tanner LLC is reasonably acceptable) (without a "going concern" or like qualification, commentary or exception, or any qualification or exception as to the scope of such audit) to the effect that such consolidated financial statements present fairly in all material respects the financial condition and results of operations of the Parent Borrower and its consolidated Subsidiaries on a consolidated basis in accordance with GAAP consistently applied, accompanied by any management letter prepared by said accountants;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b)&nbsp;&nbsp;&nbsp;&nbsp;within thirty (30) days after the end of each of the first three fiscal quarters of each fiscal year of the Parent Borrower, its consolidated balance sheet and related statements of operations, stockholders' equity and cash flows as of the end of and for such fiscal quarter and the then elapsed portion of such fiscal year, setting forth in each case in comparative form the figures for the corresponding period or periods of (or, in the case of the balance sheet, as of the end of) the previous fiscal year, all certified by a Financial Officer as presenting fairly in all material respects the financial condition and results of operations of the Parent Borrower and its consolidated Subsidiaries on a consolidated basis in accordance with GAAP consistently applied, subject to normal year-end audit adjustments and the absence of footnotes;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c)&nbsp;&nbsp;&nbsp;&nbsp;concurrently with any delivery of the Financial Statements, a written narrative report by the management of the Parent Borrower explaining material developments and trends in the Borrowers' business and in such financial statements;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(d)&nbsp;&nbsp;&nbsp;&nbsp;[Intentionally Omitted];

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(e)&nbsp;&nbsp;&nbsp;&nbsp;concurrently with any delivery of the Financial Statements, a certificate of a Financial Officer in substantially the form of <u>Exhibit E</u> (i) certifying, in the case of the Financial Statements delivered under clause (b) or (c) above, as presenting fairly in all material respects the financial condition and results of operations of the Parent Borrower and its consolidated Subsidiaries on a consolidated basis in accordance with GAAP consistently applied, subject to normal year-end audit adjustments and the absence of footnotes, (ii) certifying as to whether a Default exists and, if a Default exists, specifying the details thereof and any action taken or proposed to be taken with respect thereto, (iii) setting forth reasonably detailed calculations demonstrating compliance with Sections 6.12(a) and (b) and (iv) stating whether any change in GAAP or in the application thereof has occurred since the date of the audited financial statements referred to in Section 3.04 and, if any such change has occurred, specifying the effect of such change on the Financial Statements accompanying such certificate;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(f)&nbsp;&nbsp;&nbsp;&nbsp;[Intentionally Omitted];

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&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(g)&nbsp;&nbsp;&nbsp;&nbsp;no later than 30 days after the end of each fiscal year of the Parent Borrower, a copy of the plan and forecast (including a projected consolidated and consolidating balance sheet, income statement and cash flow statement) of the Parent Borrower and its Subsidiaries for each month of the upcoming fiscal year (the "<u>Projections</u>") in form reasonably satisfactory to the Administrative Agent;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(h)&nbsp;&nbsp;&nbsp;&nbsp;promptly after the same become publicly available, copies of all periodic and other reports, proxy statements and other materials filed by any Loan Party or any Subsidiary with the SEC, or any Governmental Authority succeeding to any or all of the functions of the SEC, or with any national securities exchange, or distributed by the Parent Borrower to its shareholders generally, as the case may be;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(i)&nbsp;&nbsp;&nbsp;&nbsp;promptly following any request therefor, such other information regarding the operations, material changes in ownership of Equity Interests, business affairs and financial condition of any Loan Party or any Subsidiary, or compliance with the terms of this Agreement, as the Administrative Agent or any Lender may reasonably request; and

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(j)&nbsp;&nbsp;&nbsp;&nbsp;promptly after any request therefor by the Administrative Agent or any Lender, copies of (i) any documents described in Section 101(k)(1) of ERISA that the Parent Borrower or any ERISA Affiliate may request with respect to any Multiemployer Plan and (ii) any notices described in Section 101(l)(1) of ERISA that the Parent Borrower or any ERISA Affiliate may request with respect to any Multiemployer Plan; <u>provided</u> that if the Parent Borrower or any ERISA Affiliate has not requested such documents or notices from the administrator or sponsor of the applicable Multiemployer Plan, the Parent Borrower or the applicable ERISA Affiliate shall promptly make a request for such documents and notices from such administrator or sponsor and shall provide copies of such documents and notices promptly after receipt thereof.

SECTION 5.02. <u>Notices of Material Events</u>. The Parent Borrower will furnish to the Administrative Agent and each Lender prompt (but in any event within any time period that may be specified below) written notice of the following:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a)&nbsp;&nbsp;&nbsp;&nbsp;the occurrence of any Default;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b)&nbsp;&nbsp;&nbsp;&nbsp;receipt of any notice of any investigation by a Governmental Authority or any litigation or proceeding commenced or threatened against any Loan Party or any Subsidiary that (i) seeks damages in excess of $250,000<u>5,000,000</u>, (ii) seeks injunctive relief, (iii) is asserted or instituted against any Plan, its fiduciaries or its assets and could reasonably be expected to result in a Material Adverse Effect, (iv) alleges the violation of, or seeks to impose remedies under, any Environmental Law or related Requirement of Law, or seeks to impose Environmental Liability, (v) asserts liability on the part of any Loan Party or any Subsidiary in excess of $250,000<u>5,000,000</u> in respect of any tax, fee, assessment, or other governmental charge, or (vi) involves any product recall that could reasonably be expected to result in a Material Adverse Effect;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c)&nbsp;&nbsp;&nbsp;&nbsp;the occurrence of any ERISA Event that, alone or together with any other ERISA Events that have occurred, could reasonably be expected to result in liability of the Loan Parties and their Subsidiaries in an aggregate amount exceeding $250,000<u>5,000,000</u>;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(d)&nbsp;&nbsp;&nbsp;&nbsp;within two (2) Business Days after the occurrence thereof, any Loan Party entering into a Swap Agreement or an amendment to a Swap Agreement, together with copies of all agreements evidencing such Swap Agreement or amendment; and

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(e)&nbsp;&nbsp;&nbsp;&nbsp;any other development that results in, or could reasonably be expected to result in, a Material Adverse Effect.

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Each notice delivered under this Section shall be accompanied by a statement of a Financial Officer or other executive officer of the Parent Borrower setting forth the details of the event or development requiring such notice and any action taken or proposed to be taken with respect thereto.

SECTION 5.03. <u>Existence; Conduct of Business</u>. Each Loan Party will, and will cause each Subsidiary to do or cause to be done all things necessary (a) to preserve, renew and keep in full force and effect its legal existence and the rights, qualifications, licenses, permits, franchises, governmental authorizations, intellectual property rights, licenses and permits, material to the conduct of its business, and maintain all requisite authority to conduct its business in each jurisdiction in which its business is conducted; <u>provided</u> that the foregoing shall not prohibit any merger, consolidation, liquidation or dissolution permitted under Section 6.03 and (b) carry on and conduct its business in (i) substantially the same manner and in substantially the same fields of enterprise as it is presently conducted and (ii) businesses reasonably related to those described in the foregoing clause (i).

SECTION 5.04. <u>Payment of Obligations</u>. Each Loan Party will, and will cause each Subsidiary to, pay or discharge all Material Indebtedness and all other material liabilities and obligations, including Taxes, before the same shall become delinquent or in default, except where (a) (i) the validity or amount thereof is being contested in good faith by appropriate proceedings and (ii) such Loan Party has set aside on its books adequate reserves with respect thereto in accordance with GAAP or (b) the failure to make payment pending such contest could not reasonably be expected to result in a Material Adverse Effect; <u>provided</u>, <u>however</u>, that each Loan Party will, and will cause each Subsidiary to, remit withholding taxes and other payroll taxes to appropriate Governmental Authorities as and when claimed to be due, notwithstanding the foregoing exceptions.

SECTION 5.05. <u>Maintenance of Properties</u>. Each Loan Party will, and will cause each Subsidiary to, keep and maintain all property necessary and material to the conduct of its business in good working order and condition, ordinary wear and tear excepted.

SECTION 5.06. <u>Books and Records; Inspection Rights</u>. Each Loan Party will, and will cause each Subsidiary to, (a) keep proper books of record and account in which full, true and correct entries are made of all dealings and transactions in relation to its business and activities and (b) permit any representatives designated by the Administrative Agent (including employees of the Administrative Agent, or any consultants, accountants, lawyers, agents and appraisers retained by the Administrative Agent), upon reasonable prior notice, to visit and inspect its properties, conduct at the Loan Party's premises field examinations of the Loan Party's assets, liabilities, books and records, including examining and making extracts from its books and records, environmental assessment reports and Phase I or Phase II studies, and to discuss its affairs, finances and condition with its officers and independent accountants, all at such reasonable times and as often as reasonably requested. The Loan Parties acknowledge that the Administrative Agent, after exercising its rights of inspection, may prepare and distribute to the Lenders certain Reports pertaining to the Loan Parties' assets for internal use by the Administrative Agent and the Lenders. The Loan Parties shall be responsible for the costs and expenses of not more than one such field examination during any 12-month period after the Effective Date; *provided, however,* the Loan Parties shall be responsible for the costs and expenses of all field examinations conducted while an Event of Default has occurred and is continuing.

SECTION 5.07. <u>Compliance with Laws and Material Contractual Obligations</u>. Each Loan Party will, and will cause each Subsidiary to, (i) comply in all material respects with each Requirement of Law applicable to it or its property (including without limitation Environmental Laws) and (ii) perform in all material respects its obligations under Material Agreements to which it is a party. Each Loan Party will maintain in effect and enforce policies and procedures designed to ensure compliance by such Loan Party,

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its Subsidiaries and their respective directors, officers, employees and agents with Anti-Corruption Laws and applicable Sanctions.

SECTION 5.08. <u>Use of Proceeds</u>.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a)&nbsp;&nbsp;&nbsp;&nbsp;The proceeds of the Term A Loan will be used to (i) refinance Indebtedness existing under the Existing Credit Agreement and (ii) to pay expenses incurred in connection therewith, and the Revolving Loans and the Letters of Credit will be used for working capital and general corporate purposes of the Borrowers. The proceeds of the Delayed Draw Term Loan (other than the First Amendment Delayed Draw Term Loan) will be used to finance Permitted Acquisitions. The proceeds of the First Amendment Delayed Draw Term Loan will be used only for working capital and general corporate purposes of the Borrowers<u>Loan Parties</u>. The proceeds of the SBA PPP Loan will be used only for CARES Allowable Uses. No part of the proceeds of any Loan and no Letter of Credit will be used, whether directly or indirectly, for any purpose that entails a violation of any of the Regulations of the Board, including Regulations T, U and X. Letters of Credit will be issued only to support purposes approved by the Administrative Agent and the Issuing Bank.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b)&nbsp;&nbsp;&nbsp;&nbsp;The Parent Borrower will not request any Borrowing or Letter of Credit, and the Borrowers shall not use, and the Borrowers shall procure that its Subsidiaries and its or their respective directors, officers, employees and agents shall not use, the proceeds of any Borrowing or Letter of Credit (a) in furtherance of an offer, payment, promise to pay, or authorization of the payment or giving of money, or anything else of value, to any Person in violation of any Anti-Corruption Laws, (b) for the purpose of funding, financing or facilitating any activities, business or transaction of or with any Sanctioned Person, or in any Sanctioned Country to the extent that such activities, businesses or transaction would be prohibited by Sanctions if conducted by a corporation incorporated in the United States or the European Union, or (c) in any manner that would result in the violation of any Sanctions applicable to any party hereto.

SECTION 5.09. <u>Accuracy of Information</u>. The Loan Parties will ensure that any information, including financial statements or other documents, furnished to the Administrative Agent or the Lenders in connection with this Agreement or any other Loan Document or any amendment or modification hereof or thereof or waiver hereunder or thereunder contains no material misstatement of fact or omits to state any material fact necessary to make the statements therein, in the light of the circumstances under which they were made, not misleading and the furnishing of such information shall be deemed to be a representation and warranty by the Borrowers on the date thereof as to the matters specified in this Section 5.09; <u>provided</u> that, with respect to the Projections, the Loan Parties will cause the Projections to be prepared in good faith based upon assumptions believed to be reasonable at the time.

SECTION 5.10. <u>Insurance</u>. Each Loan Party will, and will cause each Subsidiary to, maintain with financially sound and reputable carriers having a financial strength rating of at least A- by A.M. Best Company (a) insurance in such amounts (with no greater risk retention) and against such risks (including loss or damage by fire and loss in transit; theft, burglary, pilferage, larceny, embezzlement, and other criminal activities; business interruption; and general liability) and such other hazards, as is customarily maintained by companies of established repute engaged in the same or similar businesses operating in the same or similar locations and (b) all insurance required pursuant to the Collateral Documents. The Parent Borrower will furnish to the Lenders, upon the reasonable request of the Administrative Agent, but no less frequently than annually, information in reasonable detail as to the insurance so maintained. Notwithstanding anything to the contrary, to the extent that the Borrowers are permitted to use the Net Cash Proceeds of any casualty or other insured damage to any property or asset of any Loan Party in accordance with Section 2.11(c), the Administrative Agent shall release to the

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Borrowers the Net Cash Proceeds of such policy or award as may have been received by the Administrative Agent.

SECTION 5.11. <u>Depository Banks</u>. Each Loan Party and each <u>Domestic</u> Subsidiary will maintain the Administrative Agent as its principal depository bank, including for the maintenance of operating, administrative, cash management, collection activity, and other deposit accounts for the conduct of its business; provided that, <u>(a)</u> any deposit account acquired pursuant to a Permitted Acquisition and maintained with an institution other than the Administrative Agent shall be subject to a deposit account control agreement in form and substance reasonably satisfactory to the Administrative Agent. <u>and (b)</u> <u>notwithstanding anything to the contrary</u> <u>(i) the Loan Parties and Domestic Subsidiaries</u> <u>shall not be required to maintain Excluded Accounts with the Administrative Agent, and (ii) the Loan</u> <u>Parties and Domestic Subsidiaries shall have no obligation to obtain deposit account control agreements</u> <u>or other similar agreements with respect to Excluded Accounts.</u>

SECTION 5.12.&nbsp;&nbsp;&nbsp;&nbsp;<u>Additional Collateral; Further Assurances</u>.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a)&nbsp;&nbsp;&nbsp;&nbsp;Subject to applicable Requirements of Law, each Loan Party will cause each of its Domestic Subsidiaries formed or acquired after the date of this Agreement to become a Loan Party by executing a Joinder Agreement. Upon execution and delivery thereof, each such Person (i) shall automatically become a Loan Guarantor hereunder and thereupon shall have all of the rights, benefits, duties, and obligations in such capacity under the Loan Documents and (ii) will grant Liens to the Administrative Agent, for the benefit of the Administrative Agent and the other Secured Parties, in any property of such Loan Party which constitutes Collateral, including any parcel of real property located in the U.S. owned by any Loan Party.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b)&nbsp;&nbsp;&nbsp;&nbsp;Each Loan Party will cause (i) 100% of the issued and outstanding Equity Interests of each of its Domestic Subsidiaries and (ii) 65% of the issued and outstanding Equity Interests entitled to vote (within the meaning of Treas. Reg. Section 1.956-2(c)(2)) and 100% of the issued and outstanding Equity Interests not entitled to vote (within the meaning of Treas. Reg. Section 1.956- 2(c)(2)) in each Foreign Subsidiary <u>(other than an Immaterial Foreign Subsidiary)</u> and Foreign Holdco directly owned by the Borrowers or such Loan Party to be subject at all times to a first priority, perfected Lien in favor of the Administrative Agent for the benefit of the Administrative Agent and the other Secured Parties, pursuant to the terms and conditions of the Loan Documents or other security documents as the Administrative Agent shall reasonably request.

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&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(d)&nbsp;&nbsp;&nbsp;&nbsp;If any material assets (including any real property or improvements thereto or any interest therein, with respect to fee-owned real property, individually, or in the aggregate, having a value in excess of $1,000,000<u>2,500,000</u>) are acquired by any Loan Party after the Effective Date (other than (i) Excluded Assets<u>Collateral,</u> and (ii) assets constituting Collateral under the Security Agreement that become subject to the Lien under the Security Agreement upon acquisition thereof), the Parent Borrower will (i) notify the Administrative Agent and the Lenders thereof, and, if requested by the Administrative Agent or the Required Lenders, cause such assets to be subjected to a Lien securing the Secured Obligations and (ii) take, and cause each applicable Loan Party to take, such actions as shall be necessary or reasonably requested by the Administrative Agent to grant and perfect such Liens, including actions described in paragraph (c) of this Section, all at the expense of the Loan Parties.

SECTION 5.13.&nbsp;&nbsp;&nbsp;&nbsp;<u>Post-Closing Requirements</u>.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a)&nbsp;&nbsp;&nbsp;&nbsp;Within thirty (30) days after the <u>Sixth Amendment</u> Effective Date (or such later date as the Administrative Agent shall agree), Practicology and its Subsidiaries will maintain<u>the Borrower</u> <u>shall deliver evidence reasonably satisfactory to</u> the Administrative Agent as its principal depository bank, including for the maintenance of operating, administrative, cash management, collection activity, and other deposit accounts for the conduct of its business.<u>that the insurance policy endorsements in favor</u> <u>of the Administrative Agent required by Section 5.10 of this Agreement are in full force and</u> effect.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<u>(b)</u>&nbsp;&nbsp;&nbsp;&nbsp;<u>Within ninety (90) days after the Sixth Amendment Effective Date (or such later</u> <u>date as the Administrative Agent shall agree), the Loan Parties shall cause Pattern Europe GmbH to join</u> <u>the Loan Documents as a Guarantor and a Loan Party pursuant to documentation that is in form and</u> <u>substance reasonably acceptable to the Administrative Agent.</u>

SECTION 5.14. <u>Compliance with SBA Requirements</u>. Each Loan Party will, and will cause each Subsidiary to, (a) comply with each of the SBA's terms and conditions applicable to the SBA PPP Loan, (b) keep proper books of record and account in which full, true and correct entries are made of all dealings and transactions in relation to with respect to the use of the SBA PPP Loan and provide such records to the Administrative Agent upon request and (c) promptly and in any event within forty-five (45) days after the eight (8) week period immediately following the SBA PPP Loan Date to apply for forgiveness of the SBA PPP Loan in accordance with the regulations implementing Section 1106 of the CARES Act and provide any documentation related thereto or status of such actions undertaken to effectuate the requirements of this Section 5.14(c) to Administrative Agent upon Administrative Agent's reasonable request.

