# EDGAR Filing Document

**Accession Number:** 0001897640
**File Stem:** 0001193125-23-073119
**Filing Date:** 2023-3
**Character Count:** 3942986
**Document Hash:** de50933444db981f3116495f9aec7666
**Contains OCR:** False
**Source Format:** 

## Filing Content

## Filing Summary
**0001193125-23-073119.hdr.sgml**: 20230317

**ACCESSION NUMBER**: 0001193125-23-073119

**CONFORMED SUBMISSION TYPE**: S-1/A

**PUBLIC DOCUMENT COUNT**: 56

**FILED AS OF DATE**: 20230317

**DATE AS OF CHANGE**: 20230317

**FILER**: 

**COMPANY DATA:**
- **COMPANY CONFORMED NAME:** Steinway Musical Instruments Holdings, Inc.
- **CENTRAL INDEX KEY:** 0001897640
- **STANDARD INDUSTRIAL CLASSIFICATION:** MUSICAL INSTRUMENTS [3931]
- **IRS NUMBER:** 463419986
- **STATE OF INCORPORATION:** DE
- **FISCAL YEAR END:** 1231

**FILING VALUES:**
- **FORM TYPE:** S-1/A
- **SEC ACT:** 1933 Act
- **SEC FILE NUMBER:** 333-264287
- **FILM NUMBER:** 23740618

**BUSINESS ADDRESS:**
- **STREET 1:** 1 STEINWAY PLACE
- **CITY:** ASTORIA
- **STATE:** NY
- **ZIP:** 11105
- **BUSINESS PHONE:** (718) 721-2600

**MAIL ADDRESS:**
- **STREET 1:** 1 STEINWAY PLACE
- **CITY:** ASTORIA
- **STATE:** NY
- **ZIP:** 11105

##### [**Table of Contents**](#toc)
**As filed with the Securities and Exchange Commission on March 17, 2023.** 

**Registration No. 333-264287** 

------

**UNITED STATES** 

**SECURITIES AND EXCHANGE COMMISSION** 

**WASHINGTON, D.C. 20549** 

------

**AMENDMENT NO. 3** 

**TO** 

**FORM S-1** 

**REGISTRATION STATEMENT** 

***UNDER THE***

***SECURITIES ACT OF 1933***

------

## Steinway Musical Instruments Holdings, Inc.
**(Exact Name of Registrant as Specified in its Charter)** 

------

---

| | | |
|:---|:---|:---|
| **Delaware** | **3931** | **46-3419986** |
| **(State or Other Jurisdiction of**<br> **Incorporation or Organization)** | **(Primary Standard Industrial**<br> **Classification Code Number)** | **(I.R.S. Employer**<br> **Identification Number)** |

---

**1 Steinway Place** 

**Astoria, New York 11105** 

**(718) 721-2600** 

**(Address, including zip code, and telephone number, including area code, of registrant's principal executive offices)** 

------

**Benjamin Steiner** 

**President and Chief Executive Officer** 

**1 Steinway Place** 

**Astoria, New York 11105** 

**(718) 721-2600** 

**(Name, address, including zip code, and telephone number, including area code, of agent for service)** 

------

***Copies to:***

---

| | |
|:---|:---|
| **Marc D. Jaffe**<br> **Benjamin J. Cohen**<br> **Latham & Watkins LLP**<br> **1271 Avenue of the Americas**<br> **New York, NY 10020**<br> **(212) 906-1200** | **Joshua N. Korff**<br> **Ross M. Leff**<br> **Christie W.S. Mok**<br> **Kirkland & Ellis LLP**<br> **601 Lexington Avenue**<br> **New York, New York 10022**<br> **(212) 446-4800** |

---

------

**Approximate date of commencement of proposed sale of the securities 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 of 1933, 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 pursuant 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, as amended, or until the registration statement shall become effective on such date as the Securities and Exchange Commission, acting pursuant to said Section 8(a), may determine.** 

------

##### [**Table of Contents**](#toc)
The information in this preliminary prospectus is not complete and may be changed. The selling stockholder may not sell these securities until the Securities and Exchange Commission declares our registration statement effective. This preliminary prospectus is not an offer to sell these securities and it is not soliciting offers to buy these securities in any state or jurisdiction where the offer or sale is not permitted.

SUBJECT TO COMPLETION, DATED MARCH 17, 2023

**PRELIMINARY PROSPECTUS** 

&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

![LOGO](g212165g01s11.jpg)

**Steinway Musical Instruments Holdings, Inc.** 

Class A Common Stock

------

This is the initial public offering of shares of Class A common stock of Steinway Musical Instruments Holdings, Inc. The selling stockholder identified in this prospectus is offering shares of Class A common stock in this offering. We are not selling any shares of our Class A common stock under this prospectus and we will not receive any of the proceeds from the sale of shares of our Class A common stock by the selling stockholder in this offering, including any shares it may sell pursuant to the underwriters' option to purchase additional shares of Class A common stock.

Upon completion of this offering, we will have two classes of common stock, Class A common stock and Class B common stock. The rights of the holders of Class A common stock and Class B common stock are identical, except with respect to voting and conversion. Each share of Class A common stock is entitled to one vote per share. Each share of Class B common stock is entitled to ten votes per share. Holders of our Class A common stock and Class B common stock vote together as a single class on all matters, except as otherwise set forth in this prospectus or as required by applicable law. Each outstanding share of Class B common stock will convert automatically into one share of Class A common stock upon any transfer, except for certain exceptions and permitted transfers described in our amended and restated certificate of incorporation. Upon the completion of this offering, all shares of Class B common stock will be held by John Paulson and certain affiliated entities (as defined below), which will collectively represent approximately % of the total combined voting power of our outstanding common stock following this offering (or approximately % of the total combined voting power of our outstanding common stock if the underwriters exercise in full their option to purchase additional shares of our Class A common stock).

Prior to this offering, there has been no public market for our Class A common stock. We have applied to list our Class A common stock on the New York Stock Exchange (the "NYSE"), under the symbol "STWY".

We anticipate that the initial public offering price for our Class A common stock will be between $ and $ per share.

After the completion of this offering, we will be a "controlled company" within the meaning of the corporate governance standards of the NYSE.

We are an "emerging growth company" under the federal securities laws and, as such, may elect to comply with certain reduced public reporting requirements. See "Prospectus Summary—Implications of Being an Emerging Growth Company."

------

*Investing in our Class A common stock involves risks. See "<u>[Risk Factors](#rom212165_3)</u>" beginning on page 35 of this prospectus to read about factors you should consider before buying shares of our Class 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 discounts and commissions(1) | $| $|
|  Proceeds, before expenses, to the selling stockholder | $| $|

---

------

(1) See "Underwriting" for a description of the compensation payable to the underwriters.

At our request, an affiliate of BofA Securities, Inc., a participating underwriter, has reserved for sale, at the initial public offering price, up to 5% of the shares of Class A common stock offered by this prospectus for sale to some of our directors, officers, employees, distributors, dealers, business associates and related persons through a reserved share program (the "Reserved Share Program"). For additional information, see "Underwriting—Reserved Share Program."

The underwriters also may purchase up to additional shares of Class A common stock from the selling stockholder at the initial offering price less the underwriting discounts and commissions, within 30 days from the date of this prospectus.

The underwriters expect to deliver the shares to purchasers on or about , 2023.

------

---

| | | |
|:---|:---|:---|
| **Goldman Sachs & Co. LLC** | **BofA Securities** | **Barclays** |

---

---

| | | | | | | |
|:---|:---|:---|:---|:---|:---|:---|
| **Evercore ISI** | **TD Cowen** | **Stifel** | **Bernstein** | **Telsey Advisory Group** | **Commerzbank** | **Loop Capital Markets** |

---

------

Prospectus dated , 2023.

------

##### [**Table of Contents**](#toc)
![LOGO](g212165g04a00.jpg)

------

##### [**Table of Contents**](#toc)
![LOGO](g212165g31q03.jpg)

------

##### [**Table of Contents**](#toc)
![LOGO](g212165g06r00.jpg)

------

##### [**Table of Contents**](#toc)
![LOGO](g212165g07y04.jpg)

------

##### [**Table of Contents**](#toc)
![LOGO](g212165g76h61.jpg)

------

##### [**Table of Contents**](#toc)
![LOGO](g212165g22s91.jpg)

------

##### [**Table of Contents**](#toc)
![LOGO](g212165g09r00.jpg)

------

##### [**Table of Contents**](#toc)
**TABLE OF CONTENTS** 

---

| | |
|:---|:---|
|  [GENERAL INFORMATION](#rom212165_1) | ii |
|  [PROSPECTUS SUMMARY](#rom212165_2) | 1 |
|  [RISK FACTORS](#rom212165_3) | 35 |
|  [SPECIAL NOTE REGARDING FORWARD-LOOKING STATEMENTS](#rom212165_4) | 90 |
|  [USE OF PROCEEDS](#rom212165_5) | 92 |
|  [DIVIDEND POLICY](#rom212165_6) | 93 |
|  [CAPITALIZATION](#rom212165_7) | 94 |
|  [MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS](#rom212165_8) | 95 |
|  [BUSINESS](#rom212165_9) | 120 |
|  [MANAGEMENT](#rom212165_10) | 153 |
|  [EXECUTIVE COMPENSATION](#rom212165_11) | 160 |
|  [PRINCIPAL AND SELLING STOCKHOLDER](#rom212165_12) | 171 |
|  [CERTAIN RELATIONSHIPS AND RELATED PARTY TRANSACTIONS](#rom212165_13) | 173 |
|  [DESCRIPTION OF CAPITAL STOCK](#rom212165_14) | 176 |
|  [SHARES AVAILABLE FOR FUTURE SALE](#rom212165_15) | 186 |
|  [MATERIAL U.S. FEDERAL INCOME TAX CONSEQUENCES TO NON-U.S. HOLDERS](#rom212165_16) | 189 |
|  [UNDERWRITING](#rom212165_17) | 193 |
|  [VALIDITY OF COMMON STOCK](#rom212165_18) | 205 |
|  [EXPERTS](#rom212165_19) | 205 |
|  [WHERE YOU CAN FIND MORE INFORMATION](#rom212165_20) | 205 |
|  [INDEX TO CONSOLIDATED FINANCIAL STATEMENTS](#rom212165_21) | F-1 |

---

**We have not, and the selling stockholder and the underwriters have not, authorized anyone to provide you with information different from, or in addition to, that contained in this prospectus and any related free writing prospectus prepared by or on behalf of us and the selling stockholder. We, the selling stockholder and the underwriters take no responsibility for, and can provide no assurances as to the reliability of, any information that others may give you. This prospectus is an offer to sell only the shares offered hereby, but only under circumstances and in jurisdictions where it is lawful to do so. The information contained in this prospectus is only accurate as of the date of this prospectus, regardless of the time of delivery of this prospectus and any sale of shares of our Class A common stock.** 

**For investors outside the United States: We, the selling stockholder and the underwriters have not 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 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 Class A common stock and the distribution of this prospectus outside the United States.** 

i

------

##### [**Table of Contents**](#toc)
**GENERAL INFORMATION** 

We use the following capitalized terms in this prospectus:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• "ABL Facility" means our senior secured asset-based revolving credit facility, as described under
"Management's Discussion and Analysis of Financial Condition and Results of Operations—Liquidity and Capital Resources—Debt."

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• "Credit Facilities" means, collectively, our ABL Facility and foreign credit facilities (as defined below).

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• "common stock" means our Class A common stock and our Class B common stock, collectively.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• "First Lien Term Loan Facility" means our senior secured first lien term loan facility, as described under
"Management's Discussion and Analysis of Financial Condition and Results of Operations—Liquidity and Capital Resources—Debt."

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• "foreign credit facilities" means our German Term Loan Facility, German ABL Facility, Japanese Term Loan Facility
and Japanese Revolving Credit Facility, each as described under "Management's Discussion and Analysis of Financial Condition and Results of Operations—Liquidity and Capital Resources—Debt."

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• "Parent" means Paulson Pianissimo LLC, a Delaware limited liability company that, prior to this offering,
directly owned 100% of our capital stock.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• "Paulson & Co." means Paulson & Co. Inc.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• "John Paulson and certain affiliated entities" means John Paulson and Paulson Advantage Plus Master Ltd.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• "Registration Rights Agreement" means the registration rights agreement to be effective upon the pricing of this
offering, by and between John Paulson and certain affiliated entities, Benjamin Steiner and the Company.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• "selling stockholder" means Paulson Advantage Plus Master Ltd.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• "SMI" means Steinway Musical Instruments, Inc.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• "Stockholders Agreement" means the stockholders agreement to be effective upon the pricing of this offering, by
and between John Paulson and certain affiliated entities and the Company.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• "we," "us," "our," the "Company," or "Steinway" mean Steinway Musical
Instruments Holdings, Inc. and its consolidated subsidiaries, unless the context refers only to Steinway Musical Instruments Holdings, Inc. as a corporate entity.

**MARKET AND INDUSTRY DATA** 

This prospectus contains estimates, projections and information concerning our industry, our business and the market size and growth rates of the markets in which we participate. Some data and statistical and other information are based on independent reports from third parties, including from Euromonitor International Ltd, *The Wealth Report 2022* and Technavio, as well as industry and general publications and research, surveys and studies conducted by third parties which we have not independently verified. The content of the foregoing sources, publications and reports, except to the extent specifically set forth in this prospectus, does not constitute part of this prospectus and is not incorporated herein. Some data and statistical and other information are based on internal estimates and calculations that are derived from publicly available information, research we conducted, internal surveys, our management's knowledge of our industry and their assumptions based on such

ii

------

##### [**Table of Contents**](#toc)
information and knowledge, which we believe to be reasonable. In each case, this information and data involves a number of assumptions and limitations, and you are cautioned not to give undue weight to such information, estimates or projections. Industry publications and other reports we have obtained from independent parties may state that the data contained in these publications or other reports have been obtained in good faith or from sources considered to be reliable, but they do not guarantee the accuracy or completeness of such data. In addition, projections, assumptions and estimates of the future performance of the industry in which we operate and our future performance are necessarily subject to a high degree of uncertainty and risk due to a variety of factors, including those described in "Risk Factors" and "Special Note Regarding Forward-Looking Statements." These and other factors could cause our future performance to differ materially from the assumptions and estimates made by third parties and us.

**SERVICE MARKS, TRADEMARKS AND TRADE NAMES** 

*Steinway*, *Steinway & Sons, Spirio*, *Spirio \| r* , *Spiriocast*, *Boston*, *Essex*, *Conn-Selmer*, *Bach*, *C.G. Conn*, *King*, *Selmer*, *Ludwig, Leblanc, Armstrong, Musser, Holton, Glaesel, Scherl & Roth* and *WM Lewis & Son* and our logos and our other registered or common law trade names, trademarks or service marks appearing in this prospectus are the property of Steinway Musical Instruments Holdings, Inc. This prospectus contains additional trade names, trademarks and service marks of other companies that are the property of their respective owners. We do not intend our use or display of other companies' trade names, trademarks or service marks to imply a relationship with, or endorsement or sponsorship of us by, these other companies. Solely for convenience, our trade names, trademarks and service marks referred to in this prospectus appear without the <sup>®</sup>, <sup>™</sup> or SM symbols, but such references are not intended to indicate, in any way, that we will not assert, to the fullest extent under applicable law, our rights or the right of the applicable licensor to these trade names, trademarks and service marks.

**BASIS OF PRESENTATION** 

Certain monetary amounts, percentages, and other figures included elsewhere in this prospectus have been subject to rounding adjustments. Accordingly, figures shown as totals in certain tables or charts may not be the arithmetic aggregation of the figures that precede them, and figures expressed as percentages in the text may not total 100% or, as applicable, when aggregated may not be the arithmetic aggregation of the percentages that precede them.

iii

------

##### [**Table of Contents**](#toc)
**PROSPECTUS SUMMARY** 

*The following summary highlights selected information contained in this prospectus. Because this is only a summary, it does not contain all of the information you should consider before investing in our Class A common stock. You should carefully read this entire prospectus, including the sections titled "Risk Factors" and "Management's Discussion and Analysis of Financial Condition and Results of Operations," as well as our consolidated financial statements included elsewhere in this prospectus, before making an investment decision. For the definitions of certain capitalized terms used in this prospectus, please refer to "General Information."* 

**Our Company** 

We are a company that has been forged on, and has pushed the boundaries of, the credo of our founder, Henry Engelhard Steinway: "To build the best piano possible." Since 1853, generation after generation, we have made and continue to make what we believe are the world's finest musical instruments. With this expertise and heritage, we believe that we have created and sustained one of the best regarded luxury brands in the world. We strive to further our legacy by advancing the standards of modern musical instrument manufacturing with our enduring dedication to quality, artisanship, elegance, style and beauty.

Our masterfully crafted pianos are designed to meet the demands of a diverse range of music enthusiasts—from providing renowned concert pianists and pop culture icons, including Lang Lang, Yuja Wang and Billy Joel, an instrument to fully express their indelible artistry, to encouraging early-stage learners discovering the first joys of piano playing, to inspiring the most discerning listeners with the distinct musical experience of a *Steinway Spirio* piano in their own home, which we believe is indistinguishable from a live performance. Our ultimate goal is to foster and enrich the global musical community by continuing to provide the world's finest pianos and musical instruments shaped by our unwavering commitment to innovation, improvement and technological preeminence.

**Who We Are** 

We are a leading manufacturer of high-performance musical instruments, boasting a brand renowned worldwide. *Steinway* is one of the longest-lasting and most storied brands in the music industry and beyond.

Our legacy began in 1853 in New York City when German immigrant Henry Engelhard Steinway developed the first Steinway piano in a Manhattan loft on Varick Street. Over the next thirty years, Henry and his sons laid the foundation for modern grand piano building. They built their instruments one at a time, applying skills handed down from master to apprentice, generation after generation, and we have followed in their footsteps ever since.

Thereafter, our innovative designs, attention to detail and exacting quality have redefined and broken new ground in the market for ultra-premium pianos. With our 170-year history, we believe that we have been setting the standard for innovation in our industry for longer than most public companies have been in existence.

We produce a full line of grand and upright acoustic pianos at our manufacturing facilities in Astoria, New York; and Hamburg, Germany. We also offer exclusive, limited-edition pianos, as well as unique, fully customized models for the most discerning customers. We have mastered the end-to-end process that brings a *Steinway* piano to market, and we own and perfect each of the key components that complete our brand. At each step, our highly-trained craftsmen ensure that every *Steinway* piano meets our high standard of excellence.

------

##### [**Table of Contents**](#toc)
In addition to our long history of craftsmanship, we continue to innovate and integrate state-of-the art technology into our timeless foundation. In 2015, we introduced the *Steinway Spirio*, which we believe is the world's finest high-resolution player piano. A masterpiece of artistry and engineering, *Spirio* pianos, playable like any other *Steinway* piano, also play themselves, enabling consumers to enjoy recorded performances by renowned pianists in their own homes, with what we believe to be the same nuance, power and passion as a live performance. In 2019, we further advanced our technology and offerings by introducing *Spirio \| r*, which enables recording and high-resolution editing in addition to playback capabilities. In 2021, we launched our *Spiriocast* software feature, which permits customers to instantly stream live performances, synched with video and audio, from one *Spirio \| r* piano to others across the world.

The *Spirio* piano significantly expands our potential target market to include non-piano players and enhances our relevance to recreational music consumers, as well as amateur and professional musicians. Furthermore, *Spirio* pianos sell at a premium to our traditional *Steinway* piano models. Sales of our *Spirio* and *Spirio \| r* pianos have grown to represent approximately 34% of our total Piano segment net sales for fiscal year 2022, increasing our average selling price and improving our gross profit margin as a result. In creating and continuously adding to our expansive *Spirio* library, we regularly engage with a wide range of artists to record new tracks, strengthening our connection to a diverse community of professional artists. *Spirio* strengthens our brand by appealing to luxury consumers and reinforcing our reputation for quality and innovation.

A deep connection to the artist community has been at the core of our identity since our founding. For decades, we have used our Steinway Artist program to cultivate special relationships with the best pianists from a wide array of genres. This program forms a celebrated community of approximately 1,900 of today's most acclaimed pianists, including Martha Argerich, Ahmad Jamal, Billy Joel, Diana Krall, Charlie Puth and Yuja Wang. These and other musical greats consistently choose *Steinway* when performing on the biggest stages. In fact, approximately 97% of pianists chose a *Steinway* piano when performing with orchestras across the globe during the 2018–2019 concert season, which was the last full concert season prior to the date of this prospectus due to the COVID-19 pandemic. Each Steinway Artist is vetted through a highly selective process. To be considered for that process, they must independently own a *Steinway* piano; we do not provide a piano to our Steinway Artists in exchange for an endorsement. We believe the timeless quality and excellent performance of *Steinway* pianos are recognized and appreciated by artists across generations, geographies and cultures, with pianists in orchestras on every continent performing on *Steinway* pianos.

We also invest in building relationships with the next generation of artists through our All-Steinway school program. This program partners with over 230 institutions and schools across the globe to provide students and faculties with our high-quality pianos. By furnishing these institutions and schools exclusively with *Steinway* and *Steinway*-designed instruments, we enable our All-Steinway schools to offer premier music education on some of the finest piano models.

Our pianos are currently sold through 34 company-owned retail showrooms, strategically located across the world. This direct-to-consumer channel allows us to fully manage the luxury customer experience and our brand narrative. We also distribute our pianos through a global, expansive network of approximately 200 experienced dealers with intimate local market knowledge and close ties to local musical communities. Our comprehensive product portfolio allows us to serve as an exclusive supplier to many of our *Steinway* dealers. We seek to further optimize our distribution through ongoing retail showroom expansion in regions where we see opportunity for growth or improved performance. We continue to support dealer initiatives and implement unique distribution methods to reach smaller, previously untouched markets, including through our team of Educational Sales Managers that travel and sell direct to institutions and customers in territories not represented by a retail store or a dealer.

------

##### [**Table of Contents**](#toc)
In addition to our ultra-premium piano offerings under our *Steinway* brand and our mid-range offerings under our *Boston* and *Essex* brands, we also sell musical instruments and accessories through our Band segment under our highly regarded Conn-Selmer umbrella of brands. For over 100 years*,* Conn-Selmer's complete lines of brass, woodwind, percussion and string instruments, including *Bach* trumpets, *C.G. Conn* French horns, *King* trombones, *Selmer* saxophones, and *Ludwig* percussion instruments, have shaped the musical landscape through innovation and sophisticated musical performance. The *C.G. Conn* brand, with a legacy in music education, has been and continues to be one of the top choices for educators and marching band programs in the United States today. Most top orchestras and symphonies carry the sound of our *Bach* brass instruments. *Ludwig*, one of the world's most recognized names in drums, is a leading fixture on the marching field and on rock-and-roll's biggest stages. As such, our Conn-Selmer division caters to approximately 950 notable percussion, brass, and woodwind artists, including drummers such as Anderson Paak, Questlove and Alex Van Halen; saxophonist Kenny Garret; and trumpet players Sean Jones, Rashawn Ross and Michael Sachs.

We operate in two reporting segments, Piano (Steinway & Sons) and Band (Conn-Selmer). In fiscal year 2022, our Piano and Band segments generated net sales of $425.9 million and $149.6 million, respectively, up from $406.6 million and $131.7 million, respectively, in the prior fiscal year. In fiscal year 2022, our Piano and Band segments generated Adjusted EBITDA of $119.2 million and $5.9 million, respectively, compared to $106.8 million and $10.7 million, respectively, in the prior fiscal year. Below is a breakdown of our consolidated net sales and Adjusted EBITDA by segment for fiscal year 2022.

---

| | |
|:---|:---|
| **2022 Consolidated Net Sales** | **2022 Consolidated Adjusted EBITDA** |
| <br>![LOGO](g212165g61q72.jpg)  | <br>![LOGO](g212165g61u45.jpg)  |

---

For a reconciliation of Adjusted EBITDA to its most directly comparable GAAP financial measure, information about why we consider Adjusted EBITDA useful and a discussion of the material risks and limitations of this measure, please see "Management's Discussion and Analysis of Financial Condition and Results of Operations—Non-GAAP Financial Measures."

Our Piano segment primarily includes sales of pianos offered under the *Steinway* brand as well as our *Boston* and *Essex* brands. *Boston* and *Essex* pianos are designed and engineered using the *Steinway* experience, expertise, specifications, and patents to achieve optimal performance. *Boston* and *Essex* models are built in Asia to maximize manufacturing efficiencies, but benefit from Steinway & Sons' quality control and oversight. *Boston* competes in the upper-middle market segment, while *Essex* participates in the middle market segment. Both provide a level of performance and quality that we believe is highly favorable to others competing in their respective price ranges, giving a wide range of consumers access to pianos with genuine world-class tone and responsiveness.

------

##### [**Table of Contents**](#toc)
The *Boston* and *Essex* lines provide a broader range of consumers with an introduction into the Steinway & Sons family. Our *Boston* and *Essex* pianos come with the Steinway Promise—a trade-up program that varies across regions and channels but generally allows *Boston* and *Essex* pianos to be traded up for more expensive *Steinway* pianos, with a trade-in credit up to an amount equal to the original purchase price. This trade-in option allows our company to increase market share over time as our customers enter our community on lower-priced models, before trading up to our higher-priced models as they acquire wealth. With this family of products, we can offer our dealers a full line of our products at multiple price points, enabling us to replace lower priced product lines and to facilitate more exclusive arrangements with our dealers. This comprehensive suite of piano offerings has also allowed us to better penetrate schools and music learning centers and add to our list of All-Steinway Schools. Our *Boston* line in particular has been utilized by prominent institutions to build a strong foundation for a quality music education.

For fiscal years 2022 and 2021, approximately 70% and 69%, respectively, of net sales in the Piano segment were under the *Steinway* brand.

![LOGO](g212165g02x22.jpg)

Our Band segment manufactures, markets and distributes a diverse portfolio of instruments and brands for student, amateur and professional use that have leading market shares in each of their musical instrument categories, including brass (trumpets, trombones, French horns), woodwinds (saxophones, flutes, clarinets), percussion (drums) and strings (violins, cellos, bass).

Through the Conn-Selmer family of brands, we offer a portfolio of individual brands that represent innovation, entrepreneurship and a focus on musical excellence. Emphasizing quality craftsmanship above all else, Conn-Selmer operates U.S. production facilities in Elkhart, Indiana; Eastlake, Ohio; and Monroe, North Carolina to create exceptional instruments.

------

##### [**Table of Contents**](#toc)
Over 54% of Conn-Selmer sales in fiscal year 2022 were generated through our preferred dealer network to schools and families who participate in beginning music education programs. Of the remaining sales, many are used by students in marching bands, concert bands, orchestras, and other school-related performances. Our Conn-Selmer Division of Education was created to proactively engage with music students and educators and has become an industry leader in providing programs, services, and advocacy tailored to the growth and development of music education worldwide. Our educational team is committed to ensuring that every student and educator not only has access to a quality music education and support for their professional development, but also to the tools necessary to help them achieve their highest musical potential.

![LOGO](g212165g72r97.jpg)

Our business is global and aims to serve consumers wherever they are. In fiscal year 2022, we distributed our instruments in approximately 83 countries and territories throughout the Americas, the Asia-Pacific ("APAC") region and the Europe, Middle East and Africa ("EMEA") region. Below is a geographic breakdown of our consolidated net sales for fiscal year 2022.

---

| |
|:---|
| **2022 Consolidated Net Sales** |
| <br>![LOGO](g212165g70s67.jpg)  |

---

We were acquired by John Paulson and certain affiliated entities in 2013, and under John Paulson's stewardship, we have increased our commitment to quality while honoring our legacy, expanding our business, and strengthening our technological capabilities. As a custodian of Steinway, John Paulson has focused on investing in our business, including in technology, company-owned showrooms, our manufacturing processes and machinery, and in training our workforce to create a stronger team. We believe that these commitments have made us better equipped than ever before to bolster our reputation as one of the industry's finest musical instrument manufacturers. Over the course of the last decade, we have strategically expanded the international scope of our business, launched our *Spirio* technology, earned 17 distinct new patents, and improved manufacturing quality. The results of these initiatives are reflected in our growth over the past few years, during which time we

------

##### [**Table of Contents**](#toc)
have grown our APAC region net sales at a 11.2% compound annualized growth rate ("CAGR") from fiscal year 2016 to fiscal year 2022, released *Steinway Spirio* and *Spirio \| r* player pianos and also the *Spiriocast* feature for *Spirio \| r* models, built a team dedicated to limited-edition and bespoke pianos, and implemented manufacturing advances, such as the adoption of new machinery in our factories that raise our standards of precision and quality even higher than previously possible.

To push our boundaries and build on the strong foundation laid over a century ago, we operate with six primary objectives and guiding principles:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• Advance **excellence in manufacturing** and strive to consistently improve quality **so that the newest *Steinway* remains the best *Steinway*** .

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• Cultivate and nurture **innovation, further developing the infrastructure and technological advancements paved by *Spirio*** .

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• Continue to engage our customers directly through **retail showroom expansion, thereby broadening our local presence and presenting a consistent luxury brand narrative and experience across all markets**.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• Continue to increase **geographic penetration**, aligning our business with the fastest-growing markets, such as China.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• Leverage our **pricing power** and favorable luxury-market dynamics.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• Reinforce our brand advantage through introducing a greater mix of **special, limited-edition and bespoke products**.

**Our Industry** 

We operate within two distinct markets that partially overlap each other: the global personal luxury goods market and the global musical instruments market.

***Global Personal Luxury Goods***

Steinway competes in the fast-growing and highly attractive global personal luxury goods market. This market, which includes both hard and soft personal luxury goods, premium and luxury cars, is expected to grow from $899.1 billion in 2021 to $1,275.0 billion in 2026 globally, representing a 7.2% CAGR, according to Euromonitor estimates.<sup>\*</sup>

The factors driving this growth include higher demand for experiential luxury, increased spending and influence of millennials, and the rise in discretionary spending in China. Historically, the global personal luxury goods market has experienced strong growth, with a 5.0% CAGR from 2017 to 2019 according to Euromonitor.<sup>\*\*</sup>

According to Euromonitor, the APAC region represented approximately 44% of the global personal luxury goods market in 2021, the largest share of any region.<sup>\*\*</sup> Between 2021 and 2026, the APAC region is also expected to be one of the best-performing regions in the world, furthering its lead in the global luxury goods market. In China, the personal luxury goods market is expected to increase from $280.3 billion in 2021 to $424.9 billion in 2026, representing an 8.7% CAGR, according to Euromonitor estimates.<sup>\*\*</sup> We believe China's outsized share of growth in the luxury category can afford us numerous tailwinds as we continue to expand our presence in the country.

------

<sup>\*</sup> Source: Euromonitor International Ltd. Luxury Goods 2023, y-o-y exchange rates, Retail Value RSP, Current Prices. Hard and Soft Luxury Goods includes Apparel & Footwear, Eyewear, Jewelry, Leather Goods, Portable Consumer Electronics, Timepieces, Writing Instruments & Stationery, and Beauty & Personal Care. 

<sup>\*\*</sup> Source: Euromonitor International Ltd. Luxury Goods 2023, y-o-y exchange rates, Retail Value RSP, Current Prices.

------

##### [**Table of Contents**](#toc)
According to *The Wealth Report 2022,* published by Knight Frank, the number of high-net-worth individuals ("HNWI") in China (including Mainland China and Hong Kong), those with a net worth of over $1 million, reached approximately 10.0 million in aggregate in 2021, representing a CAGR of 15.1% from 2016 to 2021. Meanwhile, the number of ultra-high-net-worth individuals ("UHNWI") in China, those with a net worth of over $30 million, has grown 145% from 2016 to 2021 and is expected to continue to grow by 41% from 2021 to 2026. From 2021 to 2026, it is expected that the number of HNWI and UHNWI together will grow from 69.8 million to 106.3 million, representing a CAGR of 8.8% and that by 2026 the number of HNWI and UHNWI in China will reach 18.1 million, representing a five year CAGR of 13%. While the United States remains home to the largest high-net-worth population, China has the second-largest high-net-worth population.

***Global Musical Instruments***

In addition to the global personal luxury goods market, we operate in the global musical instruments market, which is also benefiting from numerous secular tailwinds. These include the increasing global appreciation for music and its role across many aspects of life; the growing desire for at-home entertainment, with pianos in particular; and the growing consumer appetite for heirloom products with longstanding interest across generations. We believe Steinway's products are inherently timeless—and we expect to be a consistent beneficiary of music's robust and growing importance in daily life and pursuits.

According to Technavio, the global musical instruments market is expected to grow from $9.3 billion in 2021 to over $10.8 billion in 2026, representing a 3.2% CAGR. The global piano and keyboards market is expected to reach approximately $3.8 billion by 2026, up from $3.3 billion in 2021. Of that total growth, the APAC region is expected to contribute the most incremental growth.

The piano market in China is the world's largest, with an average of around 400,000 pianos being sold per year from 2017 to 2021, compared to an average of around 30,000 per year in the United States over the same period.

According to statistics published by the Chinese Musicians' Association, approximately 30 million children take piano lessons in China, perhaps inspired by famous Chinese Steinway Artists including Lang Lang and Yuja Wang. Over 40,000 children participated in Steinway's 2021 International Children & Youth Piano Competition in China. To further serve the growing population of developing pianists in China, the Juilliard School made one of the largest orders of pianos in Steinway history in 2019 for its first overseas campus in Tianjin, China.

The Chinese musical instrument market in general and the piano market in particular have benefited from continued government support for music and the arts.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• *China's 14 <sup>th</sup> Five-Year Plan* for the
2021–2025 period emphasizes the importance of cultural development. The Ministry of Culture and Tourism has issued guidelines to promote cultural development, building upon the cultural activities already growing in China. The Chinese
government has invested heavily in opening new concert halls in recent years. In fact, the number of concert halls in China that own Steinway pianos has increased from 11 to 142 from 2012 to 2022.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• The government is promoting the development of young talent in music and the arts. As stated by the *Opinions on Comprehensively Strengthening and Improving School Aesthetic Education in the New Era (Opinion)* published by the Chinese State Council in October 2020, the Ministry of Education seeks to introduce music and the arts as a compulsory examination
subject

------

##### [**Table of Contents**](#toc)
nationwide as part of high school entrance examinations. Schools are also encouraged to develop a more structured curriculum for music and the arts.

As China continues to promote classical music and music education, we expect increases in demand for musical instruments across multiple channels, including orchestras, educational institutions, concerts halls, and households.

The United States has also exhibited unique support for the arts in its education system through its $13.2 billion Elementary and Secondary School Emergency Relief funds. We believe that our piano brands and our Conn-Selmer band and orchestra brands are strongly positioned to benefit from these continued investments in music education.

**Our Financial Performance** 

Since our acquisition by John Paulson and certain affiliated entities in 2013, we have been able to achieve consistently strong financial performance. We are proud of our robust growth, consistent profitability, and high cash-flow generation, which demonstrate our pricing power and optimized cost structure. While continuing to invest in innovation, we have also been able to reduce our debt from $311.6 million as of the year ended December 31, 2016 to $27.5 million as of the year ended December 31, 2022, while increasing cash and cash equivalents from $21.6 million to $56.7 million over the same period.

From fiscal year 2016 to fiscal year 2022, we realized the following results on a consolidated basis:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• Increased net sales from $386 million to $576 million, representing a CAGR of 6.9%

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• Increased Piano segment net sales from $245 million to $426 million, representing a CAGR of 9.7%

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• Increased net sales in the Piano segment under the *Steinway* brand from $154 million to $297 million,
representing a CAGR of 11.5%

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• Increased Piano segment net sales in the APAC region from $71 million to $135 million, representing a CAGR of
11.2%

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• Increased Piano segment Adjusted EBITDA from $32 million to $119 million, representing a CAGR of 24.2%

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• Increased gross profit from $137 million to $239 million, representing a CAGR of 9.7%

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• Increased Piano segment gross profit from $100 million to $211 million, representing a CAGR of 13.3%

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• Increased net income from $3 million to $87 million, representing a CAGR of 77.0%

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• Increased Adjusted EBITDA from $50 million to $125 million, representing a CAGR of 16.6%

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• Increased Adjusted Net Income from $14 million to $92 million, representing a CAGR of 36.9%

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• Increased Net Income Margin from 0.7% to 15.0%

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• Increased Adjusted EBITDA Margin from 12.9% to 21.7%

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• Increased Adjusted Net Income Margin from 3.6% to 16.0%

------

##### [**Table of Contents**](#toc)

---

| | |
|:---|:---|
| ![LOGO](g212165g01q10.jpg) | ![LOGO](g212165g05q10.jpg) |
| ![LOGO](g212165g02q10.jpg)  | ![LOGO](g212165g08q10.jpg) <br>|
| ![LOGO](g212165g04q10.jpg)  | ![LOGO](g212165g06q10.jpg)  |

---

------

##### [**Table of Contents**](#toc)

---

| | |
|:---|:---|
| ![LOGO](g212165g09q10.jpg) | ![LOGO](g212165g03q10.jpg) <br>|

---

For a reconciliation of Adjusted EBITDA and Adjusted Net Income to their most directly comparable GAAP financial measure, information about why we consider Adjusted EBITDA and Adjusted Net Income useful and a discussion of the material risks and limitations of these measures, please see "Prospectus Summary—Summary Historical Consolidated Financial Data—Non-GAAP Financial Measures" and "Management's Discussion and Analysis of Financial Condition and Results of Operations—Non-GAAP Financial Measures."

**Our Strengths** 

***We built a deep competitive moat through our more than century-long track record of creating what we believe to be the world's finest instruments and through the power of our brand.***

For 170 years, we believe our innovation, commitment to detail and extraordinary quality have established our brand as the standard by which all pianos are measured. We believe our long record of leadership across musical instrument categories places our company alongside some of the most admired American companies, with a luxury brand that transcends its functionality.

The fact that our industry's most revered artists and musical institutions consistently choose *Steinway* fortifies our high standing within the music industry. Many musical greats have endorsed the quality of our instruments and personally use our instruments on the brightest stages—classical legends such as Sergei Rachmaninoff and Arthur Rubinstein; some of the biggest classical and pop icons of today, including Lang Lang and Billy Joel; and jazz legends such as Ahmad Jamal and McCoy Tyner all chose *Steinway* time and again as the desired instrument to express their art. We also lead piano demand among the world's largest concert halls, performance venues and educational and cultural institutions.

The prominence of our instruments among the most respected musical authorities informs and influences the purchasing decisions of consumers across the world. When combined with the quality and beauty of our instruments, this reputation allows us to enjoy considerable pricing power while also increasing sales volumes. Between fiscal years 2016 and 2022, we increased sales volumes of our *Steinway* pianos by 24.7%, or at a CAGR of 3.7%, while the average sales price ("ASP") generated by our *Steinway* pianos increased by 54.1%, or at a CAGR of 7.5%.

------

##### [**Table of Contents**](#toc)
Our reach is global. Our instruments are desired and sold throughout the world, in approximately 83 countries and territories. Our brands are well-known and universal, with over 800 trademarks registered in countries across the globe. With this reach, our reputation as a preeminent piano manufacturer has allowed us to gain, based on market data and internal estimates, approximately 80% of what we believe is the ultra-premium piano market, measured in terms of production volumes.

Our top-tier *Steinway* brand provides a professional-level experience; however we also maintain product lines that allow us to serve an array of consumers, including our *Boston* and *Essex* pianos which extend our high-quality piano offerings across more affordable price points. The Piano segment is supplemented by our Band segment where, among others, the *Conn*, *Bach*, *Selmer* and *Ludwig* brands all lead their respective categories and serve a diverse group of educational institutions and instrument consumers.

***We are aligned with favorable long-term trends.***

There are a number of socioeconomic trends that serve as tailwinds for us, including:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• Outsized growth in the population of HNWI and UHNWI, particularly in China. The global population of HNWI and UHNWI has
grown at a 10.1% and 11.9% CAGR, respectively, over the five years ended December 31, 2021. In China, the population of HNWI and UHNWI has grown at a 15.1% and 19.6% CAGR respectively, over the same period, relative to total Chinese population
growth of 0.3%.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• Increasing Chinese investment in music education, with music and the arts expected to be a compulsory examination subject
nationwide.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• A continued consumer focus globally on the home and in-home activities following
the onset of the COVID-19 pandemic.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• A growing understanding of the cognitive and developmental benefits associated with music education.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• Record $13.2 billion in U.S. government investment in education with access for music education through Elementary and
Secondary School Emergency Relief (ESSER) funds, signed into law in March 2020.

While we expect these favorable trends to continue, any ebbing or reversal of one or more of these trends could adversely affect the growth of our business. See "Risk Factors—Risks Related to our Business—Unfavorable economic conditions and changes in consumer preferences could adversely affect our business."

***Our manufacturing excellence and commitment to high-performance quality lies at the core of our identity.***

For 170 years, we have played a key role in the development of the modern grand piano and due to our commitment to sustained advances in manufacturing—as evidenced by our ever-growing patent portfolio—we have remained a leading manufacturer of ultra-premium concert pianos ever since. We manufacture each of our *Steinway* pianos, one by one, in our historic factories in Astoria, New York; and Hamburg, Germany, through a precise and meticulous artisan process.

These factories and many of our pioneering techniques that we still currently employ date back to the 19th century and have shaped and further elevated the high-end piano manufacturing standards of

------

##### [**Table of Contents**](#toc)
today. Our integration of time-tested, old-world methods with state-of-the-art technology and investments in advanced machinery coalesce in a production process that requires six months to several years and dozens of artisans to create what we believe is the world's finest piano.

The quality of our materials and processes results in pianos that can be enjoyed for generations, as evidenced by what has historically been our primary competition, legacy *Steinway* pianos.

![LOGO](g212165g04s44.jpg)

***Our company-owned retail showrooms and deep relationships with experienced dealers create a powerful, high-touch distribution model.***

We have established company-owned retail showrooms coast-to-coast in the United States in wealthy metro areas from New York to Beverly Hills, Chicago, San Francisco and Miami; across Europe with locations in cultural hubs including London, Paris, Vienna and throughout Germany; and in key APAC locations including Tokyo and Shanghai and in Beijing, where we launched our APAC flagship store in 2017. Currently, we operate 15 retail showrooms in the United States, ten in Europe and nine in the APAC region. Our 34 company-owned showrooms heighten our brand awareness and allow us to build meaningful relationships directly with our valued customers.

------

##### [**Table of Contents**](#toc)
Our platform of company-owned retail locations has bolstered our sales from retail operations, which have increased by a CAGR of 15.2% between fiscal years 2016 and 2022, reaching 41.7% of our total *Piano* segment net sales for fiscal year 2022. The outsized growth of this channel has ushered in higher profitability, as pianos sold through direct channels capture a significantly larger share of margin compared to sales through traditional wholesale channels, with the added benefit that we build stronger, longer-lasting ties directly with our customers.

![LOGO](g212165g22a01.jpg)

![LOGO](g212165g65f35.jpg)

------

##### [**Table of Contents**](#toc)
In addition to our company-owned retail showrooms, we depend on a network of independent dealers and distributors to distribute a majority of our pianos and all of our band instruments. We believe that we have a robust network of dealers and distributors with deep knowledge of the markets in which they operate. However, there is no assurance that they will continue to generate sales at historical levels. See "Risk Factors—Risks Related to Our Reliance on Third Parties—We generate most of our sales through independent dealers and distributors." The comprehensive family of brands we offer allows us to serve as the exclusive supplier to many of our piano dealers, and our dealers are also awarded exclusive territories to promote robust marketing and sales programs, promotional expenditures and loyalty. We also bolster our dealers through the provision of marketing and sales programs and materials, inventory management support, sales training, customer service and technical assistance.

![LOGO](g212165g49a49.jpg)

------

Note: Showroom locations, Steinway units and piano net sales data are presented for the year ended December 31, 2022.

Finally, we are finding new and relevant ways to sell to smaller, previously unrepresented territories. We have created a team of Educational Sales Managers that travel and sell direct to institutions and customers in territories not represented by a retail store or a dealer.

Within our Band segment, our Conn-Selmer Department of Education maintains close connections to educational institutions, often the ultimate customers of our band and orchestral instruments. Conn-Selmer is an industry leader in providing support and advocacy tools specifically tailored to music education through our educational outreach team. Through our coast-to-coast School Partnership program, Conn-Selmer maintains a specialized team of educational support managers who provide personalized service and support, customized lease and purchase programs, as well as artist and clinician funding. Conn-Selmer also provides partnering schools with free access to our instrument inventory management system, which helps customers manage their long-term supply needs and track inventory age and condition. These initiatives serve to deepen our institutional relationships and supplement demand for our instruments.

***Our vertically-integrated supply chain affords numerous operational advantages.***

Our commitment to quality extends throughout our entire supply chain. Historically, we have partnered with some of the most respected suppliers in the industry. To streamline our process, better control quality of production and ensure continuity in vendor business, at opportune times, we have strategically acquired significant key parts suppliers: Kluge GmbH, the largest piano keys manufacturer in Europe; O.S. Kelly, the largest piano plate manufacturer in the United States; and most recently in 2019, Louis Renner, which we believe is one of the world's finest and most widely respected producers of piano action parts.

------

##### [**Table of Contents**](#toc)
By integrating these suppliers into our controlled manufacturing process, we can ensure that *Steinway-*caliber quality is preserved and more seamlessly improved upon across our key components. In addition, with these acquisitions, we are now the primary supplier of spare parts for used *Steinway* pianos, giving us the opportunity to reach a broader array of customers through the sale, rebuilding and restoration of certified pianos and set the standards for quality in the resale market.

***We have a long history of innovation and have developed what we believe to be the premier technology in the piano industry.***

We continue to innovate, adding 17 distinct new patents to our portfolio in the last decade to reach a current total of over 150 patents over the course of our history. The *Steinway* pianos we produce today are the best and most advanced pianos we have ever produced.

The introduction of the *Steinway Spirio* in 2015 was a culmination of years of investment, research and development and technological expertise. *Spirio*'s high resolution playback system uses proprietary software to measure hammer velocity (up to 1,020 dynamic levels at a rate of up to 800 samples per second) and proportional pedaling – for both the damper pedal and soft pedal (up to 256 pedal positions at a rate of up to 100 samples per second). We consider the *Spirio* technology to be a masterpiece of artistry and engineering, delighting listeners with recorded performances of artists, with what we believe to be the same level of intimacy and nuance as a live performance. We further enhanced *Spirio* in 2019 with the introduction of *Spirio \| r*, which enables recording, high-resolution editing, and playback, providing educational institutions and professional artists with new tools and opportunities and to seamlessly connect and integrate with multiple musical environments. In 2021 we released our latest *Spirio* feature, *Spiriocast*, which allows for performances to be streamed live, in sync with video and audio, from one *Spirio \| r* piano to others anywhere in the world.

Our *Spirio* technology provides access to our large and diverse *Spirio* music library, which includes performances recorded exclusively for *Spirio* and produced by us, offering performances from an incredible roster of hundreds of Steinway Artists. A collection of these recorded works is also synched with video for an even more engaging and unique performance at home. In addition, we pioneered technology that allows *Spirio* pianos to showcase historical performances, synched with video, by Steinway Immortals including Glenn Gould, Duke Ellington and Vladimir Horowitz. Each month, the *Spirio Spotlight* showcases all new content—music, videos and curated playlists—which is automatically downloaded to every *Spirio* piano, allowing us to drive value for and deepen our connection to our customers.

![LOGO](g212165g25c15.jpg)

------

##### [**Table of Contents**](#toc)
These innovations fortify our reputation as an industry leader in musical instrument manufacturing and strengthen our offerings relative to our competition, including legacy *Steinway* pianos. *Spirio* has been a key driver of our growth, comprising approximately half of *Steinway* piano sales in 2022. With the evolution of our *Spirio* technology, we have built an experienced, high-tech, cutting-edge Music and Technology team that we continue to leverage for future opportunities, technological advancements, and product offerings, always striving to create new avenues to grow our brands and product portfolio. Our recent investments in innovation have dramatically expanded our target audience, increased our relevance to consumers and artists, and entrenched our leading competitive position in the piano market.

![LOGO](g212165g13a00.jpg)

***We are the clear brand of choice among the professional community.***

The *Steinway* piano was the instrument of choice for approximately 97% of concert pianists when performing with orchestras across the globe during the 2018–2019 concert season, none of whom are compensated to use or endorse *Steinway*. These artists, many of whom perform at the pinnacle of the music industry, influence consumption trends across our customer base. For decades, we have cultivated relationships with the most talented pianists from nearly every genre, including Jon Batiste, Billy Joel, Lang Lang and Regina Spektor.

------

##### [**Table of Contents**](#toc)
We continue to source and grow these relationships through our Steinway Artists program. This program encompasses all genres of music and includes renowned musicians such as Martha Argerich, Ahmad Jamal, Diana Krall, Charlie Puth and Yuja Wang. We select our Steinway Artists through a rigorous application process that can last up to a year, requires applicants to already own a *Steinway* piano and have a recommendation from an existing Steinway Artist or a Steinway & Sons dealer. For our Steinway Artists, we have a concert and artist bank of *Steinway* pianos, many of which are permanently located at leading concert venues. We also transport our pianos to any location where a Steinway Artist is performing, ranging from the biggest music festivals to the hardest-to-reach locations, including an iceberg in the Arctic Ocean. These programs strengthen our relationships and standing with the professional community and also allow us to constantly solicit feedback from the most qualified sources: top concert pianists.

![LOGO](g212165g13b00.jpg)

Leading educational institutions also choose *Steinway*, and we maintain relationships with nearly all of the top music schools across the world—which we believe cements our position as the world's premier piano manufacturer and instills young artists globally with a devotion to *Steinway* pianos at the onset of their careers. Our All-Steinway schools provide pianos that inspire students to realize their artistic talents and best prepare them to compete at the highest level in the professional world. In addition, we maintain a dedicated institutional sales team that provides a suite of customized resources to colleges, universities and conservatories, including inventory analysis tools, fundraising programs, lease-to-own options, factory seminars and technical service guidelines.

We are proud of our strong market share among professionals and institutions, and believe this validates our meticulous artisan process and the quality products we produce. This endorsement by the professional and institutional community informs and drives consumer demand of individuals searching for high quality pianos for the home.

***We have an experienced management team and shareholder group committed to serving as stewards of our brands.***

Our management team, led by our Chief Executive Officer, Benjamin Steiner, has extensive industry experience and global expertise and is committed to preserving and further expanding the legacy of our brands. The management team represents a broad foundation of experiences spanning expertise in sales, marketing, manufacturing, technology and innovation and strives to conserve a deep continuity with Steinway's rich heritage. In addition, our Americas, EMEA and APAC regional

------

##### [**Table of Contents**](#toc)
leaders have intimate local knowledge of their respective geographies, allowing us to navigate the nuances of the piano market across all of our operations.

Our Chief Executive Officer, Mr. Steiner, led the investment by John Paulson and certain affiliated entities in 2013 and has been associated with our company ever since, joining the Steinway team in 2016 and subsequently being appointed as Chief Executive Officer in August 2021. During his years with our company, Mr. Steiner has connected John Paulson's vision with our management team's industry and institutional knowledge, strengthening our business through operational and digital innovation while enhancing our stature within the music industry.

The talent and industry expertise of the members of our management team make our company well positioned to realize its growth potential. Our President of Steinway Asia Pacific, Wei Wei, brings a deep knowledge of the region and marketing expertise from her past experience as Director of Marketing and Sales to her current position overseeing this particularly fast-growing region. Eric Feidner serves as our Chief Technology and Innovation Officer managing the teams responsible for music technology in product development. With his accomplished background in technology, music and e-commerce, having previously founded ArkivMusic and served in executive positions at start-ups N2K, Inc. and Winstar Communications, Eric Feidner is expected to help expand the market for *Steinway* pianos. Our Chief Financial Officer, Maia Moutopoulos, also brings years of expertise to our management team. Before joining Steinway's corporate finance team in 2014, Maia Moutopoulos served for eight years as the Accounting Manager at Steinway Inc., our Americas piano division, bringing an intimate knowledge of the company's financial structure to her role.

Furthermore, John Paulson, founder of Paulson & Co., is one of the most prominent names in the financial industry. John Paulson's reputation and knowledge—both operationally and financially—have proven to be key assets for Steinway and our people. John Paulson's primary goal has been to ensure the long-term success of our business and the continued preeminence of the *Steinway* brand, and as our controlling stockholders, John Paulson and certain affiliated entities play a central role in creating our strategic vision and setting our long-term trajectory. As testament to this commitment, one of the first initiatives undertaken by John Paulson post-acquisition was to fortify our technological capabilities with significant investment in music technology, resulting in the successful launch of the *Steinway Spirio* piano, and our total capital expenditures have more than tripled since 2013. After this offering, John Paulson and certain affiliated entities will hold a significant portion of our common stock, including all of our Class B common stock, will control the direction of our business, and so long as they do so, will prevent you and other stockholders from influencing significant decisions of our business.

**Our Growth Strategies** 

***Innovate in technology, including through Spirio.***

We believe our *Steinway Spirio* high-resolution player pianos are revolutionary for our industry and we have consistently advanced the technology since its original debut in 2015. We built upon our initial launch of *Spirio* with the introduction of *Spirio \| r* in 2019, which enabled recording, high-resolution editing and playback capabilities. In 2021, we released a new software feature, *Spiriocast*, which allows instant streaming of live performances, perfectly in sync with audio and video, from one *Spirio \| r* piano to others around the world. Our *Spirio* instruments play back the performances of renowned concert pianists, record and replay a consumer's own performances, and also allow for high-resolution editing of such recordings. Our *Spirio* music library includes thousands of exclusive performances by hundreds of artists, many of which are synched with video, all accessed with the touch of an iPad and enjoyed in a consumer's own home. Our *Spirio* music library is expanded monthly

------

##### [**Table of Contents**](#toc)
and automatically updated, increasing consumer value over time while also deepening our connection to our consumers.

With this evolution, enabled through *Spirio* technology, we believe the *Steinway* piano has been recast—not only as the preeminent high-performance piano, but also as a unique luxury entertainment system for the home. Our target market has expanded significantly with this development to now include recreational music lovers who may not play the piano but can nonetheless enjoy a moving musical experience at home. In fact, 67% of our *Spirio* customers from 2015 to 2022 reported that they are non-piano players. We have also increased our brand's relevance to customers and artists, differentiating our product from older *Steinway* models that may have been considered by customers on the used market.

We have seen significant demand for our *Steinway Spirio* player pianos; sales of our *Spirio* and *Spirio \| r* pianos grew at a CAGR of over 28% between fiscal years 2016 and 2022 and represented approximately 34% of Piano segment net sales in fiscal year 2022. We believe there is still significant room for growth in *Steinway Spirio* sales. Our *Spirio* player pianos sell at a premium to other *Steinway* models, leading to increased net sales and profit per unit sold.

We continue to advance the depth and breadth of our technology, with each *Spirio* generation continually improving on the last. In addition, the investments we have made in our technical capabilities have allowed our company to build an infrastructure of technological expertise, laying the foundation for further innovation across our instrument portfolio and potentially in adjacent markets.

Our Conn-Selmer business also continues to invest in digital technology to strengthen our relationships with music educators and students. Our recently acquired MusicProfessor digital lesson platform gives music educators a suite of teaching aids for in person, hybrid, and remote learning as well as a pedagogically-driven experience for new players without formal guidance.

***Expand our company-owned retail locations and improve distribution.***

We are driving top-line growth by building out our company-owned retail showroom presence in strategic high-growth metropolitan areas, providing the opportunity to cultivate deeper and more durable relationships directly with our end customers and to strengthen our ability to manage our luxury brand image. In addition, increasing sales through our direct outlets allows us to realize a larger share of margin compared to sales through wholesale channels.

To capitalize on this higher profit opportunity, we have improved many of our existing direct outlets and opened new locations, which feature high quality buildouts, curated merchandise and knowledgeable and effective sales employees. We have opened or renovated 28 of our 34 retail showrooms since 2013. These retail stores are strategically located across the United States, including locations in New York, Beverly Hills, Chicago, San Francisco and Miami; in cultural hubs in Europe such as London, Paris, Berlin and Vienna; and also in key APAC metros that include Shanghai, Beijing, Xi'an and Tokyo.

These initiatives have increased the percentage of sales that come from our retail operations over time, representing approximately 41.7% of all Piano segment sales in fiscal year 2022. We believe that continuing to expand our network of retail showrooms will enable us to increase the demand for our pianos, while also improving our margins, strengthening customer relationships and expanding our customer reach.

------

##### [**Table of Contents**](#toc)
Wholesale distribution remains our largest channel by volume of instruments. Many of our dealers have been in the business for almost as long as we have, and we always encourage exclusive relationships with us. They have intimate knowledge of their local markets and deep connections within their musical communities. We work with our dealers to further elevate their operations, including by providing retail design templates, encouraging location optimization, offering enhanced sales training, providing promotional materials and sales leads, and arranging ongoing technical support. These initiatives fortify our relationships with our dealers and also ensure a *Steinway*—level customer experience across our network. In addition, we continue to evaluate underperforming territories for further potential retail expansion.

Finally, we have seen successful sales results with our recently launched Steinway Educational Sales Manager program, which sends *Steinway*-trained sales managers to institutions in territories that are not represented by a dealer or a company-owned retail store. We continue to consider and implement new methods to reach underpenetrated markets.

***Expand in China, a vast and rapidly growing market for our products.***

China represents a unique market for *Steinway* due to two primary cultural and structural factors: a deep-rooted reverence for classical music, specifically piano music, and a sizeable and rapidly expanding middle and upper class with an appetite for luxury Western products. China is the largest global market for pianos and has approximately 40 million practicing pianists, roughly seven times the approximately six million practicing pianists in the United States. Currently there are approximately 30 million children in China taking piano lessons, compared to less than 10 million in the rest of the world, suggesting that the majority of children playing the piano globally are in China. Initiatives pursued by the Chinese central authorities to promote traditional forms of childhood recreation further bolster these organic dynamics, which we expect to provide further tailwinds to our business in the region.

In addition to these favorable trends, the *Steinway* brand is revered in China, where all of the 13 national conservatories use *Steinway* pianos, with four such conservatories serving as All-Steinway schools. We have taken steps to continue building our brand resonance in the region by actively partnering with celebrity Chinese concert pianists, such as Lang Lang, opening company-owned retail showrooms in strategic Chinese metro areas, promoting a full and diverse sales and marketing calendar nationwide, including, on average, over 215 events at each of our retail showrooms annually, and adding new tracks to our *Spirio* library that cater to the Chinese consumer.

Despite the prevalence of piano playing in China and our brand strength in the region, we have historically been underpenetrated in the country, selling approximately half as many *Steinway* grand pianos in China as in the U.S. market. However, as China continues to develop and accumulate wealth, we will seek to capture the growing demand for ultra-premium pianos by private customers. Over the last 20 years, we have transformed our business in China to sell more pianos to private customers rather than institutions. For example, over 90% of *Steinway* grand pianos sold in China in fiscal year 2001 were to institutional customers, compared to approximately 13% in fiscal year 2022. *The Wealth Report 2022*, published by Knight Frank, forecasts the number of UHNWI in China to grow by 41% over the five years from 2021 to 2026 while the combined population of UHNWI and HNWI is expected to reach 18.1 million, representing the second-largest wealth market globally. Our and third-party forecasts of growth in China are based on a number of assumptions, and should be read in conjunction with "Risk Factors—Risks Related to Our Business—Our estimates of market opportunity and forecasts of market growth, including in China, may prove to be inaccurate and there is no guarantee that demand for our products will grow as expected, or that we will be able to grow our business at similar rates, if at all."

------

##### [**Table of Contents**](#toc)
![LOGO](g212165g00m05.jpg)

![LOGO](g212165g12a48.jpg)

***Grow our average net sales per unit by expanding our special, limited-edition and bespoke instrument business.***

The investments we have made in our manufacturing facilities have made our factories nimbler and more efficient, allowing us to increase our range of stock keeping units ("SKUs"). We have built a team dedicated to creating new and exceptional design concepts, sourcing unique luxury materials and collaborating with specialty artisans to produce the most exquisite *Steinway* pianos. We have a long legacy of producing custom pianos, and with our advances in manufacturing capability and our investment in the right team, we are now able to produce a significantly larger number and spectacularly varied array of custom models. These include our Bespoke and Art Case custom

------

##### [**Table of Contents**](#toc)
 *Steinway* pianos, our limited-edition *Steinway* pianos, our *Crown Jewel Steinway* collection of exotic wood veneers, and our special collections. These products not only increase the selection offered to our most discerning customers, but also allow us to drive meaningful increases in average selling price.

We believe we can further increase our average net sales per unit through greater customer adoption of our special instruments, including by: (1) continuing to expand our range of special and custom instruments; (2) investing in our manufacturing capabilities to increase capacity and decrease lead times for these instruments; (3) honing our marketing efforts for such instruments; and (4) capitalizing on the growing population of UHNWI, particularly in China. Our manufacturing advances to date have allowed us to increase the percentage of special pianos produced as part of total *Steinway* grand pianos manufactured at our Hamburg factory, which supplies our growing business in China, from approximately 6% to 13% between fiscal years 2016 and 2022.

Our Band segment has also made strides in building demand for premium instruments offered within our Conn-Selmer family of brands. We have launched over 190 new or improved products since 2020, including our re-imagination of the most coveted line of trumpets on the market, the *Bach* 170, 180, and 190 series and the release of new *Ludwig* hardware to expand our growing *Ludwig* acoustic drum market. Alongside our Artist Select program, a celebration of our best horns which are hand-selected by our master artists, we have recently launched *ConnSonic*—a proprietary suite of processes for optimizing musical instrument acoustics. We believe instruments created using *ConnSonic* feature greater depth and efficiency of tone production than conventional instruments.

**Summary Risk Factors** 

We are subject to a number of risks, including risks that may prevent us from achieving our business objectives or that may adversely affect our business, financial condition and results of operations. You should carefully consider the risks discussed in the section titled "Risk Factors," including the following risks, before investing in our Class A common stock:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• Our business is dependent upon the distinctive appeal of the Steinway brand.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• Competition within the luxury goods and broader music industry is intense and our existing and potential customers may be
attracted to competing forms of products.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• Since we have a limited number of facilities, any loss of use of any of our facilities, or those of our third-party
suppliers, could adversely affect our operations.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• Our estimates of market opportunity and forecasts of market growth, including in China, may prove to be inaccurate and
there is no guarantee that demand for our products will grow as expected, or that we will be able to grow our business at similar rates, if at all.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• Unfavorable economic conditions and changes in consumer preferences could adversely affect our business.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• Any disruption in the supply of raw materials and components we and our key manufacturers need to manufacture our musical
instruments could harm our business, financial condition and results of operations.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• We operate in competitive markets.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• We depend on skilled craftspeople to develop and create our pianos and a skilled sales force to sell our pianos.

------

##### [**Table of Contents**](#toc)
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• The loss of one or more members of our senior management team could adversely affect our business.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• Our primary manufacturing facilities in Astoria, New York and Hamburg, Germany are expensive to operate, and subject us to
high labor, tax and other expenses.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• The artists who play and promote our instruments are an important aspect of our brands' images and the loss of the
support of artists may harm our business.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• Our internal computer systems, or those of any of our third-party service providers, may fail or suffer security breaches.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• We may be unable to strategically expand our showroom footprint, and maintaining our brand image and desirability to
consumers requires significant investment in showroom construction, maintenance and periodic renovation.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• Our international operations are exposed to risks associated with exchange rate fluctuations and customs, regulations,
trade restrictions and political, economic and social instability.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• Evolving U.S. and European trade regulations and policies, including with China, have in the past and may in the future
have a material and adverse effect on our business.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• Failure of our new products to gain market acceptance, or the obsolescence of our existing products, may adversely affect
our operating results.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• Our operations may subject us to liabilities for environmental or other regulatory matters, the costs of which could be
material.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• We generate most of our sales through independent dealers and distributors.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• Any significant disruption in our supply from key suppliers could delay production.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• Our third-party manufacturers and suppliers may not continue to manufacture
products that are consistent with our standards and our quality control measures may be inadequate.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• John Paulson and certain affiliated entities will hold a significant portion of our common stock, including all of our
Class B common stock, will control the direction of our business, and so long as they do so, will prevent you and other stockholders from influencing significant decisions.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• We will be a "controlled company" under the corporate governance rules of the NYSE and, as a result, will qualify
for exemptions from certain corporate governance requirements. If in the future we choose to rely on certain of these exemptions, you will not have the same protections afforded to stockholders of companies that are subject to such
requirements.

Our business also faces a number of other challenges and risks discussed throughout this prospectus. You should read this entire prospectus carefully, including "Risk Factors," "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, before deciding to invest in our Class A common stock.

**Our Corporate Information** 

Our principal executive office is located at 1 Steinway Place, Astoria, New York 11105 and our telephone number at that address is (718) 721-2600. We maintain a website on the Internet at *www.steinway.com*. We have included our website address in this prospectus as an inactive textual reference only. The information contained on, or that can be accessed through, our website is not a part of, and should not be considered as being incorporated by reference into, this prospectus.

------

##### [**Table of Contents**](#toc)
**Implications of Being an Emerging Growth Company** 

We qualify as an "emerging growth company" as defined in Section 2(a) of the Securities Act of 1933, as amended (the "Securities Act"), as modified by the Jumpstart Our Business Startups Act of 2012 (the "JOBS Act"). As an emerging growth company, we may take advantage of specified reduced disclosure and other requirements that are otherwise applicable, in general, to public companies that are not emerging growth companies. These provisions include:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• the option to present only two years of audited financial statements and only two years of related Management's
Discussion and Analysis of Financial Condition and Results of Operations in this prospectus;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• not being required to comply with the auditor attestation requirements of Section 404 of the Sarbanes-Oxley Act of 2002;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• reduced disclosure obligations regarding executive compensation in our periodic reports, proxy statements and registration
statements; and

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• exemptions from the requirements of holding nonbinding, advisory stockholder votes on executive compensation or on any
golden parachute payments not previously approved.

We will remain an emerging growth company until the earliest to occur of: (i) the last day of the first fiscal year in which our annual gross revenue exceeds $1.235 billion; (ii) the date that we become a "large accelerated filer," with at least $700 million of equity securities held by non-affiliates as of the end of the second quarter of that fiscal year; (iii) the date on which we have issued, in any three-year period, more than $1.0 billion in non-convertible debt securities; and (iv) the last day of the first fiscal year ending after the fifth anniversary of the completion of this offering.

We have elected to take advantage of certain of the reduced disclosure obligations in the registration statement of which this prospectus is a part and may elect to take advantage of other reduced reporting requirements in future filings. As a result, the information that we provide may be different than the information you receive from other public companies in which you hold stock.

Emerging growth companies can also take advantage of the extended transition period provided in Section 13(a) of the Securities Exchange Act of 1934, as amended (the "Exchange Act") for complying with new or revised accounting standards. In other words, an emerging growth company can delay the adoption of certain accounting standards until those standards would otherwise apply to private companies. We have elected to take advantage of this extended transition period and, as a result, our operating results and financial statements may not be comparable to the operating results and financial statements of companies who have adopted the new or revised accounting standards.

As a result of these elections, some investors may find our Class A common stock less attractive than they would have otherwise. The result may be a less active trading market for our Class A common stock, and the price of our Class A common stock may become more volatile.

**Distribution** 

Prior to the closing of this offering, the Parent will be liquidated and its sole asset, the shares of our common stock it holds, will be distributed to certain of its members based on their relative rights under its operating agreement. John Paulson and certain affiliated entities will receive a number of shares of our common stock in the liquidation of Parent equal to the value of their holdings in the Parent immediately before the distribution. Our Chief Executive Officer, Benjamin Steiner, will receive a

------

##### [**Table of Contents**](#toc)
number of fully-vested shares of our common stock in the distribution equal to the value of his fully-vested holdings in the Parent immediately before the distribution and will receive a number of restricted shares of our common stock in the distribution equal to the value of his unvested holdings in the Parent immediately before the distribution, which restricted shares shall be subject to the same time-vesting conditions as Mr. Steiner's unvested holdings in the Parent as of immediately before the distribution. See "Certain Relationships and Related Party Transactions—Relationships with Other Directors, Executive Officers and Affiliates." After giving effect to the filing and effectiveness of our amended and restated certificate of incorporation and the adoption of our amended and restated bylaws, each of which will be in effect upon the closing of this offering, and the Reclassification (as defined herein), John Paulson and certain affiliated funds' common stock will be recapitalized into Class B common stock and Mr. Steiner' s common stock will be recapitalized into Class A common stock.

We refer to these transactions collectively as the "Distribution." Unless otherwise indicated, all information in this prospectus assumes the completion of the Distribution prior to the closing of this offering and a public offering price of $ per share, which is the midpoint of the price range set forth on the cover page of this prospectus. Although the combined number of shares of Class A common stock and Class B common stock outstanding after the offering will remain fixed regardless of the initial public offering price in this offering, the split between the number of shares of Class A common stock and Class B common stock issued to John Paulson and certain affiliated entities and Benjamin Steiner in the Distribution will vary depending on the initial public offering price in this offering. These changes will not significantly impact the relative economic and voting interests of such stockholders after this offering. The Distribution will not affect our operations, which we will continue to conduct through our operating subsidiaries.

------

##### [**Table of Contents**](#toc)
**THE OFFERING** 

Class A common stock offered by the selling stockholder shares.

Class A common stock to be outstanding after this offering shares (shares if the underwriters exercise their option to purchase additional shares of Class A common stock in full).

Class B common stock to be outstanding after this offering shares (shares if the underwriters exercise their option to purchase additional shares in full).

---

| | |
|:---|:---|
| Total Class A common stock and Class B common stock to be outstanding after this offering  | &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&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. |

---

---

| | |
|:---|:---|
| Option to purchase additional shares of Class A common stock offered by the selling stockholder  | The underwriters have a 30-day option to purchase up to an additional shares of Class A common stock from the selling stockholder at the initial public offering price, less underwriting discounts and commissions. |

---

---

| | |
|:---|:---|
| Reserved Share Program  | At our request, an affiliate of BofA Securities, Inc., a participating underwriter, has reserved for sale, at the initial public offering price, up to 5% of the shares of Class A common stock offered by this prospectus for sale to some of our directors, officers, employees, distributors, dealers, business associates and related persons. If these persons purchase reserved shares it will reduce the number of shares available for sale to the general public. Any reserved shares that are not so purchased will be offered by the underwriters to the general public on the same terms as the other shares of Class A common stock offered by this prospectus. Any of our directors, officers and other Lock-Up Parties (as defined below) buying shares of Class A common stock through the Reserved Share Program will be subject to a 180-day lock-up period with respect to such shares, subject to certain exceptions described herein. |

---

For additional information, see "Underwriting—Reserved Share Program."

Use of proceeds The selling stockholder will receive all of the net proceeds from this offering. We will not receive any proceeds from the sale of Class A common

------

##### [**Table of Contents**](#toc)
stock by the selling stockholder in this offering. See "Use of Proceeds."

---

| | |
|:---|:---|
| Voting rights  | Shares of Class A common stock are entitled to one vote per share. Shares of Class B common stock are entitled to ten votes per share. |

---

Holders of our Class A common stock and Class B common stock will generally vote together as a single class, unless otherwise required by law or our amended and restated certificate of incorporation. Following the completion of this offering, each share of our Class B common stock will be convertible into one share of our Class A common stock at any time and will convert automatically upon certain transfers and upon the earlier of (i) ten years from the filing and effectiveness of our amended and restated certificate of incorporation in connection with this offering, (ii) the first date on which the aggregate number of outstanding shares of our Class B common stock ceases to represent at least 5% of the aggregate number of our outstanding shares of common stock and (iii) the death or disability, as defined in our amended and restated certificate of incorporation, of John Paulson.

Upon the completion of this offering, John Paulson and certain affiliated entities, which will be the holders of all of the outstanding shares of Class B common stock, will collectively hold approximately % of the total combined voting power of our outstanding common stock (or approximately % of the total combined voting power of our outstanding common stock if the underwriters exercise in full their option to purchase additional shares of our Class A common stock). As a result, the holders of the outstanding shares of Class B common stock 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 "Principal and Selling Stockholder" and "Description of Capital Stock" for additional information.

---

| | |
|:---|:---|
| Dividend Policy  | As a public company we anticipate paying a quarterly dividend at a rate initially equal to $ per share per annum on our common stock to holders of our common stock. Our ability to pay dividends on our common stock is limited  |

---

------

##### [**Table of Contents**](#toc)
by the agreements governing our Credit Facilities. See "Dividend Policy."

Controlled company Following this offering we will be a "controlled company" within the meaning of the corporate governance rules of the NYSE.

Risk factors See the section titled "Risk Factors" and the other information included in this prospectus for a discussion of factors you should consider carefully before deciding to invest in shares of our Class A common stock.

Proposed stock exchange symbol "STWY."

The number of shares of our common stock to be outstanding immediately following this offering is based on shares of Class A common stock, including shares of restricted stock, and shares of Class B common stock outstanding as of , and reflects the Distribution, Stock Split and Reclassification described below.

The number of shares of our Class A common stock and Class B common stock to be outstanding after this offering does not include:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&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 Class A common
stock, based on an assumed initial public offering price of $ per share, which is the midpoint of the price range set forth on the cover page of this prospectus, issuable in
connection with the vesting and settlement of restricted stock units that we intend to grant, to certain of our employees, under our 2023 Incentive Award Plan (the "2023 Plan"), which will become effective in connection with this offering
(the "IPO RSUs");

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&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 Class A
common stock reserved for future issuance following this offering under our 2023 Plan (which number, for the avoidance of doubt, excludes the IPO RSUs), which will become effective on the day prior to the first public trading date of our Class A
common stock, as well as any shares that become issuable pursuant to the provisions in the 2023 Plan that automatically increase the share reserve under the 2023 Plan; 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; shares of Class A common
stock reserved for future issuance following this offering under our 2023 Employee Stock Purchase Plan (the "ESPP"), which will become effective on the day prior to the first public trading date of our Class A common stock, as well as any
shares that become issuable pursuant to the provisions in the ESPP that automatically increase the share reserve under the ESPP.

Unless otherwise indicated, all information in this prospectus reflects and assumes:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• the completion of the Distribution prior to the closing of this offering, including the issuance of
 shares of restricted common stock to Mr. Steiner, of
which shares of restricted stock are expected to vest on April 30, 2023 and an additional
 shares of restricted stock are expected to vest on April 30, 2024, in each case, subject to Mr. Steiner's continued service through such vesting
date;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• the filing and effectiveness of our amended and restated certificate of incorporation and the adoption of our amended and
restated bylaws, each of which will be in effect prior to the closing of this offering;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• the reclassification of outstanding shares of our
common stock as of , into
 shares of Class A common stock and shares of
Class B common stock, which will occur prior to the closing of this offering (the "Reclassification");

------

##### [**Table of Contents**](#toc)
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• no exercise of outstanding options;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• a -for-one stock split on our common stock to be
effected prior to the consummation of this offering (the "Stock Split");

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• no exercise by the underwriters of their option to purchase additional shares of Class A common stock from the selling
stockholder; and

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• that the initial public offering price of our Class A common stock will be
$ per share (which is the midpoint of the price range set forth on the cover page of this prospectus).

Although the combined number of Class A common stock and Class B common stock outstanding after the offering will remain fixed regardless of the initial public offering price in this offering, the split between the number of shares of Class A common stock and Class B common stock issued to John Paulson and certain affiliated entities and Benjamin Steiner in the Distribution will vary depending on the initial public offering price in this offering. These changes will not significantly impact the relative economic and voting interests of such stockholders after this offering. See "—Distribution."

------

##### [**Table of Contents**](#toc)
**SUMMARY HISTORICAL CONSOLIDATED FINANCIAL DATA** 

The following tables present our summary historical consolidated financial data for the periods and as of the dates indicated. The financial data as of and for the years ended December 31, 2021 and 2022 have been derived from our audited consolidated financial statements that are included elsewhere in this prospectus. The financial data for the fiscal year ended December 31, 2020 has been derived from our audited consolidated financial statements not included in this prospectus. Our historical results are not necessarily indicative of the results to be expected in the future. This summary financial data should be read in conjunction with "Management's Discussion and Analysis of Financial Condition and Results of Operations" and our consolidated financial statements and the accompanying notes thereto included elsewhere in this prospectus.

**Consolidated Statements of Operations Data** 

---

| | | | |
|:---|:---|:---|:---|
|  | **Year Ended December 31,** | **Year Ended December 31,** | **Year Ended December 31,** |
|  | **2020** | **2021** | **2022** |
|  | **(dollars in thousands, except share<br>and per share data)** | **(dollars in thousands, except share<br>and per share data)** | **(dollars in thousands, except share<br>and per share data)** |
|  Net sales | $415856 | $538350 | $575537 |
|  Cost of sales | 256672 | 313735 | 336904 |
|  Gross profit | 159184 | 224615 | 238633 |
|  Selling, general and administrative expenses | 105222 | 136385 | 142325 |
|  Goodwill impairment | 13593 |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Total operating expenses | 118815 | 136385 | 142325 |
|  Income from operations | 40369 | 88230 | 96308 |
|  Other expense (income), net: |  |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Interest expense (income), net | 15546 | 5237 | (3648) |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Other pension benefit | (165) | (341) | (1580) |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Gain on sale of assets held for sale | (56290) |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Other income | (943) | (1606) | (8252) |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Total other expense (income), net | (41852) | 3290 | (13480) |
|  Income before provision for income taxes | 82221 | 84940 | 109788 |
|  Income tax expense | 30406 | 25677 | 23264 |
|  Net income | $51815 | $59263 | $86524 |
|  Net income per share attributable to common stockholders, basic and diluted | $51815 | $59263 | $86524 |
|  Weighted-average shares used in computing net income per share attributable to common stockholders, basic and diluted | 1000 | 1000 | 1000 |

---

**Consolidated Balance Sheet Data** 

---

| | |
|:---|:---|
|  | **As of<br>December 31, 2022** |
|  | **(in thousands)** |
|  Cash and cash equivalents | $56689 |
|  Net working capital<sup>(1)</sup> | 155604 |
|  Goodwill | 91154 |
|  Total assets | 757704 |
|  Debt-noncurrent | 24793 |

---

------

##### [**Table of Contents**](#toc)

------

(1) We define net working capital as current assets less current liabilities. See our consolidated financial statements and
the accompanying notes included elsewhere in this prospectus for further details regarding our current assets and current liabilities.

**Consolidated Cash Flows Data** 

---

| | | | |
|:---|:---|:---|:---|
|  | **Year Ended December 31,** | **Year Ended December 31,** | **Year Ended December 31,** |
|  | **2020** | **2021** | **2022** |
|  | **(in thousands)** | **(in thousands)** | **(in thousands)** |
|  Net cash provided by (used in): |  |  |  |
|  Operating activities | $58447 | $122485 | $51027 |
|  Investing activities | 57580 | (24987) | (12280) |
|  Financing activities | (104091) | (96360) | (21251) |

---

**Non-GAAP Financial Measures** 

In addition to our results determined in accordance with U.S. generally accepted accounting principles ("GAAP"), we believe the following non-GAAP financial measures are useful in evaluating and comparing our financial and operational performance over multiple periods, identifying trends affecting our business, formulating business plans and making strategic decisions.

---

| | | | |
|:---|:---|:---|:---|
|  | **Year Ended December 31,** | **Year Ended December 31,** | **Year Ended December 31,** |
|  | **2020** | **2021** | **2022** |
|  | **(dollars in thousands, except percentages)** | **(dollars in thousands, except percentages)** | **(dollars in thousands, except percentages)** |
|  Net Income | $51815 | $59263 | $86524 |
|  Net Income Margin | 12.5% | 11.0% | 15.0% |
|  Adjusted EBITDA<sup>(1)</sup> | $76998 | $117462 | $125032 |
|  Adjusted EBITDA Margin<sup>(1)</sup> | 18.5% | 21.8% | 21.7% |
|  Adjusted Net Income<sup>(2)</sup> | $30203 | $71420 | $92201 |
|  Adjusted Net Income Margin<sup>(2)</sup> | 7.3% | 13.3% | 16.0% |

---

------

(1) Adjusted EBITDA and Adjusted EBITDA margin are non-GAAP financial measures. We
define Adjusted EBITDA as net income before interest expense (income), net, income tax expense, depreciation and amortization, foreign exchange (gain)/loss, non-cash impairment, purchase accounting
adjustments, non-cash stock-based and other compensation expense, gain on sale of intangible assets, corporate re-organization and related charges, dealer termination expense, gain on sale of assets held for
sale, potential transaction / acquisition costs, loss on extinguishment of debt, initial public offering expense, non-operating legal costs (recoveries) and other charges that we do not consider reflective of
our ongoing performance. Adjusted EBITDA margin is calculated as Adjusted EBITDA divided by net sales, expressed as a percentage. For information about why we consider Adjusted EBITDA and Adjusted EBITDA margin useful and a discussion of the
material risks and limitations of these measures, see "Management's Discussion and Analysis of Financial Condition and Results of Operations—Non-GAAP Financial Measures."

We derived the below financial data for the fiscal years ended December 31, 2021 and 2022 from our audited consolidated financial statements included elsewhere in this prospectus. We derived the below financial data for the fiscal year ended December 31, 2020 from our audited consolidated financial statements not included in this prospectus. We derived the below financial data for the fiscal years ended December 31, 2016, 2017, 2018 and 2019 from our consolidated financial statements not included in this prospectus. We have prepared the consolidated financial statements for the fiscal years ended December 31, 2016, 2017, 2018 and 2019 on the same basis as our audited consolidated financial statements and have included all adjustments, consisting of only normal recurring adjustments, that we consider necessary for a fair presentation of our operating results for such periods. The following table reconciles net income, which is the most directly comparable measure calculated in accordance with GAAP, to Adjusted EBITDA, for each of the periods presented:

------

##### [**Table of Contents**](#toc)

---

| | | | | | | | |
|:---|:---|:---|:---|:---|:---|:---|:---|
|  | **Year Ended December 31,** | **Year Ended December 31,** | **Year Ended December 31,** | **Year Ended December 31,** | **Year Ended December 31,** | **Year Ended December 31,** | **Year Ended December 31,** |
|  | **2016** | **2017** | **2018** | **2019** | **2020** | **2021** | **2022** |
|  | **(dollars in thousands, except percentages)** | **(dollars in thousands, except percentages)** | **(dollars in thousands, except percentages)** | **(dollars in thousands, except percentages)** | **(dollars in thousands, except percentages)** | **(dollars in thousands, except percentages)** | **(dollars in thousands, except percentages)** |
|  Net income | $2817 | $12988 | $17941 | $28656 | $51815 | $59263 | $86524 |
|  Interest expense (income), net | 16607 | 17658 | 19800 | 23420 | 15546 | 5237 | (3648) |
|  Income tax expense | 7820 | 10698 | 20825 | 13518 | 30406 | 25677 | 23264 |
|  Depreciation and amortization | 19622 | 19383 | 14365 | 13654 | 14950 | 14889 | 15840 |
|  Foreign exchange (gain)/loss<sup>(a)</sup> | (1023) | 1419 | 1072 | 431 | 588 | (438) | (1043) |
|  Non-cash impairment<sup>(b)</sup> |  |  |  |  | 16093 |  |  |
|  Purchase accounting adjustments<sup>(c)</sup> | 943 | 298 | 131 | 17 | 468 | 71 | 15 |
|  Non-cash stock-based and other compensation expense<sup>(d)</sup> |  | 3456 | 7621 | 7203 | 2110 | 7644 | 4889 |
|  Gain on sale of intangible assets<sup>(e)</sup> |  |  |  |  |  |  | (5062) |
|  Corporate re-organization and related charges<sup>(f)</sup> | 2022 | 961 | 1954 |  |  |  |  |
|  Dealer termination expense<sup>(g)</sup> | 526 |  |  |  |  |  | 316 |
|  Gain on sale of assets held for sale<sup>(h)</sup> |  |  |  |  | (56290) |  |  |
|  Potential transaction / acquisition costs<sup>(i)</sup> | 512 |  | 113 | 3718 |  | 512 |  |
|  Loss on extinguishment of debt<sup>(j)</sup> |  |  | 3825 |  |  |  |  |
|  Initial public offering expense<sup>(k)</sup> |  |  |  |  |  | 1513 | 3586 |
|  Non-operating legal costs (recoveries)<sup>(l)</sup> |  |  |  | 471 | 457 | 184 | (444) |
|  Other charges<sup>(m)</sup> |  | 978 |  | 977 | 855 | 2910 | 795 |
|  Adjusted EBITDA | $49846 | $67839 | $87647 | $92065 | $76998 | $117462 | $125032 |
|  Adjusted EBITDA Margin | 12.9% | 16.2% | 19.5% | 19.4% | 18.5% | 21.8% | 21.7% |

---

------

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a) Foreign exchange (gain)/loss is comprised of gains or losses on receivables, payables or other assets or liabilities which
are denominated in foreign currencies.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b) Non-cash impairment is comprised of impairment losses recorded during the period
for both goodwill as well as other long-lived assets. During 2020, we recognized $13.6 million of goodwill impairment and $2.5 million of impairment on trademark assets, both related to our Band segment.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c) Purchase accounting adjustments reflect the impact on our operating results from step up adjustments recorded in
connection with our acquisition by John Paulson and certain affiliated entities in 2013.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(d) Non-cash stock-based and other compensation expense is comprised of expense
recognized for liability classified share-based payment awards granted to our executives.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(e) Gain on sale of intangible assets relates to the sale of certain land development rights, which drove the gain recognized
during 2022.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(f) Corporate re-organization and related charges are comprised of expenses incurred in connection with a corporate
re-organization that included relocations of our corporate office and our flagship New York City showroom, as well as corporate management changes including the change of our CEO and the elimination of certain global departments, such as global
marketing and global human resources. The financial impact of this re-organization and relocation was $2.0 million in 2016, $1.0 million in 2017 and $2.0 million in 2018, of which $1.5 million was for legal settlement fees paid in
2018 to our previous CEO.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(g) Dealer termination expense includes a one-time dealer termination fee of $0.5 million in connection with the
termination of our agreement with an exclusive third-party piano dealer in France in 2016 and a one-time fee of $0.3 million in connection with the termination of our agreement with an exclusive sales agent in Italy in 2022.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(h) Gain on sale of assets held for sale is comprised of gains on assets which we held for sale during the period. In 2020, we
sold a real estate property, which drove the gain recognized during the period.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(i) Potential transaction / acquisition costs are comprised of professional fees and expenses associated with potential
strategic merger and acquisition activities. In 2016 we incurred $0.5 million in costs related to real estate transfer taxes in Germany that were triggered by the purchase of our business by John Paulson and certain affiliated entities in 2013,
but not assessed by the German tax authorities until 2016. In 2018, we had $0.1 million of combined costs related to our acquisition of Louis Renner GmbH & Co. KG ("Louis Renner") and an Austrian piano dealer, as well as strategic
transactions that were not consummated. In 2019, we incurred an additional $1.6 million of costs in connection with our acquisition of Louis Renner and the Austrian piano dealer, $1.6 million of costs in connection with certain strategic
transactions that were not consummated and $0.5 million of costs in relation to the disposition of a non-operating asset. In 2021, we incurred $0.5 million of employee severance costs in connection
with our 2019 acquisition of Louis Renner.

------

##### [**Table of Contents**](#toc)
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(j) Loss on extinguishment of debt relates to the 2018 refinancing of our First Lien Term Loan Facility and ABL Facility. See
"Management's Discussion and Analysis of Financial Condition and Results of Operations—Liquidity and Capital Resources—Debt."

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(k) Initial public offering expense relates to non-recurring fees and expenses associated with the preparation for this
offering.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(l) Non-operating legal costs (recoveries) are comprised of non-recurring legal costs, net of recoveries, with respect to a
case filed by a former piano dealer. The case was dismissed on summary judgment and was affirmed on appeal. In fiscal year 2022, we received a portion of the attorney's fees that we were awarded in connection with the dismissal.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(m) Other charges include non-cash accrual of potential environmental mitigation costs in our Band segment, $0.3 million
one-time consulting fees in 2021 associated with the lowering of withholding taxes in the APAC region, a $0.4 million one-time expense in 2021 associated with relocating the production facility of our *Musser* products and $0.1 million in asset
retirement cost associated with the expiration of a leased office space in 2022.

(2) Adjusted Net Income and Adjusted Net Income margin are non-GAAP financial measures. We define Adjusted Net Income as net
income before foreign exchange (gain)/loss, non-cash impairment, purchase accounting adjustments, non-cash stock-based and other compensation expense, gain on sale of intangible assets, corporate re-organization and related charges, dealer
termination expense, gain on sale of assets held for sale, potential transaction / acquisition costs, loss on extinguishment of debt, initial public offering expense, non-operating legal costs (recoveries), other charges that we do not consider
reflective of our ongoing performance and tax impacts on the foregoing adjustments. Adjusted Net Income margin is calculated as Adjusted Net Income divided by net sales, expressed as a percentage. For information about why we consider Adjusted Net
Income and Adjusted Net Income margin useful and a discussion of the material risks and limitations of these measures, see "Management's Discussion and Analysis of Financial Condition and Results of Operations—Non-GAAP Financial
Measures."

We derived the below financial data for the fiscal years ended December 31, 2021 and 2022 from our audited consolidated financial statements included elsewhere in this prospectus. We derived the below financial data for the fiscal year ended December 31, 2020 from our audited consolidated financial statements not included in this prospectus. We derived the below financial data for the fiscal years ended December 31, 2016, 2017, 2018 and 2019 from our consolidated financial statements not included in this prospectus. We have prepared the consolidated financial statements for the fiscal years ended December 31, 2016, 2017, 2018 and 2019 on the same basis as our audited consolidated financial statements and have included all adjustments, consisting of only normal recurring adjustments, that we consider necessary for a fair presentation of our operating results for such periods. The following table reconciles net income, which is the most directly comparable measure calculated in accordance with GAAP, to Adjusted Net Income, for each of the periods presented:

---

| | | | | | | | |
|:---|:---|:---|:---|:---|:---|:---|:---|
|  | **Year Ended December 31,** | **Year Ended December 31,** | **Year Ended December 31,** | **Year Ended December 31,** | **Year Ended December 31,** | **Year Ended December 31,** | **Year Ended December 31,** |
|  | **2016** | **2017** | **2018** | **2019** | **2020** | **2021** | **2022** |
|  | **(dollars in thousands, except percentages)** | **(dollars in thousands, except percentages)** | **(dollars in thousands, except percentages)** | **(dollars in thousands, except percentages)** | **(dollars in thousands, except percentages)** | **(dollars in thousands, except percentages)** | **(dollars in thousands, except percentages)** |
|  Net income | $2817 | $12988 | $17941 | $28656 | $51815 | $59263 | $86524 |
|  Foreign exchange (gain)/loss<sup>(a)</sup> | (1023) | 1419 | 1072 | 431 | 588 | (438) | (1043) |
|  Non-cash impairment<sup>(b)</sup> |  |  |  |  | 16093 |  |  |
|  Purchase accounting adjustments<sup>(c)</sup> | 9888 | 7828 | 1659 | 205 | 1413 | 913 | 1353 |
|  Non-cash stock-based and other compensation expense<sup>(d)</sup> |  | 3456 | 7621 | 7203 | 2110 | 7644 | 4889 |
|  Gain on sale of intangible assets<sup>(e)</sup> |  |  |  |  |  |  | (5062) |
|  Corporate re-organization and related charges<sup>(f)</sup> | 2022 | 961 | 1954 |  |  |  |  |
|  Dealer termination expense<sup>(g)</sup> | 526 |  |  |  |  |  | 316 |
|  Gain on sale of assets held for sale<sup>(h)</sup> |  |  |  |  | (56290) |  |  |
|  Potential transaction / acquisition costs<sup>(i)</sup> | 512 |  | 113 | 3718 |  | 512 |  |
|  Loss on extinguishment of debt<sup>(j)</sup> |  |  | 3825 |  |  |  |  |
|  Initial public offering expense<sup>(k)</sup> |  |  |  |  |  | 1513 | 3586 |
|  Non-operating legal costs (recoveries)<sup>(l)</sup> |  |  |  | 471 | 457 | 184 | (444) |
|  Other charges<sup>(m)</sup> |  | 978 |  | 977 | 855 | 2910 | 795 |
|  Tax impact on adjustments to net income<sup>(n)</sup> | (724) | (1289) | (1717) | (1507) | 13162 | (1081) | 1287 |
|  Adjusted Net Income | $14018 | $26341 | $32468 | $40154 | $30203 | $71420 | $92201 |
|  Adjusted Net Income Margin | 3.6% | 6.3% | 7.2% | 8.4% | 7.3% | 13.3% | 16.0% |

---

------

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a) Foreign exchange (gain)/loss is comprised of gains or losses on receivables, payables or other assets or liabilities which
are denominated in foreign currencies.

------

##### [**Table of Contents**](#toc)
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b) Non-cash impairment is comprised of impairment losses recorded during the period for both goodwill as well as other
long-lived assets. During 2020, we recognized $13.6 million of goodwill impairment and $2.5 million of impairment on trademark assets, both related to our Band segment.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c) Purchase accounting adjustments reflect the impact on our operating results from step up adjustments, including
depreciation thereon, recorded in connection with our acquisition by John Paulson and certain affiliated entities in 2013.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(d) Non-cash stock-based and other compensation expense is comprised of expense recognized for liability classified
share-based payment awards granted to our executives.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(e) Gain on sale of intangible assets relates to the sale of certain land development rights, which drove the gain recognized
during 2022.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(f) Corporate re-organization and related charges are comprised of expenses incurred in connection with a corporate
re-organization that included relocations of our corporate office and our flagship New York City showroom, as well as corporate management changes including the change of our CEO and the elimination of certain global departments, such as global
marketing and global human resources. The financial impact of this re-organization and relocation was $2.0 million in 2016, $1.0 million in 2017 and $2.0 million in 2018, of which $1.5 million was for legal settlement fees paid
in 2018 to our previous CEO.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(g) Dealer termination expense includes a one-time dealer termination fee of $0.5 million in connection with the termination
of our agreement with an exclusive third-party piano dealer in France in 2016 and a one-time fee of $0.3 million in connection with the termination of our agreement with an exclusive sales agent in Italy in 2022.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(h) Gain on sale of assets held for sale is comprised of gains on assets which we held for sale during the period. In 2020, we
sold a real estate property, which drove the gain recognized during the period.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(i) Potential transaction / acquisition costs are comprised of professional fees and expenses associated with potential
strategic merger and acquisition activities. In 2016 we incurred $0.5 million in costs related to real estate transfer taxes in Germany that were triggered by the purchase of our business by John Paulson and certain affiliated entities in 2013, but
not assessed by the German tax authorities until 2016. In 2018, we had $0.1 million of combined costs related to our acquisition of Louis Renner and an Austrian piano dealer, as well as strategic transactions that were not consummated. In 2019, we
incurred an additional $1.6 million of costs in connection with our acquisition of Louis Renner and the Austrian piano dealer, $1.6 million of costs in connection with certain strategic transactions that were not consummated and $0.5 million of
costs in relation to the disposition of a non-operating asset. In 2021, we incurred $0.5 million of employee severance costs in connection with our 2019 acquisition of Louis Renner.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(j) Loss on extinguishment of debt relates to the 2018 refinancing of our First Lien Term Loan Facility and ABL Facility. See
"Management's Discussion and Analysis of Financial Condition and Results of Operations—Liquidity and Capital Resources—Debt."

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(k) Initial public offering expense relates to non-recurring fees and expenses associated with the preparation for our initial
public offering.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(l) Non-operating legal costs (recoveries) are comprised of non-recurring legal costs, net of recoveries, with respect to a
case filed by a former piano dealer. The case was dismissed on summary judgment and was affirmed on appeal. In fiscal year 2022, we received a portion of the attorney's fees that we were awarded in connection with the dismissal.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(m) Other charges include non-cash accrual of potential environmental mitigation costs
in our Band segment, $0.3 million one-time consulting fees in 2021 associated with the lowering of withholding taxes in the APAC region, a $0.4 million one-time expense in 2021 associated with relocating the production facility of our *Musser* products and $0.1 million in asset retirement cost associated with the expiration of a leased office space in 2022.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(n) Tax impact on adjustments to net income represents the tax provision estimate calculated by management associated with the
aforementioned adjustments.

------

##### [**Table of Contents**](#toc)
**RISK FACTORS** 

*Investing in our Class A common stock involves a high degree of risk. You should consider and read carefully all of the risks and uncertainties described below, as well as other information contained in this prospectus, including the section titled "Management's Discussion and Analysis of Financial Condition and Results of Operations" and our consolidated financial statements, before making an investment decision. The risks described below are not the only ones facing us. The occurrence of any of the following risks or additional risks and uncertainties not presently known to us or that we currently believe to be immaterial could materially and adversely affect our business, financial position, results of operations or cash flows. In any such case, the trading price of our Class A common stock could decline, and you may lose all or part of your investment. This prospectus also contains forward-looking statements and estimates that involve risks and uncertainties. Our actual results could differ materially from those anticipated in the forward-looking statements as a result of specific factors, including the risks and uncertainties described below.* 

**Risks Related to Our Business** 

***Our business is dependent upon the distinctive appeal of the Steinway brand.***

Our financial performance is influenced by the perception and recognition of the *Steinway* brand, which, in turn, depends on many factors such as the quality and image of our pianos, the appeal of our showrooms and stores, our association with leading artists and music institutions, the success of our promotional activities, including public relations and marketing, as well as our general reputation and image. The value of our brand and our ability to achieve premium pricing for our pianos may decline if we are unable to maintain the high-quality standards associated with the *Steinway* brand. Maintaining our reputation and image, and thus the value of our brand, will depend significantly on our ability to continue to produce high-quality pianos using quality materials and production processes.

Consequently, poor maintenance, promotion and positioning of the *Steinway* brand, as well as market over-saturation, including due to the supply of used *Steinway* pianos sold by third-parties outside of our dealer network, may adversely affect our business by diminishing the distinctive appeal of the *Steinway* brand and tarnishing its image. In addition, we face competition from unauthorized piano dealers and private restoration companies that offer rebuilt or refurbished *Steinway* pianos using non-*Steinway* parts. The use of non-*Steinway* components during the restoration process may result in pianos that bear our name but do not satisfy our quality standards, and such unauthorized products could create confusion in the market and negatively impact our reputation. Products, production methods, distribution networks or marketing methods not in line with our brand image of quality, timelessness and dependability could also affect brand awareness and adversely impact net sales. Additionally, if people do not perceive our products to be high quality or if they do not believe our products are high value, we may not be able to attract new customers, which may have a negative impact on our results of operations.

In addition, adverse publicity regarding *Steinway* and its products, as well as adverse publicity in respect of, or resulting from, the Company's third-party vendors, could adversely affect the Company's business. The considerable expansion in the use of social media in recent years has significantly expanded the potential scope of any negative publicity, which magnifies the risks associated with negative publicity.