ARTICLE VI

<u>Negative Covenants</u>

Until all of the Secured Obligations have been Paid in Full, each Loan Party executing this Agreement covenants and agrees, jointly and severally with all of the other Loan Parties, with the Lenders that:

SECTION 6.01. <u>Indebtedness</u>. No Loan Party will, nor will it permit any Subsidiary to, create, incur, assume or suffer to exist any Indebtedness, except:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a)&nbsp;&nbsp;&nbsp;&nbsp;the Secured Obligations;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b)&nbsp;&nbsp;&nbsp;&nbsp;Indebtedness existing on the date hereof<u>as of the Sixth Amendment</u> <u>Effective</u> <u>Date</u> and set forth in <u>Schedule 6.01</u> and any extensions, renewals, refinancings and replacements of any such Indebtedness in accordance with clause (f) hereof;

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&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c)&nbsp;&nbsp;&nbsp;&nbsp;Indebtedness of a Borrower to another Borrower or to any Subsidiary and of any Subsidiary to a Borrower or any other Subsidiary, <u>provided</u> that (i) Indebtedness of any Subsidiary that is not a Loan Party to the Borrower or any other Loan Party shall be subject to Section 6.04 and (ii) Indebtedness of any Loan Party to any Subsidiary that is not a Loan Party shall be subordinated to the Secured Obligations on terms reasonably satisfactory to the Administrative Agent;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(d)&nbsp;&nbsp;&nbsp;&nbsp;Guarantees by a Borrower of Indebtedness of another Borrower or any Subsidiary and by any Subsidiary of Indebtedness of a Borrower or any other Subsidiary, <u>provided</u> that (i) the Indebtedness so Guaranteed is permitted by this Section 6.01, (ii) Guarantees by any Borrower or other Loan Party of Indebtedness of any Subsidiary that is not a Loan Party shall be subject to Section 6.04 and (iii) Guarantees permitted under this clause (d) shall be subordinated to the Secured Obligations on the same terms as the Indebtedness so Guaranteed is subordinated to the Secured Obligations;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(e)&nbsp;&nbsp;&nbsp;&nbsp;Indebtedness of a Borrower or any Subsidiary incurred <u>in the ordinary course of</u> <u>business</u> to finance the acquisition, construction or improvement of any fixed or capital assets (whether or not constituting purchase money Indebtedness) <u>or the acquisition of Inventory</u>, including Capital Lease Obligations and any Indebtedness assumed in connection with the acquisition of any such assets or secured by a Lien on any such assets prior to the acquisition thereof, and extensions, renewals and replacements of any such Indebtedness in accordance with clause (f) below; <u>provided</u> that (i) such Indebtedness is incurred prior to or within 90 days after such acquisition or the completion of such<u>any</u> <u>relevant</u> construction or improvement and (ii) the aggregate principal amount of Indebtedness permitted by this clause (e) together with any Refinance Indebtedness in respect thereof permitted by clause (f) below, shall not exceed $1,000,000<u>5,000,000</u> at any time outstanding;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(f)&nbsp;&nbsp;&nbsp;&nbsp;Indebtedness which represents extensions, renewals, refinancing or replacements (such Indebtedness being so extended, renewed, refinanced or replaced being referred to herein as the "<u>Refinance Indebtedness</u>") of any of the Indebtedness described in <u>clauses (b)</u> and <u>(e)</u> hereof (such Indebtedness being referred to herein as the "<u>Original Indebtedness</u>"); <u>provided</u> that (i) such Refinance Indebtedness does not increase the principal amount of the Original Indebtedness, (ii) any Liens securing such Refinance Indebtedness are not extended to any additional property of any Loan Party or any Subsidiary, (iii) no Loan Party or any Subsidiary that is not originally obligated with respect to repayment of such Original Indebtedness is required to become obligated with respect to such Refinance Indebtedness, (iv) such Refinance Indebtedness does not result in a shortening of the average weighted maturity of such Original Indebtedness, (v) the terms of such Refinance Indebtedness are not less favorable to the obligor thereunder than the original terms of such Original Indebtedness and (vi) if such Original Indebtedness was subordinated in right of payment to the Secured Obligations, then the terms and conditions of such Refinance Indebtedness must include subordination terms and conditions that are at least as favorable to the Administrative Agent and the Lenders as those that were applicable to such Original Indebtedness;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(g)&nbsp;&nbsp;&nbsp;&nbsp;Indebtedness owed to any Person providing workers' compensation, health, disability or other employee benefits or property, casualty or liability insurance, pursuant to reimbursement or indemnification obligations to such Person, in each case incurred in the ordinary course of business;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(h)&nbsp;&nbsp;&nbsp;&nbsp;Indebtedness of any Loan Party in respect of performance bonds, bid bonds, appeal bonds, surety bonds and similar obligations, in each case provided in the ordinary course of business;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(i)&nbsp;&nbsp;&nbsp;&nbsp;Subordinated Indebtedness in an aggregate principal amount not exceeding $1,000,000 at any time outstanding;

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&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(j)&nbsp;&nbsp;&nbsp;&nbsp;Indebtedness of any Person that becomes a Subsidiary after the date hereof; <u>provided</u> that (i) such Indebtedness exists at the time such Person becomes a Subsidiary and is not created in contemplation of or in connection with such Person becoming a Subsidiary and (ii) the aggregate principal amount of Indebtedness permitted by this clause (l<u>j</u>) together with any Refinance Indebtedness in respect thereof permitted by clause (h<u>i</u>) above, shall not exceed $250,000<u>25,000,000</u> at any time outstanding <u>or such greater amount as may be agreed</u> <u>by the Administrative Agent in its reasonable</u> <u>discretion</u>;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(k)&nbsp;&nbsp;&nbsp;&nbsp;Indebtedness of any Loan Party in respect of any earn-outs or similar deferred payments in connection with any Permitted Acquisition in an aggregate amount not to exceed $250,000<u>2,500,000</u> at any time outstanding;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(l)&nbsp;&nbsp;&nbsp;&nbsp;other unsecured Indebtedness in an aggregate principal amount not exceeding $1,000,000<u>5,000,000</u> at any time outstanding; and

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(m)&nbsp;&nbsp;&nbsp;&nbsp;the SBA PPP Loan in an aggregate amount not to exceed $2,327,010 at any time.

SECTION 6.02. <u>Liens</u>. No Loan Party will, nor will it permit any Subsidiary to, create, incur, assume or permit to exist any Lien on any property or asset now owned or hereafter acquired by it, or assign or sell any income or revenues (including Accounts) or rights in respect of any thereof, except:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a)&nbsp;&nbsp;&nbsp;&nbsp;Liens created pursuant to any Loan Document;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b)&nbsp;&nbsp;&nbsp;&nbsp;Permitted Encumbrances;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c)&nbsp;&nbsp;&nbsp;&nbsp;any Lien on any property or asset of any Borrower or any Subsidiary existing on the date hereof<u>Sixth Amendment Effective Date</u> and set forth in <u>Schedule 6.02</u>; <u>provided</u> that (i) such Lien shall not apply to any other property or asset of a Borrower or Subsidiary and (ii) such Lien shall secure only those obligations which it secures on the date hereof and extensions, renewals and replacements thereof that do not increase the outstanding principal amount thereof;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(d)&nbsp;&nbsp;&nbsp;&nbsp;Liens on fixed or capital assets acquired, constructed or improved by a Borrower or any Subsidiary <u>or that constitute purchase money liens on Inventory acquired by a Borrower or any</u> <u>Subsidiary, and the proceeds thereof and any customary related property</u>; <u>provided</u> that (i) such Liens secure Indebtedness permitted by clause (e) of Section 6.01, (ii) such Liens and the Indebtedness secured thereby are incurred prior to or within 90 days after such acquisition or the completion of such construction or improvement, (iii) the Indebtedness secured thereby does not exceed 100% of the cost of acquiring, constructing or improving such fixed or capital assets <u>or Inventory, as applicable,</u> and (iv) such Liens shall not apply to any other property or assets of a Borrower or any Subsidiary;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(e)&nbsp;&nbsp;&nbsp;&nbsp;any Lien existing on any property or asset (other than Accounts and Inventory) prior to the acquisition thereof by a Borrower or any Subsidiary or existing on any property or asset (other than Accounts and Inventory) of any Person that becomes a Loan Party after the date hereof prior to the time such Person becomes a Loan Party; <u>provided</u> that (i) such Lien is not created in contemplation of or in connection with such acquisition or such Person becoming a Loan Party, as the case may be, (ii) such Lien shall not apply to any other property or assets of the Loan Party and (iii) such Lien shall secure only those obligations which it secures on the date of such acquisition or the date such Person becomes a Loan Party, as the case may be, and extensions, renewals and replacements thereof that do not increase the outstanding principal amount thereof;

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&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(f)&nbsp;&nbsp;&nbsp;&nbsp;Liens of a collecting bank arising in the ordinary course of business under Section 4-208 of the UCC in effect in the relevant jurisdiction covering only the items being collected upon;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(g)&nbsp;&nbsp;&nbsp;&nbsp;Liens arising out of Sale and Leaseback Transactions permitted by Section 6.06;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(h)&nbsp;&nbsp;&nbsp;&nbsp;Security deposits securing leases of real estate in an aggregate amount outstanding not to exceed $1,000,000 at any time<u>in the ordinary course of business</u>; and

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(i)&nbsp;&nbsp;&nbsp;&nbsp;Liens granted by a Subsidiary that is not a Loan Party in favor of a Borrower or another Loan Party in respect of Indebtedness owed by such Subsidiary.

SECTION 6.03. <u>Fundamental Changes</u>.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<u>(a)</u>&nbsp;&nbsp;&nbsp;&nbsp;No Loan Party will, nor will it permit any Subsidiary to, merge into or consolidate with any other Person, or permit any other Person to merge into or consolidate with it, or liquidate or dissolve, except that, if at the time thereof and immediately after giving effect thereto no Event of Default shall have occurred and be continuing, (i) any Borrower may merge into the Parent Borrower in a transaction in which the Parent Borrower is the surviving entity, (ii) any Subsidiary of the Borrower (other than the Parent Borrower) may merge into such Borrower in a transaction in which the Borrower is the surviving entity, (iii) any Loan Party (other than a Borrower) may merge into any other Loan Party in a transaction in which the surviving entity is a Loan Party, and (iv) any Subsidiary that is not a Loan Party may liquidate or dissolve if the Parent Borrower determines in good faith that such liquidation or dissolution is in the best interests of the Borrowers and is not materially disadvantageous to the Lenders; <u>provided</u> that any such merger involving a Person that is not a wholly owned Subsidiary immediately prior to such merger shall not be permitted unless also permitted by Section 6.04.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<u>(b)</u>&nbsp;&nbsp;&nbsp;&nbsp;<u>No Loan Party will, nor will it permit any Subsidiary to, consummate a Division</u> <u>as the Dividing Person, without the prior written consent of Administrative Agent. Without limiting the</u> <u>foregoing, if any Loan Party that is a limited liability company consummates a Division (with or without</u> <u>the prior consent of Administrative Agent as required above), each Division Successor shall be required</u> <u>to comply with the obligations set forth in Section 5.12 and the other further assurances obligations set</u> <u>forth in the Loan Documents and become a Loan Party under this Agreement and the other Loan</u> <u>Documents.</u>

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<u>(c)</u>&nbsp;&nbsp;&nbsp;&nbsp;(b) No Loan Party will, nor will it permit any Subsidiary to, engage in any business other than businesses of the type conducted by the Parent Borrower and its Subsidiaries on the date hereof and businesses reasonably related thereto.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<u>(d)</u>&nbsp;&nbsp;&nbsp;&nbsp;(c) No Loan Party will, nor will it permit any Subsidiary to change its fiscal year or any fiscal quarter from the basis in effect on the Effective Date.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<u>(e)</u>&nbsp;&nbsp;&nbsp;&nbsp;(d) No Loan Party will change the accounting basis upon which its financial statements are prepared.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<u>(f)</u>&nbsp;&nbsp;&nbsp;&nbsp;(e) No Loan Party will change the tax filing elections it has made under the Code.

SECTION 6.04. <u>Investments, Loans, Advances, Guarantees and Acquisitions</u>. No Loan Party will, nor will it permit any Subsidiary to purchase, hold or acquire (including pursuant to any merger with any Person that was not a Loan Party and a wholly owned Subsidiary prior to such merger) any Equity Interests, evidences of indebtedness or other securities (including any option, warrant or other right to acquire any of the foregoing) of, make or permit to exist any loans or advances to, Guarantee any

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obligations of, or make or permit to exist any investment or any other interest in, any other Person, or purchase or otherwise acquire (in one transaction or a series of transactions) any assets of any other Person constituting a business unit (whether through purchase of assets, merger or otherwise), except:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a)&nbsp;&nbsp;&nbsp;&nbsp;in connection with Permitted Acquisitions;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b)&nbsp;&nbsp;&nbsp;&nbsp;Permitted Investments;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c)&nbsp;&nbsp;&nbsp;&nbsp;investments in existence on the date hereof<u>as of the Sixth Amendment Effective</u> <u>Date</u> and described in <u>Schedule 6.04</u>;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(d)&nbsp;&nbsp;&nbsp;&nbsp;investments by the Parent Borrower and its Subsidiaries in Equity Interests in their respective Subsidiaries, <u>provided</u> that (i) any such Equity Interests held by a Loan Party shall be pledged pursuant to the Security Agreement (subject to the limitations applicable to Equity Interests of a Foreign Subsidiary and a Foreign Holdco referred to in Section 5.12) and (ii) the aggregate amount of investments by Loan Parties in Subsidiaries that are not Loan Parties (together with outstanding intercompany loans permitted under Section 6.04(e) and outstanding Guarantees permitted under Section 6.04(f)) shall not exceed $1,000,000<u>10,000,000</u> at any time outstanding (in each case determined without regard to any write-downs or write-offs);

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(e)&nbsp;&nbsp;&nbsp;&nbsp;loans or advances made by any Loan Party to any Subsidiary and made by any Subsidiary to a Loan Party or any other Subsidiary, <u>provided</u> that (i) any such loans and advances made by a Loan Party shall be evidenced by a promissory note pledged pursuant to the Security Agreement and (ii) the amount of such loans and advances made by Loan Parties to Subsidiaries that are not Loan Parties (together with outstanding investments permitted under Section 6.04(d) and outstanding Guarantees permitted under Section 6.04(f)) shall not exceed 1,000,000<u>$10,000,000</u> at any time outstanding (in each case determined without regard to any write-downs or write-offs);

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(f)&nbsp;&nbsp;&nbsp;&nbsp;Guarantees constituting Indebtedness permitted by Section 6.01, <u>provided</u> that the aggregate principal amount of Indebtedness of Subsidiaries that are not Loan Parties that is Guaranteed by any Loan Party (together with outstanding investments permitted under clause (ii) to the proviso to Section 6.04(d) and outstanding intercompany loans permitted under clause (ii) to the proviso to Section 6.04(e)) shall not exceed $1,000,000<u>10,000,000</u> at any time outstanding (in each case determined without regard to any write-downs or write-offs);

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(g)&nbsp;&nbsp;&nbsp;&nbsp;loans or advances made by a Loan Party to its employees on an arms-length basis in the ordinary course of business consistent with past practices for travel and entertainment expenses, relocation costs and similar purposes up to a maximum of $100,000 in the aggregate at any one time outstanding;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(h)&nbsp;&nbsp;&nbsp;&nbsp;notes payable, or stock or other securities issued by Account Debtors to a Loan Party pursuant to negotiated agreements with respect to settlement of such Account Debtor's Accounts in the ordinary course of business, consistent with past practices;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(i)&nbsp;&nbsp;&nbsp;&nbsp;investments in the form of Swap Agreements permitted by Section 6.07;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(j)&nbsp;&nbsp;&nbsp;&nbsp;investments of any Person existing at the time such Person becomes a Subsidiary of a Borrower or consolidates or merges with a Borrower or any Subsidiary (including in connection with a Permitted Acquisition), so long as such investments were not made in contemplation of such Person becoming a Subsidiary or of such merger;

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&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(k)&nbsp;&nbsp;&nbsp;&nbsp;investments received in connection with the disposition of assets permitted by Section 6.05;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(l)&nbsp;&nbsp;&nbsp;&nbsp;investments constituting deposits described in clauses (c) and (d) of the definition of the term "Permitted Encumbrances";

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(m)&nbsp;&nbsp;&nbsp;&nbsp;in connection with the Practicology Acquisition; and

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(n)&nbsp;&nbsp;&nbsp;&nbsp;other investments in an amount outstanding at any time not exceeding $250,000<u>5,000,000</u>.

SECTION 6.05. <u>Asset Sales</u>. No Loan Party will, nor will it permit any Subsidiary to, sell, transfer, lease or otherwise dispose of any asset, including any Equity Interest owned by it, nor will any Borrower permit any Subsidiary to issue any additional Equity Interest in such Subsidiary (other than to a Borrower or another Subsidiary in compliance with Section 6.04), except:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a)&nbsp;&nbsp;&nbsp;&nbsp;sales, transfers and dispositions of (i) Inventory in the ordinary course of business and (ii) used, obsolete, worn out or surplus Equipment or property in the ordinary course of business;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b)&nbsp;&nbsp;&nbsp;&nbsp;sales, transfers and dispositions of assets to any Borrower or any Subsidiary, <u>provided</u> that any such sales, transfers or dispositions involving a Subsidiary that is not a Loan Party shall be made in compliance with Section 6.09;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c)&nbsp;&nbsp;&nbsp;&nbsp;sales, transfers and dispositions of Accounts (excluding sales or dispositions in a factoring arrangement) in connection with the compromise, settlement or collection thereof;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(d)&nbsp;&nbsp;&nbsp;&nbsp;sales, transfers and dispositions consisting of Permitted Investments;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(e)&nbsp;&nbsp;&nbsp;&nbsp;Sale and Leaseback Transactions permitted by Section 6.06;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(f)&nbsp;&nbsp;&nbsp;&nbsp;dispositions resulting from any casualty or other insured damage to, or any taking under power of eminent domain or by condemnation or similar proceeding of, any property or asset of a Borrower or any Subsidiary;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(g)&nbsp;&nbsp;&nbsp;&nbsp;non-exclusive licenses, sublicenses, leases or subleases granted to third parties in the ordinary course of business not interfering with the business of the Parent Borrower and its Subsidiaries; and

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(h)&nbsp;&nbsp;&nbsp;&nbsp;sales, transfers and other dispositions of assets (other than Equity Interests in a Subsidiary unless all Equity Interests in such Subsidiary are sold) that are not permitted by any other clause of this Section, <u>provided</u> that the aggregate fair market value of all assets sold, transferred or otherwise disposed of in reliance upon this paragraph (g) shall not exceed $1,000,000<u>5,000,000</u> during any fiscal year of the Parent Borrower;

<u>provided</u> that all sales, transfers, leases and other dispositions permitted under this Section 6.05 (other than those permitted by paragraphs (b) and (d) above) shall be made for fair value and for consideration of at least 75% cash or cash equivalents.

SECTION 6.06. <u>Sale and Leaseback Transactions</u>. No Loan Party will, nor will it permit any Subsidiary to, enter into any arrangement, directly or indirectly, whereby it shall sell or transfer any property, real or personal, used or useful in its business, whether now owned or hereafter acquired, and thereafter rent or lease such property or other property that it intends to use for substantially the same

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purpose or purposes as the property sold or transferred (a "Sale and Leaseback Transaction"), except for any such sale of any fixed or capital assets by any Borrower or any Subsidiary that is made for cash consideration in an amount not less than the fair value of such fixed or capital asset and is consummated within 90 days after such Borrower or such Subsidiary acquires or completes the construction of such fixed or capital asset.