Any of the above could harm the *Steinway* brand and reputation, cause a loss of consumer confidence in the *Steinway* brand, its products and the industry, and/or negatively affect our results of operations.

------

##### [**Table of Contents**](#toc)
***Competition within the luxury goods and broader music industry is intense and our existing and potential customers may be attracted to competing forms of products, such as luxury cars, jewelry, and other luxury goods, as well as electronic pianos and keyboards. If our acoustic product lines do not maintain or increase their popularity relative to other types of luxury goods, or electronic or digital instruments, our business, financial condition, results of operations and prospects could be materially adversely affected.***

We operate in the luxury goods and musical instrument industries, with a primary focus on acoustic instruments. We compete in the highly competitive market for luxury goods and the long-term success of our business depends on maintaining and increasing the popularity of our *Steinway* pianos relative to other luxury products and experiences, such as spending on luxury cars, yachts, jewelry, handbags, travel and other forms of leisure. If the *Steinway* brand becomes less attractive to consumers and HNWI and UHNWI populations choose to purchase other luxury goods instead of our *Steinway* pianos, demand for our products could decline and have an adverse impact on our financial condition and results of operations. Additionally, other forms of musical instruments, such as electronic pianos and keyboards, have grown in popularity in recent years and may be perceived by users to offer greater variety, affordability, interactivity and enjoyment than our acoustic product lines. Measured by units, the acoustic piano industry in the United States and Europe is much smaller than it was decades ago and the industry could shrink further due to declining consumer interest in the musical genres that feature our instruments or increased competition with other forms of musical or other types of recreation. For example, we compete with other forms of digital and online music composition that do not involve buying and playing physical musical instruments. Evolving consumer tastes and shifting interests, coupled with an ever changing and expanding pipeline of consumer products that compete for consumers' interest and acceptance, create an environment in which some products can fail to achieve consumer acceptance, while others can be popular during a certain period of time but then be rapidly replaced. If we are unable to sustain sufficient interest in our product lines in comparison to our competitors that specialize in electronic and digital instruments, or other forms of music recreation or luxury goods, our business may be negatively affected.

***Since we have a limited number of facilities, any loss of use of any of our facilities, or those of our third-party suppliers, could adversely affect our operations.***

Our operations with respect to specific products are concentrated in a limited number of manufacturing and distribution facilities and any disruption at or loss of any of our facilities or those of our third-party suppliers could have a material adverse effect on our Company and operations. All of our *Steinway* pianos are manufactured in our Astoria, New York or Hamburg, Germany factories. Additionally, we rely on manufacturing facilities for certain of the critical components for our *Steinway* pianos, including our Springfield, Ohio facility which produces the plates for our pianos and our Louis Renner facilities, located in Gärtringen, Germany and Meuselwitz, Germany, which manufacture the piano actions that connect the keys to the hammers that strike the strings. We also rely on facilities in Germany and Poland that produce the keys for our *Steinway* pianos. Our *Boston* pianos are produced in Hamamatsu, Japan and near Jakarta, Indonesia by third-party manufacturers, while our *Essex* pianos are manufactured in Guangzhou, China by a third-party manufacturer. In addition, our band products sold under our Band segment are manufactured in our U.S. production facilities in Elkhart, Indiana, Eastlake, Ohio and Monroe, North Carolina, as well as at facilities in China, Taiwan and Vietnam. These manufacturing facilities, as well as certain distribution centers we utilize, including those of our third-party suppliers, include computer-controlled equipment, and are subject to a number of risks related to security, computer viruses, software and hardware malfunctions, power interruptions, mechanical failures or other system failures. Strikes and work stoppages, as well as earthquakes, fires, floods, severe weather events, tornadoes or other natural disasters at or near these manufacturing and distribution facilities could also interrupt our operations. A natural disaster or other catastrophic event or the outbreak of a pandemic, including as a result of the COVID-19 pandemic, could cause

------

##### [**Table of Contents**](#toc)
interruptions in the manufacture or distribution of our products or critical components thereof and loss of inventory and could impair our ability to fulfill customer orders in a timely manner, or at all. For example, in response to the COVID-19 pandemic and the resultant public health restrictions mandated by governments, we closed our Astoria, New York factory for approximately three months in Spring 2020 and implemented capacity restrictions in our Hamburg, Germany factory that limited the number of personnel on site in compliance with local regulations throughout 2020 and 2021. Additionally, in response to a resurgence of COVID-19 outbreaks in China, in March 2022, the Chinese government imposed lockdowns on several cities, including Shanghai. This mandate required us to temporarily close our Shanghai facilities, which consist of a key warehouse and distribution center, retail showrooms and administrative offices. Although we reopened these facilities during the second quarter of fiscal year 2022, these closures caused delays in our ability to distribute our products and fulfill customer orders in the APAC region, and such delays have had and future closures could have an adverse effect on our business and results of operations. We and our third-party suppliers may also be required to suspend or alter our operations at our respective manufacturing and distribution facilities as a result of any regulatory investigations, enforcement actions or violations or alleged violations of applicable environmental, health, safety or other regulations. To the extent disruptions at a manufacturing or distribution facility occur for an extended time period, we may be required to lease or purchase a new facility. This process would increase the complexity of our supply chain management and be time-consuming and expensive, and would likely result in delays in deliveries of our products to our customers. Furthermore, there is no assurance that we could find new manufacturing or distribution facilities, which are satisfactory to us on commercially acceptable terms, or at all. We maintain only a limited amount of business interruption insurance, which would not be sufficient to cover us in the event of significant disruption at our facilities or at any of our suppliers' facilities. Because we are heavily dependent on each of our facilities, our operations may be adversely affected if we experience a disruption in business at any particular facility for a prolonged period of time because we may not have adequate substitute facilities available to us.

***Our estimates of market opportunity and forecasts of market growth, including in China, may prove to be inaccurate and there is no guarantee that demand for our products will grow as expected, or that we will be able to grow our business at similar rates, if at all.***

This prospectus contains various estimates of market opportunities and forecasts of market growth, including estimates and forecasts relating to the global markets for luxury goods, pianos and musical instruments. Our estimates of the market size for our products that we have provided in this prospectus are subject to significant uncertainty and are based on assumptions and estimates, including our internal analysis and industry experience, which may not prove to be accurate. Such estimates and forecasts are derived from third-party industry reports and other business data that are in turn based on a number of assumptions and estimates, including the size of the general application areas in which our products are targeted, that may not prove to be accurate. Even if the markets in which we compete or intend to expand into meet our estimates and forecasts, our business could fail to grow at similar rates, if at all. In particular, although we believe that there is significant market opportunity for increased sales of our products and net sales growth in China, our forecasts are based on a number of assumptions, including in relation to the continued rise of incomes in the country and Chinese government policies that promote music education. Despite our efforts to grow our brand and increase sales of our products in China, there is no guarantee that demand for our products will grow as expected, or at all. Our products are discretionary items and, if China experiences periods of adverse or uncertain economic conditions, consumers may shift their purchases to lower-priced products from our competitors or may forgo purchases of pianos and other musical instruments altogether. Further, during economic downturns we may need to reduce the price of our products or increase marketing spend to remain competitive. Distributors and retailers in China may also seek to reduce their inventories in response to such economic conditions and we could experience a reduction in sales of our products as a result. In addition, China has a large number of social media platforms,

------

##### [**Table of Contents**](#toc)
which we and our competitors are increasingly using to advertise our products. If we are unable to use social media effectively to advertise our products in China, it could impact our ability to attract consumers and adversely affect our business, financial condition, results of operations and cash flows. Additionally, we may also face more intense competition from domestic competitors in China, which could negatively impact our growth prospects and market share. The Chinese government has also promoted sales of musical instruments through its enactment of policies that focus on investing in and encouraging music education. This includes China's 14<sup>th</sup> Five-Year Plan for the 2021–2025 period, which emphasizes the importance of cultural development, as well as the Ministry of Education's plan to introduce music and the arts as a compulsory examination subject nationwide as part of high school entrance examinations. If these policies are abandoned or are no longer prioritized by the government, we could face reduced demand for our products in China, which could adversely affect our ability to implement our growth strategy.

***Unfavorable economic conditions and changes in consumer preferences could adversely affect our business.***

As a manufacturer and retailer of high-end pianos and other instruments, our products are discretionary purchases and our sales results are particularly sensitive to changes in economic conditions and consumer confidence. Consumer confidence is affected by general business conditions, domestic and international political uncertainties and/or developments, including geopolitical events such as the Russia-Ukraine conflict, changes in the market value of equity securities and real estate, inflation, interest rates and the availability of consumer credit, tax rates and expectations of future economic conditions and employment prospects. Consumer spending for discretionary goods generally declines during times of falling consumer confidence, which negatively affects our sales and net income. Accordingly, our financial and business performance is exposed to global social and macroeconomic risks due to its international scale. An unfavorable economy in one or more of the main countries where we operate, as well as on a global level, could adversely affect the propensity to spend on luxury goods and have a negative impact on piano sales. In particular, we depend on the U.S. and Chinese markets to maintain our current sales and support future growth, and any slowdown in the U.S. or Chinese economies could have a negative impact on the sales and profitability derived from these markets. Measured by units, the acoustic piano industry in the United States and Europe is much smaller than it was decades ago and the industry could shrink further. Growing concerns regarding increased inflation and the overall economic outlook in these regions may have a negative impact on our net sales. Additionally, our Piano segment, which represented approximately 74% and 76% of our total consolidated net sales for the years ended December 31, 2022 and 2021, respectively, sells a relatively small number of *Steinway* grand pianos each year and even a slight decrease in sales could adversely affect our profitability. Our business is particularly sensitive to changes in the housing market, as consumers are more likely to buy *Steinway* pianos as they purchase new and higher-end homes. Although we have not experienced any material impact on our business from recent declines in the U.S. or other housing markets, any further decline or slowdown in housing markets in the future could negatively impact sales of our pianos. The COVID-19 pandemic had and may continue to have an adverse impact on sales in our Piano segment due to the closing of music and entertainment venues. In the year ended December 31, 2022, our business was negatively impacted by the imposition of new lockdowns in certain parts of China, and similar measures in the future could adversely affect our business and operating results. See "Management's Discussion and Analysis of Financial Condition and Results of Operations—COVID-19 Update."

Sales in our Band segment are primarily dependent upon our relationships with educational and musical institutions, as well as the continued interest of school-aged children in playing musical instruments, among other factors. The COVID-19 pandemic had an adverse impact on sales from our Band segment due to the suspension of school music programs. Any decrease in consumer spending, reduction in school budgets or decrease in the number of school-aged children or their interest in music could result in decreased sales, which could adversely affect our business and operating results.

------

##### [**Table of Contents**](#toc)
Although inflation in the United States had been relatively low for many years, there has been a significant increase in inflation since the second half of 2021 due to a substantial increase in money supply, a stimulative fiscal policy, a significant rebound in consumer demand as COVID-19 restrictions were relaxed, the Russia-Ukraine war and worldwide supply chain disruptions resulting from the economic contraction caused by COVID-19 and lockdowns followed by a rapid recovery. Inflation in the United States rose from 1.36% in December 2020 to 6.45% in December 2022.

Although we have implemented strategies to mitigate the impact of global inflationary pressures on our business, we expect to experience continued effects on our cost structure for the foreseeable future. In particular, costs for the raw materials used in our products and employee wage increases have increased our operating costs for the years ended December 31, 2022 and 2021, compared to pre-inflationary periods. In addition, the rise in freight and warehousing costs incurred to transport and store our products and manufacturing components has had, and may continue to have, a negative impact on our business and results of operations. We may also be adversely affected by increased labor costs as a result of market shortages for employees in the manufacturing, freight, warehousing and other sectors. Shortages of supplies and labor may prevent us from executing our business plan. These supply chain constraints and inflationary pressures will likely continue to adversely impact our operating costs and, if we are unable to manage our supply chain, it may impact our ability to procure materials and equipment in a timely and cost effective manner, if at all, which could result in reduced margins and production delays and, as a result, our business, financial condition, results of operations and cash flows could be materially and adversely affected.

In response to supply chain and inflationary pressures, we have begun purchasing greater quantities of raw materials that are critical to our operations to ensure that we can have adequate supplies available in our inventory. We are working closely with suppliers to maintain our inventory levels and prevent disruptions to our production capabilities. Further, in an effort to partially offset higher costs for raw materials and labor, we have increased prices for our products. Because our products are discretionary goods by nature, however, we may not be able to fully offset ongoing increases of our operating costs by passing them on to customers without risking a decline in consumer demand for our products. Accordingly, our efforts to manage increasing costs and supply chain pressures may not succeed or may be insufficient.

***Any disruption in the supply of raw materials and components we and our key manufacturers need to manufacture our musical instruments could harm our business, financial condition and results of operations.***

At our owned factories as well as the facilities of our manufacturers, our raw materials consist primarily of metals and woods. The majority of these materials are sourced from the United States and Europe, with the balance coming from Asia. We obtain certain of our raw materials from single sources, and any interruption in supply of one or more of our single-sourced raw materials would require us to find replacement sources, which could result in increased costs, disrupt our supply chain and divert management attention and resources. Although we have had adequate supplies of metals and woods in the past, there is no assurance that we may not experience serious interruptions to our supply in the future, which could have an adverse impact on our business, financial condition and results of operations.

In addition, securing adequate supplies of certain electronic components has become more important in our business as we continue to increase our production of our *Spirio* pianos. For these pianos, which represented approximately 34% of our total Piano segment net sales for the year ended December 31, 2022, we have experienced difficulty obtaining semiconductor chips at their historical standard prices as a result of the ongoing global shortage. Although the worldwide shortage of semiconductor chips has eased toward the end of 2022, we may not be able to source an adequate

------

##### [**Table of Contents**](#toc)
number of semiconductor chips at a reasonable price to meet our needs or at all should the shortage worsen again in the future. If we are unable to obtain a sufficient number of semiconductors, we may experience extended lead times for our *Spirio* products, which may result in order cancellations and/or negative publicity. Semiconductor chips are also a component of the iPads which we include in each sale of our *Spirio* pianos. As such, any difficulties in sourcing the iPad models included with our *Spirio* products as a result of the ongoing global semiconductor chip shortage or otherwise could negatively impact our ability to ship completed *Spirio* pianos on time. Our inability or failure to offset the higher costs of supplies as a result of inflation or disruptions in the supply chain could harm our business, financial condition and results of operations.

***We operate in competitive markets.***

Our success depends upon our ability to maintain our share of the musical instrument market by providing the best instruments in each market segment in which we compete. Increased competition could lead to price reductions, fewer large sales to institutions, reduced operating margins and loss of market share.

Prices for instruments in the Piano segment are generally higher than those of our competitors but are in line with consumer expectations for pianos of superior performance and quality. Our *Steinway* pianos currently compete with brands sold by Bösendorfer and Fazioli, which primarily produce and market pianos at the high end of the market. Due to the potential savings associated with buying a used or restored instrument, as well as the durability of the *Steinway* piano, a relatively large market exists for used or restored *Steinway* pianos. While it is difficult to estimate the significance of used or restored piano sales because many of these sales are conducted in the private aftermarket, we believe that used and restored *Steinway* pianos, including ones sold by us, provide the most significant competition for us in the high-end piano markets in the Americas and EMEA regions. Competition from used and restored Steinway pianos is less prevalent in the APAC region, including China, than it is in the Americas and EMEA regions, as there is not a significant installed base of Steinway pianos in the APAC market.

Our mid and upper-mid priced *Boston* and *Essex* pianos compete with brands such as Bechstein, Schimmel, Kawai, and Yamaha. With certain limited exceptions, we allow only *Steinway* dealers to carry our mid and upper-mid market *Boston* and *Essex* piano lines, thereby ensuring that these pianos will be marketed as complementary product lines to the *Steinway* line.

Our Band segment faces particularly intense competition with a number of domestic and overseas manufacturers of band instruments. Our Band segment competes with various Asian manufacturers, including Jupiter, Yamaha and Eastman Music Company, and our woodwinds and brass instruments also face competition from European manufacturers, such as Buffet Crampon SAS. In addition to Yamaha, our *Ludwig* line of drums competes with a number of well-known domestic and overseas drum manufacturers, including Pearl and Drum Workshop. Any of our competitors may concentrate their resources upon efforts to compete in our markets. Such competitors may spend more money and time on developing and testing products and services, undertake more extensive marketing campaigns, adopt more aggressive pricing or promotional policies, or otherwise develop more commercially successful products or services than ours, which could negatively impact our business. Our competitors may also develop products, features or services that are similar to ours or that achieve greater market acceptance. Such competitors may also undertake more far-reaching and successful product development efforts or marketing campaigns, or may adopt more aggressive pricing policies. Furthermore, new competitors may enter the musical instrument industry or consolidate with existing competitors. Such consolidation could result in the formation of larger competitors with increased financial resources and altered cost structures, which may enable them to offer more competitive products, gain a larger market share, expand offerings and broaden their geographic scope of

------

##### [**Table of Contents**](#toc)
operations. In addition, Asian musical instrument manufacturers have made significant strides in recent years to improve their product quality, while continuing to benefit from lower labor costs relative to western markets. They now offer a broad range of quality products at highly competitive prices and represent a significant competitive challenge for us.

It is difficult for us to assess the impact on our business from imported instruments and the sale of used *Steinway* pianos and those of our competitors, as there is limited data available on this from industry channels, and such impact could be more significant than expected. Our failure to compete effectively could have a negative impact on our results of operations.

***We depend on skilled craftspeople to develop and create our pianos and a skilled sales force to sell our pianos, and the failure to attract and retain such individuals could adversely affect our business, financial condition and cash flow*.** 

Although portions of our manufacturing processes are automated and/or outsourced, certain of our products, particularly those under our Piano segment, require a significant amount of skilled labor. We rely on skilled and well-trained craftspeople for the design and production of our pianos. Each *Steinway* piano is manufactured in our Astoria, New York or Hamburg, Germany factories through an artisanal process that takes at least six months per piano. Our inability to attract or retain qualified employees in our design, production, research and development, sales or other functions could result in diminished quality products and delinquent production schedules, impede our ability to develop new products and harm our business, financial condition and cash flows.

Many of the skills we require are not typically taught in traditional universities or schools. For example, the process of bending the *Steinway* piano rim is an acquired skill and not widely taught. Similarly, the skills required to construct and repair our pianos are taught only in highly-specialized trade schools or passed down from generation to generation. For these reasons, many of the skills required to manufacture our pianos are taught to new employees through in-house training and mentoring by more experienced staff. Therefore, if we are unable to retain and promote talent who can teach and train new employees regarding their skillset and expertise, we may be unable to sustain our historical technologies, and the long-term success of our business, as well as our financial condition and cash flows, could be adversely affected. Additionally, we currently have a small technology team that is responsible for the development, maintenance and continuous improvement of our *Spirio* technology. If we are unable to retain or attract employees with the technical expertise to promote the growth of our *Spirio* line, our business, reputation and financial condition could be adversely affected.

Further, our ability to maintain a skilled labor force is subject to many external factors, including, but not limited to, unemployment levels, prevailing wage rates, minimum wage laws, collective bargaining arrangements, changes in employment and labor legislation or other workplace regulation and increased competition for skilled craftspeople in the markets in which we operate. In response to these external factors, we may need to increase the wage rates of our skilled craftspeople and members of our technology team in order to continue attracting and retaining qualified employees. Any increase in the cost of our labor could have an adverse effect on our business, financial condition and results of operations or if we fail to pay such higher wages we could suffer increased employee turnover, which could significantly impact our ability to fulfill orders in a timely manner. If competitive pressures or other factors prevent us from offsetting increased labor costs by increases in prices, our profitability may decline and could adversely affect our business, financial condition and results of operations.

In addition, we rely on a skilled sales force that is knowledgeable about our products. It is essential that we continue to focus on developing, motivating, and retaining our sales personnel, particularly as we endeavor to grow our direct-to-consumer sales channels. If we fail to adequately

------

##### [**Table of Contents**](#toc)
identify, recruit, train and retain such sales personnel, our business, financial condition, and results of operations could be adversely affected.

***The loss of one or more members of our senior management team could adversely affect our business, financial condition and cash flows.***

We operate with minimal redundancy of personnel across various key areas of our business, including manufacturing, sales, legal/compliance, and finance. As a result, we depend on the efforts and expertise of our senior management team, and our future success largely depends on our ability to retain these qualified individuals and to attract and retain other qualified managerial personnel, especially as we grow and expand our international operations. From time to time, there may be changes in our executive management team resulting from the hiring or departure of these personnel. Retaining key management personnel 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. We may also need to increase our management compensation levels to remain competitive in attracting and retaining members of our management team. Further, we do not have formal employment agreements with all of our key personnel and the loss of one or more of our senior management members' services, and our inability to find suitable replacements or suitable new talent, or the failure by our executive team to effectively work with our employees and lead our company, could have an adverse effect on our business, financial condition and cash flows.

***Our primary manufacturing facilities in Astoria, New York and Hamburg, Germany are expensive to operate, and subject us to high labor, tax and other expenses.***

Our primary manufacturing facilities in Astoria, New York and Hamburg, Germany are more expensive to operate than equivalent facilities in jurisdictions with more favorable legal regimes and lower cost of labor. We have been producing our *Steinway* pianos at our Astoria and Hamburg facilities for over 140 years, and believe that our legacy of craftsmanship is inextricably intertwined with our manufacturing process at these locations. Nevertheless, our operations in our Astoria and Hamburg facilities expose us to costs that would be significantly less in jurisdictions more favorable to manufacturing. For example, our cost of labor, including employee wages and benefits, insurance costs, general legal compliance costs, including workplace safety and environmental regulations and protections, and federal, state and local taxes are all substantially higher than they might otherwise be if our primary manufacturing facilities were located elsewhere. Additionally, the jurisdictions in which we operate our manufacturing facilities permit or support unionized labor and, as a result, our labor costs are higher than they might be if our operations were conducted elsewhere.

In 2021, we were able to avoid a substantial property tax increase on our Astoria, New York facility by negotiating a tax abatement with New York City. We could face similar or larger tax increases in the future which we may be unable to mitigate through negotiating similar tax abatements or other arrangements to reduce our tax burden. Furthermore, the enactment of and our compliance with new laws affecting our Astoria and/or Hamburg facilities could give rise to additional expenses in the future, some of which we may not be able to predict or adequately manage. Our high operating costs at our primary manufacturing facilities in Astoria and Hamburg could have a material adverse effect on our business, financial condition and results of operations.

***The artists who play and promote our instruments are an important aspect of our brands' images. The loss of the support of artists and institutions for our musical instrument products or our inability to gain endorsements from new artists or institutions may harm our business, financial condition and cash flows.***

If current or future artists and famous musicians do not use and endorse our musical instrument products, our musical instrument brands could lose value and our net sales could decline. We have

------

##### [**Table of Contents**](#toc)
created a number of programs to further promote our brands. This includes the Steinway Artist Program, which consists of world-class pianists who voluntarily endorse Steinway & Sons by selecting the *Steinway* piano. These renowned artists help to reinforce the recognition of the *Steinway* brand name and its association with quality. Further, we maintain relationships with nearly all of the top music conservatories and schools across the world, which allows emerging artists to become familiar with our *Steinway* pianos at the outset of their careers. Additionally, the Young Steinway Artist Program allows us to consider pianists between 16 and 35 years of age who own either a *Boston* or an *Essex* piano, thus expanding our reach to emerging artists. We also partner with over 230 institutions and schools across the globe as part of our All-Steinway school program to provide students and faculties with our high-quality pianos. Our relationships with leading institutions and artists serve as an endorsement by the institutional and professional community, which in turn helps to drive consumer demand from individuals seeking to purchase high-quality pianos for home use. However, we do not have long-term contracts with any of our Steinway Artists. If we are unable to maintain our current relationships with these artists and institutions, if these artists or institutions attract negative publicity or are no longer popular or if we are unable to continue to attract the endorsement of new artists or institutions in the future, the value of our brands and our business, financial condition and cash flows could be harmed.

***Our internal computer systems, or those of any of our third-party service providers, may fail or suffer security breaches, which could cause our business, financial condition and results of operations to suffer.***

We increasingly rely on various information technology systems, including the use of our *Spirio* mobile application, all of which make up our integrated management information system, to process, transmit and store electronic information and we use information technology systems and networks in our operations and supporting departments. The future success and growth of our business depends on these information systems, communications, Internet activity and other network processes.

We may experience unanticipated delays, data breaches, complications or expenses in replacing, upgrading, implementing, integrating and operating our systems. Our integrated management information system regularly requires modifications, improvements or replacements that may result in substantial expenditures and interruptions to our operations and divert our management's attention and resources away from other aspects of our business. Our ability to implement these systems is subject to the availability of skilled information technology specialists to assist us in creating, implementing and supporting these systems. Our failure to successfully manage, design, implement and maintain all of our systems could have a material adverse effect on our business, financial condition and results of operations.

For instance, our *Spirio* technology, including our ability to regularly update the *Spirio* music library, is largely dependent on the operability of our internal computer systems, as well as our ability to secure and update the source code for our *Spirio* mobile application, which provides *Spirio* users access to the music library. Our mobile application, as well as our internal systems, depend in part on the ability of highly technical software and hardware to store, retrieve, process, and manage immense amounts of data. The software and hardware on which we rely has contained, and may in the future contain, errors, bugs, or vulnerabilities and our systems are subject to certain technical limitations that may compromise our ability to meet our objectives. Some errors, bugs, or vulnerabilities inherently may be difficult to detect and may only be discovered after the code has been released for external or internal use. Errors, bugs, vulnerabilities, design defects, or technical limitations within the software and hardware we rely on have in the past led to, and may in the future lead to, outcomes including a negative experience for customers who use our products, compromised ability of our products to perform as advertised or as intended, delayed product launches or updates, compromised ability to protect the data of our customers and/or our intellectual property, or reductions in our ability to provide some or all of our product features. To the extent such errors, bugs, vulnerabilities, or defects impact

------

##### [**Table of Contents**](#toc)
our software or the ability of customers to utilize our product features and technologies, our brand and reputation may be harmed.

Additionally, our implementation of new information technology or information systems and/or increased use and reliance on web-based hosted (i.e., cloud computing) applications and systems for the storage, processing and transmission of information, including customer and employee personal data, could expose us, our employees and our customers to a risk of loss or misuse of such information. For instance, if we fail to identify vulnerabilities in our information technology or information systems, or if the hosted payment processing applications on which we rely are breached, our customers' credit card information could be compromised. Like most companies, despite our current security measures, our information technology systems, and those of our third-party service providers, may be vulnerable to information security breaches, acts of vandalism, computer viruses and interruption or loss of personal information and other valuable business data. Our *Spirio* mobile application also involves the collection, storage, processing and transmission of a large amount of data, including personal information, and the mobile app ecosystem is prone to cyberattacks by third parties seeking unauthorized access to our data or the data of our customers or users or to disrupt our ability to provide service. Stored data might be improperly accessed due to a variety of events beyond our control, including, but not limited to, natural disasters, terrorist attacks, telecommunications failures, computer viruses, hackers and other security issues. For instance, in the past we have experienced certain ransomware attacks that have temporarily disrupted our operations. While these breaches did not materially impact our operations, there is no guarantee that we will not experience similar breaches in the future, which could have a material adverse effect on our operations, cash flows and financial condition. Our efforts to protect personal data and company information may also be adversely impacted by data security or privacy breaches that occur at our third-party suppliers and vendors. We cannot control these third-parties or their systems and cannot guarantee that a data security or privacy breach of their systems will not occur in the future.

Although we rely on a variety of security measures, software, tools and monitoring to provide security for our processing, transmission, and storage of personal information and other confidential information, we cannot assure that we, or our respective third-party service providers will not experience any future security breaches, cyber-attacks or unauthorized disclosures. For example, we face a complex and evolving threat landscape in which cybercriminals, nation-states and "hacktivists" employ a complex array of techniques designed to access personal data and other information, including the use of stolen access credentials, malware, ransomware, phishing, structured query language injection attacks and distributed denial-of-service attacks, which may penetrate our systems despite our extensive and evolving protective information security measures. Further, we rely on our software and hardware providers to issue timely patches for known vulnerabilities; however, the failure of software and hardware companies to release or to timely release effective patching and our reliance on patches or inability to patch software and hardware vulnerabilities, could expose us to increased risk of attack, data loss and data breach.

Any material misappropriation, loss or other unauthorized disclosure of confidential or personal information, or disruption in performance or availability of our websites or information technology systems as a result of a security breach or cyber-attack could materially adversely affect our business and operations, including damaging our reputation and our relationships with customers, exposing us to risks of litigation and liability, all of which could have a material adverse effect on our operations, cash flows and financial condition. For further information, see also, "—*New and existing data privacy laws and/or a significant data security breach of our information systems could increase our operational costs, subject us to claims and otherwise adversely affect our business*." These costs may not be covered by insurance and may require us to divert cash needed to support the growth of our business.

------

##### [**Table of Contents**](#toc)
The costs of mitigating cybersecurity risks are significant and are likely to increase in the future. These costs include, but are not limited to, retaining the services of cybersecurity providers; obtaining cyber liability insurance coverage; compliance costs arising out of existing and future cybersecurity, data protection and privacy laws and regulations; and costs related to maintaining redundant networks, data backups and other damage-mitigation measures.

***Our business could be adversely impacted by changes in the Internet accessibility of consumers.***

Our *Spirio* technology relies on the ability of our customers to access the Internet and our *Spirio* library of music and videos through the *Spirio* application on their personal devices or on the iPad that we provide with each *Spirio* piano we sell. As a result, sales of and demand for our *Spirio* pianos may be affected by our customers' ability to access the Internet. We may operate in jurisdictions with limited Internet connectivity, particularly as we expand internationally. Internet access may be affected by actions taken by Internet providers with significant market power or government-imposed restrictions that degrade, disrupt or increase the cost of our customers' ability to access our *Spirio* technology through the Internet. In addition, the Internet infrastructure that we rely on in any particular geographic area may be unable to support the demands placed upon it and could interfere with the speed and availability of our *Spirio* technology. Any such failure in Internet accessibility, even for a short period of time, could adversely affect our business and results of operations.

***We may be unable to strategically expand our showroom footprint or secure direct retail outlets in prime locations, and maintaining our brand image and desirability to consumers requires significant investment in showroom construction, maintenance and periodic renovation.***

We currently operate a network of 34 company-owned retail showrooms globally, ranging from New York to Beverly Hills, Chicago, San Francisco and Miami; across Europe with locations in cultural hubs including London, Paris, Vienna and throughout Germany; and in key APAC locations including Tokyo, Shanghai and Beijing, and we expect to continue to open additional showrooms as we grow our retail operations and execute our growth strategy. Our plan to continue to strategically open showrooms domestically and internationally is dependent upon a number of factors. These include strategically choosing new markets to expand into, the availability of desirable property, placement of showrooms in easily accessible locations with high visibility, the ability to attract qualified sales staff and store managers, the demographics of the area around the showroom, the design and maintenance of the showrooms, the availability of attractive locations within the markets that also meet the operational and financial criteria of management, and the ability to negotiate attractive lease terms. If we are unable to effectively expand our showroom footprint to satisfy our operational, and financial strategies, our growth and profitability could be negatively impacted.

Additionally, maintaining our brand image and desirability to consumers requires our stores to be constructed and maintained in a manner consistent with that brand image and to be staffed with knowledgeable and qualified sales staff. This requires significant capital investment, including for periodic renovations of existing showrooms. Renovations of existing showrooms may also result in temporary disruptions to an individual showroom's business. If we cannot secure and retain showroom locations on suitable terms in prime and desired luxury shopping locations, appropriately staff our showrooms or if our investments to construct and/or renovate existing showrooms do not generate sufficient incremental sales and/or profitability or significantly disrupt sales and/or profitability during renovations, our sales and/or earnings performance could be jeopardized.

------

##### [**Table of Contents**](#toc)
***Our international operations are exposed to risks associated with exchange rate fluctuations and customs, regulations, trade restrictions and political, economic and social instability specific to the countries in which we operate.***

We manufacture, market and distribute our products worldwide. Sales outside the Americas accounted for 42.2% and 46.4% of our net sales in the years ended December 31, 2022 and 2021, respectively, and we expect that our international operations could account for a larger portion of our sales in future years as we continue to pursue growth opportunities in China. The various risks inherent in doing business in the United States generally also exist when doing business outside of the United States, and may be exaggerated by the difficulty of doing business in numerous sovereign jurisdictions due to differences in culture, laws and regulations. For example, foreign regulations may limit our ability to produce and sell some of our products or repatriate profits to the United States. In addition, a foreign government may impose trade or foreign exchange restrictions or increased tariffs, which could adversely affect our operations. Our operations may also be negatively impacted by political, economic and social instability in the foreign countries in which we operate. We are also exposed to risks associated with foreign currency fluctuations. A change in the exchange rates of the U.S. dollar, the Chinese yuan, the Japanese yen, the British pound or the Euro relative to each other or other foreign currencies could have a negative impact on us. Although we sometimes engage in transactions to protect against risks associated with foreign currency fluctuations, we cannot be sure that these fluctuations will not have an adverse effect on us. Other examples of risks arising from our international operations include the following, any of which could adversely affect our business, financial condition and cash flows:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• increased transportation costs or delays and other logistical problems relating to the transportation of goods shipped by
ocean or air freight, including border shutdowns, trade conflicts and general trade route delays caused by events such as adverse weather events and the recent stoppage in the Suez Canal;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• competition from local incumbents that may understand the local market and may operate more effectively than us;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• restrictions on the transfer of funds from such countries to the United States;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• imposition of currency controls;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• increased labor costs and/or shortages;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• changes in governmental policies and regulations, including changes to import/export regulations, tariffs, freight rates or
the adoption of protectionist legislation;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• differing and potentially adverse tax consequences, including resulting from the complexities of foreign corporate income
tax systems, value added tax ("VAT") regimes, tax withholding rules, and other indirect taxes, tax collection or remittance obligations, and restrictions on the repatriation of earnings;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• the availability and extent of intellectual property law protections;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• longer payment cycles and difficulties in managing international accounts receivables;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• trade sanctions, political unrest, terrorism, war, including the Russia-Ukraine conflict, epidemics, pandemics, including COVID-19, or the threats of any of these events;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• changing or unstable economic conditions or poor infrastructure;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• different customer demand dynamics and difficulties and costs that arise in our efforts to adapt to local purchasing
behaviors and consumer preferences;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• difficulties in ensuring compliance by our employees, agents and contractors with our business practices, as well as with
applicable U.S. or foreign laws, including anti-bribery laws, labor laws and laws regulating the sale and manufacture of our products; and

------

##### [**Table of Contents**](#toc)
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• difficulties in understanding and complying with local laws and regulations in foreign jurisdictions.

***Evolving U.S. and European trade regulations and policies, including with China and other Asian countries, have in the past and may in the future have a material and adverse effect on our business, financial condition and results of operations.***

Our products are sourced from a wide variety of suppliers, including from suppliers overseas, particularly in China and other Asian countries. In addition, some of the products that we purchase from vendors in the United States also depend, in whole or in part, on suppliers located outside the United States. Any supply chain disruption or increased costs due to tariffs could impact our ability to obtain adequate supplies from our vendors or our ability to produce sufficient quantities of our products to meet demand in a timely manner, which could harm our business, reputation and relationships with our customers. As a result of our overseas exposure, restrictions or tariffs imposed on products that we or our suppliers import for sale in the United States, European Union, Asia-Pacific and other regions in which we operate could adversely and directly impact our cost of sales. Similarly, we may be materially and adversely affected by retaliatory import tariffs imposed by foreign governments, including China as further described below.

Changes in U.S., German and other trade regulations and policies could have an adverse impact on trade relations between the countries where we operate and certain foreign countries, which could materially and adversely affect our relationships with our international suppliers and reduce the supply of goods available to us. Further, we cannot predict the extent to which the United States, Germany and the other countries in which we operate, will adopt changes to existing trade regulations and policies, or the extent to which certain foreign countries will adopt retaliatory trade measures in response, which creates uncertainties in planning our sourcing strategies and forecasting our margins. For instance, since the beginning of 2018, there has been increasing rhetoric, in some cases coupled with legislative or executive action, from several U.S. and foreign leaders regarding tariffs against foreign imports of certain goods and materials. For example, in 2018 and 2019, the United States imposed significant tariffs on various products imported from China, including certain products we source from China. In response, the Chinese government imposed retaliatory tariffs on imports of U.S. goods. Currently, the majority of *Steinway* pianos sold in China originate from our Hamburg, Germany factory and, as a result, we have not experienced a significant increase in the cost of importing *Steinway* pianos into China due to retaliatory tariffs. However, the rise in tariffs has caused us to raise prices on certain of our other products and could increase the cost of selling our products into China and result in us further increasing the prices of those products or increasing the price of *Steinway* pianos manufactured in the United States and sold in China in the future. Increasing sales into China is one of our key growth strategies and any increase in the cost of our products sold in China, as well as any further raise of the prices of our products, could materially and adversely affect our growth prospectus and results of operation. The United States has also stated that further tariffs may be imposed on additional products imported from China if a trade agreement is not reached. On January 15, 2020, a "phase one" trade deal was signed between the United States and China and was accompanied by a decision from the United States to cancel a plan to increase tariffs on an additional list of products from China. The phase one agreement expired on December 31, 2021, and, at this time, there is no assurance that a new or broader trade agreement will be successfully negotiated between the United States and China to reduce or eliminate the existing tariffs.

If additional tariffs are imposed on our products, or other retaliatory trade measures are taken, our costs could further increase and we may be required to further raise our prices, which could materially and adversely affect our results.

------

##### [**Table of Contents**](#toc)
***Failure of our new products to gain market acceptance, or the obsolescence of our existing products, may adversely affect our operating results.***

We believe our long-term success will depend in part on our ability to continue to design and engineer products that employ a mix of traditional and cutting-edge technologies that address market needs and appeal to consumers. A portion of our net sales in any year is from new or modified products. We first introduced *Steinway Spirio*, a line of high-resolution self-player pianos in 2015. This was followed by the launch of *Spirio \| r* in 2019, which enables recording, high-resolution editing and playback. Furthermore, in 2021, we launched *Spiriocast*, which permits customers to instantly stream live performances, synched with video and audio, from one *Spirio \| r* piano to others across the world. Sales of our *Spirio* and *Spirio* \| *r* pianos represented approximately 34% of our total Piano segment net sales for the year ended December 31, 2022. We also continue to introduce custom pianos, such as our bespoke and Art Case custom *Steinway* pianos, our limited-edition *Steinway* pianos, our Crown Jewel Steinway collection and our other special collections.

New products may not achieve significant market acceptance or generate sufficient sales to permit us to recover development, manufacturing and marketing costs associated with these products. Achieving market acceptance for new products may also require substantial marketing efforts and expenditures to expand consumer demand. These requirements could strain our management, financial and operational resources. Furthermore, failure of our new products to achieve market acceptance could prevent us from maintaining our existing customer base, gaining new customers or expanding our markets and could have a material adverse effect on our business, financial condition and results of operations.

Additionally, customers may require features and capabilities that our current products do not have. The introduction of new technologies and products by our competitors could make our existing products obsolete or adversely affect our business. Developing new technology and enhancements to our products may require substantial investment and we have no assurance that such investments will be successful. Moreover, we may experience difficulties with development, design or marketing that could delay or prevent our development or introduction of new products. We may also have to upgrade existing products in order for such products to benefit from new features and capabilities developed by us internally. There can be no assurance that new products or upgrades will be released according to schedule, or that when released they will not contain defects. Either of these situations could result in adverse publicity, loss of net sales or delay in market acceptance, all of which could have a material adverse effect on our reputation, business, operating results and financial condition.

***We conduct a significant portion of our business in China, and we and our affiliates may be subject to negative publicity in China, which could damage our reputation and have an adverse effect on our business and results of operations.***

China is currently our largest market for pianos outside of the United States and piano sales in China represented 22.0% and 28.7% of our Piano segment net sales for the years ended December 31, 2022 and 2021, respectively. We have also sought to grow our brand resonance in the region by establishing relationships with many national conservatories and actively partnering with Chinese concert pianists. Conducting business in China exposes us to political, legal and economic risks. In particular, the political, legal and economic climate in China, both nationally and regionally, is fluid and unpredictable. Our brand could be subject to adverse publicity if incidents related to our products, image, or that of our affiliates, occur or are perceived to have occurred, whether or not we or our affiliates are at fault. In particular, given the popularity of social media, including WeChat and Weibo in China, any negative publicity, regardless of its truthfulness, could quickly proliferate and harm consumer perceptions of and confidence in our company. Furthermore, our ability to successfully position our brand could be adversely affected by public perceptions of the artists or other business

------

##### [**Table of Contents**](#toc)
partners we collaborate with in China and any actions they take that attract negative publicity, whether or not such actions are related to their collaboration with us. In recent years, certain luxury brands have experienced Chinese boycotts of their products as a result of politically or racially offensive products, ads and statements made by individuals associated with the brands. Incidents such as these may have an adverse effect on our business, financial condition and results of operations.

***Our marketing programs may not be successful and the marketing materials we use are regulated and could expose us to potential liability.***

We incur costs and expend other resources in our marketing efforts to attract and retain customers. As part of our marketing approach, we rely on various strategies, such as partnering with popular music artists and influencers to promote and endorse our products, Google ad words, maintaining a presence on third-party social media platforms, and utilizing various forms of social media advertising, including the operation of a WeChat channel aimed at consumers based in China. Our marketing activities are principally focused on customer education, increasing brand awareness and driving customer volumes. As we open new showrooms, we may undertake additional marketing campaigns to increase awareness about our products. These initiatives may not be successful, and may not adequately attract new customers, resulting in expenses incurred without the benefit of higher net sales.

Further, our ability to market our products may be restricted or limited by federal, state or foreign law, including federal and state consumer protection, advertisement and unfair competition laws that broadly regulate our marketing practices and prohibit false advertising about our products. These laws generally require any claims in advertisement to be truthful, cannot be deceptive or unfair and must be evidence-based. For example, in some cases, the Federal Trade Commission has sought enforcement action where an endorsement has failed to clearly and conspicuously disclose a financial relationship or material connection between an influencer and an advertiser. We do not control the content of what our promotional partners post on social media, and if we were held responsible for any false, misleading, or otherwise unlawful content of their posts or their actions, we could be fined or subjected to other monetary penalties or required to alter our marketing practices, which could have an adverse impact on our business and reputation.

Negative commentary regarding our business, or promotional partners who endorse our products and other third parties who are affiliated with or endorse us, may also be posted on social media platforms. The popular music artists and influencers with whom we maintain endorsement arrangements could engage in behavior or use their platforms to communicate with our customers in a manner that reflects poorly on our brand and may be attributed to us or otherwise adversely affect our reputation. Any such negative commentary could impact our reputation or brand and affect our ability to attract and retain customers, which could have a material adverse effect on our business and results of operations.

In addition to domestic laws regulating our marketing efforts, we are subject to regulation by foreign governments in overseas countries where we operate. For instance, in the European Union, the Consumer Rights Directive and the Unfair Commercial Practices Directive harmonized consumer rights across the EU member states. If Consumer Protection Regulators in the European Union find that we are in breach of consumer protection laws, we may be fined or required to change our terms and processes, which may result in increased operational costs. Consumers and certain Consumer Protection Associations in the European Union may also bring individual claims against us if they believe that our terms and/or business practices are not in compliance with local consumer protection laws. Currently, class actions may also be brought in certain countries in the European Union, and the Collective Redress Directive will extend the right to collective redress across the European Union.

------

##### [**Table of Contents**](#toc)
Additionally, China's advertising laws, rules and regulations require advertisers, advertising operators and advertising distributors to ensure that the content of the advertisements they prepare or distribute is fair and accurate and is in full compliance with applicable law. Violation of these laws, rules or regulations may result in penalties, including fines, confiscation of advertising fees, orders to cease dissemination of the advertisements and orders to publish an advertisement correcting the misleading information. In addition, for advertising content related to specific types of products and services, advertisers, advertising operators and advertising distributors must confirm that the advertisers have obtained requisite government approvals, including the advertiser's operating qualifications, proof of quality inspection of the advertised products, government pre-approval of the contents of the advertisement and filing with the local authorities. Pursuant to China's advertising laws, we could be required to take steps to monitor the content of any advertisements displayed on our platforms. This could require considerable resources and time, and could significantly affect the operation of our business, while also subjecting us to increased liability under the relevant laws, rules and regulations. The costs associated with complying with such laws, rules and regulations, including any penalties or fines for our failure to so comply if required, could have a material adverse effect on our business, financial condition and results of operations. Any change in the classification of our products and other related services by China's government may also significantly disrupt our operations and materially and adversely affect our business and prospects.

***Our inability to accurately forecast demand for our products and to respond to changes in consumer demand and trends with respect to particular products and product mixes could harm our business, financial condition and cash flows.***

Our products typically have long production lead times, particularly our grand pianos that take at least six months to build. Additionally, we also offer exclusive, limited-edition pianos, as well as unique, fully customized models, which typically have production lead times that exceed our standard grand piano models. Accordingly, we make decisions that determine our inventory levels based on our expectations regarding demand for our products. Actual demand may differ significantly from the demand levels that we project, and is particularly uncertain with respect to new products. If we underestimate demand for a new or existing product, we will not have sufficient inventory to meet this demand, which could result in delayed shipments to customers and lost sales. On the other hand, if we overestimate demand, we will have excess inventory of finished products as well as raw materials and work-in-progress. In order to manage the risk of supply chain disruption, we have been holding a greater than normal inventory of raw materials in recent years. This excess inventory could become obsolete, could result in us incurring costs to manufacture those products earlier than otherwise would have been required, or could result in us shifting production to other products for which we may not have materials in stock. Additionally, the volatile economic conditions in the Unites States, Europe, China and other countries in which we sell our products have also made, and may continue to make, accurate forecasting particularly challenging. Any failure on our part to accurately forecast demand for our products and availability of raw materials could adversely affect our business, financial condition and cash flows. Further, we operate a limited number of manufacturing facilities. As we continue to expand our business globally, there is a risk that demand for our products could exceed our production capacity. If we are unable to satisfy increased demand for our products, our product sales and operating results may be adversely affected.

Moreover, actual demand for our products is difficult to predict because consumer preferences within the markets for our various products are subject to rapid change and may shift away from our musical instruments and towards other areas based on new products and trends and for other reasons substantially beyond our control. These reasons include, among others: the popularity of genres of music that feature our musical instruments; the popularity of music in general; and new and different ways in which music is created, including, but not limited to, software-based instruments such as GarageBand. In addition, shifts of consumer preferences as to style of music may impact demand for

------

##### [**Table of Contents**](#toc)
our musical instruments and can change our musical instrument mix. For example, shifts towards electronic music, rap or music created using sampling or other digital technology, synthesizers, tablets, computers or keyboards could reduce the demand for many of our musical instrument products.

If we are not able to anticipate, identify and respond to changes in consumer preferences and trends in a timely manner, or at all, or if we fail to accurately forecast demand for our products due to those changing preferences and trends, our business, financial condition and cash flows could be harmed.

***The COVID-19 pandemic had a significant effect on our sales results, and could have a significant negative impact on our business, net sales, financial condition and results of operations.***

The COVID-19 pandemic severely restricted the level of economic activity around the world. In response to COVID-19, the governments of many countries, states, cities and other geographic regions took preventative or protective actions, such as imposing restrictions on travel and business operations and advising or requiring individuals to limit or forego their time outside of their homes. Temporary closures of businesses, schools and music and entertainment venues were ordered and numerous other businesses temporarily closed voluntarily. Further, individuals' ability to travel was curtailed through mandated travel restrictions and could be limited again in the future due to a COVID resurgence through voluntary or mandated closures of travel**-**related businesses.

Our Band segment was particularly impacted by COVID-19 due to the prolonged suspension of school music programs and delayed reopening of concert venues. In fiscal years 2022, 2021, 2020 and 2019, our Band segment's net sales was $149.6 million, $131.7 million, $98.4 million and $144.1 million, respectively. Due to the impact from COVID-19 on the Band segment, we also recognized a total of $13.6 million and $2.5 million of non-cash goodwill and trademark impairment charges, respectively, during fiscal year 2020. Additionally, our Piano segment was impacted by COVID-19 due to school closings, as well as the closing of music and entertainment venues. Our Piano segment net sales fell for fiscal year 2020 to $317.4 million, compared to $331.6 million for fiscal year 2019, but rebounded to $406.6 million for fiscal year 2021 and $425.9 million for fiscal year 2022 as schools and entertainment venues re-opened, and the overall impact of COVID-19 subsided. Our Band segment benefitted from the resumption of school music programs and the reopening of concert venues, while our Piano segment saw improvements in demand in the Americas and EMEA regions, partially offset by modest declines in the APAC region due to new COVID-19 restrictions introduced in certain parts of China during fiscal year 2022. See "Management's Discussion and Analysis of Financial Condition and Results of Operations—COVID-19 Update."

Our business is particularly sensitive to reductions in discretionary consumer spending, music institution closures, and, specifically with respect to our Band segment, school closures. We cannot predict the degree to, or the time period over, which our business will be affected by COVID-19. For example, COVID-19 could continue to impede global economic activity, leading to a further decline in discretionary spending by customers, and result in additional significant effects on our business, net sales, financial condition and results of operations. There are numerous uncertainties associated with the COVID-19 pandemic, including the frequency and severity of new variants, as well as the response of governments and individuals around the world. We intend to continue to execute on our strategic plans and operational initiatives during the COVID-19 pandemic. However, the aforementioned uncertainties may result in delays or modifications to these plans and initiatives.

COVID-19 has also impacted, and may continue to impact, our office locations, and manufacturing and servicing facilities, as well as those of our third-party suppliers and vendors, including through the effects of facility closures, reductions in operating hours, staggered shifts and

------

##### [**Table of Contents**](#toc)
other social distancing efforts, labor shortages, decreased productivity and unavailability of raw materials or components. For example, we closed most of our facilities temporarily, including our Astoria, New York manufacturing facility for approximately three months in 2020, from late-March to the beginning of July. Further, all of our retail locations have been impacted by the pandemic. The majority of our U.S. retail stores were closed during the spring of 2020 and our European retail stores were closed intermittently throughout 2020 and 2021. Even after we reopened our U.S. retail locations, we continued to require customers to make appointments in advance until the end of summer in 2021. Further, we suspended hosting recitals and other similar events in response to the COVID-19 pandemic, which impacted our sales promotion strategy and overall consumer traffic to our retail stores. Our retail stores in the APAC region were also impacted by the imposition of lockdowns and other restrictions in certain parts of China in 2022, although we reopened these stores during the second quarter of fiscal year 2022. The COVID-19 pandemic may also impact distribution and logistics providers' ability to operate or increase their operating costs. For instance, since the start of the COVID-19 pandemic, we have experienced significant price increases for components that are essential to our products, which has increased our cost of sales. Our cost of sales has also been negatively impacted by increased freight costs. These supply chain effects may negatively affect our ability to meet consumer demand and may increase our costs of production and distribution.

In addition, the COVID-19 pandemic exacerbated a global semiconductor shortage and made it difficult for us to obtain microchips needed for the production of our *Spirio* pianos. Since the inception of the pandemic, factory shutdowns and limitations due to employee illness or public health requirements have significantly slowed microchip output, while global demand for products requiring chips has increased. These challenges worsened a pre-existing semiconductor shortage and the supply of semiconductors has not yet rebounded to pre-pandemic levels, driving up demand and costs. The continued delay or disruption in the availability of semiconductors may have a material and negative impact on our Company's operations and financial results. There is no guarantee that we will be able to obtain semiconductors from suppliers on commercially acceptable terms or at all, and the heightened cost of semiconductors may increase our production costs, which we may not be able to fully pass on to consumers. Further, in order to mitigate risks associated with semiconductor shortages, we may need to carry more inventory than normal to meet expected demand, which could negatively impact our margins.

While the COVID-19 pandemic negatively impacted numerous areas of our business operations, we have also been positively impacted by certain changes to consumer behavior caused by the pandemic. Government mandates, including restrictions on travel and shelter-in-place orders, caused more people to spend time in the home, in turn spurring increased spending and investment in their housing environment. In 2021 and early 2022, these consumer spending patterns were favorable for our business, as many of our consumers tend to purchase our instruments when upsizing or upscaling their homes. We also believe consumers placed a greater emphasis on family time and in-home leisure activities during the pandemic. Any reversal of these trends, including a shift to pre-pandemic consumer behavior or other adverse trends as a result of the recovery from the COVID-19 pandemic, could have a materially adverse impact on our piano sales and our business more generally.

For the reasons set forth above and other reasons that may come to light as the COVID-19 pandemic continues to evolve, as of the date hereof, we cannot reasonably estimate the impact of COVID-19 on our business, net sales, financial condition or results of operations; however, such impact could be significantly negative.

***Any material disruption of, or a failure to successfully implement or make changes to, information systems could negatively impact our business.***

We are increasingly dependent on our information systems to operate our business, including in designing, manufacturing, marketing and distributing our products, as well as processing transactions,

------

##### [**Table of Contents**](#toc)
managing inventory and accounting for our results. Additionally, we use enterprise resource planning software to manage day-to-day business activities such as accounting, procurement, project management, risk management and compliance, and supply chain operations, and any breach or prolonged disruption to our systems could adversely impact our business. Given the complexity of our global business, it is critical that we maintain the uninterrupted operation of our information systems. Despite our preventative efforts, our information systems may be vulnerable to damage, disruption or shutdown due to power outages, computer and telecommunications failures, computer viruses, systems failures, security breaches, severe weather events or natural disasters. Damage, disruption or shutdown of our information systems may require a significant investment to repair or replace them, and we could suffer interruptions in our operations in the interim.

In addition, in the ordinary course of business, we regularly evaluate and make changes and upgrades to our information systems. These system changes and upgrades can require significant capital investments and dedication of resources. For example, we are currently upgrading our lead management system, customer databases and inventory systems. While we follow a disciplined methodology when evaluating and making such changes, there can be no assurances that we will successfully implement such changes, that such changes will be implemented without delays, that such changes will occur without disruptions to our operations or that the new or upgraded systems will achieve the desired business objectives.

Any damage, disruption or shutdown of our information systems, or the failure to successfully implement new or upgraded systems, could have a direct material adverse effect on our results of operations, could undermine our ability to execute on our strategic and operational initiatives, and could also affect our reputation, our ability to compete effectively, our relationship with customers and the *Steinway* brand, which could result in reduced sales and profitability.

***We could be subject to work stoppages or other business interruptions as a result of our unionized work force.***

A significant portion of our hourly employees are represented by various union locals and covered by collective bargaining agreements. We have in the past been and may in the future be involved in disputes with unions or employees represented by a union. Any union organizing activities, such as a strike or work stoppage, could also adversely affect our operations. Organized labor may benefit from new legislation or legal interpretations by the current presidential administration. Particularly, in light of current support for changes to federal and state labor laws, we may be exposed to risks of increased union organization activities in the future, which could result in material interruptions to our business. Additionally, our collective bargaining agreements contain various expiration dates and must be renegotiated upon expiration. See "Business – Human Capital." If we are unable to negotiate any of our collective bargaining agreements on satisfactory terms prior to expiration, we could experience disruptions in our operations which could have a material adverse effect on our operating results.

***Increased pension expenses, contributions and surcharges may have an adverse impact on our financial results.***

We are sponsors of defined benefit retirement plans for certain employees. The funded status of these plans (the difference between the fair value of the plan assets and the projected benefit obligation) is a significant factor in determining annual pension expense and cash contributions to fund the plans.

Unfavorable investment performance, increased pension expense and cash contributions may have an adverse impact on our financial results. Under the Employee Retirement Income Security Act of 1974, as amended ("ERISA"), the Pension Benefit Guaranty Corporation ("PBGC") has the authority

------

##### [**Table of Contents**](#toc)
to petition a court to terminate an underfunded pension plan in limited circumstances. In the event that our defined benefit pension plans are terminated for any reason, we could be liable for the entire amount of the underfunding, as calculated by the PBGC based on its own assumptions (which would result in a larger obligation than that based on the actuarial assumptions used to fund such plans). Under ERISA and the Code (as defined below), the liability under these defined benefit plans is joint and several with all members of our control group, such that each member of our control group is potentially liable for the defined benefit plans of each other member of the control group.

In addition, we participate in and are required pursuant to collective bargaining agreements to contribute to one material multiemployer pension plan, the United Furniture Worker's Pension Fund A (the "UFW Plan"), for certain employees. Under the Pension Protection Act of 2006 (the "PPA"), contributions in addition to those made pursuant to a collective bargaining agreement may be required in limited circumstances.

Pension expenses for multiemployer pension plans are recognized by us as contributions are made. Generally, benefits are based on a fixed amount for each year of service. Our contributions to the UFW Plan were $1.6 million during fiscal year 2022.

On February 28, 2017, the UFW Plan trustees filed an application with the PBGC to partition the UFW Plan in accordance with Section 4233 of ERISA. This request was approved effective September 1, 2017, at which point the PBGC partitioned 56% of the UFW Plan's in-pay participants' liabilities and 100% of the terminated vested participants' liabilities to a successor pension plan. On March 15, 2017, the trustees also filed an application with the U.S. Treasury to suspend benefits in accordance with Section 432(e)(9) of the Code and the application was approved effective September 1, 2017. As a result of the partition and the benefits suspension, the UFW Plan's actuaries project that, on the basis of reasonable assumptions, the UFW Plan will not become insolvent, and will emerge from "critical status" under the PPA in or around the plan year ending February 29, 2044.

The PPA zone status for the UFW Plan year ended February 28, 2022 was red. As of the date our consolidated financial statements for the year ended December 31, 2022 were issued, the Form 5500 was not available for the plan year ended February 28, 2023. The zone status is based on information we received from the plan and is certified by the plan's actuary. Plans in the red zone are generally less than 65% funded. A rehabilitation plan was adopted by the plan's trustees effective March 2009. The rehabilitation plan is designed to improve the plan's funding status over time. This rehabilitation plan removed some adjustable benefits (pre-retirement lump sum death benefit, withdrawal benefit, 36-month guarantee option and subsidized early retirement for terminated vested members). Effective March 1, 2018, the Company is required to increase its total contributions to the UFW Plan by 1.5% per year (previously 5.5% under the prior rehabilitation plan).

If the hourly employees covered by this plan and our management agree to stop participating in the UFW Plan through the collective bargaining process, then our portion of the estimated unfunded vested benefit as determined by the plan's actuary would have been approximately $52.1 million as of February 28, 2022. We were listed in the Form 5500 as providing more than 5% of the total contributions for the above plan as of the plan years ended February 28, 2022. As of the date our consolidated financial statements for the year ended December 31, 2022 were issued, the Form 5500 was not available for the plan year ended February 28, 2023. Our withdrawal liability is based on unfunded status of the plan and our contribution history and could change based on the amount contributed to the plans, investment returns on the assets held in the plans, actions taken by trustees who manage the plans' benefit payments, interest rates, the amount of withdrawal liability payments made to the plans, if the employers currently contributing to these plans cease participation, and requirements under the PPA, the Multiemployer Pension Reform Act of 2014 and applicable provisions of the Code. While we currently believe it is unlikely that we would choose to withdraw from this plan,

------

##### [**Table of Contents**](#toc)
should the rehabilitation effort not be successful or if other participating employers decide to leave the plan, we may elect to do so in the future.

The American Rescue Plan Act of 2021 ("ARPA") created a new program under which the PBGC will provide grants in the form of special financial assistance ("SFA") to multiemployer plans with solvency challenges. The UFW Plan is eligible for such relief and, on February 24, 2022, the trustees of the UFW Plan voted to apply to receive SFA. If the UFW Plan receives SFA, the withdrawal liability estimate described above could be materially affected resulting in increased potential withdrawal liability for all employers, including the Company, under the UFW Plan.

In the event we were to exit certain markets or otherwise cease contributing to these plans, we could trigger a substantial withdrawal liability. Any accrual for withdrawal liability will be recorded when a withdrawal is probable and can be reasonably estimated, in accordance with GAAP. All trades or businesses in the employer's control group are jointly and severally liable for the employer's withdrawal liability.

***We may be subject to warranty claims and consumer protection laws that could result in significant direct or indirect costs, which could have an adverse effect on our business, financial condition, and operating results.***

We generally provide a minimum limited warranty on all of our instruments. For example, our pianos generally have warranties that vary between five to ten years depending on the brand. The occurrence of any defects, real or perceived, in our products could damage our brand and make us liable for damages and warranty claims in excess of our current reserves, which could result in an adverse effect on our business prospects, liquidity, financial condition, and cash flows if returns or warranty claims were to materially exceed anticipated levels. Also, while our warranty is limited to defects in material and workmanship, warranty claims may result in litigation, the occurrence of which could have an adverse effect on our business, financial condition, and operating results.

Additionally, in recent years, China's government, media outlets and public advocacy groups have been increasingly focused on consumer protection**.** China's consumer protection laws have broad coverage and regulate all business operators, including manufacturers and retailers, and the laws outline specific measures that businesses must take in the event of defective products or services, including, among other things**,** recalling products and halting sales. Further, if a consumer is dissatisfied with their purchase of a durable good and makes a complaint within six months, businesses bear the burden of proving that the product is not deficient. We have incurred, and may in the future continue to incur, costs in connection with complying with these increased regulations. If we fail to fully comply with these consumer protection laws, we risk facing strict penalties and the imposition of such penalties in China or any of the other countries in which we operate could have a material adverse effect on our business, financial condition, cash flows and results of operations.

***The continuing impact of "Brexit" may have a negative effect on our business.***

Following a national referendum and subsequent legislation, the United Kingdom formally withdrew from the European Union, commonly referred to as "Brexit," and ratified a trade and cooperation agreement governing its future relationship with the European Union. Among other things, the agreement, which became effective in 2021, addresses trade, economic arrangements, law enforcement, judicial cooperation and governance. Because the agreement merely sets forth a framework in many respects that requires complex additional bilateral negotiations between the United Kingdom and the European Union, significant uncertainty remains about how the precise terms of the relationship between the parties will differ from the terms before withdrawal.

------

##### [**Table of Contents**](#toc)
We have operations in the United Kingdom and the European Union and, as a result, we face risks associated with the potential uncertainty and disruptions that may follow Brexit and the implementation and application of the trade and cooperation agreement, including with respect to volatility in exchange rates and interest rates, disruptions to the free movement of data, goods, services, people and capital between the United Kingdom and the European Union and potential material changes to the regulatory regime applicable to our operations in the United Kingdom.

We may also face new regulatory costs and challenges as a result of Brexit that could have a material adverse effect on our operations. For example, as of January 1, 2021, the United Kingdom lost the benefits of global trade agreements negotiated by the European Union on behalf of its members, which may result in increased trade barriers that could make doing business in areas that are subject to such global trade agreements more difficult. In addition, Brexit could lead to legal uncertainty and potentially divergent national laws and regulations as the United Kingdom determines which laws of the European Union to replace or replicate. There may continue to be economic uncertainty surrounding the consequences of Brexit that adversely impact customer confidence resulting in fewer customers buying our products, which could materially adversely affect our business, financial condition and results of operations.

We cannot yet predict the full implications of Brexit, including whether it will further increase our operational costs or otherwise have a negative effect on our business, financial condition or results of operations, which could reduce the market price of our Class A common stock.

***We may be vulnerable to climate change, severe weather conditions and natural and man-made disasters, including earthquakes, fires, floods, hurricanes, tornadoes, severe storms (including impacts from rain, snow, lightning and wind), as well as power outages and other industrial incidents, which could severely disrupt the normal operation of our business and adversely affect our results of operations.***

We have both domestic and foreign manufacturing operations and operate 34 retail showrooms across the world, including 15 in the United States, ten in Europe and nine in APAC, that are susceptible to the risks associated with climate change as well as natural and man-made disasters. Such risks include those related to the physical impacts of climate change, such as more frequent and severe weather conditions and natural disasters, including earthquakes, fires, floods, hurricanes, tornadoes, severe storms (including impacts from rain, snow, lightning and wind) that may result in power outages or other damage or disruptions at our facilities. In addition to risks associated with climate change, our manufacturing operations and retail showrooms could be negatively affected by man-made disasters and other industrial incidents, any of which could result in system failures, power supply disruptions and other interruptions that could harm our business.

The potential physical impacts of climate change on our properties and operations are highly uncertain and would be particular to the geographic circumstances in areas in which we operate. These may include changes in rainfall and storm patterns and intensities, water shortages, changing sea levels and changing temperatures. Further, climate change and climate events could also result in social, cultural and economic disruptions in these areas, including supply chain disruptions, the disruption of local infrastructure and transportation systems that could limit the ability of our employees and/or our customers to access locations, or reductions in the availability and quality of raw materials used in our products such as wood, which is sensitive to changes in environmental conditions. These events could also compound adverse economic conditions and impact consumer confidence and discretionary spending. Severe weather events and other risks associated with climate change could negatively affect our business and operations. Further, any impacts to our business and financial condition as a result of climate change are likely to occur over an undetermined period of time and are therefore difficult to quantify with any degree of specificity.

------

##### [**Table of Contents**](#toc)
We do not currently, and may not in the future, carry business interruption insurance that would be sufficient to compensate for the losses that may result from interruptions in our operations as a result of inability to operate or failures of equipment and infrastructure at our facilities due to climate change.

***We calculate certain operational metrics using internal systems and tools and do not independently verify such metrics. Certain metrics are subject to inherent challenges in measurement, and real or perceived inaccuracies in such metrics may harm our reputation and negatively affect our business.***

We refer to a number of operational metrics herein, including Adjusted EBITDA, Adjusted EBITDA margin, Adjusted Net Income, Adjusted Net Income margin and other metrics. We calculate these metrics using internal systems and tools that are not independently verified by any third-party. These metrics may differ from estimates or similar metrics published by third-parties or other companies due to differences in sources, methodologies or the assumptions on which we rely. Our internal systems and tools have a number of limitations, and our methodologies for tracking these metrics may change over time, which could result in unexpected changes to our metrics, including the metrics we publicly disclose on an ongoing basis. If the internal systems and tools we use to track these metrics undercount or over count performance or contain algorithmic or other technical errors, the data we present may not be accurate. While these numbers are based on what we believe to be reasonable estimates of our metrics for the applicable period of measurement, there are inherent challenges in measuring Adjusted EBITDA, Adjusted EBITDA margin, Adjusted Net Income, Adjusted Net Income margin and other metrics. In addition, limitations or errors with respect to how we measure data or with respect to the data that we measure may affect our understanding of certain details of our business, which would affect our long-term strategies. If our operating metrics or our estimates are not accurate representations of our business, or if investors do not perceive our operating metrics to be accurate, or if we discover material inaccuracies with respect to these figures, our reputation may be significantly harmed, and our operating and financial results could be adversely affected.

***We may be unable to successfully integrate acquisitions of related companies into our business.***

We have historically acquired other businesses whose operations or product lines complement our existing business. For example, in 2019 we acquired Louis Renner GmbH & Co. KG, a German piano actions supplier, to further vertically integrate our production and increase our global competitiveness. We continually explore new opportunities to enter into business combinations with other companies in order to maintain and grow our net sales and market presence.

These potential transactions with other companies create risks, such as difficulty in assimilating their personnel, customers, technology, products and operations with our personnel, customers, technology, products and operations; disruption of our ongoing business, including loss of management focus on existing businesses; and impairment of relationships with existing executives, employees, customers and business partners. In addition, we may not be able to identify suitable candidates for these transactions or obtain financing or otherwise complete these transactions on acceptable terms. Furthermore, the benefits that we anticipate from these potential transactions may not be realized and we cannot be sure that we will recover our investment in any such strategic transaction. In addition, to the extent that we are not able to identify or complete additional acquisitions or investments on satisfactory terms or at all, our ability to expand our business and lower our cost of production may be adversely affected. If we are not able to effectively manage these or any other risks relating to past or future acquisitions or investments, our business, financial condition and cash flows could be harmed.

------

##### [**Table of Contents**](#toc)
***Our internal control over financial reporting does not currently meet the standards required by Section 404 of the Sarbanes-Oxley Act and if we are unable to effectively implement or maintain a system of internal control over financial reporting, we may not be able to accurately or timely report our financial results and our stock price could be adversely affected.***

We are in the process of evaluating our internal controls systems to allow management to report on, and our independent registered public accounting firm to audit, our internal controls over financial reporting. We will be performing the system and process evaluation and testing (and any necessary remediation) required to comply with the management certification and, if required, the auditor attestation requirements of Section 404 of the Sarbanes-Oxley Act. Pursuant to Section 404, we will be required to furnish a report by management on, among other things, the effectiveness of our internal control over financial reporting commencing with our second annual report on Form 10-K. Furthermore, upon completion of this process, we may identify control deficiencies of varying degrees of severity under applicable SEC and PCAOB rules and regulations that require remediation. As a public company, we will be required to report, among other things, control deficiencies that constitute a "material weakness" or changes in internal controls that, or that are reasonably likely to, materially affect internal controls over financial reporting. A "material weakness" is a deficiency, or a combination of deficiencies, in internal control over financial reporting, such that there is a reasonable possibility that a material misstatement of our annual or interim financial statements will not be prevented or detected on a timely basis. A "significant deficiency" is a deficiency, or a combination of deficiencies, in internal control over financial reporting that is less severe than a material weakness, yet important enough to merit attention by those responsible for oversight of our financial reporting.

This assessment will need to include disclosure of any material weaknesses identified by our management in our internal control over financial reporting, as well as a statement that our independent registered public accounting firm has issued an opinion on the effectiveness of our internal control over financial reporting, provided that our independent registered public accounting firm will not be required to attest to the effectiveness of our internal control over financial reporting until our first annual report required to be filed with the SEC following the later of the date we are deemed to be an "accelerated filer" or a "large accelerated filer," each as defined in the Exchange Act, or the date we are no longer an emerging growth company, as defined in the JOBS Act. We could be an emerging growth company for up to five years. An independent assessment of the effectiveness of our internal controls could detect problems that our management's assessment might not. Undetected material weaknesses in our internal controls could lead to financial statement restatements and require us to incur the expense of remediation. We will be required to disclose changes made in our internal control and procedures on a quarterly basis. To comply with the requirements of being a public company, we may need to undertake various actions, such as implementing new internal controls and procedures and hiring accounting or internal audit staff. Testing and maintaining internal controls can divert our management's attention from other matters that are important to the operation of our business.

We have not been required to provide a management assessment of internal controls under section 404(a) of the Sarbanes-Oxley Act. It is possible that if we had a 404(a) assessment, material weaknesses may have been identified. Additionally, our registered independent public accounting firm has not been engaged to perform an audit of our internal controls over financial reporting.

We cannot assure you that measures we have taken to date, and actions we may take in the future, will be sufficient to prevent or avoid potential future material weaknesses. In the future, it is possible that material weaknesses or significant deficiencies that we identify may not be remedied in time to meet the applicable deadline imposed upon us for compliance with the requirements of Section 404. Our ability to comply with the annual internal control reporting requirements will depend on the effectiveness of our financial reporting and data systems and controls across our Company. If we identify any material weaknesses in our internal control over financial

------

##### [**Table of Contents**](#toc)
reporting or are unable to comply with the requirements of Section 404 in a timely manner or assert that our internal control over financial reporting is effective, if we are required to make restatements of our financial statements, or if our independent registered public accounting firm is unable to express an opinion as to the effectiveness of our internal control over financial reporting, investors may lose confidence in the accuracy, completeness or reliability of our financial reports and the trading price of our common stock may be adversely affected, and we could become subject to sanctions or investigations by the NYSE, the SEC or other regulatory authorities, which could require additional financial and management resources. In addition, if we fail to remedy any material weakness, our financial statements could be inaccurate and we could face restricted access to the capital markets.

***Defects in our products could harm our brands and our business.***

Our products may expose us to liability from claims by consumers for damages, including bodily injury or property damage. These claims, whether meritorious or not, could harm our reputation and net sales, be costly to defend and could harm our business and results of operations. In addition, even if no bodily injury or property damage occurs from a defect, if our products do not function properly, we may be obligated to replace these products at no additional charge, which also could harm our business and results of operations. Although we maintain general product liability insurance, there can be no assurance that we will be adequately covered against claims or that we will not have to obtain additional coverage in the future, which may not be available on acceptable terms or at all.

**Risks Related to Our Reliance on Third-Parties** 

***We generate most of our sales through independent dealers and distributors*.** 

We depend on a network of independent dealers and distributors to distribute a majority of our pianos and all of our band instruments. If our dealers are unsuccessful, they will reduce their purchases from us. This would negatively impact our sales and production rates.

In addition, we rely on our dealers to be knowledgeable about our products and their features. If we are not able to educate our dealers so that they may effectively sell our pianos and all of our band instruments, or if our dealers do not provide positive buying experiences for our consumers, demand for our products may fall and our brands and business could be harmed.

Because we rely on independent dealers for the majority of our sales, we depend on our dealers having succession and management continuity plans. If our dealers cease their operations due to a lack of such plans, we would need to find new dealers, which may not be possible on favorable terms or at all. In the alternative, we would need to use our own sales force to replace such dealers, which may require expanding our retail presence. Expanding our sales force and retail presence into new locations takes a significant amount of time and resources, and there is no assurance that we would be successful in such an expansion. Any failure on the part of our dealers or inability to secure adequate replacement representation in all of our existing markets could have an adverse effect on our operating results.

***Any significant disruption in our supply from key suppliers could delay production and adversely affect our sales.***

We depend on a number of key suppliers with respect to our piano and band instruments. Our *Essex* and *Boston* piano lines are sourced from manufacturers in Asia. For our Band segment, certain component parts and some of our entry-level band instruments, including our entry-level trumpets, trombones, saxophones, flutes and clarinets, are also sourced from single manufacturers in Asia. We also depend on certain job shops located in the Midwestern United States for milling and sub-assembly of component parts used in our premium U.S.-manufactured instruments. For example, one job shop

------

##### [**Table of Contents**](#toc)
on which we rely makes the valve guides for our professional line of trumpets. Furthermore, due to the relatively small size of the piano industry, suppliers of machinery and equipment for manufacturing are also limited.

We are highly dependent on the availability of essential materials and purchased components from our suppliers, some of which may be available only from limited or sole resources. Moreover, we are dependent upon the ability of our suppliers to provide material that meets specifications, quality standards and delivery schedules. Our suppliers' failure to provide expected raw materials or component parts would adversely affect production schedules and profitability.

Although we have had adequate supplies of raw materials and component parts in the past, there is no assurance that we may not experience serious interruptions in the future. Our continued supply of materials is subject to a number of risks, including: the destruction of our suppliers' facilities or their distribution infrastructure; work stoppages or strikes by our suppliers' employees; the failure of our suppliers to provide materials of the requisite quality and compliant with applicable regulatory requirements; the failure of essential equipment at our suppliers' plants; the failure or shortage of supply of raw materials and labor available to our suppliers; the liquidity of our suppliers and their ability to access adequate financing to fund their operations and contractual amendments and disputes with our suppliers.

We cannot assure investors that our suppliers will continue to provide products to us at attractive prices or at all, or that we will be able to obtain such products in the future from these or other providers on the scale and within the time periods we require. Furthermore, we cannot assure investors that substitute raw materials or component parts will meet the strict specification and quality standards we impose or that are required under applicable laws and regulations. If we are not able to obtain key materials, supplies, components or sourced instruments on a timely basis and at affordable costs, or we experience significant delays or interruptions of their supply, it could have a material adverse effect on our business, financial condition and results of operations.

***Our third-party manufacturers and suppliers may not continue to manufacture products that are consistent with our standards and our quality control measures may be inadequate, either of which could damage the value of our brands and harm our business, financial condition and cash flows.***

We rely on our third-party manufacturers and suppliers to maintain production quality that meets our standards. Our third-party manufacturers and suppliers may not continue to manufacture products that are consistent with our standards as a result of the use of lower-quality raw materials, changes in production methods, a shortage of qualified employees or poor financial condition. Our products are transported from our third-party manufacturers and suppliers primarily by ocean freight where the product can be exposed to fluctuations in temperature and humidity. Supply chain logistics issues exacerbated by the COVID-19 pandemic may lead to increasing delays in offloading ocean freight and could cause our products to be exposed to these conditions for longer time periods. The primary material used in the production of our musical instruments is wood, which is sensitive to such changing environmental conditions. Our quality control measures largely consist of inspecting samples of products shipped to us and visiting our third-party manufacturers and suppliers. In addition, we currently outsource our restoration services to a third-party contractor with facilities in Iowa and we rely on such third-party to maintain our quality control standards during the restoration process. With respect to all of our outsourced products, we engage employees located in the country of origin to oversee quality control and production at offshore manufacturing facilities operated by third parties. Our inspection methods, however, may prove inadequate to detect defects in our products before they reach consumers.

------

##### [**Table of Contents**](#toc)
If our third-party manufacturers and suppliers do not maintain adequate quality control measures, or if the quality control inspection measures that we employ fail to detect quality control issues, our reputation and the value of our brands could be harmed, and we could incur increased returns and warranty expense, either of which would harm our business, financial condition and cash flows.

***Any delay in the delivery of our products to customers could harm our business, financial condition and cash flows.***

Our ability to meet our customers' demand in a timely manner is a critical component of our business. Any delay in the shipment of our products could result in lost sales. It is especially important that we meet our customers' demand in a timely manner during the holiday selling season, as the fourth quarter historically has been our highest selling quarter. In many instances, delays in filling our wholesale customers' product orders have led to an increased backlog. Events that could result in shipment delays include:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• disruption at our manufacturing facilities or those of our third-party suppliers or manufacturers, as a result of a variety
of factors, including, but not limited to, labor disruptions, contractual disputes, labor shortages, natural disasters, technological or mechanical failures in the machines used to manufacture our products or in our enterprise resource planning
systems and warehouse management systems;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• limitations on the ability of our suppliers to provide raw materials and finished goods to ensure our paced production plan
volumes and product mix schedule;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• delays in receiving component parts required to manufacture our products;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• delays in the transportation of our products either to our warehouse facilities or to our customers; and

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• inaccurate forecasting of demand for our products.

Any of the events discussed above, or other events that disrupt the supply of our products to our customers, could harm our business, financial condition and cash flows.

In addition, if demand for our products increases, we would need to accurately forecast, purchase, warehouse and transport materials and critical components to our manufacturing facilities and distribution locations and at higher volumes. We rely on a limited number of manufacturing facilities and if demand outpaces our current production capacity at those locations or those of our third parties, we could be unable to satisfy customer orders on time, or at all. Additionally, if our key suppliers are unable to deliver adequate quantities of materials and critical components to satisfy heightened demand, we would need to identify alternate sources for such materials in a timely manner. Developing alternate sources of supply that meet our quality standards may be time-consuming, difficult and costly and we may not be able to source these essential materials and components on terms that are acceptable to us, or at all, which may undermine our ability to fulfill our orders in a timely manner. Further, disruptions at our manufacturing facilities and warehouses, including as a result of government-mandated closures in response to COVID-19 outbreaks, could negatively impact our production and distribution capacity and reduce our ability to meet increased customer demand for our products. Our expansion into new and existing geographic markets increases this risk, as do disruptions in global supply chain networks. If we cannot meet increased demand for our products, our reputation with customers could be harmed.

***Increased focus on corporate responsibility, including environmental, social, and governance factors, may impose additional costs and expose us to new risks.***

In recent years, increasing attention has been given to corporate activities related to environmental, social and governance ("ESG") matters. A number of investors, advocacy groups, and

------

##### [**Table of Contents**](#toc)
other stakeholders, both domestically and internationally, have campaigned for governmental and private action to promote change at public companies related to ESG matters, including increasing attention and demands for action and public disclosure related to climate change, implementation of sustainable business practices (such as recycling, waste reduction, energy efficiency and use of renewable energy), consideration of biodiversity impact, workforce diversity and inclusion, issues associated with supply chains (including involuntary labor risks and human rights of workers in the supply chain), and fair labor practices. Organizations that provide information to investors on corporate governance and related matters have developed ratings systems for evaluating companies on their approach to ESG matters and these ratings are used by some investors to inform their investment and voting decisions. If we fail to adapt to or meet internal or external expectations and standards on ESG, even if not legally obligated to do so, we may receive unfavorable ESG ratings and/or suffer from reputational damage, which could have a negative impact on our stock price and our access to and costs of capital.

In addition, the adoption of new ESG-related regulations applicable to our business, or pressure from key stakeholders to comply with additional voluntary ESG-related initiatives or frameworks, could require us to make substantial investments in ESG matters, which could impact the results of our operations. Decisions or related investments in this regard could affect consumer perceptions as to our brand. Furthermore, if our competitors' corporate responsibility or ESG performance is perceived to be greater than ours, potential or current investors may elect to invest with our competitors instead. In the event that we publicize certain initiatives or goals regarding ESG matters, we could fail, or be perceived to fail, in our achievement of such initiatives or goals, or we could be criticized for the scope of such initiatives or goals. If we fail to satisfy the expectations of investors and other key stakeholders or our initiatives are not executed as planned, our reputation and financial results could be materially and adversely affected.

While we have undertaken a number of ESG-related initiatives, for example, we are installing energy-efficient LED lighting at our Astoria, New York factory and other company facilities in order to reduce our energy consumption, recycling wood wastes, sourcing lumber supplies from Forest Stewardship Council ("FSC") certified suppliers, and continuing our commitment to attracting and retaining a diverse and inclusive workforce, this increased focus on ESG initiatives could affect some aspects of our operations. For example, the criteria used in assessing our products' sustainability, or our companies' ESG-related performance more generally, could change, which could result in greater expectations of us and cause us to undertake costly initiatives to satisfy such new criteria. If we are unable to satisfy such new criteria, investors may conclude that our ESG-related policies are inadequate. We risk damage to our brand and reputation in the event that our corporate responsibility procedures or standards do not meet the standards set by various constituencies.

***We do not control our suppliers or third-party manufacturers, or require them to comply with a formal code of conduct, and actions that they might take could harm our reputation and business, financial condition and cash flows.***

We do not control our suppliers or third-party manufacturers. We generally do not inspect or audit our suppliers' compliance with labor, environmental or other laws, regulations or practices and we do not require our suppliers or third-party manufacturers to comply with any form of code of conduct. Other consumer products companies have faced significant criticism for the actions of their suppliers or third-party manufacturers, and we could face similar problems in the future. A violation of such laws or regulations by our suppliers or third-party manufacturers, or a failure of these parties to follow generally accepted ethical business practices, could reduce demand for our products (or harm our ability to meet demand if we need to locate alternative suppliers or third-party manufacturers because of such violations or failures), create negative publicity and harm our business, financial condition and cash flows.

------

##### [**Table of Contents**](#toc)
***We are subject to payment processing risks and our business is affected by the availability of third-party financing to our customers.***

Our customers pay for our products using a variety of different payment methods, including credit and debit cards, certified checks, personal checks, wires, purchase orders for institutional buyers, and third-party financing arrangements. In China, we accept WeChat Pay or Alipay for certain of our pianos. We commonly offer financing arrangements in connection with the purchase of our Piano segment products and such arrangements serve as an important alternative to cash payments. Historically, a majority of our customers using financing arrangements have relied on third-party credit providers with whom we have existing relationships. If we are unable to maintain our relationships with our financing partners, there is no guarantee that we will be able to find replacement partners who will provide our customers with financing on similar terms, if any, and our ability to sell our services may be materially adversely affected. Further, reductions in consumer lending and the availability of consumer credit could limit the number of customers with the financial means to purchase our products. Higher interest rates could increase our costs or the monthly payments for our services financed through other sources of consumer financing. In the future, there is no assurance that third-party financing providers will continue to provide consumers with access to credit or that available credit limits will not be reduced. Such restrictions or reductions in the availability of consumer credit, or the loss of any of our relationships with our current financing partners, could have a material adverse effect on our business, financial condition and results of operations.

We rely on internal systems as well as those of third parties to process payment. Acceptance and processing of these payment methods are subject to certain rules and regulations and require payment of interchange and other fees. For example, we are subject to the Payment Card Industry ("PCI") Data Security Standard, which contains compliance guidelines and standards designed to protect payment card data as mandated by payment card industry entities. We have implemented various internal processes to ensure PCI compliance, such as conducting annual audits in the U.S., and we are currently PCI compliant in the applicable jurisdictions in which we operate. Despite our ongoing compliance efforts, we may become subject to claims that we have violated the PCI Data Security Standard, which could subject us to substantial fines and penalties.

To the extent there are disruptions in our payment processing systems, increases in payment processing fees, material changes in the payment ecosystem, such as large reissuances of payment cards, delays in receiving payments from payment processors, or changes to rules or regulations concerning payment processing, our net sales, operating expenses and results of operation could be adversely impacted. We leverage our third-party payment processors to bill customers on our behalf. If these third parties become unwilling or unable to continue processing payments on our behalf, including due to their non-compliance with applicable rules or regulations concerning payment processing, we would have to find alternative methods of collecting payments, which could adversely impact customer acquisition and retention. In addition, from time to time, we encounter fraudulent use of payment methods, which could impact our results of operation and, if not adequately controlled and managed, could create negative consumer perceptions of our business. If we fail to comply with applicable rules and regulations of any provider of a payment method we accept, if the volume of payment fraud in our transactions triggers limits or terminates our rights to use payment methods we currently accept, or if a data breach occurs relating to our payment systems, we may be subject to fines or higher transaction fees and may lose our ability to accept certain payment card transactions. If services of our payment providers are interrupted, harmed or such payment providers or our internal payment processing systems are subject to fraud or cyber security attacks, this may result in the data protection of our customers being compromised and the access, public disclosure, loss or theft of their personal information, as well as an inability to process their payments.

------

##### [**Table of Contents**](#toc)
**Risks Related to Our Intellectual Property** 

***We depend upon third-party licenses for the use of content in our Spirio library of music and videos. An adverse change to, loss of, or claim that we do not hold necessary licenses may have an adverse effect on our business, operating results, and financial condition.***

Approximately 34% of our total Piano segment net sales for the year ended December 31, 2022 were attributable to sales of our *Spirio* and *Spirio* \| *r* pianos, giving our customers access to a library of music and videos, accessible on their personal devices, which can be enjoyed via their high-resolution player piano. To secure the rights required to use music and/or videos in our content, we rely upon a combination of content that is in the public domain, as well as licenses from rights holders, such as music publishers, video producers, performing rights organizations, collecting societies, composers, artists, and other copyright owners or their agents.

Our *Spirio* library currently includes thousands of performances by hundreds of artists, many of which are synched with video. We have obtained licenses from certain of the rights holders for music and videos in our existing Spirio library, and we expect that we will need to obtain further licenses, both for the existing *Spirio* library, as well as for new music and videos as the library is expanded. Some of our license agreements, particularly those which are obtained as part of settlement agreements with rights holders who have asserted claims against us, have and may require us to pay advance royalty payments and license fees, as well as minimum guarantees, to such parties or their agents around the world. In addition, some of our license agreements and settlement agreements may include a release from all potential claims regarding any alleged past use of copyrighted material by us in exchange for a negotiated payment. We have and will need to enter into agreements with rights holders who represent the music catalogs that we require to operate our service. However, given the uncertain and opaque nature of music rights ownership, our *Spirio* library may continue to include music or videos for which certain rights or fractional interests have not been accurately determined or fully licensed.

The process of obtaining licenses involves identifying and negotiating with many rights holders, some of whom are unknown or difficult to identify, and implicates a myriad of complex and evolving legal issues across many jurisdictions, including open questions of law as to when and whether particular licenses are needed. At times, while we may hold some of the necessary rights and licenses for certain music in the *Spirio* library, it may be difficult to obtain all of the necessary rights and licenses for such music from all applicable rights holders. Rights holders also may attempt to take advantage of their market power to seek onerous financial terms from us. Our relationship with certain rights holders may deteriorate. Artists and/or artist representatives may object and may exert public or private pressure on rights holders to refuse to grant certain rights, or discontinue or modify license terms. Additionally, there is a risk that aspiring rights holders, their agents, or legislative or regulatory bodies will create or attempt to create new rights that could require us to enter into new license agreements with, and pay royalties to, newly defined groups of rights holders, some of which may be difficult or impossible to identify. As a result, we may enter into a license for our *Spirio* library of music and videos from a content owner who may later be found not to legally have the right to grant us a license to distribute the music and videos on our platform.

Some of our license and settlement agreements may also include so-called "most-favored nations" provisions, which require that certain terms (including material financial terms) provided to one licensor are no less favorable than those provided to any similarly situated licensor. If agreements are amended or new agreements are entered into on more favorable terms, these most-favored nations provisions could cause our payment or other obligations under the associated agreements to escalate substantially. Additionally, some of our license and settlement agreements may require consent to undertake new business initiatives utilizing the applicable licensed content (e.g., alternative distribution models), and without such consent, our ability to undertake any such new business initiatives may be limited and our competitive position could be impacted. If we need to enter into additional agreements with similar provisions in the future, it could have a material adverse effect on our business, financial condition and operating results.

------

##### [**Table of Contents**](#toc)
If we fail to obtain necessary rights or comply with any of the obligations under our license or settlement agreements, we may be required to pay damages and the counterparty may have the right to terminate the relevant agreement or license granted. Termination by the licensor would cause us to lose valuable rights, and could prevent us from using certain music and/or videos in the *Spirio* library, or inhibit our ability to commercialize future products. Any of the foregoing could have a material adverse effect on our competitive position, business, financial condition and results of operations.

With respect to musical compositions, in addition to obtaining publishing rights, we may need to obtain separate public performance rights for certain features of our product suite. In the United States, public performance rights are typically obtained through intermediaries known as performing rights organizations ("PROs"), which (a) issue blanket licenses with copyright users for the public performance of compositions in their repertory, (b) collect royalties under those licenses, and (c) distribute such royalties to copyright owners. Licenses provided by ASCAP and BMI currently are governed by consent decrees, which were issued by the U.S. Department of Justice in an effort to curb anti-competitive conduct. Removal of, or changes to, the terms or interpretation of our agreements could affect our ability to obtain licenses from these PROs on current and/or otherwise favorable terms, which could harm our business, operating results, and financial condition.

In other parts of the world, including in Canada and Europe, we may also require licenses for musical compositions either through local collecting societies representing publishers, or from publishers or other rights holders directly, or a combination thereof. No assurance can be given that any licenses with collecting societies and our direct licenses with publishers or other rights holders provide full coverage for all of the musical compositions we use in our service in the countries in which we operate, or that we may enter in the future. Publishers, songwriters, and other rights holders who choose not to be represented by major or independent publishing companies or collecting societies could adversely impact our ability to secure licensing arrangements in connection with musical compositions that such rights holders own or control, and could increase the risk of liability for copyright infringement.

License and settlement agreements regarding the right to use and distribute music and videos are complex, and certain provisions in those agreements may be susceptible to multiple interpretations. The resolution of any contract interpretation disagreement that may arise could narrow what we believe to be the scope of our rights, or increase what we believe to be our financial or other obligations under the relevant agreement. If it is determined in an applicable tribunal or court of competent jurisdiction that we are in breach of any such license or settlement agreement, we could be liable for damages, and the relevant license might be subject to termination, which may mean that we would need to cease use of the applicable music and/or videos.

Furthermore, although we seek to comply with all applicable statutory, regulatory, and judicial frameworks, due to a multitude of factors beyond our control, including the disparities in how music rights are licensed and administered across such statutory, regulatory and judicial frameworks, the variable interests that rights holders may possess in the music used on our platform and the number of rights holders whose interests may be implicated, no assurance can be given that we currently hold, or will always hold, every necessary right to use all of the music that is offered in our *Spirio* library.

These challenges, and others concerning the licensing of music on our platform, may subject us to liability for copyright infringement, breach of contract, or other claims.

***If we cannot successfully protect our intellectual property and proprietary information, our business would suffer.***

Our success depends, to a significant degree, on our ability to obtain, maintain, protect, defend and enforce our intellectual property and other proprietary rights. We particularly rely on our

------

##### [**Table of Contents**](#toc)
trademarks for our brand recognition and protection, and rely on trade dress, patents and other intellectual property rights to protect and maintain the distinctiveness of our products and their sound quality and style. Because of the differences in foreign trademark, patent and other laws concerning proprietary rights, our intellectual property rights may not receive the same degree of protection in foreign countries as they would in the United States. Our failure to obtain or maintain adequate protection of our intellectual property rights for any reason could have a material adverse effect on our business, results of operations and financial condition.

We have registered many of our brand names as trademarks in the United States and in certain foreign countries. While we intend to continue to apply for trademark registrations where we believe it would be beneficial, we cannot assure you that our trademark applications will be approved. Third parties may also oppose our trademark applications, or otherwise challenge our use of the trademarks. In the event that our trademarks are successfully challenged, we could be forced to rebrand our products, which could result in loss of brand recognition, and could require us to devote resources to advertising and marketing new brands. Further, we cannot assure you that competitors will not infringe our trademarks, or that we will have adequate resources to enforce our trademarks. We also license third parties to use our trademarks. In an effort to preserve our trademark rights, we enter into license agreements with these third parties which govern the use of our trademarks, and which require our licensees to abide by quality control standards with respect to the goods and services that they provide under our trademarks. Although we make efforts to police the use of our trademarks by our licensees, we cannot assure you that these efforts will be sufficient to ensure that our licensees abide by the terms of their licenses. In the event that our licensees fail to do so, our trademark rights could be diminished, and our reputation could be harmed.

We have also applied for patent protection in the United States and certain other countries relating to certain existing and proposed products and processes. We cannot assure you that any of our patent applications will be approved or that our products, such as the *Steinway* piano and *Spirio* technology, will not infringe third-party patents or other proprietary rights. The patents we own could be challenged, invalidated or circumvented by others and may not be of sufficient scope or strength to provide us with any meaningful protection or commercial advantage. Many patent applications in the U.S. are maintained in secrecy for a period of time after they are filed, and since publication of discoveries in the scientific or patent literature tends to lag behind actual discoveries by several months, we cannot be certain that we will be the first creator of inventions covered by any patent application we make or the first to file patent applications on such inventions. Further, we cannot assure you that competitors will not infringe our patents, or that we will have adequate resources to enforce our patents.

We also rely on unpatented proprietary technology. It is possible that others will independently develop the same or similar technology or otherwise obtain access to our unpatented technology. To protect our trade secrets, know-how and other proprietary information, we require employees, consultants, advisors and collaborators to enter into confidentiality agreements. We cannot assure you that these agreements will provide meaningful protection for our trade secrets, know-how or other proprietary information in the event of any unauthorized use, misappropriation or disclosure of such trade secrets, know-how or other proprietary information. Further, these agreements may not prevent our competitors from independently developing technologies and products that are substantially equivalent or superior to ours. These agreements may be breached, and we may not have adequate remedies for any such breach. Additionally, enforcing a claim that a party illegally disclosed or misappropriated a trade secret or know-how is difficult, expensive, and time-consuming, and the outcome is often unpredictable. Moreover, trade secrets and know-how can be difficult to protect and some courts inside and outside the U.S. are less willing or unwilling to protect trade secrets.

In addition, while it is our policy to require our employees, consultants, advisors and collaborators and other third parties who may be involved in the conception or development of intellectual property

------

##### [**Table of Contents**](#toc)
on our behalf to execute agreements containing language assigning such intellectual property to us, we may be unsuccessful in getting such agreements executed with every party who, in fact, conceives or develops intellectual property that we regard as our own. The assignment of intellectual property rights may not be self-executing, or the assignment agreements may be breached, and we may be forced to bring claims against third parties or defend claims that they may bring against us to determine the ownership of what we regard as our intellectual property. Any of the foregoing could have a material adverse effect on our business, financial condition, results of operations and prospects.

***If third parties infringe upon our intellectual property rights, our operating profits could be adversely affected.***

The steps we have taken to protect our intellectual property may not be adequate to prevent infringement of our intellectual property. We have processes in place to regularly identify potential and actual infringement on our intellectual property rights. These activities often involve unlicensed use of our trademarks or trade dress on a variety of products that we believe could harm our image. From time to time, we have discovered unauthorized products in the marketplace that are counterfeit reproductions of our products. Although we expend efforts to pursue counterfeiters, it is not practicable to pursue all counterfeiters. If we are unsuccessful in challenging a third-party's products on the basis of trademark infringement or if we are unable to dedicate sufficient resources to detecting and pursuing counterfeit products or otherwise do not aggressively pursue producers or sellers of counterfeit products, continued sales of these products could harm the value of our brands, our competitive position and our business, financial condition and cash flows.

Enforcing our intellectual property rights, including through litigation, can be expensive and time-consuming, and there is no assurance that we will be successful. If our efforts to enforce our intellectual property are inadequate, or if a third-party misappropriates our rights, the value of our brands could be harmed and our product sales could be adversely affected, which would adversely affect our business, financial condition and cash flows.

***We may be subject to intellectual property infringement claims, which are costly to defend and could limit our ability to use certain intellectual property in the future.***

From time to time, third parties claim that one or more of our products or the music and/or videos in our content infringe or otherwise violate their intellectual property and proprietary rights. Our competitors in both the United States and foreign countries, some of which may have substantially greater resources, may have applied for or obtained, or may in the future apply for and obtain, patents that will prevent, limit or otherwise interfere with our ability to make and sell our products. We also from time to time face claims that we infringe people's copyright through our *Spirio* library of music and videos, photos on our website, or marketing materials. Any claims of infringement by a third party, even those without merit, could be expensive and time consuming to defend, could divert management's attention and resources, could cause us to cease making, licensing, and selling the accused products, could require us to redesign, reengineer, or rebrand our content, products or packaging, if feasible, and could require us to enter into royalty or licensing agreements in order to obtain the right to use a third party's intellectual property. Any royalty or licensing agreements, if required, may not be available on acceptable terms or at all. Furthermore, a successful claim of infringement against us of third-party intellectual property infringement could result in our being required to pay significant damages, enter into costly license or royalty agreements, or stop the sale of certain products. Any of these events could harm our business, financial condition and cash flows.

------

##### [**Table of Contents**](#toc)
***Our proprietary software may not operate properly, which could damage our reputation or divert application of our resources from other purposes, any of which could harm our business, results of operations and financial condition.***

Proprietary software development is time-consuming, expensive and complex, and may involve unforeseen difficulties. Our proprietary software, including our *Spirio* technology, encounters technical obstacles from time to time, and it is possible that we may discover additional problems that prevent its proprietary applications from operating properly. This could damage our reputation and impair our ability to attract or maintain customers. Any defects and errors in our proprietary software, and any failure by us to identify and address them, could result in loss of net sales or market share, diversion of development resources, harm to our reputation and increased service and maintenance costs. Defects or errors may discourage existing or potential customers from purchasing its products from us. Correction of defects or errors could prove to be impossible or impracticable. The costs incurred in correcting any defects or errors may be substantial and could have a material adverse effect on our business, results of operations and financial condition.