SECTION 6.07. <u>Swap Agreements</u>. No Loan Party will, nor will it permit any Subsidiary to, enter into any Swap Agreement, except (a) Swap Agreements entered into to hedge or mitigate risks to which any Borrower or any Subsidiary has actual exposure (other than those in respect of Equity Interests of any Borrower or any Subsidiary), and (b) Swap Agreements entered into in order to effectively cap, collar or exchange interest rates (from floating to fixed rates, from one floating rate to another floating rate or otherwise) with respect to any interest-bearing liability or investment of any Borrower or any Subsidiary.

SECTION 6.08. Restricted <u>Payments; Certain Payments of Subordinated Indebtedness</u>.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a)&nbsp;&nbsp;&nbsp;&nbsp;No Loan Party will, nor will it permit any Subsidiary to, declare or make, or agree to declare or make, directly or indirectly, any Restricted Payment, or incur any obligation (contingent or otherwise) to do so, except (i) the Parent Borrower may declare and pay dividends with respect to its common stock payable solely in additional shares of its common stock, and, with respect to its preferred stock, payable solely in additional shares of such preferred stock or in shares of its common stock, (ii) Subsidiaries may declare and pay dividends ratably with respect to their Equity Interests, and (iii) the Parent Borrower may make Restricted Payments, not exceeding $500,000<u>2,000,000</u> during any fiscal year of the Parent Borrower pursuant to and in accordance with stock option plans or other benefit plans for management or employees of the Parent Borrower and its Subsidiaries.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b)&nbsp;&nbsp;&nbsp;&nbsp;No Loan Party will, nor will it permit any Subsidiary to, make or agree to pay or make, directly or indirectly, any payment or other distribution (whether in cash, securities or other property) of or in respect of principal of or interest on any Indebtedness, or any payment or other distribution (whether in cash, securities or other property), including any sinking fund or similar deposit, on account of the purchase, redemption, retirement, acquisition, cancellation or termination of any Indebtedness, except:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(i)&nbsp;&nbsp;&nbsp;&nbsp;payment and prepayment of Indebtedness created under the Loan Documents;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(ii)&nbsp;&nbsp;&nbsp;&nbsp;payment of regularly scheduled interest and principal payments as and when due in respect of any Indebtedness permitted under Section 6.01, other than payments in respect of the Subordinated Indebtedness prohibited by the subordination provisions thereof;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(iii)&nbsp;&nbsp;&nbsp;&nbsp;refinancings of Indebtedness to the extent permitted by Section 6.01;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(iv)&nbsp;&nbsp;&nbsp;&nbsp;payments of Subordinated Indebtedness to the extent permitted by the subordination terms or subordination agreement with respect thereto; and

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(v)&nbsp;&nbsp;&nbsp;&nbsp;payment of secured Indebtedness that becomes due as a result of the voluntary sale or transfer of the property or assets securing such Indebtedness to the extent such sale or transfer is permitted by the terms of Section 6.05.

SECTION 6.09. <u>Transactions with Affiliates</u>. No Loan Party will, nor will it permit any Subsidiary to engage in any transactions with any of its Affiliates, except (a) transactions that are (i) in the ordinary course of business and (ii) at prices and on terms and conditions not less favorable to such Loan Party or such Subsidiary than could be obtained on an arm's-length basis from unrelated third

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parties, (b) transactions between or among the Loan Parties not involving any other Affiliate, (c) any investment permitted by Sections 6.04(d) or 6.04(e), (d) any Indebtedness permitted under Section 6.01(c), (e) any Restricted Payment permitted by Section 6.08, (f) loans or advances to employees permitted under Section 6.04(g), (g) the payment of reasonable fees and expenses to directors of any Borrower or any Subsidiary who are not employees of any Borrower or any Subsidiary, and compensation and employee benefit arrangements paid to, and indemnities provided for the benefit of, directors, officers or employees of the Borrowers or their Subsidiaries in the ordinary course of business and (h) any issuances of securities or other payments, awards or grants in cash, securities or otherwise pursuant to, or the funding of, employment agreements, stock options and stock ownership plans approved by the Parent Borrower's board of directors.

SECTION 6.10. <u>Restrictive Agreements</u>. No Loan Party will, nor will it permit any Subsidiary to, directly or indirectly enter into, incur or permit to exist any agreement or other arrangement that prohibits, restricts or imposes any condition upon (a) the ability of such Loan Party or any Subsidiary to create, incur or permit to exist any Lien upon any of its property or assets, or (b) the ability of any Subsidiary to pay dividends or other distributions with respect to any Equity Interests or to make or repay loans or advances to the Borrowers or any other Subsidiary or to Guarantee Indebtedness of the Borrowers or any other Subsidiary; <u>provided</u> that (i) the foregoing shall not apply to restrictions and conditions imposed by any Requirement of Law or by any Loan Document, (ii) the foregoing shall not apply to restrictions and conditions existing on the date hereof<u>as of the Sixth Amendment Effective Date</u> identified on <u>Schedule 6.10</u> (but shall apply to any extension or renewal of, or any amendment or modification expanding the scope of, any such restriction or condition), (iii) the foregoing shall not apply to customary restrictions and conditions contained in agreements relating to the sale of a Subsidiary or any assets of the Borrowers or their Subsidiaries pending such sale, provided such restrictions and conditions apply only to the Subsidiary that is to be sold or such assets that are to be sold and such sale is permitted hereunder, (iv) clause (a) of the foregoing shall not apply to restrictions or conditions imposed by any agreement relating to secured Indebtedness permitted by this Agreement if such restrictions or conditions apply only to the property or assets securing such Indebtedness and the proceeds thereof and (v) clause (a) of the foregoing shall not apply to customary provisions in leases or other contracts restricting the assignment thereof.

SECTION 6.11. <u>Amendment of Material Documents</u>. No Loan Party will, nor will it permit any Subsidiary to, amend, modify or waive any of its rights under (a) any agreement relating to any Subordinated Indebtedness, except as permitted by the subordination terms or subordination agreement applicable thereto or (b) after the Effective Date, its charter, articles or certificate of organization or incorporation and bylaws or operating, management or partnership agreement, or other organizational or governing documents, with respect to clauses (a) and (b), to the extent any such amendment, modification or waiver would be adverse to the Lenders in any material respect.

SECTION 6.12. <u>Financial Covenants</u>.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<u>(a)</u>&nbsp;&nbsp;&nbsp;&nbsp;(a) &nbsp;&nbsp;&nbsp;&nbsp;<u>Total Leverage Ratio</u>. The Parent Borrower will not permit the Total Leverage Ratio, <u>for any period of four consecutive fiscal quarters ending</u> on the last day of any fiscal quarter ending during any period set forth below, to be greater than the ratio set forth below opposite such period:<u>during the term hereof, to be less than 4.00:1.00.</u>

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| | | |
|:---|:---|:---|
| | <u>Period</u> | <u>Ratio</u> |
| | Fourth Amendment Effective Date through June 30, 2021 | |
| 4.25:1.00 | | |
| | September 30, 2021 | 4.00:1.00 |
| | December 31, 2021 | 3.75:1.00 |
| | March 31, 2022, and all times thereafter | 3.50:1.00" |

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&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b)&nbsp;&nbsp;&nbsp;&nbsp;<u>Fixed Charge Coverage Ratio</u>. The Parent Borrower will not permit the Fixed Charge Coverage Ratio, for any period of four consecutive fiscal quarters ending on the last day of any fiscal quarter during the term hereof, to be less than 1.25:1.00.

ARTICLE VII

<u>Events of Default</u>

If any of the following events ("<u>Events of Default</u>") shall occur:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a)&nbsp;&nbsp;&nbsp;&nbsp;any Borrower shall fail to pay any principal of any Loan or any reimbursement obligation in respect of any LC Disbursement when and as the same shall become due and payable, whether at the due date thereof or at a date fixed for prepayment thereof or otherwise;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b)&nbsp;&nbsp;&nbsp;&nbsp;any Borrower shall fail to pay any interest on any Loan or any fee or any other amount (other than an amount referred to in clause (a) of this Article) payable under this Agreement or any other Loan Document, when and as the same shall become due and payable and such failure shall continue unremedied for three (3) Business Days;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c)&nbsp;&nbsp;&nbsp;&nbsp;any representation or warranty made or deemed made by or on behalf of any Loan Party or any Subsidiary in, or in connection with, this Agreement or any other Loan Document or any amendment or modification hereof or thereof or waiver hereunder or thereunder, or in any report, certificate, financial statement or other document furnished pursuant to or in connection with this Agreement or any other Loan Document or any amendment or modification hereof or thereof or waiver hereunder or thereunder, shall prove to have been materially incorrect when made or deemed made, provided, that any representation or warranty which is subject to any materiality qualifier shall be required to be correct without giving effect to materiality;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(d)&nbsp;&nbsp;&nbsp;&nbsp;any Loan Party shall fail to observe or perform any covenant, condition or agreement contained in Sections 5.02(a), 5.03 (with respect to a Loan Party's existence), 5.08, 5.13 or in Article VI hereof or in Article IV of the Security Agreement;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(e)&nbsp;&nbsp;&nbsp;&nbsp;any Loan Party shall fail to observe or perform any covenant, condition or agreement contained in this Agreement (other than those specified in clause (a), (b) or (d)), and such failure shall continue unremedied for a period of (i) five (5) days after the earlier of any Loan Party's knowledge of such breach or notice thereof from the Administrative Agent (which notice will be given at the request of any Lender) if such breach relates to terms or provisions of Section 5.01, 5.02 (other than Section 5.02(a)), 5.03 through 5.07, 5.10 or 5.13 of this Agreement, or (ii) thirty (30) days after the earlier of any Loan Party's knowledge of such breach or notice thereof from the Administrative Agent (which notice will be given at the request of any Lender) if such breach relates to terms or provisions of any other Section of this Agreement or any Loan Document;

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&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(f)&nbsp;&nbsp;&nbsp;&nbsp;any Loan Party or any Subsidiary shall fail to make any payment (whether of principal or interest and regardless of amount) in respect of any Material Indebtedness, when and as the same shall become due and payable and such failure shall continue beyond any grace period applicable thereto;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(g)&nbsp;&nbsp;&nbsp;&nbsp;any event or condition occurs that results in any Material Indebtedness becoming due prior to its scheduled maturity or that enables or permits (with or without the giving of notice, the lapse of time or both) the holder or holders of any Material Indebtedness or any trustee or agent on its or their behalf to cause any Material Indebtedness to become due, or to require the prepayment, repurchase, redemption or defeasance thereof, prior to its scheduled maturity; <u>provided</u> that this clause (g) shall not apply to secured Indebtedness that becomes due as a result of the voluntary sale or transfer of the property or assets securing such Indebtedness to the extent such sale or transfer is permitted by the terms of Section 6.05;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(h)&nbsp;&nbsp;&nbsp;&nbsp;an involuntary proceeding shall be commenced or an involuntary petition shall be filed seeking (i) liquidation, reorganization or other relief in respect of a Loan Party or Subsidiary or its debts, or of a substantial part of its assets, under any federal, state or foreign bankruptcy, insolvency, receivership or similar law now or hereafter in effect or (ii) the appointment of a receiver, trustee, custodian, sequestrator, conservator or similar official for any Loan Party or any Subsidiary or for a substantial part of its assets, and, in any such case, such proceeding or petition shall continue undismissed for 45 days or an order or decree approving or ordering any of the foregoing shall be entered;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(i)&nbsp;&nbsp;&nbsp;&nbsp;any Loan Party or any Subsidiary shall (i) voluntarily commence any proceeding or file any petition seeking liquidation, reorganization or other relief under any federal, state or foreign bankruptcy, insolvency, receivership or similar law now or hereafter in effect, (ii) consent to the institution of, or fail to contest in a timely and appropriate manner, any proceeding or petition described in clause (h) of this Article, (iii) apply for or consent to the appointment of a receiver, trustee, custodian, sequestrator, conservator or similar official for such Loan Party or Subsidiary of any Loan Party or for a substantial part of its assets, (iv) file an answer admitting the material allegations of a petition filed against it in any such proceeding, (v) make a general assignment for the benefit of creditors or (vi) take any action for the purpose of effecting any of the foregoing;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(j)&nbsp;&nbsp;&nbsp;&nbsp;any Loan Party or any Subsidiary shall become unable, admit in writing its inability, or publicly declare its intention not to, or fail generally, to pay its debts as they become due;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(k)&nbsp;&nbsp;&nbsp;&nbsp;one or more judgments for the payment of money in an aggregate amount not covered by insurance in excess of $500,000<u>5,000,000</u> shall be rendered against any Loan Party, any Subsidiary or any combination thereof and the same shall remain undischarged for a period of thirty (30) consecutive days during which execution shall not be effectively stayed, or any action shall be legally taken by a judgment creditor to attach or levy upon any assets of any Loan Party or any Subsidiary to enforce any such judgment or any Loan Party or any Subsidiary shall fail within thirty (30) days to discharge one or more non-monetary judgments or orders which, individually or in the aggregate, could reasonably be expected to have a Material Adverse Effect, which judgments or orders, in any such case, are not stayed on appeal and being appropriately contested in good faith by proper proceedings diligently pursued;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(l)&nbsp;&nbsp;&nbsp;&nbsp;an ERISA Event shall have occurred that, in the opinion of the Required Lenders, when taken together with all other ERISA Events that have occurred, could reasonably be expected to result in a Material Adverse Effect;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(m)&nbsp;&nbsp;&nbsp;&nbsp;a Change in Control shall occur;

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&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(n)&nbsp;&nbsp;&nbsp;&nbsp;the occurrence of any "default", as defined in any Loan Document (other than this Agreement), or the breach of any of the terms or provisions of any Loan Document (other than this Agreement), which default or breach continues beyond any period of grace therein provided;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(o)&nbsp;&nbsp;&nbsp;&nbsp;the Loan Guaranty or any Obligation Guaranty shall fail to remain in full force or effect or any action shall be taken to discontinue or to assert the invalidity or unenforceability of the Loan Guaranty or any Obligation Guaranty, or any Loan Guarantor shall fail to comply with any of the terms or provisions of the Loan Guaranty or any Obligation Guaranty to which it is a party, or any Loan Guarantor shall deny that it has any further liability under the Loan Guaranty or any Obligation Guaranty to which it is a party, or shall give notice to such effect, including, but not limited to notice of termination delivered pursuant to Section 10.08 or any notice of termination delivered pursuant to the terms of any Obligation Guaranty;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(p)&nbsp;&nbsp;&nbsp;&nbsp;except as permitted by the terms of any Collateral Document, (i) any Collateral Document shall for any reason fail to create a valid security interest in any Collateral purported to be covered thereby, or (ii) any Lien on Collateral securing any Secured Obligation shall cease to be a perfected, first priority Lien (to the extent perfection can be achieved by the filing of financing statements or other actions that are taken or requested to be taken by the Administrative Agent pursuant to the Loan Documents);

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(q)&nbsp;&nbsp;&nbsp;&nbsp;any Collateral Document shall fail to remain in full force or effect or any action shall be taken to discontinue or to assert the invalidity or unenforceability of any Collateral Document; or

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(r)&nbsp;&nbsp;&nbsp;&nbsp;any material provision of any Loan Document for any reason ceases to be valid, binding and enforceable in accordance with its terms (or any Loan Party shall challenge the enforceability of any Loan Document or shall assert in writing, or engage in any action or inaction that evidences its assertion, that any provision of any of the Loan Documents has ceased to be or otherwise is not valid, binding and enforceable in accordance with its terms);

then, and in every such event (other than an event with respect to the Borrowers described in clause (h) or (i) of this Article), and at any time thereafter during the continuance of such event, the Administrative Agent may, and at the request of the Required Lenders shall, by notice to the Parent Borrower, take either or both of the following actions, at the same or different times: (i) terminate the Commitments, whereupon the Commitments shall terminate immediately, and (ii) declare the Loans then outstanding to be due and payable in whole (or in part, but ratably as among the Classes of Loans and the Loans of each Class at the time outstanding, in which case any principal not so declared to be due and payable may thereafter be declared to be due and payable), whereupon the principal of the Loans so declared to be due and payable, together with accrued interest thereon and all fees and other obligations of the Borrowers accrued hereunder, shall become due and payable immediately, in each case without presentment, demand, protest or other notice of any kind, all of which are hereby waived by the Borrowers; and in the case of any event with respect to the Borrowers described in clause (h) or (i) of this Article, the Commitments shall automatically terminate and the principal of the Loans then outstanding, together with accrued interest thereon and all fees and other obligations of the Borrowers accrued hereunder, shall automatically become due and payable, in each case without presentment, demand, protest or other notice of any kind, all of which are hereby waived by the Borrowers. Upon the occurrence and during the continuance of an Event of Default, the Administrative Agent may, and at the request of the Required Lenders shall, increase the rate of interest applicable to the Loans and other Obligations as set forth in this Agreement and exercise any rights and remedies provided to the Administrative Agent under the Loan Documents or at law or equity, including all remedies provided under the UCC.

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ARTICLE VIII

<u>The Administrative Agent</u>

SECTION 8.01. &nbsp;&nbsp;&nbsp;&nbsp;<u>Appointment</u>. Each of the Lenders , on behalf of itself and any of its Affiliates that are Secured Parties and the Issuing Bank hereby irrevocably appoints the Administrative Agent as its agent and authorizes the Administrative Agent to take such actions on its behalf, including execution of the other Loan Documents, and to exercise such powers as are delegated to the Administrative Agent by the terms of the Loan Documents, together with such actions and powers as are reasonably incidental thereto. In addition, to the extent required under the laws of any jurisdiction other than the U.S., each of the Lenders and the Issuing Bank hereby grants to the Administrative Agent any required powers of attorney to execute any Collateral Document governed by the laws of such jurisdiction on such Lender's or Issuing Bank's behalf. The provisions of this Article are solely for the benefit of the Administrative Agent and the Lenders (including the Issuing Bank), and the Loan Parties shall not have rights as a third party beneficiary of any of such provisions. It is understood and agreed that the use of the term "agent" as used herein or in any other Loan Documents (or any similar term) with reference to the Administrative Agent is not intended to connote any fiduciary or other implied (or express) obligations arising under agency doctrine of any applicable law. Instead, such term is used as a matter of market custom, and is intended to create or reflect only an administrative relationship between independent contracting parties.

SECTION 8.02. &nbsp;&nbsp;&nbsp;&nbsp;<u>Rights as a Lender</u>. The bank serving as the Administrative Agent hereunder shall have the same rights and powers in its capacity as a Lender as any other Lender and may exercise the same as though it were not the Administrative Agent, and such bank and its Affiliates may accept deposits from, lend money to and generally engage in any kind of business with any Loan Party or any Subsidiary or any Affiliate thereof as if it were not the Administrative Agent hereunder.