**Risks Related to the Financial Position of Our Business** 

***Our indebtedness could materially adversely affect our financial condition and our ability to operate our business, react to changes in the economy or industry or pay our debts and meet our obligations under our debt and could divert our cash flow from operations to debt payments.***

As of December 31, 2022, our ABL Facility was fully undrawn, with $69.8 million available under our ABL Facility, net of letters of credit and borrowing restrictions. Additionally, we have multiple foreign credit facilities. As of December 31, 2022, our German subsidiary had $16.3 million outstanding under the German Term Loan Facility and had $10.7 million outstanding under the German ABL Facility, with $20.3 million available under the German ABL Facility, net of letters of credit. As of December 31, 2022, our Japanese subsidiary had $0.6 million outstanding under the Japanese Term Loan Facility and the Japanese Revolving Credit Facility was fully undrawn, with $4.6 million available. See "Management's Discussion and Analysis of Financial Condition and Results of Operations—Liquidity and Capital Resources—Debt." In addition, subject to restrictions in the agreements governing our Credit Facilities, we may incur additional debt.

Our debt could have important consequences to you, including the following:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• it may be difficult for us to satisfy our obligations under our outstanding debt, resulting in possible defaults on and
acceleration of such indebtedness;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• our ability to obtain additional financing for working capital, capital expenditures, debt service requirements or other
general corporate purposes may be impaired;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• a portion of cash flow from operations may be dedicated to the payment of principal and interest on our debt, therefore
reducing our ability to use our cash flow to fund our operations, capital expenditures, future business opportunities, acquisitions and other purposes;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• we may be more vulnerable to economic downturns and adverse industry conditions and our flexibility to plan for, or react
to, changes in our business or industry may be more limited;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• our ability to capitalize on business opportunities and to react to competitive pressures, as compared to our competitors,
may be compromised due to our level of debt; and

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• our ability to borrow additional funds or to refinance debt may be limited.

Furthermore, a majority of our debt under our Credit Facilities bears interest at variable rates. If these rates were to increase significantly, whether because of an increase in market interest rates or a

------

##### [**Table of Contents**](#toc)
decrease in our creditworthiness, our ability to borrow additional funds may be reduced and the risks related to our debt would intensify. Historically we have utilized interest rate swaps to manage interest rate risk associated with our borrowings with floating interest rates. During the second quarter of fiscal year 2022, we terminated all of our outstanding interest rate swap derivative instruments, and as a result, changes in market interest rates impact interest expense related to our borrowings with floating interest rates.

For the years ended December 31, 2022 and 2021, our interest and minimum mandatory principal re-payments were $4.0 million and $12.5 million, respectively. Our ability to generate sufficient cash depends on numerous factors beyond our control, and we may be unable to generate sufficient cash flow to service our debt obligations.

Our business may not generate sufficient cash flow from operating activities to service our debt obligations. Our ability to make payments on and to refinance our debt and to fund planned capital expenditures depends on our ability to generate cash in the future. To some extent, this is subject to general economic, financial, competitive, legislative, regulatory and other factors, such as those described in this "Risk Factors" section, that are beyond our control.

If we are unable to generate sufficient cash flow from operations to service our debt and meet our other commitments, we may need to refinance all or a portion of our debt, sell material assets or operations, delay capital expenditures or raise additional debt or equity capital. We may not be able to effect any of these actions on a timely basis, on commercially reasonable terms or at all, and these actions may not be sufficient to meet our capital requirements. In addition, the terms of our existing or future debt agreements may restrict us from pursuing any of these alternatives.

***Restrictive covenants in the agreements governing our Credit Facilities and future indebtedness that we may incur may restrict our ability to pursue our business strategies, and failure to comply with any of these restrictions could result in acceleration of our debt.***

The operating and financial restrictions and covenants in one or more of the agreements governing our Credit Facilities and future indebtedness that we may incur may materially adversely affect our ability to finance future operations or capital needs or to engage in other business activities. Such agreements limit our ability, among other things, to:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• incur liens;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• incur or assume additional indebtedness and guarantee indebtedness or amend our debt and other material agreements;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• prepay, redeem or repurchase indebtedness;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• increase applicable interest rate margins;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• declare or make dividends on or make distributions and redeem, repurchase or retire equity interests or make other
restricted payments;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• make certain acquisitions, investments, loans, guarantees and advances;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• transfer or sell certain assets;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• consolidate, merge, sell or otherwise dispose of all or substantially all of our assets;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• redeem, repay, repurchase or refinance other indebtedness;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• enter into agreements restricting the ability to pay dividends or grant liens securing obligations under the credit
agreements;

------

##### [**Table of Contents**](#toc)
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• enter into certain transactions with our affiliates;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• amend or modify governing documents or other debt agreements; and

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• alter the business conducted by us and our restricted subsidiaries.

A breach of any of these covenants could result in a default under one or more of our Credit Facilities. Upon the occurrence of an event of default under our Credit Facilities, the lenders could elect to declare all amounts outstanding under our Credit Facilities to be immediately due and payable and terminate any commitments to extend further credit, or we may be required to sell our assets, restructure our indebtedness or seek additional equity capital, which would dilute our stockholders' interests. In addition, a default or acceleration under our Credit Facilities may result in the acceleration of our other outstanding indebtedness to which a cross-acceleration or cross-default provision applies. We may not have or be able to obtain sufficient funds to make any accelerated payments in the event of an acceleration of our debt upon a default. Any covenant breach or event of default could harm our credit rating and our ability to access credit markets and obtain additional financing on acceptable terms.

Furthermore, the terms of any future indebtedness we may incur could have further additional restrictive covenants. We may not be able to maintain compliance with these covenants in the future, and in the event that we are not able to maintain compliance, we cannot assure you that we will be able to obtain waivers from the lenders or amend the covenants.

***We and our subsidiaries may incur substantially more debt. This could further exacerbate the risks associated with our leverage.***

We and our subsidiaries may be able to incur substantial additional debt in the future. Although the agreements governing our Credit Facilities contain restrictions on the incurrence of additional debt, these restrictions are subject to a number of qualifications and exceptions, and the debt incurred in compliance with these restrictions could be substantial. Additionally, we may successfully obtain waivers of these restrictions. If we incur additional debt above the levels currently in effect, the risks associated with our leverage, including those described above, would increase.

***We are a holding company with no operations of our own, and we depend on our subsidiaries for cash.***

We are a holding company and do not have any material assets or operations other than ownership of equity interests of our subsidiaries. Our operations are conducted almost entirely through our subsidiaries, and our ability to generate cash to meet our obligations or to pay dividends, if any, is highly dependent on the earnings of, and receipt of funds from, our subsidiaries through dividends or intercompany loans. The ability of our subsidiaries to generate sufficient cash flow from operations to allow us and them to make scheduled payments on our debt obligations will depend on their future financial performance, which will be affected by a range of economic, competitive and business factors, many of which are outside of our control.

***We experience inherent concentration of credit risk in our accounts receivable.***

Historically, a large portion of our sales have been generated by our top 15 customers who represented approximately 20% of our net sales for each of the years ended December 31, 2022 and 2021. As a result, we experience some inherent concentration of credit risk in our accounts receivable due to its composition and the relative proportion of large customer receivables to the total. This is especially true for our Band segment, which typically accounts for the majority of our consolidated accounts receivable balance. We consider the credit health and solvency of our customers when extending credit and when we develop our receivable allowance estimates. If our customers fail to pay a significant portion of outstanding receivable balances, or if we are unable to collect outstanding

------

##### [**Table of Contents**](#toc)
receivables on a timely basis, it would have a negative impact on our results of operations. Consolidation of our customers in the future or additional concentration of market share among our customers may also increase the concentration of our credit risk.

***We depend on a variety of U.S. and multi-national financial institutions to provide us with banking services. The default or failure of one or more of the financial institutions that we rely on may adversely affect our business and financial condition.***

We maintain the majority of our cash and cash equivalents in accounts with major U.S. and multi-national financial institutions, and our deposits at certain of these institutions exceed insured limits. Market conditions can impact the viability of these institutions. In the event of the failure of any of the financial institutions where we maintain our cash and cash equivalents, there can be no assurance that we would be able to access uninsured funds in a timely manner or at all. Any inability to access or delay in accessing these funds could adversely affect our liquidity, business and financial condition.

***Shifts in our product mix may result in declines in our gross margins and profit levels.***

Our gross margins vary among our product groups and as a result, shifts in product mix (that is, how much of each product type we sell in any particular period) could impact our profitability. For our Piano segment, the product, regional and channel mix of our sales from year to year is a significant factor affecting our gross margins. Generally, *Steinway* pianos sold in APAC are sold at a higher margin than *Steinway* pianos sold in the Americas or Europe, *Spirio* pianos are sold at a higher margin than comparable non-*Spirio* pianos, and larger and therefore more expensive models are sold at a higher margin than our smaller and therefore less expensive pianos. Our piano profitability is also impacted by the sales contribution from our retail showroom locations. We generate a significantly higher gross margin from our retail sales as compared to sales through our third-party dealer network. Because the majority of our gross profit is realized from the sale of our high-end grand pianos, economic downturns that impact the luxury goods market have had, and in the future may continue to have, an adverse effect on our sales and gross profits.

For our Band segment, professional instruments and procured student instruments, many of which are manufactured in Asia, are generally sold at a higher margin than domestically produced student instruments. The introduction of new band instruments, decreases in average selling prices, and shifts in the proportion of student-level instruments to professional-level instruments may cause variances in our gross margins.

If global economic conditions changed and the demand for our products shifted away from *Steinway* pianos, including those with *Spirio* technology, toward our *Boston* and *Essex* lines, or if demand for our products shifted away from APAC to other regions, and/or sales through our retail outlets slowed in proportion to sales through our dealers, our gross margin on our pianos could decline. Similarly, if we were forced to produce more of our Band segment products domestically, our gross margin on our Band segment instruments could also significantly decline and have an adverse impact on our results of operations.

***As an international company, we are subject to taxation in the United States and various other foreign jurisdictions in which we do business.***

Some of the foreign jurisdictions in which we operate, including Germany, Japan and China, have higher statutory tax rates than those in the United States, and certain of our international earnings are also taxable in the United States. Accordingly, our effective tax rates will vary depending on the relative proportion of foreign to U.S. income and absorption of foreign tax credits, changes in the valuation of our deferred tax assets and liabilities, and changes in applicable tax laws or their interpretation and application, including the possibility of retroactive effect. In addition, we are subject to examination of our income tax returns by the U.S. Internal Revenue Service and other tax authorities.

------

##### [**Table of Contents**](#toc)
As we expand our e-commerce channel, we may face increased exposure to tax liability. State and local taxing authorities in the United States have identified e-commerce platforms as a means to calculate, collect and remit indirect taxes for transactions taking place over the Internet. Multiple U.S. states have enacted related legislation and other states are now considering such legislation. Furthermore, in 2018, the U.S. Supreme Court held in *South Dakota v. Wayfair* that a U.S. state may require an online retailer to collect sales taxes imposed by the state in which the buyer is located, even if the retailer has no physical presence in that state, thus permitting a wider enforcement of such sales tax collection requirements. Outside of the United States, the application of VAT or other indirect taxes on e-commerce providers continues to evolve. An increasing number of jurisdictions are legislating or have adopted laws that impose new taxes, including revenue-based taxes that target online commerce and the remote selling of goods. These laws include new obligations to collect sales, consumption, value added, or other taxes on remote sellers, or other requirements that may result in liability for third-party obligations. Our business could be adversely affected by additional taxes that focus on e-commerce revenue. Additionally, existing and new tax laws and legislation in our current or future markets could require us to incur substantial costs in order to comply, including costs associated with legal advice, tax calculation, collection, remittance and audit requirements, which could make selling in such markets less attractive and could adversely affect our business. Further, these laws can be applied prospectively or retroactively. Noncompliance with new laws may result in fines or penalties. It is possible we may not have sufficient notice to create and adopt processes to properly comply with new reporting or collection obligations by the effective date of any new laws or regulations.

We regularly assess the likelihood of adverse outcomes resulting from these examinations to determine the adequacy of our income tax reserves and expense. Should actual events or results differ from our current expectations, charges or credits to our income tax expense reserves and income tax expense may become necessary. Any such adjustments could have a significant impact on our results of operations.

**Risks Related to Regulation** 

***Our operations may subject us to liabilities for environmental or other regulatory matters, the costs of which could be material.***

Our manufacturing operations involve the use, handling, storage, treatment and disposal of materials and waste products that may be toxic or hazardous. Consequently, we are subject to numerous federal, state and local environmental and worker health and safety laws and regulations, specifically those relating to discharges of pollutants to air, water and land, the management, treatment, handling, storage, transportation and disposal of solid and hazardous waste, exposure to hazardous or toxic substances, and the investigation, cleanup and remediation of properties contaminated by hazardous substances. We are required to hold certain environmental permits for our operations. Any failure to comply with environmental laws or environmental permits could subject us to fines and penalties or enforcement actions, including seeking to suspend or revoke our permits. In addition, environmental laws are frequently revised and the general trend has been that regulations become more stringent over time. Any changes in existing environmental laws or their interpretation, or more rigorous enforcement efforts by regulatory authorities, may require additional expenditures by us to modify operations, install pollution control equipment, obtain new or modified permits or curtail our operations. Such fines, expenditures or limitations could have a material negative impact on our financial condition and results of operations.

In addition, many environmental laws impose strict, retroactive, joint and several liability broadly upon owners and operators of properties, including with respect to discharges or releases of hazardous materials matters that occurred prior to the time the party became an owner or operator. We may also have liability with respect to third-party sites to which we sent wastes for disposal in the past. Our potential liability at any of these sites is affected by many factors including, but not limited to, the method of remediation, our share of the hazardous substances disposed of at the site relative to

------

##### [**Table of Contents**](#toc)
that of other responsible parties, the number of responsible parties, the financial capabilities of other parties, the availability of insurance coverage and other contractual rights and obligations.

We have, in the past, experienced chemical spills at our facilities, which have required us to incur cleanup costs, and we have ongoing obligations and liabilities with respect to the remediation of current and former properties. We accrue liabilities for sites where the liability is known or probable and can be reasonably estimated. Future events, including any new releases or discharges of hazardous or toxic materials or the discovery of previously unknown contamination or additional information concerning past releases of hazardous substances (at either our properties or third-party disposal sites) could require us to fund additional remedial programs for which we do not currently maintain an accrual and which may not be covered by our insurance policies.

In addition to risks relating to environmental law and regulations addressing pollution and contamination, we also face increasing complexity in the design and manufacture of our products. Specifically, we are required to comply with requirements relating to the chemical composition of many of our products or the materials used in the manufacture of our products. For example, our products are subject to certain reporting and labeling requirements under California's Proposition 65, officially known as the Safe Drinking Water and Toxic Enforcement Act of 1986 ("Prop 65"), which requires a specific warning on any product that contains a substance listed by the State of California as having been found to cause cancer or birth defects, unless the level of such substance in the product is below a safe harbor level. We have in the past been subject to lawsuits brought under Prop 65 and required to pay settlements in connection therewith. If we fail to comply with Prop 65 or other similar laws in the future, such failure to comply may result in lawsuits and regulatory enforcement that could have a material adverse effect on our reputation, business, financial condition, results of operations and prospects. Further, the inclusion of warnings on our products as required by Prop 65 could also negatively affect consumer perception of our products and reduce overall demand, which could adversely affect our reputation, business, financial condition, results of operations and prospects.

We have incurred costs to comply with environmental, health, safety, product compliance and other regulations in the past and expect to incur additional costs in the future. Compliance with these regulations by us and by our suppliers could also disrupt our operations and logistics. For example, the sale of electronic goods, both domestically and internationally, is subject to various regulations and permitting requirements. Complying with regulations concerning electronic goods has had, and will likely continue to have, an impact on our ability to launch and sell our *Spirio* products worldwide. We need to ensure that we design and manufacture our products in compliance with these requirements and that we are assured a supply of compliant components from our suppliers. These and other environmental, health and safety regulations may require us to redesign our products to utilize new components that are compatible with these regulations and/or obtain permits to sell our products in the jurisdictions in which we operate, which may result in additional costs to us or cause us to eliminate the products from our portfolio.

As regulations of our products and operations increase with our international footprint, so does the risk of our unintentional violation of applicable laws and regulations that we may be subject to globally. Violations of such laws and regulations could subject us to substantial fines and penalties.

In addition, we will likely be affected by laws or regulations imposed in response to climate change concerns and we cannot predict the full scope or impact of laws that will be enacted or amended in the future. In New York City, for example, Local Law 97 requires our manufacturing facility in Astoria, New York to meet new energy efficiency and greenhouse gas emissions limits by 2024, with stricter limits coming into effect by 2030. We are currently in the process of developing a strategy to adhere to Local Law 97 and the cost of compliance, both for capital and operating costs, could be substantial. However, if our plan does not meet the requirements of Local Law 97, or other laws that

------

##### [**Table of Contents**](#toc)
may be enacted in the future, we may become subject to fines. Accordingly, we cannot predict whether or not any other such laws or regulations will have a material adverse effect on our business, financial condition and results of operations.

***We may be subject to the enforcement of regulations and laws relating to the importation and use of certain raw materials, which could adversely affect our ability to use certain raw materials and harm our business, financial condition and cash flows.***

We are subject to a variety of customs and import laws and regulations that, if not properly followed, could delay or impact our importation of raw materials, which could harm our business, financial condition and cash flows. Although we believe our sourcing and importation practices are in compliance with the Lacey Act, Title 16, United States Code, Section 3371, et seq., and other applicable regulations, such as 50 CFR Part 23 related to the implementation of the Convention on International Trade in Endangered Species of Wild Fauna and Flora, the U.S. Department of Justice, or other applicable regulators could take a different view, which could restrict or prevent our use of specific types of woods from specific countries/regions of the world, and/or subject us to additional fines and other penalties. Other raw materials used in our business may be subject to restrictions under other environmental laws and regulations, including Title VI of the Toxic Substances Control Act that established formaldehyde emission standards, along with product testing and labeling obligations, for certain types of composite wood products. While we have implemented policies and procedures designed to ensure compliance with such laws and regulations, any inability to obtain compliant materials or any failure by us to comply with the applicable requirements could result in an adverse impact on our business, including potential negative impacts on our ability to manufacture products or imposition of fines or penalties if we have not complied.

In the case of certain raw materials that we use in our products, including certain types of woods, we may also be subject to pressure from environmental groups, media attention or consumer preference to use alternative materials. These alternative materials could reduce the quality of our products or could be more expensive. In addition, negative publicity regarding environmental matters also could harm our brands.

We may also be subject to the enforcement of other new or existing regulations and laws relating to the sourcing, transportation, distribution and use of raw materials and components, including wood, electrical components and adhesives, which could impact our ability to use certain raw materials or components.

Any of these risks may harm our business, financial condition and cash flows.

***Failure to comply with global anti-corruption laws, including the FCPA, and other laws such as sanctions and export controls associated with our activities outside of the United States could subject us to penalties and other adverse consequences.***

We operate a global business and may have direct or indirect interactions with officials and employees of government agencies or state-owned or affiliated entities. We are subject to the U.S. Foreign Corrupt Practices Act of 1977 (as amended) (the "FCPA"), the U.S. domestic bribery statute contained in 18 U.S.C. § 201, the U.S. Travel Act, the USA PATRIOT Act, the U.K. Bribery Act 2010, and other anti-bribery and anti-money laundering laws in countries in which we conduct activities. These laws generally prohibit companies and their employees, officers and directors, as well as any third-party acting on their behalf from corruptly promising, authorizing, offering, or providing, directly or indirectly, improper payments or anything of value to foreign government officials, political parties, and private-sector recipients for the purpose of obtaining or retaining business, directing business to any person, or securing any advantage. In addition, U.S. public companies are required to maintain records that accurately and fairly represent their transactions and have an adequate system of internal accounting controls.

------

##### [**Table of Contents**](#toc)
We implement certain anti-corruption compliance programs and policies, procedures and training designed to promote compliance with anti-corruption laws. However, we cannot provide assurance that our internal controls and compliance systems will always protect us from liability for acts committed by employees, agents or our employees, officers and directors, or any third parties acting on our behalf (including distributors), or any businesses that we subsequently acquire, business partners of ours (or of businesses we acquire or partner with) that would violate U.S. and/or non-U.S. laws, including the laws governing payments to government officials, bribery, fraud, kickbacks and other related laws. Any such improper actions or allegations of such acts could subject us to costly investigations and/or significant sanctions, including civil or criminal fines and penalties, disgorgement of profits, injunctions and debarment from government contracts, as well as related stockholder lawsuits and other remedial measures, all of which could adversely affect our reputation, business, financial condition and results of operations.

We face significant risks if we or any of our directors, officers, employees, agents or other partners or representatives fail to comply with these laws and governmental authorities in the United States and elsewhere could seek to impose substantial civil and/or criminal fines and penalties which could have a material adverse effect on our business, reputation, operating results and financial condition.

Further, we are subject to rules and regulations of the United States and other countries, as applicable, relating to export controls and economic sanctions, including, but not limited to, trade sanctions administered by the Office of Foreign Assets Control within the U.S. Department of the Treasury, as well as the Export Administration Regulations administered by the U.S. Department of Commerce. These regulations limit our ability to market, sell, distribute or otherwise transfer our products or technology to prohibited countries or persons. While we have taken steps to comply with these rules and regulations, a determination that we have failed to comply, whether knowingly or inadvertently, may result in substantial penalties, including fines, enforcement actions, civil and/or criminal sanctions, the disgorgement of profits, and may materially adversely affect our business, results of operations and financial condition. Further, we may be indirectly exposed to risk if our distributors or resellers export our products to sanctioned countries without our knowledge.

Moreover, in the future, additional U.S., EU and UK trade and economic sanctions or regulations, enacted due to geopolitical events or otherwise, and any counter-sanctions enacted by sanctioned counties, could restrict our ability to operate or generate or collect revenue in certain sanctioned countries, such as Russia, which could adversely affect our business. In particular, in relation to Russia, recent sanctions have impacted our operations in the region, with net sales decreasing from approximately $3.4 million in the year ended December 31, 2021 to approximately $0.3 million, or less than 1%, of our net sales in the year ended December 31, 2022.

Any violation of the FCPA, other applicable anti-corruption laws, anti-money laundering laws, or laws related to export controls and economic sanctions could result in whistleblower complaints, adverse media coverage, investigations, loss of export privileges, severe criminal or civil sanctions and, in the case of the FCPA, suspension or debarment from U.S. government contracts, any of which could have a materially adverse effect on our reputation, business, operating results and prospects. In addition, responding to any enforcement action may result in a significant diversion of management's attention and resources and significant defense costs and other professional fees.

***New and existing data privacy laws and/or a significant data security breach of our information systems could increase our operational costs, subject us to claims and otherwise adversely affect our business.***

The protection of information about customers, employees and other individuals as well as company information is important to us. Our customers, employees and other individuals about whom

------

##### [**Table of Contents**](#toc)
we hold or control information expect their data to be adequately protected. In addition, the regulatory environment surrounding information security and data privacy is becoming increasingly demanding, with evolving requirements in respect of personal data use and processing, including significant penalties for non-compliance, in the various jurisdictions in which we do business. For example, we are subject to the E.U. General Data Protection Regulation 2016/679 ("GDPR") that came into force in 2018 and the United Kingdom data protection regime consisting primarily of the UK General Data Protection Regulation ("UK GDPR") and the UK Data Protection Act 2018, as well as the California Consumer Privacy Act ("CCPA") that came into force in 2020 and was amended by the California Privacy Rights Act (the "CPRA"), effective January 2023, and other similar data privacy laws and regulations.

For example, in the European Union and United Kingdom we are subject to rules with respect to cross-border transfers of personal data out of the European Union and the United Kingdom, respectively. Recent legal developments in Europe have created complexity and uncertainty regarding transfers of personal data from the European Union and the United Kingdom to the United States and other countries outside the European Union. On July 16, 2020, the Court of Justice of the European Union ("CJEU") invalidated the EU-US Privacy Shield Framework ("Privacy Shield") under which personal data could be transferred from the European Union to US entities who had self-certified under the Privacy Shield scheme and the decision cast uncertainly on when transfers could be made under the standard contractual clauses.

These recent developments mean we have to review and may need to change the legal mechanisms by which we transfer data outside of the European Union and United Kingdom, including to the United States. As supervisory authorities issue further guidance on personal data export mechanisms, including circumstances where our intra-company data transfer agreement cannot be used, and/or start taking enforcement action, we could suffer additional costs, complaints and/or regulatory investigations or fines, and/or if we are otherwise unable to transfer personal data between and among countries and regions in which we operate, it could affect the manner in which we provide our services, the geographical location or segregation of our relevant systems and operations, and could adversely affect our financial results.

We are also subject to evolving European Union and United Kingdom privacy laws on cookies and e-marketing. In the European Union and the United Kingdom, regulators are increasingly focusing on compliance with requirements in the online behavioral advertising ecosystem, and current national laws that implement the ePrivacy Directive are highly likely to be replaced by an EU regulation known as the ePrivacy Regulation which will significantly increase fines for non-compliance. While the text of the ePrivacy Regulation is still under development, a recent European court decision, regulators' recent guidance and a campaign by a not-for-profit organization are driving increased attention to cookies and tracking technologies. If regulators start to enforce the strict approach in recent guidance, this could lead to substantial costs, limit the effectiveness of our marketing activities, divert the attention of our technology personnel, adversely affect our margins, increase costs and subject us to additional liabilities.

We are also subject to federal and state laws in the United States that impose limits on or requirements regarding the collection, distribution, use, security and storage of personal data of individuals. The Federal Trade Commission ("FTC") Act (the "FTC Act") grants the FTC authority to enforce against unfair or deceptive practices, which the FTC has interpreted to require companies' practices with respect to personal data to comply with the commitments posted in their privacy policies. We might face similar scrutiny from state regulators acting pursuant to state unfair and deceptive acts and practices ("UDAP") laws. With respect to the use of personal information for direct marketing purposes, the Controlling the Assault of Non-Solicited Pornography and Marketing Act of 2003, or the CAN-SPAM Act, establishes specific requirements for commercial email messages and specifies penalties for the transmission of commercial email messages that are intended to deceive the recipient as to source or content, and obligates, among other things, the sender of commercial emails to provide

------

##### [**Table of Contents**](#toc)
recipients with the ability to opt out of receiving future commercial emails from the sender. In addition, the protection and privacy of children's data has come under increasing scrutiny by regulatory bodies in the U.S. and abroad. The Children's Online Privacy Protection Act ("COPPA") applies to operators of commercial websites and online services directed to U.S. children under the age of 13 that collect personal information from children, and to operators of general audience websites and services with actual knowledge that they are collecting personal information from U.S. children under the age of 13. Our failure to comply with these laws could result in us being subject to governmental enforcement actions, data processing restrictions, litigation, fines and penalties, adverse publicity, reputational damage, or loss of customers.

Many states have also enacted or are considering additional data privacy and security laws and regulations that govern the processing of personal data and other information. For instance, the CCPA contains, among other things, disclosure obligations for businesses that collect personal data from California residents and affords those individuals numerous rights relating to their personal data. It provides for civil penalties for CCPA violations, in addition to providing a private right of action for data breaches. All U.S. states have adopted laws requiring the timely notification to individuals and regulators if a company exercises the unauthorized access or use of personal data. Since its inception, the CCPA has changed the manner in which we process personal data and resulted in increased litigation or regulatory oversight risks and costs of compliance. In addition, the CPRA which became effective in January 2023, amended and expanded the CCPA to impose additional data protection obligations on covered companies, including certain consumer rights processes, the right to correct personal information, and opt-outs for certain uses of sensitive personal information and the sharing of personal information for targeted advertising purposes; with certain requirements looking back to January 2022. The CPRA's amendments also created a new enforcement bureau, the California Privacy Protection Agency. The California Privacy Protection Agency recently finalized draft amendments to the CCPA Regulations, which build upon the requirements in the CCPA. Moreover, other jurisdictions in which we do business, including Colorado, Connecticut, Nevada, Utah and Virginia, have and may continue to adopt privacy-related laws whose restrictions and requirements differ from those of California, which could require us to design, implement and maintain different types of state- or country-based, privacy-related compliance controls and programs simultaneously in multiple jurisdictions, thereby further increasing the complexity and cost of compliance.

In addition to the GDPR and UK GDPR and US data privacy laws, virtually every international jurisdiction in which we operate has established its own legal framework relating to privacy, data protection, and information security matters to which we may also be subject. For example, we are also subject to laws in China. Under China's Cybersecurity Law, any collection, use, transfer and storage of personal information of a Chinese citizen through a network by the network operator should be based on the three principles of legitimacy, justification and necessity and requires the consent of the data subject. The rules, purposes, methods and ranges of such collection should also be disclosed to the data subject. China's data localization requirements are becoming increasingly common in sector-specific regulations, and laws including data localization requirements exist in many of the other jurisdictions in which we operate. For example, China's Cybersecurity Law requires operators of critical information infrastructure ("CIIOs") to store personal information and important data collected and generated from the critical information infrastructure within China. Non-compliance with China's Cybersecurity Law can result in fines of up to RMB 100,000 for the relevant entity as well as for the personnel directly responsible. On September 14, 2022, the Cyberspace Administration of China ("CAC"), China's top cybersecurity regulator, released new amendments to China's Cybersecurity Law for public consultation and if the amendments are passed, the amended law will increase the penalties for violations of cybersecurity obligations under the Cybersecurity Law to up to RMB 50 million, in line with those under the Data Security Law and PIPL.

Building on this, China's Data Security Law ("Data Security Law") became effective on September 1, 2021. The primary purpose of the Data Security Law is to regulate data activities,

------

##### [**Table of Contents**](#toc)
safeguard data security, promote data development and usage, protect individuals and entities' legitimate rights and interests, and safeguard state sovereignty, state security and development interests. The Data Security Law applies extraterritorially, and to a broad range of activities that involve "data" (not only personal or sensitive data). Under the Data Security Law, entities and individuals carrying out data activities must abide by various data security obligations. For example, the Data Security Law proposes to classify and protect data based on the importance of data to the state's economic development, as well as the degree of harm it will cause to national security, public interests, or legitimate rights and interests of individuals or organizations when such data is tampered with, destroyed, leaked, or illegally acquired or used. The appropriate level of protective measures is required to be taken for each respective class of data. The Data Security Law also echoes the data localization requirement in the Cybersecurity Law and requires important data to be stored locally in China. Such important data may only be transferred outside of China subject to compliance with certain data transfer restrictions, such as passing a security assessment organized by the relevant authorities.

The Cybersecurity Review Measures, which took effect on February 15, 2022 in China, clarify when entities must apply for a mandatory cybersecurity review from the Chinese government authorities. These circumstances include when (i) CIIOs purchase network products that may affect national security, (ii) when a network platform operator's data processing activities may affect national security, or (iii) when a network platform operator holds personal information of more than one million individuals and plans on listing publicly outside China. Network platform operators are not defined under the Cybersecurity Review Measures, but are understood to be broadly interpreted to include all Internet platform operators or service providers, thus providing for a broad application. A mandatory cybersecurity review is likely to prolong the timeline of any contemplated listing timeline outside China and increase the regulatory compliance burden on entities that are subject to this requirement. At this time, the Company does not act as a network platform operator and does not hold the personal information of more than one million individuals in China, and as such, we do not believe the Company would be subject to the Cybersecurity Review Measures. However, the relevant Chinese authorities have great discretion and it is generally uncertain as to how they may interpret and enforce the Cybersecurity Review Measures in practice.

Additionally, on August 20, 2021, China announced the Personal Information Protection Law ("PIPL"), which took effect on November 1, 2021. The PIPL is intended to clarify the scope of application, the definitions of personal information and sensitive personal information, the legality of personal information processing and the basic requirements of notice and consent, among other things. The PIPL also sets out data localization requirements for CIIOs and personal information processors who process personal information above a certain threshold prescribed by the relevant authorities. The PIPL also includes a list of rules which must be complied with prior to the transfer of personal information outside of China, such as compliance with a security assessment or certification by an agency designated by the relevant authorities or entering into standard form model contracts approved by the relevant authorities with the overseas recipient.

On July 7, 2022, the CAC issued Security Assessment Measures for Outbound Data Transfers, which became effective on September 1, 2022. The Security Assessment Measures for Outbound Data Transfers clarifies the security assessment requirement under the PIPL and requires a data processor to apply for the security assessment organized by the CAC under any of the following circumstances before the information is transferred outbound: (i) where a data processor provides key data overseas, (ii) critical information infrastructure operator and personal information processors who process more than one million individuals' personal information; (iii) where a data processor has cumulatively provided personal information of over 100,000 individuals or sensitive personal information of over 10,000 individuals in total abroad since January 1st of the previous year. Additionally, on November 18, 2022, the CAC and the State Administration of Market Regulation issued the Implementation Rules for Personal Information Protection Certification which apply with

------

##### [**Table of Contents**](#toc)
immediate effect and which provide important guidance on obtaining a personal information certification for lawful cross-border transfer of personal information under the PIPL.

Notably, the PIPL, similar to both the GDPR and certain U.S. privacy laws, applies extraterritorially. Failure to comply with PIPL can result in fines of up to RMB 50 million or 5% of the prior year's total annual revenue for the personal information processor and/or a suspension of services or data processing activities. Other potential penalties include a fine of up to RMB 1 million on the person in charge or directly responsible personnel and, in serious cases, individuals and entities may be exposed to criminal liabilities under other local Chinese law, such as the Criminal Law of the People's Republic of China. The PIPL also prohibits responsible personnel for violations of the PIPL from holding high level management or data protection officer positions in relevant enterprises.

In addition to China's Cybersecurity Law, the Data Security Law and the PIPL, the government agencies of China promulgated several regulations or released a number of draft regulations for public comments which are designed to provide further implemental guidance in accordance with the laws mentioned above. We cannot predict what impact the new laws and regulations or the increased costs of compliance, if any, will have on our operations in China, in particular the Data Security Law or PIPL, or the increased costs of compliance, if any, will have on our operations in China due to their recent enactment and the limited guidance available on their scope and applicability, particularly on PIPL. It is also generally unclear how the laws will be interpreted and enforced in practice by the relevant government authorities as often the abovementioned laws are drafted broadly and thus leaves great discretion to the relevant government authorities to exercise.

The evolving and overarching complexity of privacy and data protection laws and regulations around the world may require us to design, implement and maintain different types of state- or country-based, privacy-related compliance controls and programs simultaneously in multiple jurisdictions, thereby further increasing the complexity and cost of compliance. These costs, including others relating to increased regulatory oversight and compliance, could materially and adversely affect our business or our growth plans and result in damages or liability in other forms as a result of failure to implement proper programmatic controls, failure to adhere to those controls, or the malicious or inadvertent breach of applicable privacy and data protection requirements by us, our employees, our business partners, or our customers.

A significant violation of applicable privacy laws or the occurrence of a cybersecurity incident resulting in breach of personal data or company information could result in the temporary suspension of some or all of our operating and/or information systems, damage our reputation, our relationships with customers, suppliers, vendors and service providers and the *Steinway* brand and could result in lost data, lost sales, investigations by regulators, sizable fines (for example, non-compliance with the GDPR or UK GDPR, specifically, may result in administrative fines or monetary penalties, each regime having the ability to fine up to the greater of €20 million/£17 million or 4% of global turnover, and non-compliance with certain U.S. laws do not have a set maximum), increased insurance premiums, substantial breach-notification and other remediation costs and lawsuits, as well as adversely affect results of operations. In addition, we may face civil claims including representative actions and other class action type litigation (where individuals have suffered harm), potentially amounting to significant compensation or damages liabilities, as well as associated costs, diversion of internal resources, and reputational harm. We may also incur additional costs in the future related to the implementation of additional security measures to protect against new or enhanced data security and privacy threats, to comply with state, federal and international laws that may be enacted to address personal data processing risks and data security threats or to investigate or address potential or actual data security or privacy breaches. As of the date of this prospectus, we do not currently maintain cybersecurity insurance and therefore have no insurance coverage in the event of any breach or disruption of our or our vendors' information systems, including any unauthorized access or loss of any personal data that we collect, store or otherwise process. Although we are in the process of building up the infrastructure

------

##### [**Table of Contents**](#toc)
necessary to be eligible for cybersecurity insurance, there is no assurance of when or if we will be able to obtain cybersecurity insurance on terms satisfactory to us, if at all. To the extent we are unable to obtain cybersecurity insurance and experience any disruption or security breach that results in a loss of, or damage to, our data or information systems, or inappropriate disclosure of confidential or proprietary information, we could incur liability, our competitive position could be harmed and our business operations and financial results could be adversely affected.

**Risks Related to This Offering and Ownership of Our Class A Common Stock** 

***There has been no prior market for our Class 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 Class A common stock prior to this offering. The initial public offering price for our Class A common stock will be determined through negotiations between the representatives of the underwriters and the selling stockholder and may vary from the market price of our Class A common stock following the completion of this offering. An active or liquid market in our Class 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 Class 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 Class A common stock will trade.

***Our stock price may be volatile or may decline regardless of our operating performance, resulting in substantial losses for investors purchasing shares in this offering.***

The market price of our Class A common stock may fluctuate significantly in response to numerous factors, many of which are beyond our control, including:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• actual or anticipated fluctuations in our financial conditions and results of operations;

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

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• failure of securities analysts to initiate or maintain coverage of our company, changes in financial estimates or ratings
by any 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;&nbsp;&nbsp;• announcements by us or our competitors of significant technical innovations, acquisitions, strategic partnerships, joint
ventures, results of operations or capital commitments;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• changes in stock market valuations and operating performance of other luxury good or musical instrument companies
generally, or those in our industry in particular;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• price and volume fluctuations in the overall stock market, including as a result of trends in the economy as a whole;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• changes in our board of directors or management;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• action by institutional stockholders or other large stockholders (including John Paulson and certain affiliated entities),
including future sales of our Class A common stock;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• lawsuits threatened or filed against us;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• anticipated or actual changes in laws, regulations or government policies applicable to our business;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• changes in our capital structure, such as future issuances of debt or equity securities;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• short sales, hedging and other derivative transactions involving our capital stock;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• general economic conditions in the United States;

------

##### [**Table of Contents**](#toc)
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• other events or factors, including those resulting from war, pandemics (including COVID-19), incidents of terrorism or responses to these events; and

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• the other factors described in the sections of this prospectus titled "Risk Factors" and "Special Note
Regarding Forward-Looking Statements."

The stock market has recently experienced extreme price and volume fluctuations. The market prices of securities of companies have experienced fluctuations that often have been unrelated or disproportionate to their results of operations. Market fluctuations could result in extreme volatility in the price of shares of our Class A common stock, which could cause a decline in the value of your investment. Price volatility may be greater if the public float and trading volume of shares of our Class A common stock is low. Furthermore, in the past, stockholders have sometimes instituted securities class action litigation against companies following periods of volatility in the market price of their securities. Any similar litigation against us could result in substantial costs, divert management's attention and resources, and harm our business, financial condition and results of operations.

***The dual class structure of our common stock may adversely affect the trading market for our Class A common stock.***

We cannot predict whether our dual class structure will result in a lower or more volatile market price of our Class A common stock or in adverse publicity or other adverse consequences. For example, in 2017, FTSE Russell and S&P Dow Jones announced restrictions on including companies with dual class or multi-class share structures in certain of their indexes. FTSE Russell announced plans to require new constituents of its indices to have at least five percent of their voting rights in the hands of public stockholders, whereas S&P Dow Jones announced changes to its eligibility criteria for the inclusion of shares of public companies on certain indices, including the S&P 500, the S&P MidCap 400 and the S&P SmallCap 600, to exclude companies with multiple classes of shares of common stock from being added to these indices. Other index providers may in the future restrict or omit companies with unequal voting structures from their indices. As a result, our dual class capital structure would make us ineligible for inclusion in any of these indices, and mutual funds, exchange-traded funds and other investment vehicles that attempt to passively track these indices will not be investing in our stock. These policies are still fairly new and it is as of yet unclear what effect, if any, they will have on the valuations of publicly traded companies excluded from the indices, but it is possible that they may depress these valuations compared to those of other similar companies that are included. Furthermore, we cannot assure you that other stock indices will not take a similar approach to S&P Dow Jones or FTSE Russell in the future. Exclusion from indices could make our Class A common stock less attractive to investors and, as a result, the market price of our Class A common stock could be adversely affected.

***The dual class structure of our common stock and the existing ownership of Class B common stock by John Paulson and certain affiliated entities have the effect of concentrating voting control with John Paulson and certain affiliated entities for the foreseeable future, which will limit or preclude your ability to influence corporate matters.***

Our Class A common stock, which is the stock being offered in this offering, has one vote per share, and our Class B common stock has ten votes per share. Given the greater number of votes per share attributed to our Class B common stock, John Paulson and certain affiliated entities, who are our only Class B stockholders, will hold approximately % of the total combined voting power of our outstanding common stock following the completion of this offering. As a result of our dual class ownership structure, John Paulson and certain affiliated entities will be able to exert a significant degree of influence or actual control over our management and affairs and over matters requiring stockholder approval, including the election of directors, mergers or acquisitions, asset sales and other significant corporate transactions. Further, John Paulson and certain affiliated entities will own shares

------

##### [**Table of Contents**](#toc)
representing approximately % of the economic interest of our outstanding common stock following this offering and, together with our other executive officers, directors and their affiliates, will own shares representing approximately % of the economic interest and % of total combined voting power of our outstanding common stock following this offering. Because of the 10-to-1 voting ratio between the Class B common stock and Class A common stock, the holders of Class B common stock collectively will continue to control a majority of the total combined voting power of our outstanding common stock and therefore be able to control most matters submitted to our stockholders for approval, so long as the outstanding shares of Class B common stock represent at least % of the total number of outstanding shares of common stock. This concentrated control will limit your ability to influence corporate matters for the foreseeable future.

In addition, we will agree to nominate to our board of directors individuals designated by John Paulson and certain affiliated entities in accordance with our Stockholders Agreement. Pursuant to the Stockholders Agreement, so long as John Paulson and certain affiliated entities own, in the aggregate, (i) at least 35% of the total outstanding shares of our common stock owned by them immediately following the consummation of this offering (including the sale of any shares pursuant to the underwriters' option to purchase additional shares), they will be entitled to nominate four directors, (ii) less than 35% but at least 25% of the total outstanding shares of our common stock owned by them immediately following the consummation of this offering (including the sale of any shares pursuant to the underwriters' option to purchase additional shares), they will be entitled to nominate three directors, (iii) less than 25%, but at least 15% of the total outstanding shares of our common stock owned by them immediately following the consummation of this offering (including the sale of any shares pursuant to the underwriters' option to purchase additional shares), they will be entitled to nominate two directors, (iv) less than 15%, but at least 5% of the total outstanding shares of our common stock owned by them immediately following the consummation of this offering (including the sale of any shares pursuant to the underwriters' option to purchase additional shares), they will be entitled to nominate one director and (v) less than 5% of the total outstanding shares of our common stock owned by them immediately following the consummation of this offering (including the sale of any shares pursuant to the underwriters' option to purchase additional shares), they will not be entitled to nominate a director. See "Certain Relationships and Related Party Transactions—Relationship with John Paulson and Certain Affiliated Entities Following this Offering—Stockholders Agreement." The concentration of ownership could deprive you of an opportunity to receive a premium for your shares of Class A common stock as part of a sale of our Company and ultimately might affect the market price of our Class A common stock.

Further, our amended and restated certificate of incorporation, which will be in effect prior to the closing of this offering, will provide that the doctrine of "corporate opportunity" will not apply with respect to John Paulson and certain affiliated entities or their respective affiliates (other than us and our subsidiaries), and any of their respective principals, members, directors, partners, stockholders, officers, employees or other representatives (other than any such person who is also our employee or an employee of our subsidiaries), or any director or stockholder who is not employed by us or our subsidiaries. See "—Our amended and restated certificate of incorporation will provide that the doctrine of 'corporate opportunity' will not apply with respect to certain parties to our Stockholders Agreement and any director or stockholder who is not employed by us or our subsidiaries."

***Substantial future sales by John Paulson and certain affiliated entities or other holders of our common stock, or the perception that such sales may occur, could depress the price of our Class A common stock.***

Immediately following the completion of this offering, John Paulson and certain affiliated entities will collectively own % of our outstanding shares of common stock (or % if the underwriters exercise their option to purchase additional shares of Class A common stock in full). Subject to the restrictions described in the paragraph below, future sales of these shares in the public market will be

------

##### [**Table of Contents**](#toc)
subject to the volume and other restrictions of Rule 144 under the Securities Act, for so long as such parties are deemed to be our affiliates, unless the shares to be sold are registered with the Securities and Exchange Commission (the "SEC"). John Paulson and certain affiliated entities and Mr. Steiner are entitled to rights with respect to the registration of their shares following this offering. For a description of these registration rights, see the section titled "Description of Capital Stock—Registration Rights." We are unable to predict with certainty whether or when John Paulson and certain affiliated entities will sell a substantial number of shares of our Class A common stock. The sale by John Paulson and certain affiliated entities of a substantial number of shares after this offering, or a perception that such sales could occur, could significantly reduce the market price of our Class A common stock. Upon completion of this offering, except as otherwise described herein, all shares of our Class A common stock that are being offered hereby will be freely tradable without restriction, assuming they are not held by our affiliates.

We, the selling stockholder, and all directors, officers and the holders of substantially all of our outstanding common stock and stock options have agreed that, without the prior written consent of the representatives on behalf of the underwriters and subject to certain exceptions, we and they will not, and will not publicly disclose an intention to, during the period ending 180 days after the date of this prospectus (the "restricted period"), (i) offer, pledge, sell, contract to sell, sell any option or contract to purchase, purchase any option or contract to sell, grant any option, right or warrant to purchase, lend or otherwise transfer or dispose of, directly or indirectly, any shares of common stock or any securities convertible into or exercisable or exchangeable for shares of common stock, (ii) file any registration statement with the SEC relating to the offering of any shares of common stock or any securities convertible into or exercisable or exchangeable for common stock or (iii) enter into any swap or other arrangement that transfers to another, in whole or in part, any of the economic consequences of ownership of the common stock. Any of our directors, officers and other Lock-Up Parties buying shares of Class A common stock through the Reserved Share Program will be subject to the same restrictions during the restricted period.

Immediately following this offering, we intend to file a registration statement on Form S-8 registering under the Securities Act the shares of our Class A common stock reserved for issuance under our 2023 Plan and ESPP. In connection with this offering, we intend to grant the IPO RSUs which, if vested, would result in the issuance of shares of Class A common stock. See "Prospectus Summary—The Offering" for additional information regarding the shares of Class A common stock issuable upon vesting and settlement of such IPO RSUs. If equity securities granted under our 2023 Plan and ESPP are sold or it is perceived that they will be sold in the public market, the trading price of our Class A common stock could decline substantially. These sales also could impede our ability to raise future capital.

***We will be a "controlled company" under the corporate governance rules of the NYSE and, as a result, will qualify for exemptions from certain corporate governance requirements. If in the future we choose to rely on certain of these exemptions, you will not have the same protections afforded to stockholders of companies that are subject to such requirements.***

Upon completion of this offering, John Paulson and certain affiliated entities will own approximately % of the combined voting power of our Class A and Class B common stock (or % if the underwriters exercise their option to purchase additional shares of Class A common stock in full) and will be party to a Stockholders Agreement described in "Certain Relationships and Related Party Transactions—Stockholders Agreement." As a result, we will be a "controlled company" within the meaning of the corporate governance standards of the rules of the NYSE. Under these rules, a listed company of which more than 50% of the voting power is held by an individual, group or another company is a "controlled company" and may elect not to comply with certain corporate governance requirements, including:

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

------

##### [**Table of Contents**](#toc)
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• the requirement that its director nominations be made, or recommended to the full board of directors, by its independent
directors or by a nominations committee that is comprised entirely of independent directors and that it adopt a written charter or board resolution addressing the nominations process; and

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• the requirement that it have a compensation committee that is composed entirely of independent directors with a written
charter addressing the committee's purpose and responsibilities.

Following this offering, we do not intend to rely on these exemptions. However, as long as we remain a "controlled company," we may elect in the future to take advantage of any of these exemptions. As a result of any such election, our board of directors would not have a majority of independent directors, our compensation committee would not consist entirely of independent directors and our directors would not be nominated or selected by independent directors. Accordingly, if in the future we choose to rely on any of these exemptions, you will not have the same protections afforded to stockholders of companies that are subject to all of the corporate governance requirements of the rules of the NYSE.

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

The trading market for our Class A common stock depends in part on the research and reports that securities or industry analysts publish about us or our business, our market and our competitors. We do not have any control over these analysts. If one or more of the analysts who cover us downgrade our shares or publish negative views on us or 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.

***We are an "emerging growth company" and our compliance with the reduced reporting and disclosure requirements applicable to "emerging growth companies" may make our Class A common stock less attractive to investors.***

We are an "emerging growth company," as defined in the JOBS Act, and we have elected to take advantage of certain exemptions and relief from various reporting requirements that are applicable to other public companies that are not "emerging growth companies." These provisions include, but are not limited to: being permitted to have only two years of audited financial statements and only two years of related selected financial data and management's discussion and analysis of financial condition and results of operations disclosures; being exempt from compliance with the auditor attestation requirements of Section 404(b) of the Sarbanes-Oxley Act; being exempt from any rules that could be adopted by the Public Company Accounting Oversight Board requiring mandatory audit firm rotations or a supplement to the auditor's report on financial statements; being subject to reduced disclosure obligations regarding executive compensation in our periodic reports and proxy statements; and not being required to hold nonbinding advisory votes on executive compensation or on any golden parachute payments not previously approved.