SECTION 8.03. &nbsp;&nbsp;&nbsp;&nbsp;<u>Duties and Obligations</u>. The Administrative Agent shall not have any duties or obligations except those expressly set forth in the Loan Documents. Without limiting the generality of the foregoing, (a) the Administrative Agent shall not be subject to any fiduciary or other implied duties, regardless of whether a Default has occurred and is continuing, (b) the Administrative Agent shall not have any duty to take any discretionary action or exercise any discretionary powers, except discretionary rights and powers expressly contemplated by the Loan Documents that the Administrative Agent is required to exercise as directed in writing by the Required Lenders (or such other number or percentage of the Lenders as shall be necessary under the circumstances as provided in Section 9.02), and, (c) except as expressly set forth in the Loan Documents, the Administrative Agent shall not have any duty to disclose, and shall not be liable for the failure to disclose, any information relating to any Loan Party or any Subsidiary that is communicated to or obtained by the bank serving as Administrative Agent or any of its Affiliates in any capacity. The Administrative Agent shall not be liable for any action taken or not taken by it with the consent or at the request of the Required Lenders (or such other number or percentage of the Lenders as shall be necessary under the circumstances as provided in Section 9.02) or in the absence of its own gross negligence or willful misconduct as determined by a final nonappealable judgment of a court of competent jurisdiction. The Administrative Agent shall be deemed not to have knowledge of any Default unless and until written notice thereof is given to the Administrative Agent by the Parent Borrower or a Lender, and the Administrative Agent shall not be responsible for or have any duty to ascertain or inquire into (i) any statement, warranty or representation made in or in connection with any Loan Document, (ii) the contents of any certificate, report or other document delivered hereunder or in connection with any Loan Document, (iii) the performance or observance of any of the covenants, agreements or other terms or conditions set forth in any Loan Document, (iv) the validity, enforceability, effectiveness or genuineness of any Loan Document or any

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other agreement, instrument or document, (v) the creation, perfection or priority of Liens on the Collateral or the existence of the Collateral, or (vi) the satisfaction of any condition set forth in Article IV or elsewhere in any Loan Document, other than to confirm receipt of items expressly required to be delivered to the Administrative Agent.

SECTION 8.04. &nbsp;&nbsp;&nbsp;&nbsp;<u>Reliance</u>. The Administrative Agent shall be entitled to rely upon, and shall not incur any liability for relying upon, any notice, request, certificate, consent, statement, instrument, document or other writing believed by it to be genuine and to have been signed or sent by the proper Person. The Administrative Agent also may rely upon any statement made to it orally or by telephone and believed by it to be made by the proper Person, and shall not incur any liability for relying thereon. The Administrative Agent may consult with legal counsel (who may be counsel for the Borrowers), independent accountants and other experts selected by it, and shall not be liable for any action taken or not taken by it in accordance with the advice of any such counsel, accountants or experts.

SECTION 8.05. &nbsp;&nbsp;&nbsp;&nbsp;<u>Actions through Sub-Agents</u>. The Administrative Agent may perform any and all of its duties and exercise its rights and powers by or through any one or more subagents appointed by the Administrative Agent. The Administrative Agent and any such sub-agent may perform any and all of its duties and exercise its rights and powers through their respective Related Parties. The exculpatory provisions of the preceding paragraphs shall apply to any such sub-agent and to the Related Parties of the Administrative Agent and any such sub-agent, and shall apply to their respective activities in connection with the syndication of the credit facilities provided for herein as well as activities as the Administrative Agent.

SECTION 8.06. &nbsp;&nbsp;&nbsp;&nbsp;<u>Resignation</u>. Subject to the appointment and acceptance of a successor Administrative Agent as provided in this paragraph, the Administrative Agent may resign at any time by notifying the Lenders, the Issuing Bank and the Parent Borrower. Upon any such resignation, the Required Lenders shall have the right, in consultation with the Parent Borrower, to appoint a successor. If no successor shall have been so appointed by the Required Lenders and shall have accepted such appointment within thirty (30) days after the retiring Administrative Agent gives notice of its resignation, then the retiring Administrative Agent may, on behalf of the Lenders and the Issuing Bank appoint a successor Administrative Agent which shall be a bank with an office in New York, New York, or an Affiliate of any such bank. Upon the acceptance of its appointment as Administrative Agent hereunder by its successor, such successor shall succeed to and become vested with all the rights, powers, privileges and duties of the retiring Administrative Agent, and the retiring Administrative Agent shall be discharged from its duties and obligations hereunder and under the other Loan Documents. The fees payable by the Borrowers to a successor Administrative Agent shall be the same as those payable to its predecessor, unless otherwise agreed by the Borrowers and such successor. Notwithstanding the foregoing, in the event no successor Administrative Agent shall have been so appointed and shall have accepted such appointment within thirty (30) days after the retiring Administrative Agent gives notice of its intent to resign, the retiring Administrative Agent may give notice of the effectiveness of its resignation to the Lenders, the Issuing Banks and the Parent Borrower, whereupon, on the date of effectiveness of such resignation stated in such notice, (a) the retiring Administrative Agent shall be discharged from its duties and obligations hereunder and under the other Loan Documents, <u>provided</u> that, solely for purposes of maintaining any security interest granted to the Administrative Agent under any Collateral Document for the benefit of the Secured Parties, the retiring Administrative Agent shall continue to be vested with such security interest as collateral agent for the benefit of the Secured Parties and, in the case of any Collateral in the possession of the Administrative Agent, shall continue to hold such Collateral, in each case until such time as a successor Administrative Agent is appointed and accepts such appointment in accordance with this paragraph (it being understood and agreed that the retiring Administrative Agent shall have no duly or obligation to take any further action under any Collateral

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Document, including any action required to maintain the perfection of any such security interest), and (b) the Required Lenders shall succeed to and become vested with all the rights, powers, privileges and duties of the retiring Administrative Agent, provided that (i) all payments required to be made hereunder or under any other Loan Document to the Administrative Agent for the account of any Person other than the Administrative Agent shall be made directly to such Person and (ii) all notices and other communications required or contemplated to be given or made to the Administrative Agent shall also directly be given or made to each Lender and each Issuing Bank. Following the effectiveness of the Administrative Agent's resignation from its capacity as such, the provisions of this Article, Section 2.17(d) and Section 9.03, as well as any exculpatory, reimbursement and indemnification provisions set forth in any other Loan Document, shall continue in effect for the benefit of such retiring Administrative Agent, its sub-agents and their respective Related Parties in respect of any actions taken or omitted to be taken by any of them while it was acting as Administrative Agent and in respect of the matters referred to in the proviso under clause (a) above.

SECTION 8.07. &nbsp;&nbsp;&nbsp;&nbsp;<u>Non-Reliance</u>.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a)&nbsp;&nbsp;&nbsp;&nbsp;Each Lender acknowledges and agrees that the extensions of credit made hereunder are commercial loans and letters of credit and not investments in a business enterprise or securities. Each Lender further represents that it is engaged in making, acquiring or holding commercial loans in the ordinary course of its business and has, independently and without reliance upon the Administrative Agent or any other Lender and based on such documents and information as it has deemed appropriate, made its own credit analysis and decision to enter into this Agreement as a Lender, and to make, acquire or hold Loans hereunder. Each Lender shall, independently and without reliance upon the Administrative Agent or any other Lender and based on such documents and information (which may contain material, non-public information within the meaning of the U.S. securities laws concerning the Borrowers and their Affiliates) as it shall from time to time deem appropriate, continue to make its own decisions in taking or not taking action under or based upon this Agreement, any other Loan Document, any related agreement or any document furnished hereunder or thereunder and in deciding whether or to the extent to which it will continue as a Lender or assign or otherwise transfer its rights, interests and obligations hereunder.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b)&nbsp;&nbsp;&nbsp;&nbsp;Each Lender hereby agrees that (i) it has requested a copy of each Report prepared by or on behalf of the Administrative Agent; (ii) the Administrative Agent (A) makes no representation or warranty, express or implied, as to the completeness or accuracy of any Report or any of the information contained therein or any inaccuracy or omission contained in or relating to a Report and (B) shall not be liable for any information contained in any Report; (iii) the Reports are not comprehensive audits or examinations, and that any Person performing any field examination will inspect only specific information regarding the Loan Parties and will rely significantly upon the Loan Parties' books and records, as well as on representations of the Loan Parties' personnel and that the Administrative Agent undertakes no obligation to update, correct or supplement the Reports; (iv) it will keep all Reports confidential and strictly for its internal use, not share the Report with any Loan Party or any other Person except as otherwise permitted pursuant to this Agreement; and (v) without limiting the generality of any other indemnification provision contained in this Agreement, (A) it will hold the Administrative Agent and any such other Person preparing a Report harmless from any action the indemnifying Lender may take or conclusion the indemnifying Lender may reach or draw from any Report in connection with any extension of credit that the indemnifying Lender has made or may make to the Borrowers, or the indemnifying Lender's participation in, or the indemnifying Lender's purchase of, a Loan or Loans; and (B) it will pay and protect, and indemnify, defend, and hold the Administrative Agent and any such other Person preparing a Report harmless from and against, the claims, actions, proceedings, damages, costs, expenses, and other amounts (including reasonable attorneys' fees) incurred by the

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Administrative Agent or any such other Person as the direct or indirect result of any third parties who might obtain all or part of any Report through the indemnifying Lender.

SECTION 8.08.&nbsp;&nbsp;&nbsp;&nbsp;<u>Other Agency Titles</u>. The Sole Bookrunner and Sole Lead Arranger shall not have any right, power, obligation, liability, responsibility or duty under this Agreement other than those applicable to all Lenders as such. Without limiting the foregoing, none of such Lenders shall have or be deemed to have a fiduciary relationship with any Lender. Each Lender hereby makes the same acknowledgments with respect to the relevant Lenders in their respective capacities as Sole Bookrunner and Sole Lead Arranger, as applicable, as it makes with respect to the Administrative Agent in the preceding paragraph.<u>[Reserved].</u>

SECTION 8.09.&nbsp;&nbsp;&nbsp;&nbsp;<u>Not Partners or Co-Venturers; Administrative Agent as</u> <u>Representative of the Secured Parties</u>. The Lenders are not partners or co-venturers, and no Lender shall be liable for the acts or omissions of, or (except as otherwise set forth herein in case of the Administrative Agent) authorized to act for, any other Lender. The Administrative Agent shall have the exclusive right on behalf of the Lenders to enforce the payment of the principal of and interest on any Loan after the date such principal or interest has become due and payable pursuant to the terms of this Agreement.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a)&nbsp;&nbsp;&nbsp;&nbsp;In its capacity, the Administrative Agent is a "representative" of the Secured Parties within the meaning of the term "secured party" as defined in the UCC. Each Lender authorizes the Administrative Agent to enter into each of the Collateral Documents to which it is a party and to take all action contemplated by such documents. Each Lender agrees that no Secured Party (other than the Administrative Agent) shall have the right individually to seek to realize upon the security granted by any Collateral Document, it being understood and agreed that such rights and remedies may be exercised solely by the Administrative Agent for the benefit of the Secured Parties upon the terms of the Collateral Documents. In the event that any Collateral is hereafter pledged by any Person as collateral security for the Secured Obligations, the Administrative Agent is hereby authorized, and hereby granted a power of attorney, to execute and deliver on behalf of the Secured Parties any Loan Documents necessary or appropriate to grant and perfect a Lien on such Collateral in favor of the Administrative Agent on behalf of the Secured Parties.

SECTION 8.10.&nbsp;&nbsp;&nbsp;&nbsp;<u>Credit Bidding</u>. The Secured Parties hereby irrevocably authorize the Administrative Agent, at the direction of the Required Lenders, to credit bid all or any portion of the Obligations (including by accepting some or all of the Collateral in satisfaction of some or all of the Obligations pursuant to a deed in lieu of foreclosure or otherwise) and in such manner purchase (either directly or through one or more acquisition vehicles) all or any portion of the Collateral (a) at any sale thereof conducted under the provisions of the Bankruptcy Code, including under Sections 363, 1123 or 1129 of the Bankruptcy Code, or any similar laws in any other jurisdictions to which a Credit Party is subject, or (b) at any other sale, foreclosure or acceptance of collateral in lieu of debt conducted by (or with the consent or at the direction of) the Administrative Agent (whether by judicial action or otherwise) in accordance with any applicable law. In connection with any such credit bid and purchase, the Obligations owed to the Secured Parties shall be entitled to be, and shall be, credit bid by the Administrative Agent at the direction of the Required Lenders on a ratable basis (with Obligations with respect to contingent or unliquidated claims receiving contingent interests in the acquired assets on a ratable basis that shall vest upon the liquidation of such claims in an amount proportional to the liquidated portion of the contingent claim amount used in allocating the contingent interests) for the asset or assets so purchased (or for the equity interests or debt instruments of the acquisition vehicle or vehicles that are issued in connection with such purchase). In connection with any such bid (i) the Administrative Agent shall be authorized to form one or more acquisition vehicles and to assign any successful credit bid to such acquisition vehicle or vehicles (ii) each of the Secured Parties' ratable interests in the Obligations

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which were credit bid shall be deemed without any further action under this Agreement to be assigned to such vehicle or vehicles for the purpose of closing such sale, (iii) the Administrative shall be authorized to adopt documents providing for the governance of the acquisition vehicle or vehicles (<u>provided</u> that any actions by the Administrative Agent with respect to such acquisition vehicle or vehicles, including any disposition of the assets or equity interests thereof, shall be governed, directly or indirectly, by, and the governing documents shall provide for, control by the vote of the Required Lenders or their permitted assignees under the terms of this Agreement or the governing documents of the applicable acquisition vehicle or vehicles, as the case may be, irrespective of the termination of this Agreement and without giving effect to the limitations on actions by the Required Lenders contained in Section 9.02 of this Agreement), (iv) the Administrative Agent on behalf of such acquisition vehicle or vehicles shall be authorized to issue to each of the Secured Parties, ratably on account of the relevant Obligations which were credit bid, interests, whether as equity, partnership, limited partnership interests or membership interests, in any such acquisition vehicle and/or debt instruments issued by such acquisition vehicle, all without the need for any Secured Party or acquisition vehicle to take any further action, and (v) to the extent that Obligations that are assigned to an acquisition vehicle are not used to acquire Collateral for any reason, such Obligations shall automatically be reassigned to the Secured Parties pro rata and the equity interests and/or debt instruments issued by any acquisition vehicle on account of such Obligations shall automatically be cancelled, without the need for any Secured Party or any acquisition vehicle to take any further action. Notwithstanding that the ratable portion of the Obligations of each Secured Party are deemed assigned to the acquisition vehicle or vehicles as set forth in clause (ii) above, each Secured Party shall execute such documents and provide such information regarding the Secured Party (and/or any designee of the Secured Party which will receive interests in or debt instruments issued by such acquisition vehicle) as the Administrative Agent may reasonably request in connection with the formation of any acquisition vehicle, the formulation or submission of any credit bid or the consummation of the transactions contemplated by such credit bid.

SECTION 8.11. &nbsp;&nbsp;&nbsp;&nbsp;<u>Acknowledgment of Lenders</u>.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a)&nbsp;&nbsp;&nbsp;&nbsp;Each Lender hereby agrees that (x) if the Administrative Agent notifies such Lender that the Administrative Agent has determined in its sole discretion that any funds received by such Lender from the Administrative Agent or any of its Affiliates (whether as a payment, prepayment or repayment of principal, interest, fees or otherwise; individually and collectively, a "Payment") were erroneously transmitted to such Lender (whether or not known to such Lender), and demands the return of such Payment (or a portion thereof), such Lender shall promptly, but in no event later than one Business Day thereafter, return to the Administrative Agent the amount of any such Payment (or portion thereof) as to which such a demand was made in same day funds, together with interest thereon in respect of each day from and including the date such Payment (or portion thereof) was received by such Lender to the date such amount is repaid to the Administrative Agent at the greater of the NYFRB Rate and a rate determined by the Administrative Agent in accordance with banking industry rules on interbank compensation from time to time in effect, and (y) to the extent permitted by applicable law, such Lender shall not assert, and hereby waives, as to the Administrative Agent, any claim, counterclaim, defense or right of set-off or recoupment with respect to any demand, claim or counterclaim by the Administrative Agent for the return of any Payments received, including without limitation any defense based on "discharge for value" or any similar doctrine. A notice of the Administrative Agent to any Lender under this Section 8.11(a) shall be conclusive, absent manifest error.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b)&nbsp;&nbsp;&nbsp;&nbsp;Each Lender hereby further agrees that if it receives a Payment from the Administrative Agent or any of its Affiliates (x) that is in a different amount than, or on a different date from, that specified in a notice of payment sent by the Administrative Agent (or any of its Affiliates) with respect to such Payment (a "Payment Notice") or (y) that was not preceded or accompanied by a Payment Notice, it

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shall be on notice, in each such case, that an error has been made with respect to such Payment. Each Lender agrees that, in each such case, or if it otherwise becomes aware a Payment (or portion thereof) may have been sent in error, such Lender shall promptly notify the Administrative Agent of such occurrence and, upon demand from the Administrative Agent, it shall promptly, but in no event later than one (1) Business Day thereafter, return to the Administrative Agent the amount of any such Payment (or portion thereof) as to which such a demand was made in same day funds, together with interest thereon in respect of each day from and including the date such Payment (or portion thereof) was received by such Lender to the date such amount is repaid to the Administrative Agent at the greater of the NYFRB Rate and a rate determined by the Administrative Agent in accordance with banking industry rules on interbank compensation from time to time in effect.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c)&nbsp;&nbsp;&nbsp;&nbsp;The Borrower and each other Loan Party hereby agrees that (x) in the event an erroneous Payment (or portion thereof) are not recovered from any Lender that has received such Payment (or portion thereof) for any reason, the Administrative Agent shall be subrogated to all the rights of such Lender with respect to such amount and (y) an erroneous Payment shall not pay, prepay, repay, discharge or otherwise satisfy any Obligations owed by the Borrower or any other Loan Party.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(d)&nbsp;&nbsp;&nbsp;&nbsp;Each party's obligations under this Section 8.11 shall survive the resignation or replacement of the Administrative Agent or any transfer of rights or obligations by, or the replacement of, a Lender, the termination of the Commitments or the repayment, satisfaction or discharge of all Obligations under any Loan Document

ARTICLE IX

<u>Miscellaneous</u>

SECTION 9.01. &nbsp;&nbsp;&nbsp;&nbsp;<u>Notices</u>.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a)&nbsp;&nbsp;&nbsp;&nbsp;Except in the case of notices and other communications expressly permitted to be given by telephone or Electronic Systems (and subject in each case to paragraph (b) below), all notices and other communications provided for herein shall be in writing and shall be delivered by hand or overnight courier service, mailed by certified or registered mail, or Electronic Systems, as follows:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(i)&nbsp;&nbsp;&nbsp;&nbsp;if to any Loan Party, to it in care of the Parent Borrower at:

Covalent Group, Inc.

1633 West<u>1441 W.</u> Innovation Way<u>, Suite 500</u>

Suite 300

Lehi, Utah<u>UT</u>, 84043

Attention: Chief Financial Officer<u>Jason Beesley</u>

Email: jeff<u>jason.beesley</u>@pattern.com

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(ii)&nbsp;&nbsp;&nbsp;&nbsp;if to the Administrative Agent or JPMorgan in its capacity as a Lender, the Swingline Lender or an Issuing Bank, to JPMorgan Chase Bank, N.A. at:

JPMorgan Chase Bank, N.A.

Middle Market Servicing

10 South Dearborn, Floor L2

Suite IL1-0480

Chicago, IL, 60603-2300

Attention: Jasmine Doke

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With a copy to:

JPMorgan Chase Bank, N.A.

MM Technology Banking

<u>237 Park Avenue, 6th Floor</u>

<u>New York, NY 10017</u>

560 Mission St.

San Francisco, CA 94115

Attention: Haley Heslip<u>Grace Mahood</u>

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(iii)&nbsp;&nbsp;&nbsp;&nbsp;if to any other Lender or Issuing Bank, to it at its address or fax number set forth in its Administrative Questionnaire.

All such notices and other communications (i) sent by hand or overnight courier service, or mailed by certified or registered mail shall be deemed to have been given when received, (ii) sent by fax shall be deemed to have been given when sent, provided that if not given during normal business hours for the recipient, such notice or communication shall be deemed to have been given at the opening of business on the next Business Day of the recipient, or (iii) delivered through Electronic Systems to the extent provided in paragraph (b) below shall be effective as provided in such paragraph.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b)&nbsp;&nbsp;&nbsp;&nbsp;Notices and other communications to the Lenders hereunder may be delivered or furnished by Electronic Systems pursuant to procedures approved by the Administrative Agent;

<u>provided</u> that the foregoing shall not apply to notices pursuant to Article II or to compliance and no Default certificates delivered pursuant to Section 5.01(d) unless otherwise agreed by the Administrative Agent and the applicable Lender. Each of the Administrative Agent and the Parent Borrower (on behalf of the Loan Parties) may, in its discretion, agree to accept notices and other communications to it hereunder by Electronic Systems pursuant to procedures approved by it; <u>provided</u> that approval of such procedures may be limited to particular notices or communications. Unless the Administrative Agent otherwise proscribes, all such notices and other communications (i) sent to an e-mail address shall be deemed received upon the sender's receipt of an acknowledgement from the intended recipient (such as by the "return receipt requested" function, as available, return e-mail or other written acknowledgement), <u>provided</u> that if not given during the normal business hours of the recipient, such notice or communication shall be deemed to have been given at the opening of business on the next Business Day for the recipient, and (ii) posted to an Internet or intranet website shall be deemed received upon the deemed receipt by the intended recipient, at its e-mail address as described in the foregoing clause (i), of notification that such notice or communication is available and identifying the website address therefor; <u>provided</u> that, for both clauses (i) and (ii) above, if such notice, e-mail or other communication is not sent during the normal business hours of the recipient, such notice or communication shall be deemed to have been sent at the opening of business on the next Business Day of the recipient.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c)&nbsp;&nbsp;&nbsp;&nbsp;Any party hereto may change its address, facsimile number or e-mail address for notices and other communications hereunder by notice to the other parties hereto.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(d)&nbsp;&nbsp;&nbsp;&nbsp;<u>Electronic Systems</u>.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(i)&nbsp;&nbsp;&nbsp;&nbsp;Each Loan Party agrees that the Administrative Agent may, but shall not be obligated to, make Communications (as defined below) available to the Issuing Bank and the other Lenders by posting the Communications on Debt Domain, Intralinks, Syndtrak, ClearPar or a substantially similar Electronic System.

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&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(ii)&nbsp;&nbsp;&nbsp;&nbsp;Any Electronic System used by the Administrative Agent is provided "as is" and "as available." The Agent Parties (as defined below) do not warrant the adequacy of such Electronic Systems and expressly disclaim liability for errors or omissions in the Communications. No warranty of any kind, express, implied or statutory, including any warranty of merchantability, fitness for a particular purpose, non-infringement of third-party rights or freedom from viruses or other code defects, is made by any Agent Party in connection with the Communications or any Electronic System. In no event shall the Administrative Agent or any of its Related Parties (collectively, the "Agent Parties") have any liability to the Borrowers or the other Loan Parties, any Lender, the Issuing Bank or any other Person or entity for damages of any kind, including direct or indirect, special, incidental or consequential damages, losses or expenses (whether in tort, contract or otherwise) arising out of the Borrowers' or any Loan Party's or the Administrative Agent's transmission of communications through an Electronic System. "<u>Communications</u>" means, collectively, any notice, demand, communication, information, document or other material provided by or on behalf of any Loan Party pursuant to any Loan Document or the transactions contemplated therein which is distributed by the Administrative Agent, any Lender or the Issuing Bank by means of electronic communications pursuant to this Section, including through an Electronic System.

SECTION 9.02. &nbsp;&nbsp;&nbsp;&nbsp;<u>Waivers; Amendments</u>.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a)&nbsp;&nbsp;&nbsp;&nbsp;No failure or delay by the Administrative Agent, the Issuing Bank or any Lender in exercising any right or power hereunder or under any other Loan Document shall operate as a waiver thereof, nor shall any single or partial exercise of any such right or power, or any abandonment or discontinuance of steps to enforce such a right or power, preclude any other or further exercise thereof or 99 the exercise of any other right or power. The rights and remedies of the Administrative Agent, the Issuing Bank and the Lenders hereunder and under any other Loan Document are cumulative and are not exclusive of any rights or remedies that they would otherwise have. No waiver of any provision of any Loan Document or consent to any departure by any Loan Party therefrom shall in any event be effective unless the same shall be permitted by paragraph (b) of this Section, and then such waiver or consent shall be effective only in the specific instance and for the purpose for which given. Without limiting the generality of the foregoing, the making of a Loan or issuance of a Letter of Credit shall not be construed as a waiver of any Default, regardless of whether the Administrative Agent, any Lender or the Issuing Bank may have had notice or knowledge of such Default at the time.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b)&nbsp;&nbsp;&nbsp;&nbsp;Subject to Section 2.14(c)<u>, (d) and (e)</u> and Section 9.02(c) below, neither this Agreement nor any other Loan Document nor any provision hereof or thereof may be waived, amended or modified except (i) in the case of this Agreement, pursuant to an agreement or agreements in writing entered into by the Borrowers and the Required Lenders or (ii) in the case of any other Loan Document, pursuant to an agreement or agreements in writing entered into by the Administrative Agent and the Loan Party or Loan Parties that are parties thereto, with the consent of the Required Lenders; provided that no such agreement shall (A) increase the Commitment of any Lender without the written consent of such Lender (including any such Lender that is a Defaulting Lender), (B) reduce or forgive the principal amount of any Loan or LC Disbursement or reduce the rate of interest thereon, or reduce or forgive any interest or fees payable hereunder (other than any reduction of any default rate of interest to the regular rate of interest), without the written consent of each Lender (including any such Lender that is a Defaulting Lender) directly affected thereby, (C) postpone any scheduled date of payment of the principal amount of any Loan or LC Disbursement, or any date for the payment of any interest, fees or other Obligations payable hereunder, or reduce the amount of, waive or excuse any such payment, or postpone the scheduled date of expiration of any Commitment, without the written consent of each Lender (including any such Lender that is a Defaulting Lender) directly affected thereby, (D) change Section 2.18(b) or (d) in a manner that would alter the manner in which payments are shared, without the written

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consent of each Lender (other than any Defaulting Lender), (E) change any of the provisions of this Section or the definition of "Required Lenders" or any other provision of any Loan Document specifying the number or percentage of Lenders (or Lenders of any Class) required to waive, amend or modify any rights thereunder or make any determination or grant any consent thereunder, without the written consent of each Lender (other than any Defaulting Lender) directly affected thereby, (F) change Section 2.20, without the consent of each Lender (other than any Defaulting Lender), (G) release any Loan Guarantor from its obligation under its Loan Guaranty or Obligation Guaranty (except as otherwise permitted herein or in the other Loan Documents), without the written consent of each Lender (other than any Defaulting Lender), or (H) except as provided in clause (c) of this Section or in any Collateral Document, release all or substantially all of the Collateral without the written consent of each Lender (other than any Defaulting Lender); <u>provided further</u> that no such agreement shall amend, modify or otherwise affect the rights or duties of the Administrative Agent, the Swingline Lender or the Issuing Bank hereunder without the prior written consent of the Administrative Agent, the Swingline Lender or the Issuing Bank, as the case may be (it being understood that any amendment to Section 2.20 shall require the consent of the Administrative Agent, the Swingline Lender and the Issuing Bank); <u>provided further</u> that no such agreement shall amend or modify the provisions of Section 2.07 or any letter of credit application and any bilateral agreement between the Borrowers and the Issuing Bank regarding the Issuing Bank's Issuing Bank Sublimit or the respective rights and obligations between the Borrowers and the Issuing Bank in connection with the issuance of Letters of Credit without the prior written consent of the Administrative Agent and the Issuing Bank, respectively. The Administrative Agent may also amend the <u>Commitment</u> <u>Schedule</u> to reflect assignments entered into pursuant to Section 9.04. Any amendment, waiver or other modification of this Agreement or any other Loan Document that by its terms affects the rights or duties under this Agreement of the Lenders of one or more Classes (but not the Lenders of any other Class), may be effected by an agreement or agreements in writing entered into by the Borrowers and the requisite number or percentage in interest of each affected Class of Lenders that would be required to consent thereto under this Section if such Class of Lenders were the only Class of Lenders hereunder at the time.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c)&nbsp;&nbsp;&nbsp;&nbsp;The Lenders and the Issuing Bank hereby irrevocably authorize the Administrative Agent, at its option and in its sole discretion, to release any Liens granted to the Administrative Agent by the Loan Parties on any Collateral (i) upon the Payment in Full of all Secured Obligations (other than Unliquidated Obligations), and the cash collateralization of all Unliquidated Obligations in a manner satisfactory to each affected Lender, (ii) constituting property being sold or disposed of if the Loan Party disposing of such property certifies to the Administrative Agent that the sale or disposition is made in compliance with the terms of this Agreement (and the Administrative Agent may rely conclusively on any such certificate, without further inquiry), and to the extent that the property being sold or disposed of constitutes 100% of the Equity Interests of a Subsidiary, the Administrative Agent is authorized to release any Loan Guaranty or Obligation Guaranty provided by such Subsidiary, (iii) constituting property leased to a Loan Party under a lease which has expired or been terminated in a transaction permitted under this Agreement, or (iv) as required to effect any sale or other disposition of such Collateral in connection with any exercise of remedies of the Administrative Agent and the Lenders pursuant to Article VII. Except as provided in the preceding sentence, the Administrative Agent will not release any Liens on Collateral without the prior written authorization of the Required Lenders; <u>provided</u> that the Administrative Agent may, in its discretion, release its Liens on Collateral valued in the aggregate not in excess of $500,000 during any calendar year without the prior written authorization of the Required Lenders (it being agreed that the Administrative Agent may rely conclusively on one or more certificates of the Parent Borrower as to the value of any Collateral to be so released, without further inquiry). Any such release shall not in any manner discharge, affect, or impair the Obligations or any Liens (other than those expressly being released) upon (or obligations of the Loan Parties in respect of) all interests retained by the Loan Parties, including the proceeds of any sale, all of which shall continue to constitute part of the

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Collateral. Any execution and delivery by the Administrative Agent of documents in connection with any such release shall be without recourse to or warranty by the Administrative Agent.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(d)&nbsp;&nbsp;&nbsp;&nbsp;If, in connection with any proposed amendment, waiver or consent requiring the consent of "each Lender" or "each Lender affected thereby," the consent of the Required Lenders is obtained, but the consent of other necessary Lenders is not obtained (any such Lender whose consent is necessary but has not been obtained being referred to herein as a "<u>Non-Consenting Lender</u>"), then the Borrowers may elect to replace a Non-Consenting Lender as a Lender party to this Agreement, <u>provided</u> that, concurrently with such replacement, (i) another bank or other entity which is reasonably satisfactory to the Borrowers, the Administrative Agent and the Issuing Bank shall agree, as of such date, to purchase for cash the Loans and other Obligations due to the Non-Consenting Lender pursuant to an Assignment and Assumption and to become a Lender for all purposes under this Agreement and to assume all obligations of the Non-Consenting Lender to be terminated as of such date and to comply with the requirements of clause (b) of Section 9.04, and (ii) the Borrowers shall pay to such Non-Consenting Lender in same day funds on the day of such replacement (1) all interest, fees and other amounts then accrued but unpaid to such Non-Consenting Lender by the Borrowers hereunder to and including the date of termination, including without limitation payments due to such Non-Consenting Lender under Sections 2.15 and 2.17, and (2) an amount, if any, equal to the payment which would have been due to such Lender on the day of such replacement under Section 2.16 had the Loans of such Non-Consenting Lender been prepaid on such date rather than sold to the replacement Lender.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(e)&nbsp;&nbsp;&nbsp;&nbsp;Notwithstanding anything to the contrary herein the Administrative Agent may, with the consent of the Parent Borrower only, amend, modify or supplement this Agreement or any of the other Loan Documents to cure any ambiguity, omission, mistake, defect or inconsistency.

SECTION 9.03. &nbsp;&nbsp;&nbsp;&nbsp;<u>Expenses; Indemnity; Damage Waiver</u>.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a)&nbsp;&nbsp;&nbsp;&nbsp;The Loan Parties, jointly and severally, shall pay all (i) reasonable out-of-pocket expenses incurred by the Administrative Agent and its Affiliates, including the reasonable fees, charges and disbursements of counsel for the Administrative Agent, in connection with the syndication and distribution (including, without limitation, via the internet or through an Electronic System) of the credit facilities provided for herein, the preparation and administration of the Loan Documents and any amendments, modifications or waivers of the provisions of the Loan Documents (whether or not the transactions contemplated hereby or thereby shall be consummated), (ii) reasonable out-of-pocket expenses incurred by the Issuing Bank in connection with the issuance, amendment, renewal or extension of any Letter of Credit or any demand for payment thereunder and (iii) out-of-pocket expenses incurred by the Administrative Agent, the Issuing Bank or any Lender, including the fees, charges and disbursements of any counsel for the Administrative Agent, the Issuing Bank or any Lender, in connection with the enforcement or protection of its rights in connection with the Loan Documents, including its rights under this Section, or in connection with the Loans made or Letters of Credit issued hereunder, including all such out-of-pocket expenses incurred during any workout, restructuring or negotiations in respect of such Loans or Letters of Credit. Subject to the limitations set forth in Section 5.06, expenses being reimbursed by the Loan Parties under this Section include, without limiting the generality of the foregoing, fees, costs and expenses incurred in connection with:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(A)&nbsp;&nbsp;&nbsp;&nbsp;appraisals and insurance reviews;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(B)&nbsp;&nbsp;&nbsp;&nbsp;field examinations and the preparation of Reports based on the fees charged by a third party retained by the Administrative Agent or the internally allocated fees for each Person employed by the Administrative Agent with respect to each field examination;

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&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(C)&nbsp;&nbsp;&nbsp;&nbsp;background checks regarding senior management and/or key investors, as deemed necessary or appropriate in the sole discretion of the Administrative Agent;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(D)&nbsp;&nbsp;&nbsp;&nbsp;Taxes, fees and other charges for (i) lien and title searches and title insurance and (ii) recording any mortgages, filing financing statements and continuations, and other actions to perfect, protect, and continue the Administrative Agent's Liens;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(E)&nbsp;&nbsp;&nbsp;&nbsp;sums paid or incurred to take any action required of any Loan Party under the Loan Documents that such Loan Party fails to pay or take; and

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(F)&nbsp;&nbsp;&nbsp;&nbsp;forwarding loan proceeds, collecting checks and other items of payment, and establishing and maintaining the accounts and lock boxes, and costs and expenses of preserving and protecting the Collateral.

All of the foregoing fees, costs and expenses may be charged to the Borrowers as Revolving Loans or to another deposit account, all as described in Section 2.18(c).

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b)&nbsp;&nbsp;&nbsp;&nbsp;The Loan Parties, jointly and severally, shall indemnify the Administrative Agent, the Issuing Bank and each Lender, and each Related Party of any of the foregoing Persons (each such Person being called an "Indemnitee") against, and hold each Indemnitee harmless from, any and all losses, claims, damages, penalties, incremental taxes, liabilities and related expenses, including the fees, charges and disbursements of any counsel for any Indemnitee, incurred by or asserted against any Indemnitee arising out of, in connection with, or as a result of (i) the execution or delivery of the Loan Documents or any agreement or instrument contemplated thereby, (ii) the performance by the parties hereto of their respective obligations thereunder or the consummation of the Transactions or any other transactions contemplated hereby, (iii) any action taken in connection with this Agreement, including, but not limited to, the payment of principal, interest and fees, (iv) any Loan or Letter of Credit or the use of the proceeds therefrom (including any refusal by the Issuing Bank to honor a demand for payment under a Letter of Credit if the documents presented in connection with such demand do not strictly comply with the terms of such Letter of Credit), (v) any actual or alleged presence or Release of Hazardous Materials on or from any property owned or operated by a Loan Party or a Subsidiary, or any Environmental Liability related in any way to a Loan Party or a Subsidiary, (vi) the failure of a Loan Party to deliver to the Administrative Agent the required receipts or other required documentary evidence with respect to a payment made by such Loan Party for Taxes pursuant to Section 2.17, or (vii) any actual or prospective claim, litigation, investigation or proceeding relating to any of the foregoing, whether or not such claim, litigation, investigation or proceeding is brought by any Loan Party or their respective equity holders, Affiliates, creditors or any other third Person and whether based on contract, tort or any other theory and regardless of whether any Indemnitee is a party thereto; provided that such indemnity shall not, as to any Indemnitee, be available to the extent that such losses, claims, damages, penalties, liabilities or related expenses are determined by a court of competent jurisdiction by final and nonappealable judgment to have resulted from the gross negligence, willful misconduct or breach in bad faith of such Indemnitee. This Section 9.03(b) shall not apply with respect to Taxes other than any Taxes that represent losses or damages arising from any non-Tax claim.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c)&nbsp;&nbsp;&nbsp;&nbsp;To the extent that any Loan Party fails to pay any amount required to be paid by it to the Administrative Agent (or any sub-agent thereof), the Swingline Lender or the Issuing Bank (or any Related Party of any of the foregoing) under paragraph (a) or (b) of this Section, each Lender severally agrees to pay to the Administrative Agent, the Swingline Lender or the Issuing Bank (or any Related Party of any of the foregoing), as the case may be, such Lender's Applicable Percentage (determined as of the time that the applicable unreimbursed expense or indemnity payment is sought) of such unpaid amount (it being understood that the Borrowers' failure to pay any such amount shall not

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relieve the Borrowers of any default in the payment thereof); <u>provided</u> that the unreimbursed expense or indemnified loss, claim, damage, penalty, liability or related expense, as the case may be, was incurred by or asserted against the Administrative Agent, the Swingline Lender or the Issuing Bank in its capacity as such.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(d)&nbsp;&nbsp;&nbsp;&nbsp;To the extent permitted by applicable law, no Loan Party shall assert, and each Loan Party hereby waives, any claim against any Indemnitee, (i) for any damages arising from the use by others of information or other materials obtained through telecommunications, electronic or other information transmission systems (including the Internet) or (ii) on any theory of liability, for special, indirect, consequential or punitive damages (as opposed to direct or actual damages) arising out of, in connection with, or as a result of, this Agreement, any other Loan Document, or any agreement or instrument contemplated hereby or thereby, the Transactions, any Loan or Letter of Credit or the use of the proceeds thereof; <u>provided</u> that, nothing in this paragraph (d) shall relieve any Loan Party of any obligation it may have to indemnify an Indemnitee against special, indirect, consequential or punitive damages asserted against such Indemnitee by a third party.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(e)&nbsp;&nbsp;&nbsp;&nbsp;All amounts due under this Section shall be payable not later than 3 days after written demand therefor.