In addition, while we are an "emerging growth company," we will not be required to comply with any new financial accounting standard until such standard is generally applicable to private companies. As a result, our financial statements may not be comparable to companies that are not "emerging growth companies" or elect not to avail themselves of this provision.

We may remain an "emerging growth company" until as late as December 31, 2028, the fiscal year-end following the fifth anniversary of the completion of this initial public offering, though we may

------

##### [**Table of Contents**](#toc)
cease to be an "emerging growth company" earlier under certain circumstances, including if (i) we have more than $1.235 billion in annual revenue in any fiscal year, (ii) we become a "large accelerated filer," with at least $700 million of equity securities held by non-affiliates as of the end of the second quarter of that fiscal year or (iii) we issue more than $1.0 billion of non-convertible debt over a three-year period. The exact implications of the JOBS Act are still subject to interpretations and guidance by the SEC and other regulatory agencies, and we cannot assure you that we will be able to take advantage of all of the benefits of the JOBS Act. In addition, investors may find our Class A common stock less attractive to the extent we rely on the exemptions and relief granted by the JOBS Act. If some investors find our Class A common stock less attractive as a result, there may be a less active trading market for our Class A common stock and our stock price may decline or become more volatile.

***We will incur significant increased costs as a result of operating as a public company, and our management will be required to devote substantial time to new compliance initiatives.***

As a public company, we will incur significant legal, accounting and other expenses that we did not incur as a private company. We will be subject to the reporting requirements of the Exchange Act, which will require, among other things, that we file with the SEC annual, quarterly and current reports with respect to our business and financial condition. In addition, the Sarbanes-Oxley Act, as well as rules subsequently adopted by the SEC and to implement provisions of the Sarbanes-Oxley Act, impose significant requirements on public companies, including requiring establishment and maintenance of effective disclosure and financial controls and changes in corporate governance practices. Further, in July 2010, the Dodd-Frank Wall Street Reform and Consumer Protection Act, or the Dodd-Frank Act, was enacted. There are significant corporate governance and executive compensation related provisions in the Dodd-Frank Act that require the SEC to adopt additional rules and regulations in these areas such as "say on pay" and proxy access. Emerging growth companies are permitted to implement many of these requirements over a longer period and up to five years from the pricing of this offering. We intend to take advantage of this legislation for as long as we are permitted to do so. Once we become required to implement these requirements, we will incur additional compliance-related expenses. Stockholder activism, the current political environment and the current high level of government intervention and regulatory reform may lead to substantial new regulations and disclosure obligations, which may lead to additional compliance costs and impact the manner in which we operate our business in ways we cannot currently anticipate.

We expect the rules and regulations applicable to public companies to continue to increase our legal and financial compliance costs and to make some activities more time-consuming and costly. If these requirements divert the attention of our management and personnel from other business concerns, they could have a material adverse effect on our business, financial condition and results of operations. The increased costs will decrease our net income or increase our net loss, and may require us to reduce costs in other areas of our business or increase the prices of our solutions or services. For example, we expect these rules and regulations to make it more difficult and more expensive for us to obtain director and officer liability insurance and we may be required to incur substantial costs to maintain the same or similar coverage. We cannot predict or estimate the amount or timing of additional costs we may incur to respond to these requirements. The impact of these requirements could also make it more difficult for us to attract and retain qualified persons to serve on our board of directors, our board committees or as executive officers.

In addition, public company reporting and disclosure obligations may cause our business and financial condition to become more visible. We believe that this increased profile and visibility may result in threatened or actual litigation from time to time. If such claims are successful, our business, operating results and financial condition may be adversely affected, and even if the claims do not result in litigation or are resolved in our favor, these claims, and the time and resources necessary to resolve them and the diversion of management resources, could adversely affect our business, operating results and financial condition.

------

##### [**Table of Contents**](#toc)
***Future offerings of debt or equity securities which would rank senior to our common stock may adversely affect the market price of our Class A common stock.***

If, in the future, we decide to issue debt or equity securities that rank senior to our Class A common stock, it is likely that such securities will be governed by an indenture or other instrument containing covenants restricting our operating flexibility. Additionally, any convertible or exchangeable securities that we issue in the future may have rights, preferences and privileges more favorable than those of our Class A common stock and may result in dilution to owners of our Class A common stock. We and, indirectly, our stockholders, will bear the cost of issuing and servicing such securities. Because our decision to issue debt or equity securities in any future offering will depend on market conditions and other factors beyond our control, we cannot predict or estimate the amount, timing or nature of our future offerings. Thus, holders of our Class A common stock will bear the risk of our future offerings reducing the market price of our Class A common stock and diluting the value of their stock holdings in us.

***Delaware law and provisions in our amended and restated certificate of incorporation and amended and restated bylaws could make a merger, tender offer or proxy contest more difficult, limit attempts by our stockholders to replace or remove our current management and limit the market price of our Class A common stock.***

Certain provisions in our amended and restated certificate of incorporation and amended and restated bylaws will contain provisions that may make the acquisition of our company more difficult, including the following:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• at any time when the holders of our Class B common stock no longer beneficially own, in the aggregate, at least the
majority of the voting power of our outstanding capital stock, amendments to certain provisions of our amended and restated certificate of incorporation or amendments to our amended and restated bylaws by our stockholders will generally require the
approval of at least 66 2/3% of the voting power of our outstanding capital stock;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• our dual class common stock structure, which provides John Paulson and certain affiliated entities with the ability to
significantly influence the outcome of matters requiring stockholder approval, even if they own significantly less than a majority of the shares of our outstanding Class A common stock and Class B common stock;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• our staggered board;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• at any time when the holders of our Class B common stock no longer beneficially own, in the aggregate, at least the
majority of the voting power of our outstanding capital stock, our stockholders will only be able to take action at a meeting of stockholders and will not be able to take action by written consent for any matter;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• our amended and restated certificate of incorporation will not provide for cumulative voting;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• vacancies on our board of directors will be able to be filled only by our board of directors and not by stockholders,
subject to the rights granted pursuant to the Stockholders Agreement;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• a special meeting of our stockholders may only be called by the chairperson of our board of directors, our Chief Executive
Officer or a majority of our board of directors, except that, at any time when the holders of our Class B common stock beneficially own, in the aggregate, at least the majority of the voting power of our outstanding capital stock, the secretary may
call a special meeting at the request of the holders of at least a majority of the voting power of the then outstanding shares of our capital stock;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• restrict the forum for certain litigation against us to Delaware or the federal courts, as applicable;

------

##### [**Table of Contents**](#toc)
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• our amended and restated certificate of incorporation will authorize undesignated preferred stock, the terms of which may
be established and shares of which may be issued without further action by our stockholders; and

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• advance notice procedures apply for stockholders (other than John Paulson and certain affiliated entities, who have certain
additional rights pursuant to the Stockholders Agreement) to nominate candidates for election as directors or to bring matters before an annual meeting of stockholders.

In addition, we have opted out of Section 203 of the Delaware General Corporation Law, but our amended and restated certificate of incorporation will provide that engaging in any of a broad range of business combinations with any "interested stockholder" (generally defined to be any entity or person who, together with that entity's or person's affiliates and associates, owns or within the previous three years owned, 15% or more of our outstanding voting stock) for a period of three years following the date on which the stockholder became an "interested stockholder" is prohibited, provided, however, that, under our amended and restated certificate of incorporation, John Paulson and certain affiliated entities and any of their respective affiliates will not be deemed to be interested stockholders regardless of the percentage of our outstanding voting stock owned by them, and accordingly will not be subject to such restrictions.

These provisions, alone or together, could discourage, delay or prevent a transaction involving a change in control of our company. These provisions could also discourage proxy contests and make it more difficult for stockholders to elect directors of their choosing and to cause us to take other corporate actions they desire, any of which, under certain circumstances, could limit the opportunity for our stockholders to receive a premium for their shares of our Class A common stock, and could also affect the price that some investors are willing to pay for our Class A common stock.

***Our amended and restated certificate of incorporation will provide that the doctrine of "corporate opportunity" will not apply with respect to certain parties to our Stockholders Agreement and any director or stockholder who is not employed by us or our subsidiaries.***

The doctrine of corporate opportunity generally provides that a corporate fiduciary may not develop an opportunity using corporate resources, acquire an interest adverse to that of the corporation or acquire property that is reasonably incident to the present or prospective business of the corporation or in which the corporation has a present or expectancy interest, unless that opportunity is first presented to the corporation and the corporation chooses not to pursue that opportunity. The doctrine of corporate opportunity is intended to preclude officers or directors or other fiduciaries from personally benefiting from opportunities that belong to the corporation. Our amended and restated certificate of incorporation, which will be in effect prior to the closing of this offering, will provide that the doctrine of "corporate opportunity" will not apply with respect to John Paulson and certain affiliated entities or their affiliates (other than us and our subsidiaries), and any of their respective principals, members, directors, partners, stockholders, officers, employees or other representatives (other than any such person who is also our employee or an employee of our subsidiaries), or any director or stockholder who is not employed by us or our subsidiaries, in each case unless the transaction or opportunity was presented to such person solely in his or her capacity as a director of the Company. John Paulson and certain affiliated entities and any director or stockholder who is not employed by us or our subsidiaries will, therefore, have no duty to communicate or present certain corporate opportunities to us, and will have the right to either hold such corporate opportunity for their (and their affiliates') own account and benefit or to recommend, assign or otherwise transfer such corporate opportunity to persons other than us, including to any director or stockholder who is not employed by us or our subsidiaries. As a result, certain of our stockholders, directors and their respective affiliates will not be prohibited from operating or investing in competing businesses. We, therefore, may find ourselves in competition with certain of our stockholders, directors or their respective affiliates, and we

------

##### [**Table of Contents**](#toc)
may not have knowledge of, or be able to pursue, transactions that could potentially be beneficial to us. Accordingly, we may lose a corporate opportunity or suffer competitive harm, which could negatively impact our business, operating results and financial condition.

***Our amended and restated certificate of incorporation will provide that the Court of Chancery of the State of Delaware will be the sole and exclusive forum for certain stockholder litigation matters and the federal district courts of the United States shall be the exclusive forum for the resolution of any complaint asserting a cause of action arising under the Securities Act, which could limit our stockholders' ability to obtain a favorable judicial forum for disputes with us or our directors, officers, employees or stockholders.***

**General Risk Factors** 

***Changes in accounting rules, assumptions and/or judgments could materially and adversely affect us.***

Accounting rules and interpretations for certain aspects of our operations are highly complex and involve significant assumptions and judgment. These complexities could lead to a delay in the preparation and dissemination of our financial statements. Furthermore, changes in accounting rules and interpretations or in our accounting assumptions and/or judgments could significantly impact our financial statements. In some cases, we could be required to apply a new or revised standard retroactively, resulting in restating prior period financial statements. Any of these circumstances could have a material adverse effect on our business, prospects, liquidity, financial condition and results of operations.

------

##### [**Table of Contents**](#toc)
***Litigation and the outcomes of such litigation could negatively impact our future financial condition and results of operations.***

In the ordinary course of our business, we are, from time to time, subject to various litigation and legal proceedings and could face litigation relating to compliance with environmental laws and regulations, product liability and contractual disputes with dealers and business partners, among others. As a public company, we may be subject to proceedings across a variety of matters, including matters involving stockholder class actions, tax audits, unclaimed property audits and related matters, environmental, employment and others. The outcome of litigation and other legal proceedings and the magnitude of potential losses therefrom, particularly class action lawsuits and regulatory actions, is difficult to assess or quantify. Significant legal proceedings, if decided adversely to us or settled by us, may require changes to our business operations that negatively impact our operating results or involve significant liability awards that impact our financial condition. The cost to defend litigation may be significant. As a result, legal proceedings may adversely affect our business, financial condition, results of operations or liquidity.

***We may change our dividend policy at any time.***

Although following this offering we initially expect to pay quarterly dividends at a rate initially equal to $ per share per annum on our common stock to holders of our common stock, we have no obligation to pay any dividend, and our dividend policy may change at any time without notice. The declaration and amount of any future dividends is subject to the discretion of our board of directors in determining whether dividends are in the best interest of our stockholders based on our financial performance and other factors and are in compliance with all laws and agreements applicable to the declaration and payment of cash dividends by us. In addition, our ability to pay dividends on our common stock is currently limited by the covenants of our Credit Facilities and may be further restricted by the terms of any future debt or preferred securities. See "Dividend Policy." Future dividends may also be affected by factors that our board of directors deems relevant, including our potential future capital requirements for investments, legal risks, changes in federal and state income tax laws or corporate laws and contractual restrictions such as financial or operating covenants in our debt arrangements. As a result, there can be no assurance that we will not need to reduce or eliminate the payment of dividends on our common stock in the future, and any return on investment in our common stock.

------

##### [**Table of Contents**](#toc)
**SPECIAL NOTE REGARDING FORWARD-LOOKING STATEMENTS** 

This prospectus contains forward-looking statements. All statements contained in this prospectus other than statements of historical facts, including statements regarding our business strategy, plans, market growth and our objectives for future operations, are forward-looking statements. The words "may," "will," "should," "expect," "plan," "anticipate," "could," "intend," "target," "project," "contemplate," "believe," "estimate," "forecast," "predict," "potential" or "continue" or the negative of these terms and other similar expressions are intended to identify forward-looking statements.

Forward-looking statements contained in this prospectus include, but are not limited to, statements about:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• our ability to maintain the distinctive appeal of the *Steinway* brand;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• the ability of our acoustic products to successfully compete within the luxury goods and broader music industry;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• our continued and uninterrupted operations at a limited number of facilities;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• our estimates of market opportunity and forecasts of market growth, including in China, and the expected growth rates of
these markets and our ability to grow within and further penetrate our primary markets, as well as our ability to penetrate new markets;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• our expectations regarding macroeconomic conditions and consumer preferences for luxury goods;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• our ability to continue to obtain the raw materials and components parts needed to manufacture our musical instruments;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• our ability to successfully compete with existing and new competitors in our markets;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• our ability to successfully attract and retain senior management, skilled craftspeople and sales personnel to develop and
sell our products;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• our ability to operate our primary manufacturing facilities in Astoria, New York and Hamburg, Germany and our expectations
regarding the costs to operate those locations;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• our ability to develop and maintain relationships with new and existing artists who play and promote our instruments;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• our ability to adequately prevent security breaches and/or material disruptions of our internal computer systems;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• our ability to expand our showroom footprint and/or secure direct retail outlets and build and maintain our brands;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• our future financial performance, including our expectations regarding our net sales, cost of sales, operating expenses,
including capital expenditures, fluctuations in foreign currency exchange rates or changes in our effective tax rates and our ability to maintain future profitability;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• our expectations regarding evolving U.S. and European trade regulations and policies and our ability to comply with new
regulations that are applicable to our business and products;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• our ability to successfully develop and gain market acceptance for new products;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• our expectations regarding the success of our marketing programs and marketing materials;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• our ability to accurately forecast demand for our products and consumer trends;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• our ability to attract new customers;

------

##### [**Table of Contents**](#toc)
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• our ability to develop and protect our brand;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• our relationship with our unionized work force and our ability to enter into collective bargaining agreements on favorable
terms in the future;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• our expectations regarding warranty claims and our ability to comply with evolving consumer protection laws;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• our ability to successfully identify acquisition targets, acquire businesses and integrate acquired operations into our
business;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• our ability to implement, maintain and improve effective internal controls;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• the ability of our third-party suppliers and manufacturers to meet our supply needs and quality standards on a timely basis
or at all;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• our ability to obtain third-party licenses for the use of content in our *Spirio* library of music and videos;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• our ability to maintain, protect and enhance our intellectual property;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• our expectations regarding the effects of existing and developing laws and regulations;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• our ability to comply with regulations applicable to our business and our products;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• our expectations regarding geopolitical and economic risks in the international markets in which we operate;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• our ability to successfully execute our business strategy; and

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• the increased expenses associated with being a public company.

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

We have based these forward-looking statements largely on our current expectations and projections about future events and trends that we believe may affect our financial condition, results of operations, business strategy, short-term and long-term business operations and objectives, and financial needs. These forward-looking statements are subject to a number of risks, uncertainties, and assumptions, including those described in the section titled "Risk Factors." Moreover, we operate in a very competitive and rapidly changing environment. New risks emerge from time to time. It is not possible for our management to predict all risks, nor can we assess the impact of all factors on our business or the extent to which any factor, or combination of factors, may cause actual results to differ materially from those contained in any forward-looking statements we may make. In light of these risks, uncertainties and assumptions, the future events and trends discussed in this prospectus may not occur and our actual results could differ materially and adversely from those anticipated or implied in the forward-looking statements.

You should not rely upon forward-looking statements as predictions of future events. The events and circumstances reflected in the forward-looking statements may not be achieved or occur. Although we believe that the expectations reflected in the forward-looking statements are reasonable, we cannot guarantee future results, performance, or achievements. We undertake no obligation to update any of these forward-looking statements for any reason after the date of this prospectus or to conform these statements to actual results or revised expectations, except as required by law.

You should read this prospectus and the documents that we reference in this prospectus and have filed with the SEC as exhibits to the registration statement of which this prospectus is a part with the understanding that our actual future results, performance, and events and circumstances may be materially different from what we expect.

------

##### [**Table of Contents**](#toc)
**USE OF PROCEEDS** 

We will not receive any proceeds from the sale of Class A common stock by the selling stockholder in this offering (including any proceeds from the sale of shares of Class A common stock that the selling stockholder may sell pursuant to the underwriters' option to purchase additional Class A common stock). The selling stockholder will receive all of the net proceeds from the sale of shares of our Class A common stock in this offering. However, we will bear the costs associated with the sale of shares of Class A common stock by the selling stockholder, other than underwriting discounts and commissions.

------

##### [**Table of Contents**](#toc)
**DIVIDEND POLICY** 

As a public company we anticipate paying a quarterly dividend at a rate initially equal to $ per share per annum on our common stock to holders of our common stock. Based on shares of our common stock outstanding immediately following this offering, we estimate that the cash outlay on our dividend will be approximately $ million per annum. We had $56.7 million of cash and cash equivalents as of December 31, 2022 and $51.0 million of net cash provided by operating activities for the year then ended. Additionally, we had $10.7 million outstanding under our revolving credit facilities in the United States, Germany and Japan with an additional available balance of $94.7 million as of December 31, 2022 under all facilities. Based on our cash and cash equivalents on hand and historical net cash provided by operating activities, we believe that we have sufficient liquidity to be able to pay our intended dividend. Any future determination related to our dividend policy will be made at the discretion of our board of directors after considering our financial condition, results of operations, capital requirements, the operations and performance of our subsidiaries, business prospects and other factors our board of directors deems relevant, and may be subject to statutory, regulatory and contractual limitations, including those contained in agreements governing the indebtedness of our subsidiaries.

We are a holding company and do not currently conduct significant business operations of our own. As such, our ability to pay dividends is highly dependent on cash distributions and other transfers received from our subsidiaries, including SMI, whose ability to make any payments to us will depend upon many factors, including their operating results and cash flows. Our current Credit Facilities also impose restrictions on our subsidiaries' ability to pay dividends or make other distributions to us. In addition to these restrictions, our ability to pay cash dividends on our capital stock in the future may also be limited by the terms of any preferred securities we may issue or agreements governing any additional indebtedness we or our subsidiaries may incur. Delaware law may also impose requirements that may restrict our ability to pay dividends to holders of our common stock. See "Risk Factors—Risks Related to the Financial Position of Our Business—We are a holding company with no operations of our own, and we depend on our subsidiaries for cash," "Risk Factors—General Risk Factors—We may change our dividend policy at any time" and "Management's Discussion and Analysis of Financial Condition and Results of Operations—Liquidity and Capital Resources."

Based on the status of the factors listed above, the anticipated size of our intended quarterly dividend, the current relationships with our operating subsidiaries and the status of our various operating and debt agreements, we believe that we have sufficient liquidity and authorization to be able to pay our intended dividend. See Note 10 to our consolidated financial statements and "Management's Discussion and Analysis of Financial Condition and Results of Operations—Liquidity and Capital Resources—Debt" appearing elsewhere in this prospectus, for descriptions of restrictions on our ability to pay dividends.

------

##### [**Table of Contents**](#toc)
**CAPITALIZATION** 

The following table sets forth our cash and cash equivalents and capitalization as of December 31, 2022 on:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• an actual basis; and

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• a pro forma basis to give effect to (i) the Distribution, (ii) the filing and effectiveness of our amended and
restated certificate of incorporation, (iii) the Reclassification, and (iv) the Stock Split.

The selling stockholder is selling all of the shares of Class A common stock in this offering. We will not receive any of the proceeds from the sale of shares of Class A common stock by the selling stockholder, including any proceeds from the sale of shares of Class A common stock that such selling stockholder may sell pursuant to the underwriters' option to purchase additional Class A common stock.

You should read this information in conjunction with the section titled "Management's Discussion and Analysis of Financial Condition and Results of Operations" and our consolidated financial statements and the accompanying notes thereto included elsewhere in this prospectus.

---

| | | |
|:---|:---|:---|
|  | **As of December 31, 2022** | **As of December 31, 2022** |
|  | **Actual** | **Pro Forma** |
|  | **(dollars in thousands, except<br>share and per share data)** | **(dollars in thousands, except<br>share and per share data)** |
|  Cash and cash equivalents | $56689 | $— |
|  Long-term debt: |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; ABL Facility<sup>(1)</sup> |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; German Term Loan Facility | 16254 |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; German ABL Facility<sup>(2)</sup> | 10702 |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Japanese Term Loan Facility | 583 |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Japanese Revolving Credit Facility<sup>(3)</sup> |  |  |
|  Total debt | 27539 |  |
|  Stockholders' equity: |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Preferred stock, par value $0.01 per share; 1,000 shares authorized, no shares issued and outstanding, actual; and 50,000,000 shares authorized, par value 0.0001, no shares issued and outstanding, pro forma |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Common stock, par value $0.01 per share; 1,000 shares authorized, 1,000 shares issued and outstanding, actual; and no shares authorized, issued and outstanding, pro forma |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Class A common stock, par value $0.0001 per share; no shares authorized, issued and outstanding, actual; and 500,000,000 shares authorized, shares issued and outstanding, pro forma |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Class B common stock, par value $0.0001 per share; no shares authorized, issued and outstanding, actual; and 100,000,000 shares authorized, shares issued and outstanding, pro forma |  |  |
|  Additional paid-in capital<sup>(4)</sup> | 233170 |  |
|  Retained earnings<sup>(4)</sup> | 256551 |  |
|  Accumulated other comprehensive loss | (28380) |  |
|  Total stockholders' equity | 461341 |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Total capitalization | $488880 | $— |

---

------

(1) As of December 31, 2022, we had $69.8 million of available borrowing capacity under our ABL Facility.

(2) As of December 31, 2022, we had $20.3 million of available borrowing capacity under our German ABL Facility.

(3) As of December 31, 2022, we had $4.6 million of available borrowing capacity under our Japanese Revolving Credit
Facility.

(4) The Pro Forma amount gives effect to the vested portion of liability classified share-based payment awards revalued at
$ million based on the assumed initial public offering price of $ per share (which is the midpoint of the
price range set forth on the cover page of this prospectus), as the vested portion of the awards will be converted to Class A common stock and the related liability will be reclassified to additional paid-in capital upon the completion of this
offering. The difference of $ million between the $ million, which represents the revalued vested portion
of the awards, and the $ million, which represents the value of the awards as of December 31, 2022, has been reflected as an adjustment within Pro Forma retained earnings.

------

##### [**Table of Contents**](#toc)
**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 section titled "Summary Historical Consolidated Financial Data" and our consolidated financial statements and the accompanying notes thereto included elsewhere in this prospectus. Some of the information contained in this discussion and analysis or set forth elsewhere in this prospectus, including information with respect to our plans and strategy for our business, includes forward looking statements that involve risks and uncertainties. You should read the sections titled "Risk Factors" and "Special Note Regarding Forward Looking Statements" for a discussion of important factors that could cause our actual results to differ materially from the results described in or implied by the forward looking statements contained in the following discussion and analysis.* 

**Overview** 

Steinway is a leading manufacturer of what we believe are the world's finest musical instruments and our flagship piano brand, *Steinway*, is among the world's foremost luxury brands. We are focused on manufacturing, designing and selling the world's most recognized ultra-premium pianos. Since our founding in 1853, our innovative designs, attention to detail and exacting quality have established *Steinway* as a symbol of manufacturing excellence, innovation and timelessness. We operate in two reporting segments: Piano (Steinway & Sons) and Band (Conn-Selmer). Our Piano segment primarily includes sales of pianos offered under the *Steinway* brand as well as under our mid-range *Boston* and *Essex* brands. In addition, under our Band segment, we manufacture a portfolio of band, orchestral and percussion instruments which are distributed through our Conn-Selmer family of brands, most of which have leading market shares in their respective musical instrument categories.

From fiscal year 2016 to fiscal year 2022, we grew our net sales from $385.7 million to $575.5 million, representing a CAGR of 6.9%. Over this same period, our Piano segment net sales grew from $244.8 million to $425.9 million, equivalent to a CAGR of 9.7%. Our Piano segment net sales benefited considerably from our *Steinway* piano sales, which grew at an approximately 11.5% CAGR from $154.3 million to $296.6 million between fiscal years 2016 and 2022. Within our Piano segment*,* sales of our higher margin *Spirio* pianos grew at an approximately 28.0% CAGR from $32.9 million to $145.0 million between fiscal years 2016 and 2022. Piano segment net sales has also been supported by the growth of sales from retail operations, which grew at an approximately 15.2% CAGR from $75.9 million to $177.5 million between fiscal years 2016 and 2022. Furthermore, Piano segment net sales from the APAC region, our key growth market, grew at an approximately 11.2% CAGR from $71.2 million to $134.6 million between fiscal years 2016 and 2022.

In fiscal year 2022, we had total net sales of $575.5 million, of which our Piano and Band segments contributed $425.9 million and $149.6 million, respectively. We had net income of $86.5 million in fiscal year 2022 and Adjusted EBITDA of $125.0 million, of which our Piano and Band segments contributed $119.2 million and $5.9 million, respectively.

In fiscal year 2021, we had total net sales of $538.4 million, of which our Piano and Band segments contributed $406.6 million and $131.7 million, respectively. We had net income of $59.3 million in fiscal year 2021 and Adjusted EBITDA of $117.5 million, of which our Piano and Band segments contributed $106.8 million and $10.7 million, respectively.

The strength of our *Steinway* brand and the quality of our instruments are key strategic assets which we believe position our company for continuing success. As we continue to leverage our *Steinway* brand and fortify our business with technological advances, higher priced offerings and strategic geographic and retail expansion, we have ample pathways to support future growth. We are

------

##### [**Table of Contents**](#toc)
proud of our track record of growth, consistent profitability and high cash flow generation and we will continue to enhance our operations, innovate within our industry and bolster the strength of our brands to preserve and enhance our financial profile.

Our business celebrates a 170-year history of innovation and a commitment to providing the global musical community with what we believe are the world's finest pianos and musical instruments. We were founded in 1853, when German immigrant Henry Engelhard Steinway developed the first *Steinway* piano in a Manhattan loft on Varick Street. Over the next thirty years, Henry and his sons honed the exacting hand-crafted process that brings a *Steinway* piano to market, which they passed down from generation to generation and which still forms the basis of our *Steinway* pianos today. In 1857, our company was granted its first patent and by 1880, we invented the iconic curved shape of the grand piano that defines our *Steinway* pianos. In 1873 we opened our manufacturing facility in Astoria, New York, followed by our factory in Hamburg, Germany in 1880, where our *Steinway* pianos continue to be manufactured to this day. We have grown our business beyond its founding in the United States, opening our first APAC flagship store in 2017 in Beijing. As we have expanded our international reach, we have also continued to push the boundaries of what makes a high-quality piano, launching the *Steinway Spirio* in 2015, followed by the *Spirio \| r* in 2019 and also the *Spiriocast* software feature for our *Spirio \| r* models in 2021.

**Our Business Model** 

***How We Generate Net Sales***

Our net sales consist of sales of products through our Piano and Band segments. In fiscal years 2022 and 2021, we generated 74.0% and 75.5%, respectively, of our net sales through our Piano segment, and our Band segment contributed the remaining 26.0% and 24.5%, respectively. We are a global business and the demand for our products spans many continents. In fiscal year 2022, sales in the Americas region contributed 57.8% of our net sales, followed by 24.1% in the APAC region and 18.1% in the EMEA region. In fiscal year 2021, sales in the Americas region contributed 53.6% of our net sales, followed by 28.5% in the APAC region and 17.9% in the EMEA region.

*Piano*. Sales of our pianos are influenced by general economic conditions, demographic trends and general interest in music and the arts. The operating results of our Piano segment are primarily affected by *Steinway* piano sales, which comprised approximately 69.6% and 68.8% of Piano segment net sales for fiscal years 2022 and 2021, respectively. *Steinway* pianos are a high-performance and professionally-endorsed offering, meticulously crafted through an intensive process lasting at least six months. As such, we produce a limited volume of *Steinways* and sell them at a high price point. Given the high individual net sales contribution of each *Steinway*, our total piano net sales are significantly influenced by small absolute changes in the unit volume of our *Steinway* pianos compared to similar changes in the unit volume of pianos sold under our mid-market *Boston* and *Essex* brands. In fiscal years 2022 and 2021, sales of *Boston* and *Essex* brands together represented 75.2% and 77.7%, respectively, of total new piano units sold and approximately 18.2% and 18.9%, respectively, of total Piano segment net sales.

The price premium between our *Steinway* pianos and our *Boston* and *Essex* pianos means that the composition of our sales mix materially impacts the net sales that we generate each year. We monitor the percentage change in the unit volume of our products and the percentage change in our average selling price for each of our products across our sales channels in a given year. Our average selling price is a function of both product level pricing and the composition of our sales mix.

The introduction of our *Steinway Spirio* pianos, which are priced above the traditional *Steinway*, has become an increasingly important factor in increasing our average selling price. In 2015, we

------

##### [**Table of Contents**](#toc)
introduced the *Steinway Spirio*, the world's premier high-resolution player piano, which has grown to represent approximately 34.0% and 32.2% of our total Piano segment net sales for each of fiscal year 2022 and 2021, respectively. We have since introduced the *Spirio \| r*, which enables recording and high-resolution editing in addition to playback capabilities, and the *Spiriocast* software feature for *Spirio \| r* models, which permits customers to instantly stream live performances, synched with video and audio, from one *Spirio \| r* piano to others across the world. In addition, improvements in our manufacturing capabilities have allowed us to produce higher proportions of special and custom pianos, which can be sold at higher margins than our *Steinway* and *Steinway Spirio* pianos and further drive growth in average selling price.

Our pianos are currently sold through 34 company-owned retail showrooms, strategically located across the world. We have established company-owned retail showrooms coast-to-coast in the United States and in various international locations that have bolstered our retail sales. In addition to our company-owned retail showrooms, we also distribute our pianos through a global, expansive network of approximately 200 third-party dealers. Additionally, we have created a Steinway team of Educational Sales Managers that travel and sell direct to institutions in territories not represented by a company-owned retail store or a dealer.

In fiscal year 2022, 44.9% of our Piano segment net sales were in the Americas region, 31.6% were in the APAC region and 23.5% were in the EMEA region. In fiscal year 2021, 40.1% of our Piano segment net sales were in the Americas region, 36.9% were in the APAC region and 23.0% were in the EMEA region.

*Band*. Through our Conn-Selmer family of brands, we offer a portfolio of individual music accessories and brass, percussion, woodwind and string instrument brands that have leading market shares in each of their musical instrument categories. In fiscal years 2022 and 2021, brass and woodwind instruments contributed approximately 65.0% and 64.1%, respectively, to our Band segment net sales; percussion instruments contributed approximately 20.6% and 20.5%, respectively; strings, accessories, and others contributed approximately 14.4% and 15.4%, respectively.

Our band instrument sales are influenced by trends in school enrollment, school budgeting and the prevalence and popularity of extracurricular music education. Over 50% of Conn-Selmer net sales in both fiscal years 2022 and 2021 were generated through our preferred dealer network to schools and families who participate in beginning music education programs. Of the remaining sales, many are used by students in marching bands, concert bands, orchestras and other school-related performances. Due to the suspension of in-person schooling and extra-curricular activities for a significant part of fiscal year 2020 due to COVID-19, our Band segment net sales decreased in fiscal year 2020 from historical levels, but recovered strongly in fiscal year 2021 as schools and concert halls re-opened and continued to experience growth in fiscal year 2022.

Our Band segment is primarily a domestic business. For fiscal years 2022 and 2021, 94.3% and 95.5%, respectively, of our Band segment net sales were generated in the Americas, 3.0% and 2.0%, respectively, were generated in EMEA and 2.7% and 2.5%, respectively, were generated in APAC.

***Gross Profit and Gross Margin***

Our operating results are impacted by our ability to convert net sales into higher gross profit, which we monitor using the metric gross margin. Gross margin measures gross profit as a percentage of net sales. We define gross profit as net sales less cost of sales. Our cost of sales is largely variable, enabling us to align costs to production levels and to maintain consistent gross margins.

In fiscal year 2022, we generated $238.6 million of gross profit, of which $211.5 million, or 88.6%, was attributable to the Piano segment and $27.2 million, or 11.4%, was attributable to the Band

------

##### [**Table of Contents**](#toc)
segment. This translated to a consolidated gross margin of 41.5%, Piano segment gross margin of 49.6% and Band segment gross margin of 18.2%.

In fiscal year 2021, we generated $224.6 million of gross profit, of which $196.5 million, or 87.5%, was attributable to the Piano segment and $28.1 million, or 12.5%, was attributable to the Band segment. This translated to a consolidated gross margin of 41.7%, Piano segment gross margin of 48.3% and Band segment gross margin of 21.4%.

Our Piano segment gross profit has increased from $99.9 million to $211.5 million from fiscal year 2016 to fiscal year 2022, primarily driven by higher net sales, as well as a higher share of *Spirio* piano sales*,* sales from retail operations and sales in the APAC region. For our Piano segment, the product, regional and channel mix of our sales from year to year is a significant factor affecting our gross margins. Generally, larger and more expensive models are sold at a higher margin than our smaller and less expensive pianos, and *Spirio* pianos are sold at a higher margin than comparable non-*Spirio* pianos. Based on fiscal year 2022 pricing and cost, our wholesale gross profit on a Model B *Spirio* \| *r* piano in the United States is two times greater than our wholesale gross profit on the equivalent non-*Spirio* model in the United States. Generally, pianos sold through the retail channel generate higher margin than pianos sold through the third-party dealer network. Based on fiscal year 2022 pricing and cost, our retail gross profit on a Model B *Spirio* \| *r* piano in the United States is nearly two-and-a-half times greater than the wholesale gross profit on an equivalent model in the United States. S*teinway* pianos sold in APAC are generally sold at a higher margin than *Steinway* pianos sold in the Americas or EMEA. Based on fiscal year 2022 pricing and cost, our retail gross profit on a Model B *Spirio* \| *r* piano in China is one-and-a-half times greater than our retail gross profit for the same model sold in the United States. These factors, when combined, generally generate even higher gross margin than any one factor by itself. Based on fiscal year 2022 pricing and cost, retail sales of our Model B *Spirio* \| *r* piano in China generate gross profit that is nearly seven-and-half times higher than sales of the equivalent non-*Spirio* model in the United States through our third-party dealer network. Additionally, we generally generate higher margin on our special, bespoke, and limited edition pianos. Based on fiscal year 2022 pricing and cost, our retail gross profit on a Crown Jewel *Spirio* \| *r* piano in China is two-and-a-half times greater than the retail gross profit on a Model B *Spirio* \| *r* piano in China.

For our Band segment, professional instruments and procured student instruments, many of which are manufactured in Asia, are generally sold at a higher margin than domestically produced student instruments.

In addition, our ability to innovate and continually improve our products enables us to command premium prices for our pianos and other instruments, thereby contributing to profitability. By implementing certain new manufacturing processes, including automation, we are able to achieve manufacturing efficiencies that improve our gross margin. Our gross margin is also impacted by labor costs, the price at which we are able to procure instruments and raw materials, overhead expenses, logistics expenses and the productivity of our plants.

**Key Factors Affecting our Business** 

***Macroeconomic conditions***

We realize the majority of our gross profit from the sale of our high-end grand pianos, the demand for which, as an ultra-premium item, is generally more significantly affected by demographics and economic cycles than industry trends. Due to the discretionary nature of consumer spending, economic downturns can have a greater effect on the luxury goods market. The purchasing decision behind acquiring one of our instruments is emotional and is tightly linked to consumer confidence, especially regarding future income streams and the ability to make a significant investment at the time

------

##### [**Table of Contents**](#toc)
of purchase. Although the overall impact of macroeconomic conditions on our industry is less prominent as compared to other consumer goods industries given that the HNWI, who comprise a significant portion of our consumer base, are often better equipped to withstand the typical restrictions on consumer spending caused by economic downturns, there are a number of adverse macroeconomic conditions that affect our business, including the recent increase in inflation since the second half of 2021, a stimulative fiscal policy, the Russia-Ukraine war, worldwide supply chain disruptions and labor shortages.

We have faced significant cost increases for labor, materials and services in recent years. In particular, costs for the raw materials used in our products and employee wage increases have increased our operating costs for the years ended December 31, 2022 and 2021 compared to pre-inflationary periods. In addition, the rise in freight and warehousing costs incurred to transport and store our products and manufacturing components has had, and may continue to have, a negative impact on our business and results of operations. Although we believe we have managed our supply chain effectively thus far, the prolonged continuation of elevated inflation may exacerbate supply chain constraints and inflationary pressures, which could impede our ability to procure materials and equipment in a timely and cost-effective manner, potentially resulting in reduced margins and production delays.

In order to manage supply chain and inflationary pressures, we have begun purchasing greater quantities of raw materials that are critical to our operations to ensure that we have adequate supplies available in our inventory. We are working closely with suppliers to maintain our inventory levels and prevent disruptions to our production capabilities. Further, in an effort to partially offset higher costs for raw materials and labor, we have increased prices for our products. While we have been able to pass on our operating cost increases to customers, the discretionary nature of our products may limit our ability to continue this practice without risking a potential decline in consumer demand of our products.

***Growth of the global UHNWI and HNWI populations***

The world's UHNWI population grew by 9.3% from 2020 to 2021, according to *The Wealth Report 2022*. The global population of HNWI and UHNWI has grown at a 10.1% and 11.9% CAGR, respectively, over the past five years ended December 31, 2021, and over the next five years, the global population of UHNWIs is forecast to grow by a further 28%, driven especially by increasing wealth creation in Asia. As the HNWI and UHNWI populations in China and other APAC nations continue to grow, we expect that APAC will continue to be one of our largest growth opportunities in the future, particularly given the strong appeal of western classical music and luxury goods in China.

***International expansion***

As a luxury brand offering ultra-premium products, we believe that *Steinway* strongly appeals to Chinese consumers and benefits from an established reputation in the market. We also believe our growing physical presence in China will allow us to grow our *Steinway* brand and meet the high demand for western luxury products in China and across the APAC region. In fiscal years 2022 and 2021, 32% and 37%, respectively, of Piano segment net sales came from the APAC region, of which 70% of sales in each year were generated from the sale of our high-end *Steinway* pianos.

***Investment in music education***

Increasing attention to and investment in the development of music education and performance significantly affects our business. Both our Piano and Band segments maintain close connections to educational institutions. We are seeing increasing government support for music education, as demonstrated by the U.S. government's $13.2 billion investment in education, including access to

------

##### [**Table of Contents**](#toc)
music education, through its Elementary and Secondary School Emergency Relief ("ESSER") funds in 2020. The Chinese government has also indicated an increasing focus on promoting the development of young talent in the music and the arts, including encouraging schools to develop a more structured curriculum for music and the arts and seeking to introduce music and the arts as a compulsory examination subject as part of high school entrance examinations nationwide. These initiatives are reflective of the increasing appreciation for Western music in China, where there are currently approximately 30 million children taking piano lessons and where four of the top Chinese conservatories serve as All-Steinway Schools. The remaining top conservatories all have fleets of *Steinway* pianos. Moreover, four major conservatories that have opened in China since 2016 (Tianjin Julliard Conservatory, Shenzhen Conservatory, Harbin Conservatory and Zhejiang Conservatory) have purchased more than 750 pianos from us to date. Through our partnerships with schools and institutions, our business is one of the key suppliers of premier pianos and orchestral instruments to top conservatories across the globe. Furthermore, the artists and teachers who use our instruments serve as mentors to future generations of musicians and music enthusiasts.

***Support from the professional community***

A deep respect and connection to the artist community is at the center of Steinway's business. We further reinforce and expand our relationship with the artist community through the Steinway Artist program, where professional musicians endorse the quality of our instruments by personally selecting our pianos to play in their performances. Though we are only one of many manufacturers who make pianos for the concert-hall stage, approximately 97% of concert pianists used our pianos at their concerts in the 2018-2019 season, which was the last full concert season prior to the date of this prospectus due to the COVID-19 pandemic. The support from these acclaimed artists brings visibility to our pianos on some of the world's most renowned stages and we believe makes our pianos the instrument of choice, both among the professional community and their audience.

***Ability to innovate with new technology***

We believe our ability to innovate and integrate state-of-the-art technology into our timeless designs gives us a key competitive edge above other manufacturers of pianos and musical instruments. Our legacy of innovation is reflected in our substantial portfolio of patents, which to date stands at more than 150 since our founding. Investing in product innovation enables us to maintain price momentum and to affirm our reputation as the world's premier piano manufacturer. Our commitment to constantly innovate is at the heart of our business and we ensure that each new *Steinway* piano builds and improves on the quality of the last through advancements we make in our technological and manufacturing capabilities. By continuing to develop and integrate new technologies, we are able to expand our potential target market beyond piano players and professional musicians and provide a wide range of music experiences to our diverse group of customers. Since we first launched the *Steinway Spirio* in 2015, the high-resolution player piano has grown to represent approximately 34% of our total Piano segment net sales in fiscal year 2022, and we expect it will continue to represent a significant portion of our Piano segment net sales.

***Effects of foreign currency exchange rates***

Our business is affected by changes in foreign currency exchange rates through transactions by our entities in currencies other than their own functional currency. As our international business grows, our results of operations can be impacted by changes in foreign currency exchange rates, as we generate net sales and certain costs in regions outside of the U.S. and recognize these results in foreign currencies. As a result, we are exposed to certain gains and losses in our reported results as we translate from foreign currencies into U.S. dollars. In particular, a strengthening of the U.S. dollar will negatively affect our net sales and gross margins as expressed in U.S. dollars, and strengthening

------

##### [**Table of Contents**](#toc)
of EURO, RMB, YEN or GBP will have a positive impact. Historically foreign currency fluctuations accounted for an average of less than 2% of the change in our net sales on an absolute basis. In fiscal year 2022, our consolidated net sales were unfavorably impacted by foreign currency fluctuations by 4.3% compared to fiscal year 2021, whereas in fiscal year 2021, our consolidated net sales were favorably impacted by foreign currency fluctuations by 2.4%, compared to fiscal year 2020.

**COVID-19 Update** 

In response to COVID-19 and the public health restrictions mandated by governments, at various points in time in fiscal year 2020 we had to close most of our plants and retail showrooms. Most of our dealers also had to close their storefronts. In addition to these closures, government restrictions required the cancellation of many of our events and recitals, which are important ways that our company markets our products and generates business. The suspension of live musical events and in-person schooling and extra-curricular activities significantly decreased the institutional demand for our products, particularly for our Band segment.

In fiscal year 2021, as our plants, retail showrooms and dealers resumed full operations, government restrictions were repealed, and concert venues and schools re-opened, our consolidated net sales increased to $538.4 million, exceeding our performance in each of the prior two fiscal years, including our 2019 consolidated net sales of $475.7 million. Our Band segment had net sales of $131.7 million in fiscal year 2021, demonstrating a significant improvement over the prior fiscal year, but was still lower than pre-COVID levels due the continued suspension of school music programs and delayed reopening of concert venues. Driven by increased demand resulting from the restarting and reopening of school music programs and concert venues, this improvement continued in fiscal year 2022 with our consolidated net sales reaching $575.5 million, compared to $538.4 million in fiscal year 2021, with improvements in the Americas, partially offset by declines in the APAC region due to the implementation of COVID-19 restrictions in certain parts of China during fiscal year 2022.

The COVID-19 pandemic also negatively impacted our supply chain, leading to longer lead times and increasing freight costs. Specifically, in response to a resurgence of COVID-19 outbreaks in China, in March 2022 the Chinese government imposed lockdowns on several cities, including Shanghai. This mandate required us to temporarily close our Shanghai facilities, which consist of a key warehouse and distribution center, retail showrooms and administrative offices. Although we reopened these facilities in the second quarter of fiscal year 2022, these closures caused delays in our ability to distribute our products and fulfill customer orders in parts of China affected by the aforementioned lockdowns. We have also experienced decreasing microchip availability leading to increased material costs for *Spirio* pianos. Going forward, the COVID-19 pandemic may continue to impact our business in a variety of ways.

While the COVID-19 pandemic negatively impacted numerous areas of our business operations, we have also been positively impacted by certain changes to consumer behavior caused by the pandemic, many of which we believe will continue post-recovery. Government mandates, including restrictions on travel and shelter-in-place orders, caused more people to spend time at home, in turn spurring increased spending and investment in their home environment. This effect was favorable for our business, as many of our consumers tend to purchase our instruments when upsizing or upscaling their homes. We also believe consumers have placed a greater emphasis on family time and in-home leisure activities.

For additional information regarding COVID-19's impact on our business, see "Risk Factors–Risks Related to our Business—The COVID-19 pandemic had a significant effect on our sales results, and could have a significant negative impact on our business, net sales, financial condition and results of operations."

------

##### [**Table of Contents**](#toc)
**Non-GAAP Financial Measures** 

In addition to our results determined in accordance with GAAP, our management and board of directors also consider Adjusted EBITDA, Adjusted EBITDA margin, Adjusted Net Income and Adjusted Net Income margin, non-GAAP financial measures, to assess the performance of our business.

We define Adjusted EBITDA as net income before interest expense (income), net, income tax expense, depreciation and amortization, foreign exchange (gain)/loss, purchase accounting adjustments, non-cash stock-based and other compensation expense, gain on sale of intangible assets, corporate re-organization and related charges, dealer termination expense, potential transaction/acquisition costs, loss on extinguishment of debt, initial public offering expense, non-operating legal costs (recoveries) and other charges that we do not consider reflective of our ongoing performance. We believe that Adjusted EBITDA provides useful information to investors regarding our performance as it removes items that reduce the comparability of our underlying core business performance across reporting periods. Adjusted EBITDA margin measures Adjusted EBITDA as a percentage of net sales.

We define Adjusted Net Income as net income before foreign exchange (gain)/loss, purchase accounting adjustments, non-cash stock-based and other compensation expense, gain on sale of intangible assets, corporate re-organization and related charges, dealer termination expense, potential transaction/acquisition costs, loss on extinguishment of debt, initial public offering expense, non-operating legal costs (recoveries), other charges that we do not consider reflective of our ongoing performance, and tax impacts on the foregoing adjustments. We believe that Adjusted Net Income provides useful information to investors regarding our performance as it removes items that reduce the comparability of our underlying core business performance across reporting periods. Adjusted Net Income margin measures Adjusted Net Income as a percentage of net sales. Adjusted EBITDA, Adjusted EBITDA margin, Adjusted Net Income and Adjusted Net Income margin are non-GAAP financial measures and are not intended to be substitutes for any GAAP financial measures. They should be considered in addition to, not as substitutes for, or in isolation from, measures prepared in accordance with GAAP, such as consolidated net income.

You are encouraged to evaluate our calculation of Adjusted EBITDA, Adjusted EBITDA margin, Adjusted Net Income and Adjusted Net Income margin and the reasons we consider these adjustments appropriate for supplemental analysis. In evaluating these measures, you should be aware that in the future we may incur expenses that are the same as or similar to some of the adjustments in our presentation of Adjusted EBITDA and Adjusted Net Income. Our presentation of these measures should not be construed as an inference that our future results will be unaffected by unusual or non-recurring items. There can be no assurance that we will not modify the presentation of these measures following this offering, and any such modification may be material. Adjusted EBITDA, Adjusted EBITDA margin, Adjusted Net Income and Adjusted Net Income margin have their limitations as analytical tools, and you should not consider it in isolation or as a substitute for analysis of our results as reported under GAAP. Some of these limitations include:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• Adjusted EBITDA and Adjusted Net Income do not include our cash expenditure or future requirements for capital expenditures
or contractual commitments;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• Adjusted EBITDA and Adjusted Net Income do not reflect changes in our cash requirements for our working capital needs;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• Adjusted EBITDA does not include the interest expense and the cash requirements necessary to service interest or principal
payments on our debt;

------

##### [**Table of Contents**](#toc)
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• although depreciation and amortization are non-cash charges, the assets being
depreciated and amortized may have to be replaced in the future, and Adjusted EBITDA does not reflect cash requirements for replacement of assets that are being depreciated and amortized;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• Adjusted EBITDA and Adjusted Net Income exclude the impact of certain cash charges or cash receipts resulting from matters
we do not find indicative of our ongoing operations; and

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• other companies in our industry may calculate Adjusted EBITDA, Adjusted EBITDA margin, Adjusted Net Income and Adjusted Net
Income margin differently than we do.