SECTION 9.04. &nbsp;&nbsp;&nbsp;&nbsp;<u>Successors and Assigns</u>.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a)&nbsp;&nbsp;&nbsp;&nbsp;The provisions of this Agreement shall be binding upon and inure to the benefit of the parties hereto and their respective successors and assigns permitted hereby (including any Affiliate of the Issuing Bank that issues any Letter of Credit), except that (i) the Borrowers may not assign or otherwise transfer any of its rights or obligations hereunder without the prior written consent of each Lender and (ii) no Lender may assign or otherwise transfer its rights or obligations hereunder except in accordance with this Section. Any attempted assignment or transfer by any party hereto without such consents required by this Section shall be null and void. Nothing in this Agreement, expressed or implied, shall be construed to confer upon any Person (other than the parties hereto, their respective successors and assigns permitted hereby (including any Affiliate of the Issuing Bank that issues any Letter of Credit), Participants (to the extent provided in paragraph (c) of this Section) and, to the extent expressly contemplated hereby, the Related Parties of each of the Administrative Agent, the Issuing Bank and the Lenders) any legal or equitable right, remedy or claim under or by reason of this Agreement.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b)&nbsp;&nbsp;&nbsp;&nbsp;(i) Subject to the conditions set forth in paragraph (b)(ii) below, any Lender may assign to one or more Persons (other than an Ineligible Institution) all or a portion of its rights and obligations under this Agreement (including all or a portion of its Commitment, participations in Letters of Credit and the Loans at the time owing to it) with the prior written consent (such consent not to be unreasonably withheld) of:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(A)&nbsp;&nbsp;&nbsp;&nbsp;the Parent Borrower, <u>provided</u> that the Parent Borrower shall be deemed to have consented to any such assignment unless it shall object thereto by written notice to the Administrative Agent within five (5) Business Days after having received notice thereof, <u>provided further</u> that no consent of the Parent Borrower shall be required for an assignment to a Lender, an Affiliate of a Lender, an Approved Fund or, if an Event of Default has occurred and is continuing, any other assignee;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(B)&nbsp;&nbsp;&nbsp;&nbsp;the Administrative Agent, <u>provided</u> that no consent of the Administrative Agent shall be required for an assignment of all or any portion of a Term A Loan or Delayed Draw Term Loan to a Lender, an Affiliate of a Lender or an Approved Fund;<u>; and</u>

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<u>(C)</u>&nbsp;&nbsp;&nbsp;&nbsp;<u>the Issuing Bank.</u>

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&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(C)&nbsp;&nbsp;&nbsp;&nbsp;the Issuing Bank, <u>provided</u> that no consent of the Issuing Bank shall be required for an assignment of all or any portion of a Term A Loan or Delayed Draw Term Loan; and

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(D)&nbsp;&nbsp;&nbsp;&nbsp;the Swingline Lender, <u>provided</u> that no consent of the Swingline Lender shall be required for an assignment of all or any portion of a Term A Loan or Delayed Draw Term Loan.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(ii)&nbsp;&nbsp;&nbsp;&nbsp;Assignments shall be subject to the following additional conditions:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(A)&nbsp;&nbsp;&nbsp;&nbsp;except in the case of an assignment to a Lender, an Affiliate of a Lender, or an Approved Fund, or an assignment of the entire remaining amount of the assigning Lender's Commitment or Loans of any Class, the amount of the Commitment or Loans of the assigning Lender subject to each such assignment (determined as of the date the Assignment and Assumption with respect to such assignment is delivered to the Administrative Agent) shall not be less than $5,000,000 or, in the case of a Term A Loan or Delayed Draw Term Loan, $1,000,000, unless each of the Parent Borrower and the Administrative Agent otherwise consent, <u>provided</u> that no such consent of the Parent Borrower shall be required if an Event of Default has occurred and is continuing;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(B)&nbsp;&nbsp;&nbsp;&nbsp;each partial assignment shall be made as an assignment of a proportionate part of all the assigning Lender's rights and obligations under this Agreement, <u>provided</u> that this clause shall not be construed to prohibit the assignment of a proportionate part of all the assigning Lender's rights and obligations in respect of one Class of Commitments or Loans;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(C)&nbsp;&nbsp;&nbsp;&nbsp;the parties to each assignment shall execute and deliver to the Administrative Agent (x) an Assignment and Assumption or (y) to the extent applicable, an agreement incorporating an Assignment and Assumption by reference pursuant to a Platform as to which the Administrative Agent and the parties to the Assignment and Assumption are participants, together with a processing and recordation fee of $3,500; and

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(D)&nbsp;&nbsp;&nbsp;&nbsp;the assignee, if it shall not be a Lender, shall deliver to the Administrative Agent an Administrative Questionnaire in which the assignee designates one or more credit contacts to whom all syndicate-level information (which may contain material non-public information about the Borrowers, the other Loan Parties and their Related Parties or their respective securities) will be made available and who may receive such information in accordance with the assignee's compliance procedures and applicable laws, including federal and state securities laws.

For the purposes of this Section 9.04(b), the terms "Approved Fund" and "Ineligible Institution" have the following meanings:

"<u>Approved Fund</u>" means any Person (other than a natural person) that is engaged in making, purchasing, holding or otherwise investing in commercial loans and similar extensions of credit in the ordinary course of its business and that is administered or managed by (a) a Lender, (b) an Affiliate of a Lender or (c) an entity or an Affiliate of an entity that administers or manages a Lender.

"<u>Ineligible Institution</u>" means a (a) natural person, (b) a Defaulting Lender, (c) company, investment vehicle or trust for, or owned and operated for the primary benefit of, a natural person or relative(s) thereof; <u>provided</u> that, such company, investment vehicle or trust shall not constitute an Ineligible Institution if it (i) has not been established for the primary purpose of acquiring any Loans or Commitments, (ii) is managed by a professional advisor, who is not such natural person or a relative thereof, having significant experience in the business of making or purchasing commercial loans, and (iii) has assets greater than $1,000,000,000 and a significant part of its activities consist of making or purchasing commercial loans and similar extensions of credit in the ordinary course of its business; <u>provided</u> that upon the occurrence and continuation of an Event of Default, any Person (other than a

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Lender) shall be an Ineligible Institution if after giving effect to any proposed assignment to such Person, such Person would hold more than 25% of the then outstanding Aggregate Credit Exposure or Commitments, as the case may be or (d) a Loan Party or a Subsidiary or other Affiliate of a Loan Party.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(iii)&nbsp;&nbsp;&nbsp;&nbsp;Subject to acceptance and recording thereof pursuant to paragraph (b)(iv) of this Section, from and after the effective date specified in each Assignment and Assumption, the assignee thereunder shall be a party hereto and, to the extent of the interest assigned by such Assignment and Assumption, have the rights and obligations of a Lender under this Agreement, and the assigning Lender thereunder shall, to the extent of the interest assigned by such Assignment and Assumption, be released from its obligations under this Agreement (and, in the case of an Assignment and Assumption covering all of the assigning Lender's rights and obligations under this Agreement, such Lender shall cease to be a party hereto but shall continue to be entitled to the benefits of Sections 2.15, 2.16, 2.17 and 9.03) with respect to facts and circumstances occurring prior to the effective date of such assignment; provided that, except to the extent otherwise expressly agreed by the affected parties, no assignment by a Defaulting Lender will constitute a waiver or release of any claim of any party hereunder arising from that Lender's having been a Defaulting Lender. Any assignment or transfer by a Lender of rights or obligations under this Agreement that does not comply with this Section 9.04 shall be treated for purposes of this Agreement as a sale by such Lender of a participation in such rights and obligations in accordance with paragraph (c) of this Section.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(iv)&nbsp;&nbsp;&nbsp;&nbsp;The Administrative Agent, acting for this purpose as a non-fiduciary agent of the Borrowers, shall maintain at one of its offices in the U.S. a copy of each Assignment and Assumption delivered to it and a register for the recordation of the names and addresses of the Lenders, and the Commitment of, and principal amount of (and stated interest on) the Loans and LC Disbursements owing to, each Lender pursuant to the terms hereof from time to time (the "Register"). The entries in the Register shall be conclusive absent manifest error, and the Borrowers, the Administrative Agent, the Issuing Bank and the Lenders shall treat each Person whose name is recorded in the Register pursuant to the terms hereof as a Lender hereunder for all purposes of this Agreement. The Register shall be available for inspection by the Borrowers, the Issuing Bank and any Lender, at any reasonable time and from time to time upon reasonable prior notice. The Register is intended to cause any Commitment, Loan, Letter of Credit or other obligations hereunder or under any Loan Document to be in registered form within the meaning of Sections 163(f), 871(h)(2) and 881(c)(2) of the Code and under Sections 5f.103-1(c) and 1.871-14(c) of the United States Treasury Regulations.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(v)&nbsp;&nbsp;&nbsp;&nbsp;Upon its receipt of (x) a duly completed Assignment and Assumption executed by an assigning Lender and an assignee or (y) to the extent applicable, an agreement incorporating an Assignment and Assumption by reference pursuant to a Platform as to which the Administrative Agent and the parties to the Assignment and Assumption are participants, the assignee's completed Administrative Questionnaire (unless the assignee shall already be a Lender hereunder), the processing and recordation fee referred to in paragraph (b) of this Section and any written consent to such assignment required by paragraph (b) of this Section, the Administrative Agent shall accept such Assignment and Assumption and record the information contained therein in the Register; <u>provided</u> that if either the assigning Lender or the assignee shall have failed to make any payment required to be made by it pursuant to Section 2.06(d) or (e), 2.07(b), 2.18(d) or 9.03(c), the Administrative Agent shall have no obligation to accept such Assignment and Assumption and record the information therein in the Register unless and until such payment shall have been made in full, together with all accrued interest thereon. No assignment shall be effective for purposes of this Agreement unless it has been recorded in the Register as provided in this paragraph.

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&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c)&nbsp;&nbsp;&nbsp;&nbsp;Any Lender may, without the consent of the Borrowers, the Administrative Agent or the Issuing Bank, sell participations to one or more banks or other entities (a "<u>Participant</u>") other than an Ineligible Institution in all or a portion of such Lender's rights and obligations under this Agreement (including all or a portion of its Commitment and the Loans owing to it); <u>provided</u> that (i) such Lender's obligations under this Agreement shall remain unchanged; (ii) such Lender shall remain solely responsible to the other parties hereto for the performance of such obligations; and (iii) the Borrowers, the Administrative Agent, the Issuing Bank and the other Lenders shall continue to deal solely and directly with such Lender in connection with such Lender's rights and obligations under this Agreement. Any agreement or instrument pursuant to which a Lender sells such a participation shall provide that such Lender shall retain the sole right to enforce this Agreement and to approve any amendment, modification or waiver of any provision of this Agreement; <u>provided</u> that such agreement or instrument may provide that such Lender will not, without the consent of the Participant, agree to any amendment, modification or waiver described in the first proviso to Section 9.02(b) that affects such Participant. The Borrowers agree that each Participant shall be entitled to the benefits of Sections 2.15, 2.16 and 2.17 (subject to the requirements and limitations therein, including the requirements under Sections 2.17(f) and (g) (it being understood that the documentation required under Section 2.17(f) shall be delivered to the participating Lender and the information and documentation required under Section 2.17(g) will be delivered to the Borrowers and the Administrative Agent)) to the same extent as if it were a Lender and had acquired its interest by assignment pursuant to paragraph (b) of this Section; <u>provided</u> that such Participant (A) agrees to be subject to the provisions of Sections 2.18 and 2.19 as if it were an assignee under paragraph (b) of this Section; and (B) shall not be entitled to receive any greater payment under Sections 2.15 or 2.17 with respect to any participation, than its participating Lender would have been entitled to receive, except to the extent such entitlement to receive a greater payment results from a Change in Law that occurs after the Participant acquired the applicable participation.

Each Lender that sells a participation agrees, at the Borrowers' request and expense, to use reasonable efforts to cooperate with the Borrowers to effectuate the provisions of Section 2.19(b) with respect to any Participant. To the extent permitted by law, each Participant also shall be entitled to the benefits of Section 9.08 as though it were a Lender, provided such Participant agrees to be subject to Section 2.18(d) as though it were a Lender. Each Lender that sells a participation shall, acting solely for this purpose as an agent of the Borrowers, maintain a register on which it enters the name and address of each Participant and the principal amounts (and stated interest) of each Participant's interest in the Loans or other obligations under this Agreement or any other Loan Document (the "<u>Participant Register</u>"); <u>provided</u> that no Lender shall have any obligation to disclose all or any portion of the Participant Register (including the identity of any Participant or any information relating to a Participant's interest in any Commitments, Loans, Letters of Credit or its other obligations under this Agreement or any other Loan Document) to any Person except to the extent that such disclosure is necessary to establish that such Commitment, Loan, Letter of Credit or other obligation is in registered form within the meaning of Sections 163(f), 871(h)(2) and 881(c)(2) of the Code and under Sections 5f.103-1(c) and 1.871-14(c) of the United States Treasury Regulations. The entries in the Participant Register shall be conclusive absent manifest error, and such Lender shall treat each Person whose name is recorded in the Participant Register as the owner of such participation for all purposes of this Agreement, notwithstanding any notice to the contrary. For the avoidance of doubt, the Administrative Agent (in its capacity as Administrative Agent) shall have no responsibility for maintaining a Participant Register.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(d)&nbsp;&nbsp;&nbsp;&nbsp;Any Lender may at any time pledge or assign a security interest in all or any portion of its rights under this Agreement to secure obligations of such Lender, including without limitation any pledge or assignment to secure obligations to a Federal Reserve Bank, and this Section shall not apply to any such pledge or assignment of a security interest; <u>provided</u> that no such pledge or

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assignment of a security interest shall release a Lender from any of its obligations hereunder or substitute any such pledgee or assignee for such Lender as a party hereto.

SECTION 9.05. &nbsp;&nbsp;&nbsp;&nbsp;<u>Survival</u>. All covenants, agreements, representations and warranties made by the Loan Parties in the Loan Documents and in the certificates or other instruments delivered in connection with or pursuant to this Agreement or any other Loan Document shall be considered to have been relied upon by the other parties hereto and shall survive the execution and delivery of the Loan Documents and the making of any Loans and issuance of any Letters of Credit, regardless of any investigation made by any such other party or on its behalf and notwithstanding that the Administrative Agent, the Issuing Bank or any Lender may have had notice or knowledge of any Default or incorrect representation or warranty at the time any credit is extended hereunder, and shall continue in full force and effect until Payment in Full of the Secured Obligations. The provisions of Sections 2.15, 2.16, 2.17 and 9.03 and Article VIII shall survive and remain in full force and effect regardless of the consummation of the transactions contemplated hereby, the repayment of the Loans, the expiration or termination of the Letters of Credit and the Commitments or the termination of this Agreement or any other Loan Document or any provision hereof or thereof.

SECTION 9.06. &nbsp;&nbsp;&nbsp;&nbsp;<u>Counterparts; Integration; Effectiveness; Electronic Execution</u>.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a)&nbsp;&nbsp;&nbsp;&nbsp;This Agreement may be executed in counterparts (and by different parties hereto on different counterparts), each of which shall constitute an original, but all of which when taken together shall constitute a single contract. This Agreement, the other Loan Documents and any separate letter agreements with respect to (i) fees payable to the Administrative Agent and (ii) increases or reductions of the Issuing Bank Sublimit of the Issuing Bank constitute the entire contract among the parties relating to the subject matter hereof and supersede any and all previous agreements and understandings, oral or written, relating to the subject matter hereof. Except as provided in Section 4.01, this Agreement shall become effective when it shall have been executed by the Administrative Agent and when the Administrative Agent shall have received counterparts hereof which, when taken together, bear the signatures of each of the other parties hereto, and thereafter shall be binding upon and inure to the benefit of the parties hereto and their respective successors and assigns.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b)&nbsp;&nbsp;&nbsp;&nbsp;Delivery of an executed counterpart of a signature page of this Agreement by telecopy, emailed pdf. or any other electronic means that reproduces an image of the actual executed signature page shall be effective as delivery of a manually executed counterpart of this Agreement. The words "execution," "signed," "signature," "delivery," and words of like import in or relating to any document to be signed in connection with this Agreement and the transactions contemplated hereby or thereby shall be deemed to include Electronic Signatures, deliveries or the keeping of records in electronic form, each of which shall be of the same legal effect, validity or enforceability as a manually executed signature, physical delivery thereof or the use of a paper-based recordkeeping system, as the case may be, to the extent and as provided for in any applicable law, including the Federal Electronic Signatures in Global and National Commerce Act, the New York State Electronic Signatures and Records Act, or any other similar state laws based on the Uniform Electronic Transactions Act; provided that nothing herein shall require the Administrative Agent to accept electronic signatures in any form or format without its prior written consent.

SECTION 9.07.&nbsp;&nbsp;&nbsp;&nbsp;<u>Severability</u>. Any provision of any Loan Document held to be invalid, illegal or unenforceable in any jurisdiction shall, as to such jurisdiction, be ineffective to the extent of such invalidity, illegality or unenforceability without affecting the validity, legality and enforceability of the remaining provisions thereof; and the invalidity of a particular provision in a particular jurisdiction shall not invalidate such provision in any other jurisdiction.

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SECTION 9.08. &nbsp;&nbsp;&nbsp;&nbsp;<u>Right of Setoff</u>. If an Event of Default shall have occurred and be continuing, each Lender and each of its Affiliates is hereby authorized at any time and from time to time, to the fullest extent permitted by law, to set off and apply any and all deposits (general or special, time or demand, provisional or final) at any time held and other obligations at any time owing by such Lender or Affiliate to or for the credit or the account of any Loan Party against any of and all the Secured Obligations held by such Lender, irrespective of whether or not such Lender shall have made any demand under the Loan Documents and although such obligations may be unmatured. The applicable Lender shall notify the Borrowers and the Administrative Agent of such set-off or application, provided that any failure to give or any delay in giving such notice shall not affect the validity of any such set-off or application under this Section. The rights of each Lender under this Section are in addition to other rights and remedies (including other rights of setoff) which such Lender may have.

SECTION 9.09. &nbsp;&nbsp;&nbsp;&nbsp;<u>Governing Law; Jurisdiction; Consent to Service of Process</u>.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a)&nbsp;&nbsp;&nbsp;&nbsp;The Loan Documents (other than those containing a contrary express choice of law provision) shall be governed by and construed in accordance with the internal laws of the State of New York, but giving effect to federal laws applicable to national banks.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b)&nbsp;&nbsp;&nbsp;&nbsp;Each Loan Party hereto hereby irrevocably and unconditionally submits, for itself and its property, to the exclusive jurisdiction of any U.S. federal or New York state court sitting in New York, New York in any action or proceeding arising out of or relating to any Loan Documents, or for recognition or enforcement of any judgment, and each of the parties hereto hereby irrevocably and unconditionally agrees that all claims in respect of any such action or proceeding may be heard and determined in such state court or, to the extent permitted by law, in such federal court. Each of the parties hereto agrees that a final judgment in any such action or proceeding shall be conclusive and may be enforced in other jurisdictions by suit on the judgment or in any other manner provided by law. Nothing in this Agreement or any other Loan Document shall affect any right that the Administrative Agent, the Issuing Bank or any Lender may otherwise have to bring any action or proceeding relating to this Agreement or any other Loan Document against any Loan Party or its properties in the courts of any jurisdiction.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c)&nbsp;&nbsp;&nbsp;&nbsp;Each Loan Party hereto hereby irrevocably and unconditionally waives, to the fullest extent permitted by applicable law, any objection that it may now or hereafter have to the laying of venue of any action or proceeding arising out of or relating to this Agreement or any other Loan Document in any court referred to in paragraph (b) of this Section. Each of the parties hereto hereby irrevocably waives, to the fullest extent permitted by applicable law, the defense of an inconvenient forum to the maintenance of such action or proceeding in any such court.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(d)&nbsp;&nbsp;&nbsp;&nbsp;Each party to this Agreement irrevocably consents to service of process in the manner provided for notices in Section 9.01. Nothing in this Agreement or any other Loan Document will affect the right of any party to this Agreement to serve process in any other manner permitted by applicable law.

SECTION 9.10. &nbsp;&nbsp;&nbsp;&nbsp;<u>WAIVER OF JURY TRIAL</u>. EACH PARTY HERETO HEREBY WAIVES, TO THE FULLEST EXTENT PERMITTED BY APPLICABLE LAW, ANY RIGHT IT MAY HAVE TO A TRIAL BY JURY IN ANY LEGAL PROCEEDING DIRECTLY OR INDIRECTLY ARISING OUT OF OR RELATING TO THIS AGREEMENT, ANY OTHER LOAN DOCUMENT OR THE TRANSACTIONS CONTEMPLATED HEREBY OR THEREBY (WHETHER BASED ON CONTRACT, TORT OR ANY OTHER THEORY). EACH PARTY HERETO (A) CERTIFIES THAT NO REPRESENTATIVE OR OTHER AGENT (INCLUDING ANY ATTORNEY) OF ANY OTHER PARTY HAS REPRESENTED, EXPRESSLY OR OTHERWISE, THAT SUCH OTHER PARTY

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WOULD NOT, IN THE EVENT OF LITIGATION, SEEK TO ENFORCE THE FOREGOING WAIVER AND (B) ACKNOWLEDGES THAT IT AND THE OTHER PARTIES HERETO HAVE BEEN INDUCED TO ENTER INTO THIS AGREEMENT BY, AMONG OTHER THINGS, THE MUTUAL WAIVERS AND CERTIFICATIONS IN THIS SECTION.

SECTION 9.11. &nbsp;&nbsp;&nbsp;&nbsp;<u>Headings</u>. Article and Section headings and the **Table of Contents** used herein are for convenience of reference only, are not part of this Agreement and shall not affect the construction of, or be taken into consideration in interpreting, this Agreement.

SECTION 9.12. &nbsp;&nbsp;&nbsp;&nbsp;<u>Confidentiality</u>. Each of the Administrative Agent, the Issuing Bank and the Lenders agrees to maintain the confidentiality of the Information (as defined below), except that Information may be disclosed (a) to its and its Affiliates' directors, officers, employees and agents, including accountants, legal counsel and other advisors (it being understood that the Persons to whom such disclosure is made will be informed of the confidential nature of such Information and instructed to keep such Information confidential), (b) to the extent requested by any Governmental Authority (including any self-regulatory authority, such as the National Association of Insurance Commissioners), (c) to the extent required by any Requirement of Law or by any subpoena or similar legal process, (d) to any other party to this Agreement, (e) in connection with the exercise of any remedies hereunder or under any other Loan Document or any suit, action or proceeding relating to this Agreement or any other Loan Document or the enforcement of rights hereunder or thereunder, (f) subject to an agreement containing provisions substantially the same as those of this Section, to (x) any assignee of or Participant in, or any prospective assignee of or Participant in, any of its rights or obligations under this Agreement or (y) any actual or prospective counterparty (or its advisors) to any swap or derivative transaction relating to the Loan Parties and their obligations, (g) with the consent of the Parent Borrower, (h) to holders of Equity Interests in the Borrowers, (i) to any Person providing a Guarantee of all or any portion of the Secured Obligations, or (j) to the extent such Information (x) becomes publicly available other than as a result of a breach of this Section or (y) becomes available to the Administrative Agent, the Issuing Bank or any Lender on a non-confidential basis from a source other than a Borrower. For the purposes of this Section, "<u>Information</u>" means all information received from the Borrowers relating to the Borrowers or their business, other than any such information that is available to the Administrative Agent, the Issuing Bank or any Lender on a non-confidential basis prior to disclosure by the Borrowers and other than information pertaining to this Agreement provided by arrangers to data service providers, including league table providers, that serve the lending industry; <u>provided</u> that, in the case of information received from the Borrowers after the date hereof, such information is clearly identified at the time of delivery as confidential. Any Person required to maintain the confidentiality of Information as provided in this Section shall be considered to have complied with its obligation to do so if such Person has exercised the same degree of care to maintain the confidentiality of such Information as such Person would accord to its own confidential information.

SECTION 9.13.&nbsp;&nbsp;&nbsp;&nbsp;<u>Several Obligations; Nonreliance; Violation of Law</u>. The respective obligations of the Lenders hereunder are several and not joint and the failure of any Lender to make any Loan or perform any of its obligations hereunder shall not relieve any other Lender from any of its obligations hereunder. Each Lender hereby represents that it is not relying on or looking to any margin stock (as defined in Regulation U of the Board) for the repayment of the Borrowings provided for herein. Anything contained in this Agreement to the contrary notwithstanding, neither the Issuing Bank nor any Lender shall be obligated to extend credit to the Borrowers in violation of any Requirement of Law.

SECTION 9.14.&nbsp;&nbsp;&nbsp;&nbsp;<u>USA PATRIOT Act</u>. Each Lender that is subject to the requirements of the USA PATRIOT Act hereby notifies each Loan Party that pursuant to the requirements of the USA PATRIOT Act, it is required to obtain, verify and record information that identifies such Loan Party,

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which information includes the name and address of such Loan Party and other information that will allow such Lender to identify such Loan Party in accordance with the USA PATRIOT Act.

SECTION 9.15.&nbsp;&nbsp;&nbsp;&nbsp;<u>Disclosure</u>. Each Loan Party, each Lender and the Issuing Bank hereby acknowledges and agrees that the Administrative Agent and/or its Affiliates from time to time may hold investments in, make other loans to or have other relationships with, any of the Loan Parties and their respective Affiliates.

SECTION 9.16.&nbsp;&nbsp;&nbsp;&nbsp;<u>Appointment for Perfection</u>. Each Lender hereby appoints each other Lender as its agent for the purpose of perfecting Liens, for the benefit of the Administrative Agent and the Secured Parties, in assets which, in accordance with Article 9 of the UCC or any other applicable law can be perfected only by possession or control. Should any Lender (other than the Administrative Agent) obtain possession or control of any such Collateral, such Lender shall notify the Administrative Agent thereof, and, promptly upon the Administrative Agent's request therefor shall deliver such Collateral to the Administrative Agent or otherwise deal with such Collateral in accordance with the Administrative Agent's instructions.

SECTION 9.17.&nbsp;&nbsp;&nbsp;&nbsp;<u>Interest Rate Limitation</u>. Notwithstanding anything herein to the contrary, if at any time the interest rate applicable to any Loan, together with all fees, charges and other amounts which are treated as interest on such Loan under applicable law (collectively the "<u>Charges</u>"), shall exceed the maximum lawful rate (the "<u>Maximum Rate</u>") which may be contracted for, charged, taken, received or reserved by the Lender holding such Loan in accordance with applicable law, the rate of interest payable in respect of such Loan hereunder, together with all Charges payable in respect thereof, shall be limited to the Maximum Rate and, to the extent lawful, the interest and Charges that would have been payable in respect of such Loan but were not payable as a result of the operation of this Section shall be cumulated and the interest and Charges payable to such Lender in respect of other Loans or periods shall be increased (but not above the Maximum Rate therefor) until such cumulated amount, together with interest thereon at the Federal Funds Effective Rate to the date of repayment, shall have been received by such Lender.

SECTION 9.18.&nbsp;&nbsp;&nbsp;&nbsp;<u>Marketing Consent</u>. The Borrowers hereby authorize JPMorgan and its affiliates (collectively, the "<u>JPMorgan Parties</u>"), at their respective sole expense, but without any prior approval by any Borrower, to publish such tombstones and give such other publicity to this Agreement as each may from time to time determine in its sole discretion. The foregoing authorization shall remain in effect unless the Parent Borrower notifies JPMorgan in writing that such authorization is revoked.

SECTION 9.19.&nbsp;&nbsp;&nbsp;&nbsp;<u>Amendment and Restatement of Existing Credit Agreement; No</u> <u>Novation; Joint and Several Obligations</u>.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a)&nbsp;&nbsp;&nbsp;&nbsp;<u>Amendment and Restatement of Existing Credit Agreement</u>. The parties to this Agreement agree that, upon (a) the execution and delivery by each of the parties hereto of this Agreement and (b) satisfaction or waiver of the conditions set forth in Section 4.01, the terms and provisions of the Existing Credit Agreement shall be and hereby are amended, superseded and restated in their entirety by the terms and provisions of this Agreement. This Agreement is not intended to and shall not constitute a novation or termination of the Obligations under the Existing Credit Agreement. On the Effective Date, the credit facilities described in the Existing Credit Agreement, shall be amended, supplemented, modified and restated in their entirety by the facilities described herein, and all loans and other obligations of the Borrowers outstanding as of such date under the Existing Credit Agreement (to the extent not repaid on the Effective Date), shall be deemed to be loans and joint and several obligations of the Borrowers outstanding under the corresponding facilities described herein, without any further action by any Person, except that the Administrative Agent shall make such reallocations of commitments and

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transfers of funds as are necessary in order that the outstanding balance of such Loans, together with any Loans funded on the Effective Date, reflect the respective Commitments of the Lenders hereunder and the Borrowers hereby agree to compensate each Lender for any and all losses, costs and expenses incurred by such Lender in connection with such reallocations and transfers, in each case on the terms and in the manner set forth in Section 2.16.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b)&nbsp;&nbsp;&nbsp;&nbsp;<u>Joint and Several Obligations</u>.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(i)&nbsp;&nbsp;&nbsp;&nbsp;The Obligations are the joint and several obligation of each Loan Party. To the fullest extent permitted by applicable law, the obligations of each Loan Party under the Loan Documents shall not be affected by (i) the failure of Lender to assert any claim or demand or to enforce or exercise any right or remedy against any other Loan Party under the provisions of this Agreement, any other Loan Document or otherwise, (ii) any rescission, waiver, amendment or modification of, or any release from any of the terms or provisions of, this Agreement or any other Loan Document, or (iii) the failure to perfect any security interest in, or the release of, any of the Collateral or other security held by or on behalf Lender.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(ii)&nbsp;&nbsp;&nbsp;&nbsp;The obligations of each Loan Party under the Loan Documents shall not be subject to any reduction, limitation, impairment or termination for any reason (other than the payment in full of the Obligations after the termination of the Commitments), including any claim of waiver, release, surrender, alteration or compromise of any of the Obligations, and shall not be subject to any defense (other than defense of payment) or setoff, counterclaim, recoupment or termination whatsoever by reason of the invalidity, illegality or unenforceability of any of the Obligations or otherwise. Without limiting the generality of the foregoing, the obligations of each Loan Party hereunder shall not be discharged or impaired or otherwise affected by the failure of Lender to assert any claim or demand or to enforce any remedy under this Agreement, any other Loan Document or any other agreement, by any waiver or modification of any provision of any thereof, any default, failure or delay, willful or otherwise, in the performance of any of the Obligations, or by any other act or omission that may or might in any manner or to any extent vary the risk of any Loan Party or that would otherwise operate as a discharge of any Loan Party as a matter of law or equity (other than the payment in full of all the Obligations after the termination of the Commitments).

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(iii)&nbsp;&nbsp;&nbsp;&nbsp;To the fullest extent permitted by applicable law, each Loan Party waives any defense based on or arising out of any defense of any other Loan Party or the unenforceability of the Obligations or any part thereof from any cause, or the cessation from any cause of the liability of any other Loan Party, other than the payment in full of all the Obligations and the termination of the Commitments. Lender may, at its election, foreclose on any security held by one or more of them which has been granted by the Loan Parties by one or more judicial or non-judicial sales, accept an assignment of any such security in lieu of foreclosure, compromise or adjust any part of the Obligations, make any other accommodation with any other Loan Party in each case, in accordance with the Loan Documents, or exercise any other right or remedy available to them against any other Loan Party, without affecting or impairing in any way the liability of any Loan Party hereunder except to the extent that all the Obligations have been paid in full and the Commitments have been terminated. Each Loan Party waives any defense arising out of any such election even though such election operates, pursuant to applicable law, to impair or to extinguish any right of reimbursement or subrogation or other right or remedy of such Loan Party against any other Loan Party, as the case may be, or any security.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(iv)&nbsp;&nbsp;&nbsp;&nbsp;Each Loan Party is obligated to repay their Obligations as joint and several obligors under this Agreement. Upon payment by any Loan Party of any Obligations, all rights of such Loan Party against any other Loan Party arising as a result thereof by way of right of subrogation,

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contribution, reimbursement, indemnity or otherwise shall in all respects be subordinate and junior in right of payment to the prior payment in full of all the Obligations and the termination of the Commitments. In addition, any indebtedness of any Loan Party now or hereafter held by any other Loan Party or any Subsidiary thereof is hereby subordinated in right of payment to the prior payment in full of the Obligations and no Loan Party will demand, sue for or otherwise attempt to collect any such indebtedness owing to it by any other Loan Party. If any amount shall erroneously be paid to any Loan Party on account of (i) such subrogation, contribution, reimbursement, indemnity or similar right or (ii) any suit in respect of such indebtedness of any Loan Party, such amount shall be held in trust for the benefit of Lender and shall forthwith be paid to Lender to be credited against the payment of the Obligations, whether matured or unmatured, in accordance with the terms of this Agreement and the other Loan Documents.

SECTION 9.20. &nbsp;&nbsp;&nbsp;&nbsp;<u>Acknowledgement and Consent to Bail-In of EEA Financial</u> <u>Institutions</u>. Notwithstanding anything to the contrary in any Loan Document or in any other agreement, arrangement or understanding among any such parties, each party hereto acknowledges that any liability of any EEA Financial Institution arising under any Loan Document may be subject to the write-down and conversion powers of an EEA Resolution Authority and agrees and consents to, and acknowledges and agrees to be bound by:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a)&nbsp;&nbsp;&nbsp;&nbsp;the application of any Write-Down and Conversion Powers by an EEA Resolution Authority to any such liabilities arising hereunder which may be payable to it by any party hereto that is an EEA Financial Institution; and

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b)&nbsp;&nbsp;&nbsp;&nbsp;the effects of any Bail-In Action on any such liability, including, if applicable:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(i)&nbsp;&nbsp;&nbsp;&nbsp;a reduction in full or in part or cancellation of any such liability;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(ii)&nbsp;&nbsp;&nbsp;&nbsp;a conversion of all, or a portion of, such liability into shares or other instruments of ownership in such EEA Financial Institution, its parent entity, or a bridge institution that may be issued to it or otherwise conferred on it, and that such shares or other instruments of ownership will be accepted by it in lieu of any rights with respect to any such liability under this Agreement or any other Loan Document; or

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(iii)&nbsp;&nbsp;&nbsp;&nbsp;the variation of the terms of such liability in connection with the exercise of the write-down and conversion powers of any EEA Resolution Authority.

SECTION 9.21. &nbsp;&nbsp;&nbsp;&nbsp;<u>Acknowledgement Regarding Any Supported QFCs.</u> To the extent that the Loan Documents provide support, through a guarantee or otherwise, for Swap Agreements or any other agreement or instrument that is a QFC (such support, "<u>QFC Credit Support</u>" and each such QFC a "<u>Supported QFC</u>"), the parties acknowledge and agree as follows with respect to the resolution power of the Federal Deposit Insurance Corporation under the Federal Deposit Insurance Act and Title II of the Dodd-Frank Wall Street Reform and Consumer Protection Act (together with the regulations promulgated thereunder, the "<u>U.S. Special Resolution Regimes</u>") in respect of such Supported QFC and QFC Credit Support (with the provisions below applicable notwithstanding that the Loan Documents and any Supported QFC may in fact be stated to be governed by the laws of the State of New York and/or of the United States or any other state of the United States):

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a)&nbsp;&nbsp;&nbsp;&nbsp;In the event a Covered Entity that is party to a Supported QFC (each, a "Covered Party") becomes subject to a proceeding under a U.S. Special Resolution Regime, the transfer of such Supported QFC and the benefit of such QFC Credit Support (and any interest and obligation in or under such Supported QFC and such QFC Credit Support, and any rights in property securing such

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Supported QFC or such QFC Credit Support) from such Covered Party will be effective to the same extent as the transfer would be effective under the U.S. Special Resolution Regime if the Supported QFC and such QFC Credit Support (and any such interest, obligation and rights in property) were governed by the laws of the United States or a state of the United States. In the event a Covered Party or a BHC Act Affiliate of a Covered Party becomes subject to a proceeding under a U.S. Special Resolution Regime, Default Rights under the Loan Documents that might otherwise apply to such Supported QFC or any QFC Credit Support that may be exercised against such Covered Party are permitted to be exercised to no greater extent than such Default Rights could be exercised under the U.S. Special Resolution Regime if the Supported QFC and the Loan Documents were governed by the laws of the United States or a state of the United States. Without limitation of the foregoing, it is understood and agreed that rights and remedies of the parties with respect to a Defaulting Lender shall in no event affect the rights of any Covered Party with respect to a Supported QFC or any QFC Credit Support.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b)&nbsp;&nbsp;&nbsp;&nbsp;As used in this <u>Section 9.21</u>, the following terms have the following meanings:

"**BHC Act Affiliate**" of a party means an "affiliate" (as such term is defined under, and interpreted in accordance with, 12 U.S.C. 1841(k)) of such party.

"**Covered Entity**" means any of the following:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;i.&nbsp;&nbsp;&nbsp;&nbsp;"covered entity" as that term is defined in, and interpreted in accordance with, 12 C.F.R. § 252.82(b);

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;ii.&nbsp;&nbsp;&nbsp;&nbsp;a "covered bank" as that term is defined in, and interpreted in accordance with, 12 C.F.R. § 47.3(b); or

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;iii.&nbsp;&nbsp;&nbsp;&nbsp;a "covered FSI" as that term is defined in, and interpreted in accordance with, 12 C.F.R. § 382.2(b).