The following table reconciles Adjusted EBITDA to its most directly comparable GAAP financial measure, net income:

---

| | | |
|:---|:---|:---|
|  | **Year Ended December 31,** | **Year Ended December 31,** |
|  | **2021** | **2022** |
|  | **(dollars in thousands, except**<br> **percentages)** | **(dollars in thousands, except**<br> **percentages)** |
|  Net income | $59263 | $86524 |
|  Interest expense (income), net | 5237 | (3648) |
|  Income tax expense | 25677 | 23264 |
|  Depreciation and amortization | 14889 | 15840 |
|  Foreign exchange (gain)/loss<sup>(a)</sup> | (438) | (1043) |
|  Purchase accounting adjustments<sup>(b)</sup> | 71 | 15 |
|  Non-cash stock-based and other compensation expense<sup>(c)</sup> | 7644 | 4889 |
|  Gain on sale of intangible assets<sup>(d)</sup> |  | (5062) |
|  Potential transaction / acquisition costs<sup>(e)</sup> | 512 |  |
|  Initial public offering expense<sup>(f)</sup> | 1513 | 3586 |
|  Dealer Termination Expense<sup>(g)</sup> |  | 316 |
|  Non-operating legal costs (recoveries)<sup>(h)</sup> | 184 | (444) |
|  Other charges<sup>(i)</sup> | 2910 | 795 |
|  Adjusted EBITDA | $117462 | $125032 |
|  Adjusted EBITDA Margin | 21.8% | 21.7% |

---

------

(a) Foreign exchange (gain)/loss is comprised of gains or losses on receivables, payables or other assets or liabilities which
are denominated in foreign currencies.

(b) Purchase accounting adjustments reflect the impact on our operating results from step up adjustments recorded in
connection with our acquisition by John Paulson and certain affiliated entities in 2013.

(c) Non-cash stock-based and other compensation expense is comprised of expense
recognized for liability classified share-based payment awards granted to our executives.

(d) Gain on sale of intangible assets relates to the sale of certain land development rights, which drove the gain recognized
during 2022.

(e) Potential transaction / acquisition costs are comprised of professional fees and expenses associated with potential
strategic merger and acquisition activities. In 2021, we incurred $0.5 million of employee severance costs in connection with our 2019 acquisition of Louis Renner.

(f) Initial public offering expense relates to non-recurring fees and expenses associated with the preparation for this
offering.

(g) Dealer termination expense includes a one-time fee of $0.3 million in connection with the termination of our agreement
with an exclusive sales agent in Italy in 2022.

(h) Non-operating legal costs (recoveries) are comprised of non-recurring legal costs, net of recoveries, with respect to a
case filed by a former piano dealer. The case was dismissed on summary judgment and was affirmed on appeal. In 2022, we received a portion of the attorney's fees that we were awarded in connection with the dismissal.

(i) Other charges include non-cash accrual of potential environmental mitigation costs
in our Band segment, $0.3 million one-time consulting fees in 2021 associated with the lowering of withholding taxes in the APAC region, a $0.4 million one-time expense in 2021 associated with relocating the
production facility of our *Musser* products and $0.1 million in asset retirement cost associated with the expiration of a leased office space in 2022.

Consolidated Adjusted EBITDA increased by $7.6 million, or 6.4%, from $117.5 million in fiscal year 2021 to $125.0 million in fiscal year 2022. Consolidated Adjusted EBITDA margin declined slightly to 21.7%, from 21.8% in fiscal year 2021 due to a decline in gross profit and an increase in selling,

------

##### [**Table of Contents**](#toc)
general and administrative expenses in the Band segment, which was largely offset by margin accretive improvements in both gross profit and selling, general and administrative expenses within the Piano segment. For additional information regarding Adjusted EBITDA for the Piano segment and Adjusted EBITDA for the Band segment, see "—Results of Operations—Segment Information."

The following table reconciles Adjusted Net Income to its most directly comparable GAAP financial measure, net income:

---

| | | |
|:---|:---|:---|
|  | **Year Ended December 31,** | **Year Ended December 31,** |
|  | **2021** | **2022** |
|  | **(dollars in thousands, except**<br> **percentages)** | **(dollars in thousands, except**<br> **percentages)** |
|  Net income | $59263 | $86524 |
|  Foreign exchange (gain)/loss<sup>(a)</sup> | (438) | (1043) |
|  Purchase accounting adjustments<sup>(b)</sup> | 913 | 1353 |
|  Non-cash stock-based and other compensation expense<sup>(c)</sup> | 7644 | 4889 |
|  Gain on sale of intangible assets<sup>(d)</sup> |  | (5062) |
|  Potential transaction / acquisition costs<sup>(e)</sup> | 512 |  |
|  Initial public offering expense<sup>(f)</sup> | 1513 | 3586 |
|  Dealer Termination Expense<sup>(g)</sup> |  | 316 |
|  Non-operating legal costs (recoveries)<sup>(h)</sup> | 184 | (444) |
|  Other charges<sup>(i)</sup> | 2910 | 795 |
|  Tax impact on adjustments to net income<sup>(j)</sup> | (1081) | 1287 |
|  Adjusted Net Income | $71420 | $92201 |
|  Adjusted Net Income Margin | 13.3% | 16.0% |

---

------

(a) Foreign exchange (gain)/loss is comprised of gains or losses on receivables, payables or other assets or liabilities which
are denominated in foreign currencies.

(b) Purchase accounting adjustments reflect the impact on our operating results from step up adjustments, including
depreciation thereon, recorded in connection with our acquisition by John Paulson and certain affiliated entities in 2013.

(c) Non-cash stock-based and other compensation expense is comprised of expense recognized for liability classified share-based payment awards granted to our executives.

(d) Gain on sale of intangible assets relates to the sale of certain land development rights, which drove the gain recognized
during 2022.

(e) Potential transaction / acquisition costs are comprised of professional fees and expenses associated with potential
strategic merger and acquisition activities. In 2021, we incurred $0.5 million of employee severance costs in connection with our 2019 acquisition of Louis Renner.

(f) Initial public offering expense relates to non-recurring fees and expenses associated with the preparation for this
offering.

(g) Dealer termination expense includes a one-time fee of $0.3 million in connection with the termination of our agreement
with an exclusive sales agent in Italy in 2022.

(h) Non-operating legal costs (recoveries) are comprised of non-recurring legal costs, net of recoveries, with respect to a
case filed by a former piano dealer. The case was dismissed on summary judgment and was affirmed on appeal. In 2022, we received a portion of the attorney's fees that we were awarded in connection with the dismissal.

(i) Other charges include non-cash accrual of potential environmental mitigation costs in our Band segment, $0.3 million one-time consulting fees in 2021 associated with the lowering of withholding taxes in the APAC region, a $0.4 million one-time expense in 2021 associated with relocating the production facility of our *Musser* products and $0.1 million in asset retirement cost associated with the expiration of a leased office space in 2022.

(j) Tax impact on adjustments to net income represents the tax provision estimate calculated by management associated with the
aforementioned adjustments.

Adjusted Net Income increased by $20.8 million, or 29.1%, from $71.4 million in fiscal year 2021 to $92.2 million in fiscal year 2022, primarily driven by the combination of higher net sales, a slower increase in selling, general and administrative expenses that was outpaced by faster growth in net sales, a lower interest expense, net and a lower income tax expense.

------

##### [**Table of Contents**](#toc)
**Components of Our Results of Operations** 

***Net Sales***

We generate substantially all of our net sales through the manufacture and distribution of musical instruments from our two operating segments: Piano and Band. In our Piano segment, net sales is primarily comprised of sales of our pianos under different brands including *Steinway*, *Boston* and *Essex*, which are sold through our retail operations and wholesale distribution network. In our Band segment, net sales is primarily comprised of wholesale distribution of band instruments under various brands.

Net sales include revenue recognized from other adjacent services, including from restoration and maintenance services, sale of piano parts and other musical instruments accessories, rental fees, and royalties from the use of our trademarks.

***Cost of Sales***

Cost of sales in both our Piano and Band segments comprise the cost to manufacture our products, including raw materials, direct labor, and overhead, plus freight, duties, and non-refundable taxes incurred in delivering the goods to distribution centers managed by third parties or to our retail stores. Product development costs, primarily payroll and related expenses, included in inventories are recognized in cost of sales when the musical instruments are sold.

***Selling, General and Administrative Expenses***

Selling, general and administrative expenses ("SG&A") consist of payroll and related expenses for employees involved in selling and general corporate functions, including sales, accounting, finance, tax, legal and human resources; costs associated with these functions, such as depreciation expense and rent relating to facilities, retail storefronts and equipment; professional fees; and other general corporate costs. SG&A also includes expenditures related to sales commissions, marketing, advertising, our brand awareness activities, sales support and professional fees.

Following the completion of this offering, we expect to incur additional expenses as a result of operating as a public company. These costs include the costs of complying with the rules and regulations applicable to companies listed on a U.S. securities exchange and costs related to compliance and reporting obligations pursuant to the rules and regulations of the SEC, including third-party and internal resources related to accounting, auditing, compliance with the Sarbanes-Oxley Act, legal, and investor and public relations expenses. In addition, as a public company, we expect to incur increased expenses, such as insurance and professional services. As a result, we expect our SG&A expenses to increase for the foreseeable future.

***Interest Expense (Income), Net***

Interest expense includes the cost of our borrowings under our Credit Facilities, net of interest income. Debt issuance costs related to our indebtedness are included as an offset to long-term debt in our consolidated balance sheets and are amortized to interest expense over the life of the applicable facility using the effective interest rate method.

Historically we have utilized interest rate swaps to manage interest rate risk associated with our borrowings subject to floating interest rates. We have not elected to apply hedge accounting to these derivative financial instruments, and therefore, we recognize all changes in the fair value of the instruments as a component of interest expense (income), net. In the second quarter of fiscal year 2022, we terminated all of our outstanding interest rate swap derivative instruments, and as a result, changes in market interest rates impact interest expense related to our borrowings subject to floating interest rates.

------

##### [**Table of Contents**](#toc)
***Other Pension Benefit***

We have defined benefit pension plans covering certain domestic employees and certain foreign employees. Benefits under the pension plans are generally based on age at retirement and years of service, and for some pension plans, benefits are also based on the employee's annual earnings. We determine the net cost of pension and other post-retirement benefit plans using the projected unit credit method and several actuarial assumptions, including the discount rate, the long-term rate of asset return, and current interest rate trends.

***Other Income***

Other income, net is primarily comprised of foreign currency gains and losses as well as other non-operating gains and losses.

**Results of Operations for the Years Ended December 31, 2021 and 2022** 

***Consolidated Overview***

The following results of operations data for the years ended December 31, 2021 and 2022 have been derived from the audited consolidated financial statements included elsewhere in this prospectus.

---

| | | | | |
|:---|:---|:---|:---|:---|
|  | **Year Ended<br>December 31,** | **Year Ended<br>December 31,** | **Change** | **Change** |
|  | **2021** | **2022** | **Amount** | **%** |
|  | **(dollars in thousands)** | **(dollars in thousands)** | **(dollars in thousands)** | |
|  Net sales | $538350 | $575537 | $37187 | 6.9% |
|  Cost of sales | 313735 | 336904 | 23169 | 7.4 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Gross profit | 224615 | 238633 | 14018 | 6.2 |
|  Selling, general and administrative expenses | 136385 | 142325 | 5940 | 4.4 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Total operating expenses | 136385 | 142325 | 5940 | 4.4% |
|  Income from operations | 88230 | 96308 | 8078 | 9.2 |
|  Other expense (income), net: |  |  |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Interest expense (income), net | 5237 | (3648) | (8885) | \* |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Other pension benefit | (341) | (1580) | (1239) | \* |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Other income | (1606) | (8252) | (6646) | \* |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Total other expense (income), net | 3290 | (13480) | (16770) | \* |
|  Income before provision for income taxes | $84940 | $109788 | $24848 | 29.3 |
|  Income tax expense | 25677 | 23264 | (2413) | (9.4) |
|  Net income | $59263 | $86524 | $27261 | 46.0% |

---

------

*\** *Not meaningful*

------

##### [**Table of Contents**](#toc)
The following table sets forth our results of operations data expressed as a percentage of net sales:

---

| | | |
|:---|:---|:---|
|  | **Year Ended<br>December 31,** | **Year Ended<br>December 31,** |
|  | **2021** | **2022** |
|  | **(% of net sales)** | **(% of net sales)** |
|  Net sales | 100.0% | 100.0% |
|  Cost of sales | 58.3 | 58.5 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Gross profit | 41.7 | 41.5 |
|  Selling, general and administrative expenses | 25.3 | 24.7 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Total operating expenses | 25.3% | 24.7% |
|  Income from operations | 16.4 | 16.7 |
|  Other (income) expense, net: |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Interest expense, net | 1 | (0.6) |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Other pension benefit | (0.1) | (0.3) |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Other income | (0.3) | (1.4) |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Total other expense (income), net | 0.6 | (2.3) |
|  Income before provision for income taxes | 15.8 | 19.1 |
|  Income tax expense | 4.8 | 4 |
|  Net income | 11.0% | 15.0% |

---

***Net Sales***

---

| | | | | |
|:---|:---|:---|:---|:---|
|  | **Year Ended<br>December 31,** | **Year Ended<br>December 31,** | **Change** | **Change** |
|  | **2021** | **2022** | **Amount** | **%** |
|  | **(dollars in thousands)** | **(dollars in thousands)** | **(dollars in thousands)** | |
|  Net Sales: |  |  |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Piano | $406601 | $425905 | $19304 | 4.7% |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Band | 131749 | 149632 | 17883 | 13.6% |
|  Total net sales | $538350 | $575537 | $37187 | 6.9% |

---

Net sales from our consolidated operations increased $37.2 million, or 6.9%, from $538.4 million in fiscal year 2021 to $575.5 million in fiscal year 2022. Excluding the unfavorable impact of foreign currency fluctuations, our consolidated net sales in fiscal year 2022 would have increased by $60.4 million, or 11.2%, compared to fiscal year 2021. The increase in our consolidated net sales was attributable to growth in our Piano segment, which was largely due to higher net sales from retail operations as well as increased net sales of *Steinway* pianos, and growth in our Band segment, which was largely due to increased institutional and dealer orders. For additional information regarding net sales for the Piano segment and net sales for the Band segment, see "—Segment Information."

------

##### [**Table of Contents**](#toc)
***Cost of Sales, Gross Profit and Gross Margin***

---

| | | | | |
|:---|:---|:---|:---|:---|
|  | **Year Ended<br>December 31,** | **Year Ended<br>December 31,** | **Change** | **Change** |
|  | **2021** | **2022** | **Amount** | **%** |
|  | **(dollars in thousands)** | **(dollars in thousands)** | **(dollars in thousands)** | |
|  Cost of sales: |  |  |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Piano | $210118 | $214454 | $4336 | 2.1% |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Band | 103617 | 122450 | 18833 | 18.2% |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Total cost of sales | $313735 | $336904 | $23169 | 7.4% |
|  Gross profit: |  |  |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Piano | $196483 | $211451 | $14968 | 7.6% |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Band | 28132 | 27182 | (950) | (3.4)% |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Total gross profit | $224615 | $238633 | $14018 | 6.2% |
|  Gross margin: |  |  |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Piano | 48.3% | 49.6% |  | 1.3% |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Band | 21.4% | 18.2% |  | (3.2)% |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Total gross margin | 41.7% | 41.5% |  | (0.2)% |

---

Cost of sales from our consolidated operations increased by $23.2 million, or 7.4%, to $336.9 million for fiscal year 2022 as compared to $313.7 million for fiscal year 2021. The increase was primarily driven by higher net sales from both the Piano and Band segments as well as higher total manufacturing costs associated with higher production volumes.

Gross profit for the Company increased by $14.0 million, or 6.2%, to $238.6 million for fiscal year 2022, from $224.6 million for fiscal year 2021. Gross margin slightly declined to 41.5% for fiscal year 2022 from 41.7% for fiscal year 2021 primarily due to a higher proportion of Band segment net sales, which generate lower margin, a lower share of Piano segment net sales in the APAC region, where we realize higher margin, as well as higher material and freight costs. These negative impacts were partially offset by a favorable channel mix due to higher share of retail sales, a favorable product mix due to higher sales of Spirio pianos, and price increases. For additional information regarding gross profit for the Piano segment and gross profit for the Band segment, see "—Segment Information."

***Selling, General and Administrative Expenses***

---

| | | | | |
|:---|:---|:---|:---|:---|
|  | **Year Ended<br>December 31,** | **Year Ended<br>December 31,** | **Change** | **Change** |
|  | **2021** | **2022** | **Amount** | **%** |
|  | **(dollars in thousands)** | **(dollars in thousands)** | **(dollars in thousands)** | |
|  Selling, General and Administrative | $136385 | $142325 | $5940 | 4.4% |

---

Selling, general and administrative expenses increased by $5.9 million, or 4.4%, to $142.3 million compared to $136.4 million in fiscal year 2021, primarily due to an increase in legal and professional fees of $3.6 million, which was largely driven by incremental professional services fees associated with this offering, an increase in advertising and promotional expenses of $2.1 million, an increase in sales-driven commission expenses of $1.1 million, an increase in travel and entertainment expenses of $0.9 million, and an increase in rent and utilities expenses of $0.9 million. These increases were partially offset by a decrease in non-cash stock-based compensation of $2.8 million.

------

##### [**Table of Contents**](#toc)
***Other Expense (Income), Net***

---

| | | | | |
|:---|:---|:---|:---|:---|
|  | **Year Ended<br>December 31,** | **Year Ended<br>December 31,** | **Change** | **Change** |
|  | **2021** | **2022** | **Amount** | **%** |
|  | **(dollars in thousands)** | **(dollars in thousands)** | **(dollars in thousands)** | |
|  Other expense (income), net: |  |  |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Interest expense (income), net | $5237 | $(3648) | $(8885) | \* |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Other pension benefit | (341) | (1580) | (1239) | \* |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Other income | (1606) | (8252) | (6646) | \* |
|  Total other expense (income), net | $3290 | $(13480) | $(16770) | \* |

---

------

*\** *Not meaningful* 

*Interest Expense (Income), net* 

The change in interest expense (income), net, during fiscal year 2022 was primarily attributable to a lower average level of outstanding debt as compared to fiscal year 2021, as well as an increase in the gain recognized from the remeasurement of interest rate swap derivatives period over period. In May 2022, we settled and terminated our interest rate swap contracts, resulting in a gain of $5.7 million.

*Other Pension Benefit* 

Other pension benefit increased to $1.6 million in fiscal year 2022, as compared to $0.3 million in fiscal year 2021.

*Other Income* 

Other income increased by $6.6 million, to $8.3 million in fiscal year 2022, as compared to $1.6 million in fiscal year 2021. The increase was primarily attributable to the gain on sale of land development rights of $5.1 million.

***Segment Information***

We have two operating segments: Piano and Band. We evaluate segment operating performance using net sales, gross margin and Adjusted EBITDA, with Adjusted EBITDA being the primary profitability metric used to make resource allocation decisions and evaluate segment performance.

The segment measurements provided to and evaluated by the chief operating decision maker (CODM) are described in Note 17 to our consolidated financial statements included elsewhere in this prospectus. Management believes segment Adjusted EBITDA is indicative of operational performance and ongoing profitability and uses Adjusted EBITDA to evaluate the operating performance of our segments and for planning and forecasting purposes, including the allocation of resources and capital.

*<u>Net Sales</u>* 

*Piano Segment*

Net sales for the Piano segment for fiscal year 2022 increased by $19.3 million, or 4.7%, to $425.9 million from $406.6 million in fiscal year 2021. Piano segment net sales from the Americas region increased by $28.4 million, or 17.5%, net sales from the APAC region decreased by $15.3 million, or 10.2%, and net sales from the EMEA region increased by $6.2 million, or 6.6%. Excluding the unfavorable impact of foreign currency fluctuations, Piano segment net sales across all

------

##### [**Table of Contents**](#toc)
regions would have increased by $41.8 million, or 10.3%, net sales from the APAC region would have decreased by $4.5 million, or 3.0% and net sales from the EMEA region would have increased by $17.8 million, or 19.0%. The increase in Piano segment net sales was primarily driven by higher sales from our *Steinway* pianos, which increased by $17.0 million, or 6.1%, to $296.6 million and higher sales from retail operations, which increased by $17.1 million, or 10.7% to $177.5 million. The increase in *Steinway* piano net sales was primarily driven by greater shipments of *Spirio* pianos, which increased by $14.1 million, or 10.8%. Growth from our retail operations was led by higher net sales from our showrooms in the Americas region, which increased by $17.8 million, or 22.9%. This favorable impact was partially offset by a decline in net sales from showrooms in the APAC region, which decreased by $7.7 million, or 17.5%, due to COVID-19 related lockdowns in China that significantly limited our business operations and reduced our store foot traffic.

*Band Segment* 

Net sales for the Band Segment for fiscal year 2022 increased by $17.9 million, or 13.6%, to $149.6 million from $131.7 million in fiscal year 2021, primarily driven by an increase in institutional and dealer orders as a result of the continued recovery of school music programs and the reopening of concert venues amid the lessening of COVID-19 impacts. Net sales in the Americas region, which represented 94.3% of Band segment net sales in fiscal year 2022, increased by $15.3 million, or 12.2%, while net sales in the rest of the world increased by $2.6 million, or 43.0%.

Net sales from brass and woodwind instruments increased by $12.8 million, or 15.2%, to $97.2 million for fiscal year 2022. Net sales from percussion instruments increased by $3.8 million, or 14.0%, to $30.8 million for fiscal year 2022. Sales from string instruments, accessories, and others increased by $1.3 million, or 6.2%, to $21.6 million for fiscal year 2022. Across all brass and woodwind instrument types, sales of professional and step-up instruments increased by $8.9 million, or 16.1%, to $64.6 million while sales of student instruments increased by $3.9 million, or 13.5%, to $32.6 million for fiscal year 2022.

*<u>Gross Profit</u>* 

*Piano Segment*

Gross profit from the Piano segment for fiscal year 2022 increased by $15.0 million, or 7.6%, to $211.5 million from $196.5 million for fiscal year 2021, and gross margin improved to 49.6% from 48.3%, mainly due to a combination of a higher share of net sales from retail operations, a favorable product mix due to a higher share of *Spirio* piano shipments during the period and price increases. These positive factors were partially offset by increases in our material costs as well as a lower share of net sales from the APAC region where we realize higher margins.

*Band Segment* 

Gross profit from the Band segment for fiscal year 2022 declined by $1.0 million, or 3.4%, to $27.2 million compared to $28.1 million in fiscal year 2021, and gross margin declined to 18.2% from 21.4%, driven by higher unfavorable manufacturing variances as well as higher material and freight costs due to inflationary pressures and supply chain constraints. Additionally, many product orders shipped earlier in fiscal year 2022 were sold at prior year prices before 2022 price increases were effective, negatively impacting our gross margin**.**

*<u>Adjusted EBITDA</u>* 

*Piano Segment*

Adjusted EBITDA for the Piano segment for fiscal year 2022 increased by $12.4 million, or 11.6%, to $119.2 million from $106.8 million in fiscal year 2021. Adjusted EBITDA margin improved to

------

##### [**Table of Contents**](#toc)
28.0% from 26.3%, primarily driven by the combination of higher net sales, improvement in gross margin mainly due to favorable product and channel mixes, and a slower increase in selling, general and administrative expenses that was outpaced by faster growth in gross profit. These positive factors were partially offset by a lower share of sales in the APAC region, where we generate higher margin.

*Band Segment* 

Adjusted EBITDA for the Band Segment for fiscal year 2022 decreased by $4.8 million, or 45.0%, to $5.9 million from $10.7 million in fiscal year 2021. Adjusted EBITDA margin declined to 3.9% from 8.1%, primarily due to a lower gross profit, as the price increases implemented in 2022 were insufficient to fully offset the increased manufacturing, material and freight costs.

**Seasonality and Quarterly Trends** 

We experience seasonal fluctuations in our net sales and operating results and we historically have realized a higher portion of our revenue and earnings for the fiscal year during our third and fourth fiscal quarters. For our Piano segment, we typically realize our strongest net sales and earnings during the fourth fiscal quarter driven by holiday shopping, while for our Band segment we experience strongest demand during the third fiscal quarter driven by back-to-school shopping activities. In addition, we typically experience lower profitability in the first and second fiscal quarters as we invest ahead of our most active seasons. Working capital requirements typically increase throughout our first and second fiscal quarters as inventory builds to support our peak shipping and selling period which typically occurs from November to December. Cash provided by operating activities is typically highest in our fourth fiscal quarter due to the significant inflows associated with our peak selling season.

We generated positive cash flow from operating activities for the second half of 2022, which more than offset the negative cash flow from operating activities generated from the first half of 2022. This is consistent with our historical seasonality in that higher cash flow resulting from a combination of higher sales and lower working capital needs during the second half of the year, especially the fourth fiscal quarter, offsets the negative cash impacts of the first half of the year. During the first half of a typical fiscal year, we have higher working capital needs as we build up inventories in anticipation of higher sales during the second half of the fiscal year, while also paying accrued expenses, such as employee bonuses from the previous fiscal year. Contrary to the first half of a typical fiscal year, we had significant positive cash flow from operating activities for the first half of 2021, during which we had lower accrued expenses in addition to lower production levels. Additionally, we were working through existing inventories as we were recovering from lower sales in 2020 as a result of the COVID-19 pandemic. The combination of these factors enabled us to generate significant positive cash flow from operating activities during 2021 that is higher than the cash flow from operating activities from a typical year.

For fiscal years 2022 and 2021, we generated the highest percentage of net sales during the fourth fiscal quarter. Net sales in the fourth fiscal quarter of fiscal years 2022 and 2021 contributed 32.8% and 33.3%, respectively, of annual net sales. For fiscal years 2022 and 2021, we generated the lowest percentage of net sales during the first fiscal quarter. Net sales in the first fiscal quarter of fiscal years 2022 and 2021 contributed 20.2% and 17.2%, respectively, of annual net sales.

For fiscal years 2022 and 2021, we generated the highest percentage of Adjusted EBITDA during the fourth fiscal quarter. Adjusted EBITDA in the fourth fiscal quarter of fiscal years 2022 and 2021 contributed 37.7% and 41.4%, respectively, of annual adjusted EBITDA. For fiscal years 2022 and 2021, we generated the lowest percentage of Adjusted EBITDA during the first fiscal quarter. Adjusted EBITDA in the first fiscal quarter of fiscal years 2022 and 2021 contributed 15.6% and 11.7%, respectively, of annual Adjusted EBITDA.

For fiscal years 2022 and 2021, we had negative cash flows from operating activities during the first fiscal quarter as we built up our inventory levels in anticipation of our peak selling period, which is

------

##### [**Table of Contents**](#toc)
typically the fourth fiscal quarter. For fiscal years 2022 and 2021, we had the highest cash inflows from operating activities during the fourth fiscal quarter due to higher sales. In the fourth fiscal quarters of fiscal years 2022 and 2021, we generated cash inflows from operating activities of $52.0 million and $67.3 million, respectively.

**Liquidity and Capital Resources** 

We assess our liquidity in terms of our ability to generate adequate amounts of cash to meet current and future needs. We have relied primarily upon cash provided by operations, supplemented as necessary by seasonal borrowings under our Credit Facilities, to finance our operations, repay or repurchase long-term indebtedness, finance acquisitions, and fund our capital expenditures.

As of December 31, 2022, we had $56.7 million of cash. Additionally, we had $10.7 million outstanding under our revolving credit facility in Germany with an additional available balance of $94.7 million as of December 31, 2022 under all facilities in the United States, Germany and Japan. We believe that our existing cash and cash equivalent balances will be sufficient to support our working capital requirements for at least the next 12 months based on our current operating plans.

However, our future capital requirements will depend on many factors, including our net sales growth rate, the level of our expenditures in advertising and marketing activities and all other areas of the company, the impact of the COVID-19 pandemic and other factors described in "Risk Factors." Our expected primary uses on a short-term and long-term basis are for repayment of debt, interest payments, working capital, capital expenditures, geographic expansion, and other general corporate purposes. We also have ongoing lease obligations with remaining commitments of $84.2 million as of December 31, 2022.

We may, in the future, enter into arrangements to acquire or invest in complementary businesses, products and technologies which may require us to seek additional financing. To the extent additional funds are necessary to meet our liquidity needs as we continue to execute our business strategy, we anticipate that they will be obtained through borrowings under our existing Credit Facilities, the incurrence of other additional indebtedness, the issuance of additional equity or a combination of these potential sources of funds; however, such financing may not be available on favorable terms, or at all. In particular, the widespread COVID-19 pandemic has resulted in, and may continue to result in, significant disruption of global financial markets, reducing our ability to access capital. If we are unable to raise additional funds on commercially reasonable terms or at all, our business, financial condition and results of operations could be adversely affected. See "Risk Factors—Risks Related to the Financial Position of Our Business—Our indebtedness could materially adversely affect our financial condition and our ability to operate our business, react to changes in the economy or industry or pay our debts and meet our obligations under our debt and could divert our cash flow from operations to debt payments."

***Cash Flows***

The following table summarizes our cash flows for the periods presented:

---

| | | |
|:---|:---|:---|
|  | **Year Ended** <br>**December 31,** | **Year Ended** <br>**December 31,** |
|  | **2021** | **2022** |
|  | **(in thousands)** | **(in thousands)** |
|  Net cash provided by (used in) operating activities | $122485 | $51027 |
|  Net cash provided by (used in) investing activities | (24987) | (12280) |
|  Net cash provided by (used in) financing activities | (96360) | (21251) |
|  Effects of foreign exchange rate changes on cash and cash equivalents | (1204) | (4525) |
|  Net increase (decrease) in cash and cash equivalents | $(66) | $12971 |

---

------

##### [**Table of Contents**](#toc)
***Operating Activities***

Net cash used in operating activities of $51.0 million for fiscal year 2022 was primarily due to net income of $86.5 million, a net cash outflow related to changes in operating assets and liabilities of $45.8 million, and positive non-cash adjustments of $10.3 million. Non-cash adjustments primarily consisted of positive adjustments related to depreciation and amortization expense of $15.8 million, share-based compensation of $4.9 million, and an amortization of pension through other comprehensive loss of $1.5 million, which were offset by negative adjustments related to a change in the fair value of derivative instruments of $5.7 million, a gain on sale of land development rights of $5.1 million, and a change in net deferred taxes of $1.1 million. Changes in cash flows related to operating assets and liabilities primarily consisted of cash inflows related to an increase in accounts payable of $3.8 million and a decrease in prepaid expenses and other assets of $0.8 million. These inflows were offset by cash outflows related to an increase of inventories of $29.6 million as a result of higher production rates during the period to support higher anticipated sales as well as higher cost of materials, an increase in accounts receivables of $14.5 million due to higher sales, and a decrease in other current and noncurrent liabilities of $6.0 million largely due to the combination of tax payments during the period as well as a decrease in deferred income.

Net cash provided by operating activities of $122.5 million for fiscal year 2021 was primarily due to net income of $59.3 million, a net cash inflow related to changes in operating assets and liabilities of $41.7 million, and non-cash adjustments of $21.5 million. Non-cash adjustments primarily consisted of depreciation and amortization expense of $14.9 million, share-based compensation of $7.6 million, amortization of pension through other comprehensive loss of $2.8 million, and non-cash interest expense of $2.2 million, partially offset by a change in fair value of derivative instruments of $4.7 million and a change in net deferred taxes of $1.2 million. Changes in cash flows related to operating assets and liabilities primarily consisted of cash inflow related to an increase of $39.2 million in other current and noncurrent liabilities due to a higher level of deferred income associated with advanced payments on pianos that were not yet delivered to our customers as well as higher accrued compensation expenses, a decrease in inventories of $15.4 million as a result increased sales in 2021, and an increase in accounts payable of $1.9 million due to timing of payments. This inflow was partially offset by an increase in prepaid expenses and other assets of $7.9 million due to timing of payments and an increase in accounts receivable of $6.8 million due to a higher sales.

***Investing Activities***

Net cash used in investing activities of $12.3 million for fiscal year 2022 primarily consisted of capital expenditures of $19.0 million resulting from ongoing investments in machinery and equipment at our factories, partially offset by the proceeds from the sale of land development rights of $6.4 million.

Net cash used in investing activities of $25.0 million for fiscal year 2021 was due to capital expenditures of $22.0 million primarily due to ongoing investment in machinery and equipment at our factories, a $1.3 million acquisition of land development rights, capitalization of software development costs of $1.0 million as a result of our continued investment in software for internal use, and other investments of $0.8 million, partially offset by proceeds from sales of property, plant and equipment of $0.1 million.

On average from fiscal year 2016 to fiscal year 2022, we have generated higher cash flow from operating activities when compared to our capital expenditures. From fiscal year 2016 to fiscal year 2022, we generated average annual cash flow from operating activities of $54.8 million and incurred average annual capital expenditures of $16.1 million.

***Financing Activities***

Net cash used in financing activities of $21.3 million for fiscal year 2022 was driven by repayments under lines of credit of $19.5 million, repayments of long-term debt of $2.0 million and

------

##### [**Table of Contents**](#toc)
$0.6 million of debt issuance costs, partially offset by $0.8 million of net borrowings under our ABL Facility and foreign revolving credit facilities. See Note 10 to our consolidated financial statements included elsewhere in this prospectus for more information.

Net cash used in financing activities of $96.4 million for fiscal year 2021 consisted of repayments of long-term debt of $98.3 million and repayments under lines of credit of $0.5 million, partially offset by borrowings under lines of credit $1.5 million and borrowings of long-term debt of $0.9 million.

***Debt***

We entered into the First Lien Term Loan Facility and the ABL Facility (collectively, "domestic debt") in September 2013, and on February 16, 2018, we refinanced both the First Lien Term Loan Facility and the ABL Facility. We further, amended the ABL Facility on June 27, 2022 to, among other things, replace LIBOR with SOFR in the calculation of interest rates and extend the maturity date of the ABL Facility. The First Lien Term Loan Facility, which had a maturity date of February 16, 2025, provided an aggregate principal amount of $235.0 million at an interest rate of either LIBOR plus 3.75% (subject to a LIBOR floor of 1.0%) or a Base Rate plus 2.75% (subject to a Base Rate floor of 2.0%). We selected the one-month LIBOR in 2021. The applicable interest rate with respect to the First Lien Term Loan Facility was 4.75% as of December 31, 2020. The repayment terms of the First Lien Term Loan Facility required quarterly installment payments of $0.6 million beginning June 30, 2018. The First Lien Term Loan Facility also required mandatory annual excess cash flow prepayments starting December 31, 2019 equal to 50%, 25% or 0% of our Excess Cash Flow (as defined in therein). As a result of previous period additional prepayments made by us, there were no additional mandatory quarterly principal payments required on or after December 31, 2020, and there was no excess cash flow payment required for fiscal year 2021. As of December 31, 2021 we had repaid in full and cancelled our First Lien Term Loan Facility.

The ABL Facility provides a total commitment of $110.0 million expiring on June 27, 2027. The ABL Facility provides for borrowings at either the Secured Overnight Financing Rate (SOFR) plus a range from 1.60% to 2.25% or as-needed borrowings at an alternate Base Rate (as defined in the ABL Facility), plus a range from 0.50% to 1.00%; these ranges depend upon availability at the time of borrowing and length of the interest period. As of December 31, 2022, the applicable interest rate with respect to the ABL Facility was 5.9%. All outstanding borrowings under the facility are repayable when the facility matures in June 2027. In connection with the amendment of the ABL Facility in June 2022, we incurred approximately $0.4 million of upfront and professional fees. As of December 31, 2022, the amount available on the ABL Facility, net of letters of credit and borrowing restrictions, was $69.8 million. For the year ended December 31, 2022, commitment fees for the unused credit line were $0.3 million.

Capitalized debt issuance costs are reflected net of amortization in debt - noncurrent, on our condensed consolidated balance sheet.

Simultaneously with the execution of the credit agreements governing our domestic debt, we and various of our subsidiaries entered into a guarantee agreement and a collateral agreement with respect to each of our First Lien Term Loan Facility and our ABL Facility. Pursuant to the guarantee agreements, we and various of our subsidiaries are guarantors under the ABL Facility. Pursuant to the collateral agreements, our ABL Facility is collateralized by substantially all our assets, including our intellectual property and the equity interests of our various subsidiaries.

In addition to our ABL Facility, we also have multiple foreign credit facilities. In 2019, our German subsidiary entered into a credit facility with a foreign bank which entitled it to borrow up to the amount of €18.0 million. This credit facility, which is guaranteed by SMI, originally expired on December 31, 2019 and was extended to April 15, 2020. In April 2020, our German subsidiary refinanced this credit facility, resulting in a €20.0 million term loan (the "German Term Loan Facility") and €30.0 million ABL facility (the "German ABL Facility"), which was further amended in June 2022 to extend the maturity date of the German ABL Facility to January 2026 and replace the LIBOR alternate borrowing base rate

------

##### [**Table of Contents**](#toc)
with an alternate borrowing base rate based on SOFR. Our Japanese subsidiary also has a term loan facility in the amount of ¥98.0 million, entered into in January 2021 (the "Japanese Term Loan Facility" and together with the German Term Loan Facility, the "foreign term loans"), and a revolving credit facility which it increased from ¥300.0 million to ¥600.0 million in March 2020 (the "Japanese Revolving Credit Facility"). The German ABL Facility, together with the Japanese Revolving Credit Facility, are referred to as the "foreign revolving credit facilities" and, together with the foreign term loans, the "foreign credit facilities." The outstanding debt issuance costs related to the foreign credit facilities was $0.3 million as of December 31, 2022.

The outstanding balance of our foreign term loans was $16.8 million as of December 31, 2022. The total outstanding balance of our foreign revolving credit facilities was $10.7 million as of December 31, 2022. The amount available on the foreign revolving credit facilities, net of letters of credit, was $24.9 million as of December 31, 2022.

Current portion of debt represents scheduled installments within the next twelve months for the foreign term loans.

All of our debt agreements contain affirmative and negative covenants that place certain restrictions on us, including, among other things, restrictions on indebtedness, liens, fundamental changes and asset sales, investments, negative pledges, repurchases of stock, dividends and other distributions, and transactions with affiliates. We were in compliance with all such covenants as of December 31, 2022.

**Off-Balance Sheet Arrangements** 

We did not have during the period presented, and we do not currently have, any off-balance sheet financing arrangements as defined under the rules and regulations of the SEC, or any relationships with unconsolidated entities or financial partnerships, including entities sometimes referred to as structured finance or special purpose entities, that were established for the purpose of facilitating off-balance sheet arrangements or other contractually narrow or limited purposes.

**Critical Accounting Policies and Estimates** 

We believe that the following accounting policies involve a high degree of judgment and complexity. Accordingly, these are the policies we believe are the most critical to aid in fully understanding and evaluating our financial condition and results of our operations. See Note 2 to our consolidated financial statements included elsewhere in this prospectus for a description of our other significant accounting policies. The preparation of our financial statements in conformity with GAAP requires us to make estimates and judgments that affect the amounts reported in those financial statements and accompanying notes. Although we believe that the estimates we use are reasonable, due to the inherent uncertainty involved in making those estimates, actual results reported in future periods could differ from those estimates.

***Valuation of Goodwill and Intangible Assets***

The valuation of assets acquired in a business combination and subsequent impairment reviews of such assets require the use of significant estimates and assumptions. The acquisition method of accounting for business combinations requires us to estimate the fair value of assets acquired and liabilities assumed, and we record goodwill when consideration paid in a business acquisition exceeds the value of the net assets acquired. We also hold trademarks which are considered indefinite-lived as we expect to continue to derive benefits from these assets. Goodwill and indefinite-lived intangible assets are not amortized, but rather are tested for impairment annually, or more frequently if facts and circumstances warrant a review.

------

##### [**Table of Contents**](#toc)
We assess both the existence of potential impairment and the amount of loss, if any, by comparing the fair value of each reporting unit that includes goodwill or indefinite-lived intangible assets with its carrying amount. Our estimates are based upon assumptions that we believe to be reasonable, but which are inherently uncertain and unpredictable. These valuations require the use of management's assumptions, which do not reflect unanticipated events and circumstances that may occur. If factors indicate that the fair value of the reporting unit or indefinite lived intangible assets is less than its carrying amount, we perform a quantitative assessment and the fair value of the reporting unit is determined by analyzing the expected present value of future cash flows for goodwill and relief from royalty method of indefinite-lived intangible assets. If the carrying value of the reporting unit or indefinite-lived intangible assets continues to exceed its fair value, the implied fair value of the reporting unit's goodwill or indefinite-lived intangible assets is calculated and an impairment loss equal to the excess is recorded.

We performed a qualitative assessment for each of our reporting units and our indefinite-lived intangible assets as of October 1. The qualitative analyses resulted in us determining that it was more likely than not that the fair value of the Band reporting unit and certain indefinite-lived intangible assets was less than its carrying amount. As a result, management performed a quantitative analysis to determine the amount of impairment associated with the reporting unit for goodwill and certain indefinite-lived intangible assets.

Refer to Note 8 of our consolidated financial statements included elsewhere in this prospectus for further information.

We evaluate long-lived assets, including finite-lived intangible assets and other assets, for impairment whenever events or changes in circumstances indicate that the carrying amount of the assets may not be recoverable. Events or changes in circumstances that could result in an impairment review include, but are not limited to, significant underperformance relative to historical or projected future operating results, significant changes in the manner of use of the acquired assets or the strategy for our overall business, and significant negative industry or economic trends. If an event occurs that would cause us to revise our estimates and assumptions used in analyzing the value of our property and equipment or our finite-lived intangibles and other assets, that revision could result in a non-cash impairment charge that could have a material impact on our financial results.

***Revenue Recognition***

We recognize net sales from contracts with customers when (or as) control of the promised goods or services transfers to the customer. For wholesale net sales, this generally occurs when the product is shipped to the dealer after receipt of a valid order. For retail net sales, this generally occurs when the product is delivered to the customer in accordance with the purchase agreement. Net sales is recorded at the amount of consideration we expect to be entitled to in exchange for the delivered goods or services, which includes an estimate of expected returns or refunds and customer incentives.

***Share-Based Compensation***

We recognize compensation cost of share-based awards on a straight-line basis over the requisite service period (typically the vesting period) of the award and we elected to recognize forfeitures as they occur. The awards were classified as a liability in our financial statements. We recognize compensation expense as selling, general and administrative expenses within our consolidated statement of operations.

As a nonpublic entity, the Company elected to measure the awards based on their intrinsic value as permitted under ASC 718. The Company measured the intrinsic value of the awards based on the

------

##### [**Table of Contents**](#toc)
estimated settlement value of the awards at each reporting period. The Company continued to record changes in the intrinsic value of the awards up to the date on which the Company ceased to be a nonpublic entity as defined in ASC 718. Upon becoming a public entity, as a result of filing its initial registration statement with the SEC and for each reporting period thereafter, the Company measured the awards using the fair value-based method as required under ASC 718. The impact from the change in valuation methods on the date on which the Company became a public entity was accounted for as compensation cost during that period.

Refer to Note 15 of our consolidated financial statements included elsewhere in this prospectus for further information.

***Environmental Obligations***

We accrue for any environmental investigation, remediation, operating and maintenance costs when it is probable that a liability has been incurred and the amount can be reasonably estimated. For environmental matters, the most likely cost to be incurred is accrued based on an evaluation of currently available facts with respect to each individual site, current laws and regulations and prior remediation experience. For sites with multiple potentially responsible parties, we consider the likely proportionate share of the anticipated remediation costs and the ability of the other parties to fulfill obligations in establishing a provision for those costs. Where no amount within a range of estimates is more likely to occur than another, the minimum undiscounted amount is accrued.

The uncertain nature inherent in such remediation and the possibility that initial estimates may not reflect the outcome could result in additional costs being recognized by us in future periods.

***Retirement Plans***

We have defined benefit or defined contribution pension plans covering a majority of our employees, including certain employees in foreign countries. Certain domestic hourly employees are covered by a multi-employer defined benefit pension plan, to which we make contributions. We also provide post-retirement life insurance benefits to certain eligible hourly retirees and their dependents. We previously maintained a non-qualified Supplemental Executive Retirement Plan ("SERP") for a select group of our former executives; however, the SERP was terminated in March of 2021 and final asset distributions were completed by April of 2022.

Benefits under the pension and other post-retirement benefit plans are generally based on age at retirement and years of service and, for some pension plans, benefits are also based on the employee's annual earnings. The net cost of our pension and other post-retirement benefit plans is determined using the projected unit credit method and several actuarial assumptions, the most significant of which are the discount rate, the long-term rate of asset return, and current rate trends. A portion of these costs is not recognized in net income in the year incurred because it is allocated to product costs and reflected in inventory at the end of a reporting period.

**Recent Accounting Pronouncements** 

See Note 2 to our consolidated financial statements included elsewhere in this prospectus for additional details regarding recent accounting pronouncements.

**Quantitative and Qualitative Disclosures about Market Risk** 

We are exposed to market risk in the ordinary course of our business. Market risk represents the risk of loss that may impact our financial position due to adverse changes in financial market prices and rates.

------

##### [**Table of Contents**](#toc)
***Inflation Risk***

We do not believe that inflation has had a material effect on our business, financial condition, or results of operations, other than its impact on the general economy. Nonetheless, if our costs were to become subject to inflationary pressures, we might not be able to fully offset such higher costs through price increases. Our inability or failure to do so could harm our business, financial condition, and results of operations.

***Interest Rate Risk and Market Risk***

Our cash equivalents and marketable securities are subject to market risk due to changes in interest rates. Fixed rate securities may have their market value adversely affected due to a rise in interest rates, while floating rate securities may produce less income than expected if interest rates fall. As of December 31, 2022, a hypothetical 10% change in interest rates would not have had a material impact on the value of our cash and cash equivalents.

We are also subjected to interest rate exposure on interest rates on our debt. Interest rate risk is highly sensitive due to many factors, including domestic and foreign monetary and tax policies, U.S. and international economic factors and other factors beyond our control. The vast majority of our debt bears interest at floating rates plus a margin. As of December 31, 2022, we had a total outstanding debt balance of $26.8 million, net of $0.8 million of deferred financing costs. Based on the amounts outstanding, a 100-basis point increase or decrease in market interest rates over a twelve-month period would cause an increase or decrease in interest expense of approximately $0.3 million on an annual basis.

***Foreign Currency Exchange Rate Risk***

Our reporting and functional currency is the U.S. dollar, and the functional currency of our foreign subsidiaries is their respective local currencies. Our consolidated results of operations and cash flows are therefore subject to fluctuations due to changes in foreign currency exchange rates and may be adversely affected in the future due to changes in foreign exchange rates. We conduct transactions denominated in foreign currencies including the EUR, RMB, GBP and JPY. The assets and liabilities of each of our foreign subsidiaries are translated into U.S. dollars at exchange rates in effect at each balance sheet date. Adjustments resulting from translating foreign functional currency financial statements into U.S. dollars are recorded as a separate component on the consolidated statements of comprehensive loss. Gains or losses due to transactions in foreign currencies are included in other income in our consolidated results of operations.

The volatility of exchange rates depends on many factors that we cannot forecast with reliable accuracy. We have experienced and will continue to experience fluctuations in foreign exchange gains and losses related to changes in foreign currency exchange rates. In the event our foreign currency denominated assets, liabilities, net sales, or expenses increase, our results of operations may be more greatly affected by fluctuations in the exchange rates of the currencies in which we do business. To date we have not engaged in the hedging of foreign currency transactions, although we may choose to do so in the future. A hypothetical 10% change in the relative value of the U.S. dollar to other currencies during any of the periods presented would not have had a material effect on our consolidated financial statements.

**JOBS Act** 

We qualify as an "emerging growth company" as defined in Section 2(a) of the Securities Act, as modified by the JOBS Act. As an emerging growth company, we may take advantage of specified

------

##### [**Table of Contents**](#toc)
reduced disclosure and other requirements that are otherwise applicable, in general, to public companies that are not emerging growth companies. These provisions include:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• the option to present only two years of audited financial statements and only two years of related Management's
Discussion and Analysis of Financial Condition and Results of Operations in this prospectus;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• not being required to comply with the auditor attestation requirements of Section 404 of the Sarbanes-Oxley Act of
2002;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• reduced disclosure obligations regarding executive compensation in our periodic reports, proxy statements and registration
statements; and

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• exemptions from the requirements of holding nonbinding, advisory stockholder votes on executive compensation or on any
golden parachute payments not previously approved.

We will remain an emerging growth company until the earliest to occur of: (i) the last day of the first fiscal year in which our annual gross revenue exceeds $1.235 billion; (ii) the date that we become a "large accelerated filer," with at least $700.0 million of equity securities held by non-affiliates as of the end of the second quarter of that fiscal year; (iii) the date on which we have issued, in any three-year period, more than $1.0 billion in non-convertible debt securities; and (iv) the last day of the fiscal year ending after the fifth anniversary of the completion of this offering.

We have elected to take advantage of certain of the reduced disclosure obligations in the registration statement of which this prospectus is a part and may elect to take advantage of other reduced reporting requirements in future filings. As a result, the information that we provide may be different than the information you receive from other public companies in which you hold stock.

An emerging growth company can also take advantage of the extended transition period provided in Section 13(a) of the Exchange Act for complying with new or revised accounting standards. As such, an emerging growth company can delay the adoption of certain accounting standards until those standards would otherwise apply to private companies. We have elected to take advantage of this extended transition period and, as a result, our operating results and financial statements may not be comparable to the operating results and financial statements of companies who have adopted the new or revised accounting standards.