"**Default Right**" has the meaning assigned to that term in, and shall be interpreted in accordance with, 12 C.F.R. §§ 252.81, 47.2 or 382.1, as applicable.

"**QFC**" has the meaning assigned to the term "qualified financial contract" in, and shall be interpreted in accordance with, 12 U.S.C. 5390(c)(8)(D).

ARTICLE X

<u>Loan Guaranty</u>

SECTION 10.01. &nbsp;&nbsp;&nbsp;&nbsp;<u>Guaranty</u>. Each Loan Guarantor (other than those that have delivered a separate Guaranty) hereby agrees that it is jointly and severally liable for, and, as a primary obligor and not merely as surety, absolutely, unconditionally and irrevocably guarantees to the Secured Parties, the prompt payment when due, whether at stated maturity, upon acceleration or otherwise, and at all times thereafter, of the Secured Obligations and all costs and expenses, including, without limitation, all court costs and reasonable attorneys' and paralegals' fees (including allocated costs of in-house counsel and paralegals) and expenses paid or incurred by the Administrative Agent, the Issuing Bank and the Lenders in endeavoring to collect all or any part of the Secured Obligations from, or in prosecuting any action against, the Borrowers, any Loan Guarantor or any other guarantor of all or any part of the Secured Obligations (such costs and expenses, together with the Secured Obligations, collectively the "Guaranteed Obligations"); provided, however, that the definition of "Guaranteed Obligations" shall not create any guarantee by any Loan Guarantor of (or grant of security interest by any Loan Guarantor to support, as applicable) any Excluded Swap Obligations of such Loan Guarantor for purposes of determining any

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obligations of any Loan Guarantor). Each Loan Guarantor further agrees that the Guaranteed Obligations may be extended or renewed in whole or in part without notice to or further assent from it, and that it remains bound upon its guarantee notwithstanding any such extension or renewal. All terms of this Loan Guaranty apply to and may be enforced by or on behalf of any domestic or foreign branch or Affiliate of any Lender that extended any portion of the Guaranteed Obligations.

SECTION 10.02. &nbsp;&nbsp;&nbsp;&nbsp;<u>Guaranty of Payment</u>. This Loan Guaranty is a guaranty of payment and not of collection. Each Loan Guarantor waives any right to require the Administrative Agent, the Issuing Bank or any Lender to sue the Borrowers, any Loan Guarantor, any other guarantor of, or any other Person obligated for all or any part of the Guaranteed Obligations (each, an "<u>Obligated Party</u>"), or otherwise to enforce its payment against any collateral securing all or any part of the Guaranteed Obligations.

SECTION 10.03. &nbsp;&nbsp;&nbsp;&nbsp;<u>No Discharge or Diminishment of Loan Guaranty</u>. Except as otherwise provided for herein, the obligations of each Loan Guarantor hereunder are unconditional and absolute and not subject to any reduction, limitation, impairment or termination for any reason (other than the Payment in Full of the Guaranteed Obligations), including: (i) any claim of waiver, release, extension, renewal, settlement, surrender, alteration, or compromise of any of the Guaranteed Obligations, by operation of law or otherwise; (ii) any change in the corporate existence, structure or ownership of the Borrowers or any other Obligated Party liable for any of the Guaranteed Obligations; (iii) any insolvency, bankruptcy, reorganization or other similar proceeding affecting any Obligated Party, or their assets or any resulting release or discharge of any obligation of any Obligated Party; or (iv) the existence of any claim, setoff or other rights which any Loan Guarantor may have at any time against any Obligated Party, the Administrative Agent, the Issuing Bank, any Lender, or any other Person, whether in connection herewith or in any unrelated transactions.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a)&nbsp;&nbsp;&nbsp;&nbsp;The obligations of each Loan Guarantor hereunder are not subject to any defense or setoff, counterclaim, recoupment, or termination whatsoever by reason of the invalidity, illegality, or unenforceability of any of the Guaranteed Obligations or otherwise, or any provision of applicable law or regulation purporting to prohibit payment by any Obligated Party, of the Guaranteed Obligations or any part thereof.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b)&nbsp;&nbsp;&nbsp;&nbsp;Further, the obligations of any Loan Guarantor hereunder are not discharged or impaired or otherwise affected by: (i) the failure of the Administrative Agent, the Issuing Bank or any Lender to assert any claim or demand or to enforce any remedy with respect to all or any part of the Guaranteed Obligations; (ii) any waiver or modification of or supplement to any provision of any agreement relating to the Guaranteed Obligations; (iii) any release, non-perfection, or invalidity of any indirect or direct security for the obligations of the Borrowers for all or any part of the Guaranteed Obligations or any obligations of any other Obligated Party liable for any of the Guaranteed Obligations; (iv) any action or failure to act by the Administrative Agent, the Issuing Bank or any Lender with respect to any collateral securing any part of the Guaranteed Obligations; or (v) any default, failure or delay, willful or otherwise, in the payment or performance of any of the Guaranteed Obligations, or any other circumstance, act, omission or delay that might in any manner or to any extent vary the risk of such Loan Guarantor or that would otherwise operate as a discharge of any Loan Guarantor as a matter of law or equity (other than the Payment in Full of the Guaranteed Obligations).

SECTION 10.04.&nbsp;&nbsp;&nbsp;&nbsp;<u>Defenses Waived</u>. To the fullest extent permitted by applicable law, each Loan Guarantor hereby waives any defense based on or arising out of any defense of the Borrowers or any Loan Guarantor or the unenforceability of all or any part of the Guaranteed Obligations from any cause, or the <u>cessation</u> from any cause of the liability of the Borrowers, any Loan Guarantor or any other

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Obligated Party, other than the defense of payment or performance. Without limiting the generality of the foregoing, each Loan Guarantor irrevocably waives acceptance hereof, presentment, demand, protest and, to the fullest extent permitted by law, any notice not provided for herein, as well as any requirement that at any time any action be taken by any Person against any Obligated Party, or any other Person. Each Loan Guarantor confirms that it is not a surety under any state law and shall not raise any such law as a defense to its obligations hereunder. The Administrative Agent may, at its election, foreclose on any Collateral held by it by one or more judicial or nonjudicial sales, accept an assignment of any such Collateral in lieu of foreclosure or otherwise act or fail to act with respect to any collateral securing all or a part of the Guaranteed Obligations, compromise or adjust any part of the Guaranteed Obligations, make any other accommodation with any Obligated Party or exercise any other right or remedy available to it against any Obligated Party, without affecting or impairing in any way the liability of such Loan Guarantor under this Loan Guaranty, except to the extent the Guaranteed Obligations have been Paid in Full. To the fullest extent permitted by applicable law, each Loan Guarantor waives any defense arising out of any such election even though that election may operate, pursuant to applicable law, to impair or extinguish any right of reimbursement or subrogation or other right or remedy of any Loan Guarantor against any Obligated Party or any security.

SECTION 10.05.&nbsp;&nbsp;&nbsp;&nbsp;<u>Rights of Subrogation</u>. No Loan Guarantor will assert any right, claim or cause of action, including, without limitation, a claim of subrogation, contribution or indemnification that it has against any Obligated Party, or any collateral, until the Loan Parties and the Loan Guarantors have fully performed all their obligations to the Administrative Agent, the Issuing Bank and the Lenders.

SECTION 10.06.&nbsp;&nbsp;&nbsp;&nbsp;<u>Reinstatement; Stay of Acceleration</u>. If at any time any payment of any portion of the Guaranteed Obligations (including a payment effected through exercise of a right of setoff) is rescinded, or must otherwise be restored or returned upon the insolvency, bankruptcy or reorganization of any Borrower or otherwise (including pursuant to any settlement entered into by a Secured Party in its discretion), each Loan Guarantor's obligations under this Loan Guaranty with respect to that payment shall be reinstated at such time as though the payment had not been made and whether or not the Administrative Agent, the Issuing Bank and the Lenders are in possession of this Loan Guaranty. If acceleration of the time for payment of any of the Guaranteed Obligations is stayed upon the insolvency, bankruptcy or reorganization of any Borrower, all such amounts otherwise subject to acceleration under the terms of any agreement relating to the Guaranteed Obligations shall nonetheless be payable by the Loan Guarantors forthwith on demand by the Administrative Agent.

SECTION 10.07.&nbsp;&nbsp;&nbsp;&nbsp;<u>Information</u>. Each Loan Guarantor assumes all responsibility for being and keeping itself informed of each Borrower's financial condition and assets, and of all other circumstances bearing upon the risk of nonpayment of the Guaranteed Obligations and the nature, scope and extent of the risks that each Loan Guarantor assumes and incurs under this Loan Guaranty, and agrees that none of the Administrative Agent, the Issuing Bank or any Lender shall have any duty to advise any Loan Guarantor of information known to it regarding those circumstances or risks.

SECTION 10.08.&nbsp;&nbsp;&nbsp;&nbsp;<u>Termination</u>. Each of the Lenders and the Issuing Bank may continue to make loans or extend credit to the Borrowers based on this Loan Guaranty until five (5) days after it receives written notice of termination from any Loan Guarantor. Notwithstanding receipt of any such notice, each Loan Guarantor will continue to be liable to the Lenders for any Guaranteed Obligations created, assumed or committed to prior to the fifth day after receipt of the notice, and all subsequent renewals, extensions, modifications and amendments with respect to, or substitutions for, all or any part of such Guaranteed Obligations. Nothing in this Section 10.08 shall be deemed to constitute a waiver of, or eliminate, limit, reduce or otherwise impair any rights or remedies the Administrative Agent or any

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Lender may have in respect of, any Default or Event of Default that shall exist under Article VII hereof as a result of any such notice of termination.

SECTION 10.09.&nbsp;&nbsp;&nbsp;&nbsp;<u>Taxes</u>. Each payment of the Guaranteed Obligations will be made by each Loan Guarantor without withholding for any Taxes, unless such withholding is required by law. If any Loan Guarantor determines, in its sole discretion exercised in good faith, that it is so required to withhold Taxes, then such Loan Guarantor may so withhold and shall timely pay the full amount of withheld Taxes to the relevant Governmental Authority in accordance with applicable law. If such Taxes are Indemnified Taxes, then the amount payable by such Loan Guarantor shall be increased as necessary so that, net of such withholding (including such withholding applicable to additional amounts payable under this Section), the Administrative Agent, Lender or Issuing Bank (as the case may be) receives the amount it would have received had no such withholding been made.

SECTION 10.10.&nbsp;&nbsp;&nbsp;&nbsp;<u>Maximum Liability</u>. Notwithstanding any other provision of this Loan Guaranty, the amount guaranteed by each Loan Guarantor hereunder shall be limited to the extent, if any, required so that its obligations hereunder shall not be subject to avoidance under Section 548 of the Bankruptcy Code or under any applicable state Uniform Fraudulent Transfer Act, Uniform Fraudulent Conveyance Act or similar statute or common law. In determining the limitations, if any, on the amount of any Loan Guarantor's obligations hereunder pursuant to the preceding sentence, it is the intention of the parties hereto that any rights of subrogation, indemnification or contribution which such Loan Guarantor may have under this Loan Guaranty, any other agreement or applicable law shall be taken into account.

SECTION 10.11.&nbsp;&nbsp;&nbsp;&nbsp;<u>Contribution</u>.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a)&nbsp;&nbsp;&nbsp;&nbsp;To the extent that any Loan Guarantor shall make a payment under this Loan Guaranty (a "<u>Guarantor Payment</u>") which, taking into account all other Guarantor Payments then previously or concurrently made by any other Loan Guarantor, exceeds the amount which otherwise would have been paid by or attributable to such Loan Guarantor if each Loan Guarantor had paid the aggregate Guaranteed Obligations satisfied by such Guarantor Payment in the same proportion as such Loan Guarantor's "Allocable Amount" (as defined below) (as determined immediately prior to such Guarantor Payment) bore to the aggregate Allocable Amounts of each of the Loan Guarantors as determined immediately prior to the making of such Guarantor Payment, then, following indefeasible payment in full in cash of the Guarantor Payment and the Payment in Full of the Guaranteed Obligations, and all Commitments and Letters of Credit have terminated or expired or, in the case of all Letters of Credit, are fully collateralized on terms reasonably acceptable to the Administrative Agent and the Issuing Bank, and this Agreement, the Swap Agreement Obligations and the Banking Services Obligations have terminated, such Loan Guarantor shall be entitled to receive contribution and indemnification payments from, and be reimbursed by, each other Loan Guarantor for the amount of such excess, pro rata based upon their respective Allocable Amounts in effect immediately prior to such Guarantor Payment.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b)&nbsp;&nbsp;&nbsp;&nbsp;As of any date of determination, the "Allocable Amount" of any Loan Guarantor shall be equal to the excess of the fair saleable value of the property of such Loan Guarantor over the total liabilities of such Loan Guarantor (including the maximum amount reasonably expected to become due in respect of contingent liabilities, calculated, without duplication, assuming each other Loan Guarantor that is also liable for such contingent liability pays its ratable share thereof), giving effect to all payments made by other Loan Guarantors as of such date in a manner to maximize the amount of such contributions.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c)&nbsp;&nbsp;&nbsp;&nbsp;This Section 10.11 is intended only to define the relative rights of the Loan Guarantors, and nothing set forth in this Section 10.11 is intended to or shall impair the obligations of the

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Loan Guarantors, jointly and severally, to pay any amounts as and when the same shall become due and payable in accordance with the terms of this Loan Guaranty.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(d)&nbsp;&nbsp;&nbsp;&nbsp;The parties hereto acknowledge that the rights of contribution and indemnification hereunder shall constitute assets of the Loan Guarantor or Loan Guarantors to which such contribution and indemnification is owing.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(e)&nbsp;&nbsp;&nbsp;&nbsp;The rights of the indemnifying Loan Guarantors against other Loan Guarantors under this Section 10.11 shall be exercisable upon the Payment in Full of the Guaranteed Obligations.

SECTION 10.12.&nbsp;&nbsp;&nbsp;&nbsp;<u>Liability Cumulative</u>. The liability of each Loan Party as a Loan Guarantor under this Article X is in addition to and shall be cumulative with all liabilities of each Loan Party to the Administrative Agent, the Issuing Bank and the Lenders under this Agreement and the other Loan Documents to which such Loan Party is a party or in respect of any obligations or liabilities of the other Loan Parties, without any limitation as to amount, unless the instrument or agreement evidencing or creating such other liability specifically provides to the contrary.

SECTION 10.13.&nbsp;&nbsp;&nbsp;&nbsp;<u>Keepwell</u>. Each Qualified ECP Guarantor hereby jointly and severally absolutely, unconditionally and irrevocably undertakes to provide such funds or other support as may be needed from time to time by each other Guarantor to honor all of its obligations under this Guarantee in respect of a Swap Obligation (<u>provided</u>, <u>however</u>, that each Qualified ECP Guarantor shall only be liable under this Section 10.13 for the maximum amount of such liability that can be hereby incurred without rendering its obligations under this Section 10.13 or otherwise under this Loan Guaranty voidable under applicable law relating to fraudulent conveyance or fraudulent transfer, and not for any greater amount). Except as otherwise provided herein, the obligations of each Qualified ECP Guarantor under this Section 10.13 shall remain in full force and effect until the termination of all Swap Obligations. Each Qualified ECP Guarantor intends that this Section 10.13 constitute, and this Section 10.13 shall be deemed to constitute, a "keepwell, support, or other agreement" for the benefit of each other Loan Party for all purposes of Section 1a(18)(A)(v)(II) of the Commodity Exchange Act.

ARTICLE XI

<u>The Borrower Representative</u>

SECTION 11.01.&nbsp;&nbsp;&nbsp;&nbsp;<u>Appointment; Nature of Relationship</u>. Parent Borrower is hereby appointed by each of the Borrowers as its contractual representative (herein referred to as the "<u>Borrower</u> <u>Representative</u>" hereunder and under each other Loan Document, and each of the Borrowers irrevocably authorizes the Borrower Representative in its capacity as the Parent Borrower to act as the contractual representative of such Borrower with the rights and duties expressly set forth herein and in the other Loan Documents. The Borrower Representative agrees to act as such contractual representative upon the express conditions contained in this Article XI. Additionally, the Borrowers hereby appoint the Borrower Representative as their agent to receive all of the proceeds of the Loans in the Funding Accounts, at which time the Borrower Representative shall promptly disburse such Loans to the appropriate Borrower, provided that, in the case of a Revolving Loan, such amount shall not exceed Availability. The Administrative Agent, the Lenders, and their respective officers, directors, agents or employees, shall not be liable to the Borrower Representative or any Borrower for any action taken or omitted to be taken by the Borrower Representative or the Borrowers pursuant to this Section 11.01.

SECTION 11.02.&nbsp;&nbsp;&nbsp;&nbsp;<u>Powers</u>. The Borrower Representative shall have and may exercise such powers under the Loan Documents as are specifically delegated to the Borrower Representative by the terms of each thereof, together with such powers as are reasonably incidental thereto. The Borrower

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Representative shall have no implied duties to the Borrowers, or any obligation to the Lender to take any action thereunder except any action specifically provided by the Loan Documents to be taken by the Borrower Representative.

SECTION 11.03.&nbsp;&nbsp;&nbsp;&nbsp;<u>Employment of Agents</u>. The Borrower Representative may execute any of its duties as the Borrower Representative hereunder and under any other Loan Document by or through authorized officers.

SECTION 11.04.&nbsp;&nbsp;&nbsp;&nbsp;<u>Notices</u>. Each Borrower shall immediately notify the Borrower Representative of the occurrence of any Default or Event of Default hereunder, refer to this Agreement, describe such Default or Event of Default, and state that such notice is a "notice of default". In the event that the Borrower Representative receives such a notice, the Borrower Representative shall give prompt notice thereof to the Lender. Any notice provided to the Borrower Representative hereunder shall constitute notice to each Borrower on the date received by the Borrower Representative.

SECTION 11.05.&nbsp;&nbsp;&nbsp;&nbsp;<u>Successor Borrower Representative</u>. Upon the prior written consent of the Lender, the Borrower Representative may resign at any time, such resignation to be effective upon the appointment of a successor Borrower Representative.

SECTION 11.06.&nbsp;&nbsp;&nbsp;&nbsp;<u>Execution of Loan Documents</u>. The Borrowers hereby empower and authorize the Borrower Representative, on behalf of the Borrowers, to execute and deliver to the Lender the Loan Documents and all related agreements, certificates, documents, or instruments as shall be necessary or appropriate to effect the purposes of the Loan Documents, including the Compliance Certificates. Each Borrower agrees that any action taken by the Borrower Representative or the Borrowers in accordance with the terms of this Agreement or the other Loan Documents, and the exercise by the Borrower Representative of its powers set forth therein or herein, together with such other powers that are reasonably incidental thereto, shall be binding upon all of the Borrowers.

SECTION 11.07.&nbsp;&nbsp;&nbsp;&nbsp;<u>Reporting</u>. Each Borrower hereby agrees that such Borrower shall furnish promptly after each fiscal month to the Borrower Representative a copy of any certificate or report required hereunder or requested by the Borrower Representative on which the Borrower Representative shall rely to prepare the Compliance Certificate required pursuant to the provisions of this Agreement.

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