As a result of these elections, some investors may find our Class A common stock less attractive than they would have otherwise. The result may be a less active trading market for our Class A common stock, and the price of our Class A common stock may become more volatile.

------

##### [**Table of Contents**](#toc)
**BUSINESS** 

**Our Purpose** 

We are a company that has been forged on, and has pushed the boundaries of, the credo of our founder, Henry Engelhard Steinway: "To build the best piano possible." Since 1853, generation after generation, we have made and continue to make what we believe are the world's finest musical instruments. With this expertise and heritage, we believe that we have created and sustained one of the best regarded luxury brands in the world. We strive to further our legacy by advancing the standards of modern musical instrument manufacturing with our enduring dedication to quality, artisanship, elegance, style and beauty.

Our masterfully crafted pianos are designed to meet the demands of a diverse range of music enthusiasts—from providing renowned concert pianists and pop culture icons, including Lang Lang, Yuja Wang and Billy Joel, an instrument to fully express their indelible artistry, to encouraging early-stage learners discovering the first joys of piano playing, to inspiring the most discerning listeners with the distinct musical experience of a *Steinway Spirio* piano in their own home, which we believe is indistinguishable from a live performance. Our ultimate goal is to foster and enrich the global musical community by continuing to provide the world's finest pianos and musical instruments shaped by our unwavering commitment to innovation, improvement and technological preeminence.

**Who We Are** 

We are a leading manufacturer of high-performance musical instruments, boasting a brand renowned worldwide. *Steinway* is one of the longest-lasting and most storied brands in the music industry and beyond.

Our legacy began in 1853 in New York City when German immigrant Henry Engelhard Steinway developed the first Steinway piano in a Manhattan loft on Varick Street. Over the next thirty years, Henry and his sons laid the foundation for modern grand piano building. They built their instruments one at a time, applying skills handed down from master to apprentice, generation after generation, and we have followed in their footsteps ever since.

Thereafter, our innovative designs, attention to detail and exacting quality have redefined and broken new ground in the market for ultra-premium pianos. With our 170-year history, we believe that we have been setting the standard for innovation in our industry for longer than most public companies have been in existence.

We produce a full line of grand and upright acoustic pianos at our manufacturing facilities in Astoria, New York; and Hamburg, Germany. We also offer exclusive, limited-edition pianos, as well as unique, fully customized models for the most discerning customers. We have mastered the end-to-end process that brings a *Steinway* piano to market, and we own and perfect each of the key components that complete our brand. At each step, our highly-trained craftsmen ensure that every *Steinway* piano meets our high standard of excellence.

In addition to our long history of craftsmanship, we continue to innovate and integrate state-of-the art technology into our timeless foundation. In 2015, we introduced the *Steinway Spirio*, which we believe is the world's finest high-resolution player piano. A masterpiece of artistry and engineering, *Spirio* pianos, playable like any other *Steinway* piano, also play themselves, enabling consumers to enjoy recorded performances by renowned pianists in their own homes, with what we believe to be the same nuance, power and passion as a live performance. In 2019, we further advanced our technology and offerings by introducing *Spirio \| r*, which enables recording and high-resolution editing in addition to

------

##### [**Table of Contents**](#toc)
playback capabilities. In 2021, we launched our *Spiriocast* software feature, which permits customers to instantly stream live performances, synched with video and audio, from one *Spirio \| r* piano to others across the world.

The *Spirio* piano significantly expands our potential target market to include non-piano players and enhances our relevance to recreational music consumers, as well as amateur and professional musicians. Furthermore, *Spirio* pianos sell at a premium to our traditional *Steinway* piano models. Sales of our *Spirio* and *Spirio \| r* pianos have grown to represent approximately 34% of our total Piano segment net sales for fiscal year 2022, increasing our average selling price and improving our gross profit margin as a result. In creating and continuously adding to our expansive *Spirio* library, we regularly engage with a wide range of artists to record new tracks, strengthening our connection to a diverse community of professional artists. *Spirio* strengthens our brand by appealing to luxury consumers and reinforcing our reputation for quality and innovation.

A deep connection to the artist community has been at the core of our identity since our founding. For decades, we have used our Steinway Artist program to cultivate special relationships with the best pianists from a wide array of genres. This program forms a celebrated community of approximately 1,900 of today's most acclaimed pianists, including Martha Argerich, Ahmad Jamal, Billy Joel, Diana Krall, Charlie Puth and Yuja Wang. These and other musical greats consistently choose *Steinway* when performing on the biggest stages. In fact, approximately 97% of pianists chose a *Steinway* piano when performing with orchestras across the globe during the 2018–2019 concert season, which was the last full concert season prior to the date of this prospectus due to the COVID-19 pandemic. Each Steinway Artist is vetted through a highly selective process. To be considered for that process, they must independently own a *Steinway* piano; we do not provide a piano to our Steinway Artists in exchange for an endorsement. We believe the timeless quality and excellent performance of *Steinway* pianos are recognized and appreciated by artists across generations, geographies and cultures, with pianists in orchestras on every continent performing on *Steinway* pianos.

We also invest in building relationships with the next generation of artists through our All-Steinway school program. This program partners with over 230 institutions and schools across the globe to provide students and faculties with our high-quality pianos. By furnishing these institutions and schools exclusively with *Steinway* and *Steinway*-designed instruments, we enable our All-Steinway schools to offer premier music education on some of the finest piano models.

Our pianos are currently sold through 34 company-owned retail showrooms, strategically located across the world. This direct-to-consumer channel allows us to fully manage the luxury customer experience and our brand narrative. We also distribute our pianos through a global, expansive network of approximately 200 experienced dealers with intimate local market knowledge and close ties to local musical communities. Our comprehensive product portfolio allows us to serve as an exclusive supplier to many of our *Steinway* dealers. We seek to further optimize our distribution through ongoing retail showroom expansion in regions where we see opportunity for growth or improved performance. We continue to support dealer initiatives and implement unique distribution methods to reach smaller, previously untouched markets, including through our team of Educational Sales Managers that travel and sell direct to institutions and customers in territories not represented by a retail store or a dealer.

In addition to our ultra-premium piano offerings under our *Steinway* brand and our mid-range offerings under our *Boston* and *Essex* brands, we also sell musical instruments and accessories through our Band segment under our highly regarded Conn-Selmer umbrella of brands. For over 100 years*,* Conn-Selmer's complete lines of brass, woodwind, percussion and string instruments, including *Bach* trumpets, *C.G. Conn* French horns, *King* trombones, *Selmer* saxophones, and *Ludwig* percussion instruments, have shaped the musical landscape through innovation and sophisticated musical performance. The *C.G. Conn* brand, with a legacy in music education, has been and continues

------

##### [**Table of Contents**](#toc)
to be one of the top choices for educators and marching band programs in the United States today. Most top orchestras and symphonies carry the sound of our *Bach* brass instruments. *Ludwig*, one of the world's most recognized names in drums, is a leading fixture on the marching field and on rock-and-roll's biggest stages. As such, our Conn-Selmer division caters to approximately 950 notable percussion, brass, and woodwind artists, including drummers such as Anderson Paak, Questlove and Alex Van Halen; saxophonist Kenny Garret; and trumpet players Sean Jones, Rashawn Ross and Michael Sachs.

We operate in two reporting segments, Piano (Steinway & Sons) and Band (Conn-Selmer). In fiscal year 2022, our Piano and Band segments generated net sales of $425.9 million and $149.6 million, respectively, up from $406.6 million and $131.7 million, respectively, in the prior fiscal year. In fiscal year 2022, our Piano and Band segments generated Adjusted EBITDA of $119.2 million and $5.9 million, respectively, compared to $106.8 million and $10.7 million, respectively, in the prior fiscal year. Below is a breakdown of our consolidated net sales and Adjusted EBITDA by segment for fiscal year 2022.

---

| | |
|:---|:---|
| **2022 Consolidated Net Sales** | **2022 Consolidated Adjusted EBITDA** |
| <br>![LOGO](g212165g61q72.jpg)  | <br>![LOGO](g212165g61u45.jpg)  |

---

For a reconciliation of Adjusted EBITDA to its most directly comparable GAAP financial measure, information about why we consider Adjusted EBITDA useful and a discussion of the material risks and limitations of this measure, please see "Management's Discussion and Analysis of Financial Condition and Results of Operations—Non-GAAP Financial Measures."

Our Piano segment primarily includes sales of pianos offered under the *Steinway* brand as well as our *Boston* and *Essex* brands. *Boston* and *Essex* pianos are designed and engineered using the *Steinway* experience, expertise, specifications, and patents to achieve optimal performance. *Boston* and *Essex* models are built in Asia to maximize manufacturing efficiencies, but benefit from Steinway & Sons' quality control and oversight. *Boston* competes in the upper-middle market segment, while *Essex* participates in the middle market segment. Both provide a level of performance and quality that we believe is highly favorable to others competing in their respective price ranges, giving a wide range of consumers access to pianos with genuine world-class tone and responsiveness.

The *Boston* and *Essex* lines provide a broader range of consumers with an introduction into the Steinway & Sons family. Our *Boston* and *Essex* pianos come with the Steinway Promise—a trade-up program that varies across regions and channels but generally allows *Boston* and *Essex* pianos to be traded up for more expensive *Steinway* pianos, with a trade-in credit up to an amount equal to the original purchase price. This trade-in option allows our company to increase market share over time as our customers enter our community on lower-priced models, before trading up to our higher-priced models as they acquire wealth. With this family of products, we can offer our dealers a full line of our products at multiple price points, enabling us to replace lower priced product lines and to facilitate more

------

##### [**Table of Contents**](#toc)
exclusive arrangements with our dealers. This comprehensive suite of piano offerings has also allowed us to better penetrate schools and music learning centers and add to our list of All-Steinway Schools. Our *Boston* line in particular has been utilized by prominent institutions to build a strong foundation for a quality music education.

For fiscal years 2022 and 2021, approximately 70% and 69%, respectively, of net sales in the Piano segment were under the *Steinway* brand.

![LOGO](g212165g02x22.jpg)

Our Band segment manufactures, markets and distributes a diverse portfolio of instruments and brands for student, amateur and professional use that have leading market shares in each of their musical instrument categories, including brass (trumpets, trombones, French horns), woodwinds (saxophones, flutes, clarinets), percussion (drums) and strings (violins, cellos, bass).

Through the Conn-Selmer family of brands, we offer a portfolio of individual brands that represent innovation, entrepreneurship and a focus on musical excellence. Emphasizing quality craftsmanship above all else, Conn-Selmer operates U.S. production facilities in Elkhart, Indiana; Eastlake, Ohio; and Monroe, North Carolina to create exceptional instruments.

Over 54% of Conn-Selmer sales in fiscal year 2022 were generated through our preferred dealer network to schools and families who participate in beginning music education programs. Of the remaining sales, many are used by students in marching bands, concert bands, orchestras, and other school-related performances. Our Conn-Selmer Division of Education was created to proactively engage with music students and educators and has become an industry leader in providing programs, services, and advocacy tailored to the growth and development of music education worldwide. Our educational team is committed to ensuring that every student and educator not only has access to a quality music education and support for their professional development, but also to the tools necessary to help them achieve their highest musical potential.

![LOGO](g212165g72r97.jpg)

------

##### [**Table of Contents**](#toc)
Our business is global and aims to serve consumers wherever they are. In fiscal year 2022, we distributed our instruments in approximately 83 countries and territories throughout the Americas, the APAC region and the EMEA region. Below is a geographic breakdown of our consolidated net sales for fiscal year 2022.

---

| |
|:---|
| **2022 Consolidated Net Sales** |
| <br>![LOGO](g212165g70s67.jpg)  |

---

We were acquired by John Paulson and certain affiliated entities in 2013, and under John Paulson's stewardship, we have increased our commitment to quality while honoring our legacy, expanding our business, and strengthening our technological capabilities. As a custodian of Steinway, John Paulson has focused on investing in our business, including in technology, company-owned showrooms, our manufacturing processes and machinery, and in training our workforce to create a stronger team. We believe that these commitments have made us better equipped than ever before to bolster our reputation as one of the industry's finest musical instrument manufacturers. Over the course of the last decade, we have strategically expanded the international scope of our business, launched our *Spirio* technology, earned 17 distinct new patents, and improved manufacturing quality. The results of these initiatives are reflected in our growth over the past few years, during which time we have grown our APAC region net sales at a 11.2% CAGR from fiscal year 2016 to fiscal year 2022, released *Steinway Spirio* and *Spirio \| r* player pianos and also the *Spiriocast* feature for *Spirio \| r* models, built a team dedicated to limited-edition and bespoke pianos, and implemented manufacturing advances, such as the adoption of new machinery in our factories that raise our standards of precision and quality even higher than previously possible.

To push our boundaries and build on the strong foundation laid over a century ago, we operate with six primary objectives and guiding principles:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• Advance **excellence in manufacturing** and strive to consistently improve quality **so that the newest *Steinway* remains the best *Steinway*** .

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• Cultivate and nurture **innovation, further developing the infrastructure and technological advancements paved by *Spirio*** .

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• Continue to engage our customers directly through **retail showroom expansion, thereby broadening our local presence and presenting a consistent luxury brand narrative and experience across all markets**.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• Continue to increase **geographic penetration**, aligning our business with the fastest-growing markets, such as China.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• Leverage our **pricing power** and favorable luxury-market dynamics.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• Reinforce our brand advantage through introducing a greater mix of **special, limited-edition and bespoke products**.

------

##### [**Table of Contents**](#toc)
**Our Industry** 

We operate within two distinct markets that partially overlap each other: the global personal luxury goods market and the global musical instruments market.

***Global Personal Luxury Goods***

Steinway competes in the fast-growing and highly attractive global personal luxury goods market. This market, which includes both hard and soft personal luxury goods, premium and luxury cars, is expected to grow from $899.1 billion in 2021 to $1,275.0 billion in 2026 globally, representing a 7.2% CAGR, according to Euromonitor estimates.<sup>\*</sup>

The factors driving this growth include higher demand for experiential luxury, increased spending and influence of millennials, and the rise in discretionary spending in China. Historically, the global personal luxury goods market has experienced strong growth, with a 5.0% CAGR from 2017 to 2019 according to Euromonitor.<sup>\*\*</sup>

According to Euromonitor, the APAC region represented approximately 44% of the global personal luxury goods market in 2021, the largest share of any region.<sup>\*\*</sup> Between 2021 and 2026, the APAC region is also expected to be one of the best-performing regions in the world, furthering its lead in the global luxury goods market. In China, the personal luxury goods market is expected to increase from $280.3 billion in 2021 to $424.9 billion in 2026, representing an 8.7% CAGR, according to Euromonitor estimates.<sup>\*\*</sup> We believe China's outsized share of growth in the luxury category can afford us numerous tailwinds as we continue to expand our presence in the country.

According to *The Wealth Report 2022,* published by Knight Frank, the number of HNWI in China (including Mainland China and Hong Kong), those with a net worth of over $1 million, reached approximately 10.0 million in aggregate in 2021, representing a CAGR of 15.1% from 2016 to 2021. Meanwhile, the number of UHNWI in China, those with a net worth of over $30 million, has grown 145% from 2016 to 2021 and is expected to continue to grow by 41% from 2021 to 2026. From 2021 to 2026, it is expected that the number of HNWI and UHNWI together will grow from 69.8 million to 106.3 million, representing a CAGR of 8.8% and that by 2026 the number of HNWI and UHNWI in China will reach 18.1 million, representing a five year CAGR of 13%. While the United States remains home to the largest high-net-worth population, China has the second-largest high-net-worth population.

***Global Musical Instruments***

In addition to the global personal luxury goods market, we operate in the global musical instruments market, which is also benefiting from numerous secular tailwinds. These include the increasing global appreciation for music and its role across many aspects of life; the growing desire for at-home entertainment, with pianos in particular; and the growing consumer appetite for heirloom products with longstanding interest across generations. We believe Steinway's products are inherently timeless—and we expect to be a consistent beneficiary of music's robust and growing importance in daily life and pursuits.

According to Technavio, the global musical instruments market is expected to grow from $9.3 billion in 2021 to over $10.8 billion in 2026, representing a 3.2% CAGR. The global piano and keyboards market is expected to reach approximately $3.8 billion by 2026, up from $3.3 billion in 2021. Of that total growth, the APAC region is expected to contribute the most incremental growth.

------

<sup>\*</sup> Source: Euromonitor International Ltd. Luxury Goods 2023, y-o-y exchange rates, Retail Value RSP, Current Prices. Hard and Soft Luxury Goods includes Apparel & Footwear, Eyewear, Jewelry, Leather Goods, Portable Consumer Electronics, Timepieces, Writing Instruments & Stationery, and Beauty & Personal Care. 

<sup>\*\*</sup> Source: Euromonitor International Ltd. Luxury Goods 2023, y-o-y exchange rates, Retail Value RSP, Current Prices.

------

##### [**Table of Contents**](#toc)
The piano market in China is the world's largest, with an average of around 400,000 pianos being sold per year from 2017 to 2021, compared to an average of around 30,000 per year in the United States over the same period.

According to statistics published by the Chinese Musicians' Association, approximately 30 million children take piano lessons in China, perhaps inspired by famous Chinese Steinway Artists including Lang Lang and Yuja Wang. Over 40,000 children participated in Steinway's 2021 International Children & Youth Piano Competition in China. To further serve the growing population of developing pianists in China, the Juilliard School made one of the largest orders of pianos in Steinway history in 2019 for its first overseas campus in Tianjin, China.

The Chinese musical instrument market in general and the piano market in particular have benefited from continued government support for music and the arts.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• *China's 14 <sup>th</sup> Five-Year Plan* for the
2021–2025 period emphasizes the importance of cultural development. The Ministry of Culture and Tourism has issued guidelines to promote cultural development, building upon the cultural activities already growing in China. The Chinese
government has invested heavily in opening new concert halls in recent years. In fact, the number of concert halls in China that own Steinway pianos has increased from 11 to 142 from 2012 to 2022.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• The government is promoting the development of young talent in music and the arts. As stated by the *Opinions on Comprehensively Strengthening and Improving School Aesthetic Education in the New Era (Opinion)* published by the Chinese State Council in October 2020, the Ministry of Education seeks to introduce music and the arts as a compulsory examination
subject nationwide as part of high school entrance examinations. Schools are also encouraged to develop a more structured curriculum for music and the arts.

As China continues to promote classical music and music education, we expect increases in demand for musical instruments across multiple channels, including orchestras, educational institutions, concerts halls, and households.

The United States has also exhibited unique support for the arts in its education system through its $13.2 billion Elementary and Secondary School Emergency Relief funds. We believe that our piano brands and our Conn-Selmer band and orchestra brands are strongly positioned to benefit from these continued investments in music education.

**Our Financial Performance** 

Since our acquisition by John Paulson and certain affiliated entities in 2013, we have been able to achieve consistently strong financial performance. We are proud of our robust growth, consistent profitability, and high cash-flow generation, which demonstrate our pricing power and optimized cost structure. While continuing to invest in innovation, we have also been able to reduce our debt from $311.6 million as of the year ended December 31, 2016 to $27.5 million as of the year ended December 31, 2022, while increasing cash and cash equivalents from $21.6 million to $56.7 million over the same period.

From fiscal year 2016 to fiscal year 2022, we realized the following results on a consolidated basis:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• Increased net sales from $386 million to $576 million, representing a CAGR of 6.9%

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• Increased Piano segment net sales from $245 million to $426 million, representing a CAGR of 9.7%

------

##### [**Table of Contents**](#toc)
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• Increased net sales in the Piano segment under the *Steinway* brand from $154 million to $297 million, representing a
CAGR of 11.5%

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• Increased Piano segment net sales in the APAC region from $71 million to $135 million, representing a CAGR of 11.2%

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• Increased Piano segment Adjusted EBITDA from $32 million to $119 million, representing a CAGR of 24.2%

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• Increased gross profit from $137 million to $239 million, representing a CAGR of 9.7%

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• Increased Piano segment gross profit from $100 million to $211 million, representing a CAGR of 13.3%

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• Increased net income from $3 million to $87 million, representing a CAGR of 77.0%

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• Increased Adjusted EBITDA from $50 million to $125 million, representing a CAGR of 16.6%

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• Increased Adjusted Net Income from $14 million to $92 million, representing a CAGR of 36.9%

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• Increased Net Income Margin from 0.7% to 15.0%

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• Increased Adjusted EBITDA Margin from 12.9% to 21.7%

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• Increased Adjusted Net Income Margin from 3.6% to 16.0%

---

| | |
|:---|:---|
| ![LOGO](g212165g01q10.jpg) | ![LOGO](g212165g05q10.jpg) |
| ![LOGO](g212165g02q10.jpg)  | ![LOGO](g212165g08q10.jpg) <br>|

---

------

##### [**Table of Contents**](#toc)

---

| | |
|:---|:---|
| ![LOGO](g212165g04q10.jpg)  | ![LOGO](g212165g06q10.jpg)  |

---

---

| | |
|:---|:---|
| ![LOGO](g212165g09q10.jpg) | ![LOGO](g212165g03q10.jpg) |

---

For a reconciliation of Adjusted EBITDA and Adjusted Net Income to their most directly comparable GAAP financial measure, information about why we consider Adjusted EBITDA and Adjusted Net Income useful and a discussion of the material risks and limitations of these measures, please see "Prospectus Summary—Summary Historical Consolidated Financial Data—Non-GAAP Financial Measures" and "Management's Discussion and Analysis of Financial Condition and Results of Operations—Non-GAAP Financial Measures."

**Our Strengths** 

***We built a deep competitive moat through our more than century-long track record of creating what we believe to be the world's finest instruments and through the power of our brand.***

For 170 years, we believe our innovation, commitment to detail and extraordinary quality have established our brand as the standard by which all pianos are measured. We believe our long record of leadership across musical instrument categories places our company alongside some of the most admired American companies, with a luxury brand that transcends its functionality.

The fact that our industry's most revered artists and musical institutions consistently choose *Steinway* fortifies our high standing within the music industry. Many musical greats have endorsed the

------

##### [**Table of Contents**](#toc)
quality of our instruments and personally use our instruments on the brightest stages—classical legends such as Sergei Rachmaninoff and Arthur Rubinstein; some of the biggest classical and pop icons of today, including Lang Lang and Billy Joel; and jazz legends such as Ahmad Jamal and McCoy Tyner all chose *Steinway* time and again as the desired instrument to express their art. We also lead piano demand among the world's largest concert halls, performance venues and educational and cultural institutions.

The prominence of our instruments among the most respected musical authorities informs and influences the purchasing decisions of consumers across the world. When combined with the quality and beauty of our instruments, this reputation allows us to enjoy considerable pricing power while also increasing sales volumes. Between fiscal years 2016 and 2022, we increased sales volumes of our *Steinway* pianos by 24.7%, or at a CAGR of 3.7%, while the ASP generated by our *Steinway* pianos increased by 54.1%, or at a CAGR of 7.5%.

Our reach is global. Our instruments are desired and sold throughout the world, in approximately 83 countries and territories. Our brands are well-known and universal, with over 800 trademarks registered in countries across the globe. With this reach, our reputation as a preeminent piano manufacturer has allowed us to gain, based on market data and internal estimates, approximately 80% of what we believe is the ultra-premium piano market, measured in terms of production volumes.

Our top-tier *Steinway* brand provides a professional-level experience; however we also maintain product lines that allow us to serve an array of consumers, including our *Boston* and *Essex* pianos which extend our high-quality piano offerings across more affordable price points. The Piano segment is supplemented by our Band segment where, among others, the *Conn*, *Bach*, *Selmer* and *Ludwig* brands all lead their respective categories and serve a diverse group of educational institutions and instrument consumers.

***We are aligned with favorable long-term trends.***

There are a number of socioeconomic trends that serve as tailwinds for us, including:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• Outsized growth in the population of HNWI and UHNWI, particularly in China. The global population of HNWI and UHNWI has
grown at a 10.1% and 11.9% CAGR, respectively, over the five years ended December 31, 2021. In China, the population of HNWI and UHNWI has grown at a 15.1% and 19.6% CAGR respectively, over the same period, relative to total Chinese population
growth of 0.3%.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• Increasing Chinese investment in music education, with music and the arts expected to be a compulsory examination subject
nationwide.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• A continued consumer focus globally on the home and in-home activities following
the onset of the COVID-19 pandemic.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• A growing understanding of the cognitive and developmental benefits associated with music education.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• Record $13.2 billion in U.S. government investment in education with access for music education through Elementary and
Secondary School Emergency Relief (ESSER) funds, signed into law in March 2020.

While we expect these favorable trends to continue, any ebbing or reversal of one or more of these trends could adversely affect the growth of our business. See "Risk Factors—Risks Related to

------

##### [**Table of Contents**](#toc)
our Business—Unfavorable economic conditions and changes in consumer preferences could adversely affect our business."

***Our manufacturing excellence and commitment to high-performance quality lies at the core of our identity.***

For 170 years, we have played a key role in the development of the modern grand piano and due to our commitment to sustained advances in manufacturing—as evidenced by our ever-growing patent portfolio—we have remained a leading manufacturer of ultra-premium concert pianos ever since. We manufacture each of our *Steinway* pianos, one by one, in our historic factories in Astoria, New York; and Hamburg, Germany, through a precise and meticulous artisan process.

These factories and many of our pioneering techniques that we still currently employ date back to the 19th century and have shaped and further elevated the high-end piano manufacturing standards of today. Our integration of time-tested, old-world methods with state-of-the-art technology and investments in advanced machinery coalesce in a production process that requires six months to several years and dozens of artisans to create what we believe is the world's finest piano.

The quality of our materials and processes results in pianos that can be enjoyed for generations, as evidenced by what has historically been our primary competition, legacy *Steinway* pianos.

![LOGO](g212165g04s44.jpg)

***Our company-owned retail showrooms and deep relationships with experienced dealers create a powerful, high-touch distribution model.***

We have established company-owned retail showrooms coast-to-coast in the United States in wealthy metro areas from New York to Beverly Hills, Chicago, San Francisco and Miami; across Europe with locations in cultural hubs including London, Paris, Vienna and throughout Germany; and in

------

##### [**Table of Contents**](#toc)
key APAC locations including Tokyo and Shanghai and in Beijing, where we launched our APAC flagship store in 2017. Currently, we operate 15 retail showrooms in the United States, ten in Europe and nine in the APAC region. Our 34 company-owned showrooms heighten our brand awareness and allow us to build meaningful relationships directly with our valued customers.

Our platform of company-owned retail locations has bolstered our sales from retail operations, which have increased by a CAGR of 15.2% between fiscal years 2016 and 2022, reaching 41.7% of our total *Piano* segment net sales for fiscal year 2022. The outsized growth of this channel has ushered in higher profitability, as pianos sold through direct channels capture a significantly larger share of margin compared to sales through traditional wholesale channels, with the added benefit that we build stronger, longer-lasting ties directly with our customers.

![LOGO](g212165g22a01.jpg)

![LOGO](g212165g65f35.jpg)

In addition to our company-owned retail showrooms, we depend on a network of independent dealers and distributors to distribute a majority of our pianos and all of our band instruments. We believe that we have a robust network of dealers and distributors with deep knowledge of the markets in which they operate. However, there is no assurance that they will continue to generate sales at historical levels. See "Risk Factors—Risks Related to Our Reliance on Third Parties—We generate most of our sales through independent dealers and distributors." The comprehensive family of brands we offer allows us to serve as the exclusive supplier to many of our piano dealers, and our dealers are also awarded exclusive territories to promote robust marketing and sales programs, promotional expenditures and loyalty. We also bolster our dealers through the provision of marketing and sales

------

##### [**Table of Contents**](#toc)
programs and materials, inventory management support, sales training, customer service and technical assistance.

![LOGO](g212165g49a49.jpg)

------

Note: Showroom locations, Steinway units and piano net sales data are presented for the year ended December 31, 2022.

Finally, we are finding new and relevant ways to sell to smaller, previously unrepresented territories. We have created a team of Educational Sales Managers that travel and sell direct to institutions and customers in territories not represented by a retail store or a dealer.

Within our Band segment, our Conn-Selmer Department of Education maintains close connections to educational institutions, often the ultimate customers of our band and orchestral instruments. Conn-Selmer is an industry leader in providing support and advocacy tools specifically tailored to music education through our educational outreach team. Through our coast-to-coast School Partnership program, Conn-Selmer maintains a specialized team of educational support managers who provide personalized service and support, customized lease and purchase programs, as well as artist and clinician funding. Conn-Selmer also provides partnering schools with free access to our instrument inventory management system, which helps customers manage their long-term supply needs and track inventory age and condition. These initiatives serve to deepen our institutional relationships and supplement demand for our instruments.

***Our vertically-integrated supply chain affords numerous operational advantages.***

Our commitment to quality extends throughout our entire supply chain. Historically, we have partnered with some of the most respected suppliers in the industry. To streamline our process, better control quality of production and ensure continuity in vendor business, at opportune times, we have strategically acquired significant key parts suppliers: Kluge GmbH, the largest piano keys manufacturer in Europe; O.S. Kelly, the largest piano plate manufacturer in the United States; and most recently in 2019, Louis Renner, which we believe is one of the world's finest and most widely respected producers of piano action parts.

By integrating these suppliers into our controlled manufacturing process, we can ensure that *Steinway-*caliber quality is preserved and more seamlessly improved upon across our key components. In addition, with these acquisitions, we are now the primary supplier of spare parts for used *Steinway* pianos, giving us the opportunity to reach a broader array of customers through the sale, rebuilding and restoration of certified pianos and set the standards for quality in the resale market.

***We have a long history of innovation and have developed what we believe to be the premier technology in the piano industry.***

We continue to innovate, adding 17 distinct new patents to our portfolio in the last decade to reach a current total of over 150 patents over the course of our history. The *Steinway* pianos we produce today are the best and most advanced pianos we have ever produced.

------

##### [**Table of Contents**](#toc)
The introduction of the *Steinway Spirio* in 2015 was a culmination of years of investment, research and development and technological expertise. *Spirio*'s high resolution playback system uses proprietary software to measure hammer velocity (up to 1,020 dynamic levels at a rate of up to 800 samples per second) and proportional pedaling – for both the damper pedal and soft pedal (up to 256 pedal positions at a rate of up to 100 samples per second). We consider the *Spirio* technology to be a masterpiece of artistry and engineering, delighting listeners with recorded performances of artists, with what we believe to be the same level of intimacy and nuance as a live performance. We further enhanced *Spirio* in 2019 with the introduction of *Spirio \| r*, which enables recording, high-resolution editing, and playback, providing educational institutions and professional artists with new tools and opportunities and to seamlessly connect and integrate with multiple musical environments. In 2021 we released our latest *Spirio* feature, *Spiriocast*, which allows for performances to be streamed live, in sync with video and audio, from one *Spirio \| r* piano to others anywhere in the world.

Our *Spirio* technology provides access to our large and diverse *Spirio* music library, which includes performances recorded exclusively for *Spirio* and produced by us, offering performances from an incredible roster of hundreds of Steinway Artists. A collection of these recorded works is also synched with video for an even more engaging and unique performance at home. In addition, we pioneered technology that allows *Spirio* pianos to showcase historical performances, synched with video, by Steinway Immortals including Glenn Gould, Duke Ellington and Vladimir Horowitz. Each month, the *Spirio Spotlight* showcases all new content—music, videos and curated playlists—which is automatically downloaded to every *Spirio* piano, allowing us to drive value for and deepen our connection to our customers.

![LOGO](g212165g25c15.jpg)

These innovations fortify our reputation as an industry leader in musical instrument manufacturing and strengthen our offerings relative to our competition, including legacy *Steinway* pianos. *Spirio* has been a key driver of our growth, comprising approximately half of *Steinway* piano sales in 2022. With the evolution of our *Spirio* technology, we have built an experienced, high-tech, cutting-edge Music and Technology team that we continue to leverage for future opportunities, technological advancements, and product offerings, always striving to create new avenues to grow our brands and product portfolio. Our recent investments in innovation have dramatically expanded our target audience, increased our relevance to consumers and artists, and entrenched our leading competitive position in the piano market.

------

##### [**Table of Contents**](#toc)
![LOGO](g212165g13a00.jpg)

***We are the clear brand of choice among the professional community.***

The *Steinway* piano was the instrument of choice for approximately 97% of concert pianists when performing with orchestras across the globe during the 2018–2019 concert season, none of whom are compensated to use or endorse *Steinway*. These artists, many of whom perform at the pinnacle of the music industry, influence consumption trends across our customer base. For decades, we have cultivated relationships with the most talented pianists from nearly every genre, including Jon Batiste, Billy Joel, Lang Lang and Regina Spektor.

We continue to source and grow these relationships through our Steinway Artists program. This program encompasses all genres of music and includes renowned musicians such as Martha Argerich, Ahmad Jamal, Diana Krall, Charlie Puth and Yuja Wang. We select our Steinway Artists through a rigorous application process that can last up to a year, requires applicants to already own a *Steinway* piano and have a recommendation from an existing Steinway Artist or a Steinway & Sons dealer. For our Steinway Artists, we have a concert and artist bank of *Steinway* pianos, many of which are permanently located at leading concert venues. We also transport our pianos to any location where a Steinway Artist is performing, ranging from the biggest music festivals to the hardest-to-reach locations, including an iceberg in the Arctic Ocean. These programs strengthen our relationships and standing with the professional community and also allow us to constantly solicit feedback from the most qualified sources: top concert pianists.

![LOGO](g212165g13b00.jpg)

Leading educational institutions also choose *Steinway*, and we maintain relationships with nearly all of the top music schools across the world—which we believe cements our position as the world's

------

##### [**Table of Contents**](#toc)
premier piano manufacturer and instills young artists globally with a devotion to *Steinway* pianos at the onset of their careers. Our All-Steinway schools provide pianos that inspire students to realize their artistic talents and best prepare them to compete at the highest level in the professional world. In addition, we maintain a dedicated institutional sales team that provides a suite of customized resources to colleges, universities and conservatories, including inventory analysis tools, fundraising programs, lease-to-own options, factory seminars and technical service guidelines.

We are proud of our strong market share among professionals and institutions, and believe this validates our meticulous artisan process and the quality products we produce. This endorsement by the professional and institutional community informs and drives consumer demand of individuals searching for high quality pianos for the home.

***We have an experienced management team and shareholder group committed to serving as stewards of our brands.***

Our management team, led by our Chief Executive Officer, Benjamin Steiner, has extensive industry experience and global expertise and is committed to preserving and further expanding the legacy of our brands. The management team represents a broad foundation of experiences spanning expertise in sales, marketing, manufacturing, technology and innovation and strives to conserve a deep continuity with Steinway's rich heritage. In addition, our Americas, EMEA and APAC regional leaders have intimate local knowledge of their respective geographies, allowing us to navigate the nuances of the piano market across all of our operations.

Our Chief Executive Officer, Mr. Steiner, led the investment by John Paulson and certain affiliated entities in 2013 and has been associated with our company ever since, joining the Steinway team in 2016 and subsequently being appointed as Chief Executive Officer in August 2021. During his years with our company, Mr. Steiner has connected John Paulson's vision with our management team's industry and institutional knowledge, strengthening our business through operational and digital innovation while enhancing our stature within the music industry.

The talent and industry expertise of the members of our management team make our company well positioned to realize its growth potential. Our President of Steinway Asia Pacific, Wei Wei, brings a deep knowledge of the region and marketing expertise from her past experience as Director of Marketing and Sales to her current position overseeing this particularly fast-growing region. Eric Feidner serves as our Chief Technology and Innovation Officer managing the teams responsible for music technology in product development. With his accomplished background in technology, music and e-commerce, having previously founded ArkivMusic and served in executive positions at start-ups N2K, Inc. and Winstar Communications, Eric Feidner is expected to help expand the market for *Steinway* pianos. Our Chief Financial Officer, Maia Moutopoulos, also brings years of expertise to our management team. Before joining Steinway's corporate finance team in 2014, Maia Moutopoulos served for eight years as the Accounting Manager at Steinway Inc., our Americas piano division, bringing an intimate knowledge of the company's financial structure to her role.

Furthermore, John Paulson, founder of Paulson & Co., is one of the most prominent names in the financial industry. John Paulson's reputation and knowledge—both operationally and financially—have proven to be key assets for Steinway and our people. John Paulson's primary goal has been to ensure the long-term success of our business and the continued preeminence of the *Steinway* brand, and as our controlling stockholders, John Paulson and certain affiliated entities play a central role in creating our strategic vision and setting our long-term trajectory. As testament to this commitment, one of the first initiatives undertaken by John Paulson post-acquisition was to fortify our technological capabilities with significant investment in music technology, resulting in the successful launch of the *Steinway Spirio* piano, and our total capital expenditures have more than tripled since 2013. After this offering,

------

##### [**Table of Contents**](#toc)
John Paulson and certain affiliated entities will hold a significant portion of our common stock, including all of our Class B common stock, will control the direction of our business, and so long as they do so, will prevent you and other stockholders from influencing significant decisions of our business.

**Our Growth Strategies** 

***Innovate in technology, including through Spirio.***

We believe our *Steinway Spirio* high-resolution player pianos are revolutionary for our industry and we have consistently advanced the technology since its original debut in 2015. We built upon our initial launch of *Spirio* with the introduction of *Spirio \| r* in 2019, which enabled recording, high-resolution editing and playback capabilities. In 2021, we released a new software feature, *Spiriocast*, which allows instant streaming of live performances, perfectly in sync with audio and video, from one *Spirio \| r* piano to others around the world. Our *Spirio* instruments play back the performances of renowned concert pianists, record and replay a consumer's own performances, and also allow for high-resolution editing of such recordings. Our *Spirio* music library includes thousands of exclusive performances by hundreds of artists, many of which are synched with video, all accessed with the touch of an iPad and enjoyed in a consumer's own home. Our *Spirio* music library is expanded monthly and automatically updated, increasing consumer value over time while also deepening our connection to our consumers.

With this evolution, enabled through *Spirio* technology, we believe the *Steinway* piano has been recast—not only as the preeminent high-performance piano, but also as a unique luxury entertainment system for the home. Our target market has expanded significantly with this development to now include recreational music lovers who may not play the piano but can nonetheless enjoy a moving musical experience at home. In fact, 67% of our *Spirio* customers from 2015 to 2022 reported that they are non-piano players. We have also increased our brand's relevance to customers and artists, differentiating our product from older *Steinway* models that may have been considered by customers on the used market.

We have seen significant demand for our *Steinway Spirio* player pianos; sales of our *Spirio* and *Spirio \| r* pianos grew at a CAGR of over 28% between fiscal years 2016 and 2022 and represented approximately 34% of Piano segment net sales in fiscal year 2022. We believe there is still significant room for growth in *Steinway Spirio* sales. Our *Spirio* player pianos sell at a premium to other *Steinway* models, leading to increased net sales and profit per unit sold.

We continue to advance the depth and breadth of our technology, with each *Spirio* generation continually improving on the last. In addition, the investments we have made in our technical capabilities have allowed our company to build an infrastructure of technological expertise, laying the foundation for further innovation across our instrument portfolio and potentially in adjacent markets.

Our Conn-Selmer business also continues to invest in digital technology to strengthen our relationships with music educators and students. Our recently acquired MusicProfessor digital lesson platform gives music educators a suite of teaching aids for in person, hybrid, and remote learning as well as a pedagogically-driven experience for new players without formal guidance.

***Expand our company-owned retail locations and improve distribution.***

We are driving top-line growth by building out our company-owned retail showroom presence in strategic high-growth metropolitan areas, providing the opportunity to cultivate deeper and more durable relationships directly with our end customers and to strengthen our ability to manage our luxury brand image. In addition, increasing sales through our direct outlets allows us to realize a larger share of margin compared to sales through wholesale channels.

------

##### [**Table of Contents**](#toc)
To capitalize on this higher profit opportunity, we have improved many of our existing direct outlets and opened new locations, which feature high quality buildouts, curated merchandise and knowledgeable and effective sales employees. We have opened or renovated 28 of our 34 retail showrooms since 2013. These retail stores are strategically located across the United States, including locations in New York, Beverly Hills, Chicago, San Francisco and Miami; in cultural hubs in Europe such as London, Paris, Berlin and Vienna; and also in key APAC metros that include Shanghai, Beijing, Xi'an and Tokyo.

These initiatives have increased the percentage of sales that come from our retail operations over time, representing approximately 41.7% of all Piano segment sales in fiscal year 2022. We believe that continuing to expand our network of retail showrooms will enable us to increase the demand for our pianos, while also improving our margins, strengthening customer relationships and expanding our customer reach.

Wholesale distribution remains our largest channel by volume of instruments. Many of our dealers have been in the business for almost as long as we have, and we always encourage exclusive relationships with us. They have intimate knowledge of their local markets and deep connections within their musical communities. We work with our dealers to further elevate their operations, including by providing retail design templates, encouraging location optimization, offering enhanced sales training, providing promotional materials and sales leads, and arranging ongoing technical support. These initiatives fortify our relationships with our dealers and also ensure a *Steinway*—level customer experience across our network. In addition, we continue to evaluate underperforming territories for further potential retail expansion.

Finally, we have seen successful sales results with our recently launched Steinway Educational Sales Manager program, which sends *Steinway*-trained sales managers to institutions in territories that are not represented by a dealer or a company-owned retail store. We continue to consider and implement new methods to reach underpenetrated markets.

***Expand in China, a vast and rapidly growing market for our products.***

China represents a unique market for *Steinway* due to two primary cultural and structural factors: a deep-rooted reverence for classical music, specifically piano music, and a sizeable and rapidly expanding middle and upper class with an appetite for luxury Western products. China is the largest global market for pianos and has approximately 40 million practicing pianists, roughly seven times the approximately six million practicing pianists in the United States. Currently there are approximately 30 million children in China taking piano lessons, compared to less than 10 million in the rest of the world, suggesting that the majority of children playing the piano globally are in China. Initiatives pursued by the Chinese central authorities to promote traditional forms of childhood recreation further bolster these organic dynamics, which we expect to provide further tailwinds to our business in the region.

In addition to these favorable trends, the *Steinway* brand is revered in China, where all of the 13 national conservatories use *Steinway* pianos, with four such conservatories serving as All-Steinway schools. We have taken steps to continue building our brand resonance in the region by actively partnering with celebrity Chinese concert pianists, such as Lang Lang, opening company-owned retail showrooms in strategic Chinese metro areas, promoting a full and diverse sales and marketing calendar nationwide, including, on average, over 215 events at each of our retail showrooms annually, and adding new tracks to our *Spirio* library that cater to the Chinese consumer.

Despite the prevalence of piano playing in China and our brand strength in the region, we have historically been underpenetrated in the country, selling approximately half as many *Steinway* grand

------

##### [**Table of Contents**](#toc)
pianos in China as in the U.S. market. However, as China continues to develop and accumulate wealth, we will seek to capture the growing demand for ultra-premium pianos by private customers. Over the last 20 years, we have transformed our business in China to sell more pianos to private customers rather than institutions. For example, over 90% of *Steinway* grand pianos sold in China in fiscal year 2001 were to institutional customers, compared to approximately 13% in fiscal year 2022. *The Wealth Report 2022*, published by Knight Frank, forecasts the number of UHNWI in China to grow by 41% over the five years from 2021 to 2026 while the combined population of UHNWI and HNWI is expected to reach 18.1 million, representing the second-largest wealth market globally. Our and third-party forecasts of growth in China are based on a number of assumptions, and should be read in conjunction with "Risk Factors—Risks Related to Our Business—Our estimates of market opportunity and forecasts of market growth, including in China, may prove to be inaccurate and there is no guarantee that demand for our products will grow as expected, or that we will be able to grow our business at similar rates, if at all."

![LOGO](g212165g00m05.jpg)

![LOGO](g212165g12a48.jpg)

------

##### [**Table of Contents**](#toc)
***Grow our average net sales per unit by expanding our special, limited-edition and bespoke instrument business.***

The investments we have made in our manufacturing facilities have made our factories nimbler and more efficient, allowing us to increase our range of SKUs. We have built a team dedicated to creating new and exceptional design concepts, sourcing unique luxury materials and collaborating with specialty artisans to produce the most exquisite *Steinway* pianos. We have a long legacy of producing custom pianos, and with our advances in manufacturing capability and our investment in the right team, we are now able to produce a significantly larger number and spectacularly varied array of custom models. These include our Bespoke and Art Case custom *Steinway* pianos, our limited-edition *Steinway* pianos, our *Crown Jewel Steinway* collection of exotic wood veneers, and our special collections. These products not only increase the selection offered to our most discerning customers, but also allow us to drive meaningful increases in average selling price.

We believe we can further increase our average net sales per unit through greater customer adoption of our special instruments, including by: (1) continuing to expand our range of special and custom instruments; (2) investing in our manufacturing capabilities to increase capacity and decrease lead times for these instruments; (3) honing our marketing efforts for such instruments; and (4) capitalizing on the growing population of UHNWI, particularly in China. Our manufacturing advances to date have allowed us to increase the percentage of special pianos produced as part of total *Steinway* grand pianos manufactured at our Hamburg factory, which supplies our growing business in China, from approximately 6% to 13% between fiscal years 2016 and 2022.

Our Band segment has also made strides in building demand for premium instruments offered within our Conn-Selmer family of brands. We have launched over 190 new or improved products since 2020, including our re-imagination of the most coveted line of trumpets on the market, the *Bach* 170, 180, and 190 series and the release of new *Ludwig* hardware to expand our growing *Ludwig* acoustic drum market. Alongside our Artist Select program, a celebration of our best horns which are hand-selected by our master artists, we have recently launched *ConnSonic*—a proprietary suite of processes for optimizing musical instrument acoustics. We believe instruments created using *ConnSonic* feature greater depth and efficiency of tone production than conventional instruments.

**Our Segments and Brands** 

Our company is a global manufacturer and distributor of world-class pianos and band instruments. We operate our business in two segments: Piano and Band. In fiscal year 2022 and 2021, our Piano segment contributed approximately 74.0% and 75.5%, respectively, of our total consolidated net sales and our Band segment contributed 26.0% and 24.5%, respectively, of our consolidated total net sales.

***Piano Segment***

We sell our pianos under our Piano segment, Steinway & Sons, which includes our *Steinway*, *Boston* and *Essex* brands. Select *Steinway* models also feature our *Steinway Spirio* technology, offered through both our *Spirio* and *Spirio \| r* pianos. Through these brands, we provide a comprehensive offering of what we believe are the world's finest pianos at three distinct price points.

*Steinway* 

For 170 years, our innovative designs and superior craftsmanship have established our pianos as what we believe are the world's finest pianos and *Steinway* as a luxury brand. At retail, the price of our *Steinway* grand pianos ranges from approximately $85,000 to approximately $360,000*.* Our special, limited-edition and bespoke pianos garner significantly higher selling prices, with our Frank Pollaro-

------

##### [**Table of Contents**](#toc)
designed *Fibonacci* piano selling for $2.4 million in 2016. Our *Steinway* pianos are available in the following grand piano models (from largest to smallest):

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• Our **Model D Concert Grand**, our largest grand piano, is the pinnacle of concert grands and the overwhelming choice of
concert pianists and educational and cultural institutions throughout the world;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• Our **Model B Classic Grand** is designed for spacious homes, smaller recital halls, auditoriums, and broadcasting,
recording or professional studios;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• Our **Model A Salon Grand** was first designed by C.F. Theodore Steinway in 1878 and reintroduced in 2005 due to popular
demand. It is known for delivering a grand sound in a medium-sized piano;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• Our **Model O Living Room Grand**, the largest of our "small grands" offers remarkable depth and resonance
while requiring less space than full-sized grands;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• Our **Model M Medium Grand** is a grand piano with a full tone, yet small enough to fit in nearly any home or apartment;
and

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• Our **Model S Baby Grand** is a small grand piano suitable for the home or apartment where space is more limited.

We also offer a *Steinway* **Model K Professional Upright** piano, which is made in the same factory as our grand pianos, using the same materials, techniques, conditioning processes and artisans. Introduced in 1903, our *Steinway* upright piano features a soundboard larger in area than many grand pianos produced by other manufacturers for a larger, more resonant tone. At retail, the price of our *Steinway* Model K Professional Upright ranges from approximately $40,000 to approximately $70,000.

In 2015, we introduced our high-resolution player piano, the *Steinway Spirio.* A piece of artistry and engineering, *Steinway Spirio* pianos*,* playable like any other *Steinway* piano, also play themselves. We continue to advance our *Spirio* technology, releasing the *Spirio \| r* piano in 2019, which offers recording and playback capabilities, followed by the *Spiriocast* software in 2021, which offers new live streaming technology. Our *Steinway Spirio* pianos significantly expand our customer base to include non-piano players and music enthusiasts of all kinds.

In addition to our standard portfolio of piano offerings, we also manufacture custom pianos to serve the demand of ultra-high end customers. Our Bespoke, Art Case and *Crown Jewel Steinway* collections employ innovative design concepts, unique luxury materials and specialty artist collaborations to create one-of-a-kind instruments. These products allow us to serve a broader customer base and also meaningfully increase the average selling price within our Piano segment. To capitalize on this opportunity, we have equipped our factories to produce significantly larger volumes and more variations of custom pianos.

------

##### [**Table of Contents**](#toc)
![LOGO](g212165g32v36.jpg)

Our *Steinway* customers include individual households and professional artists, with *Steinway* representing the brand of choice for approximately 97% of concert pianists when performing with orchestras across the globe during the 2018-2019 season, which was the last full concert season prior to the date of this prospectus due to the COVID-19 pandemic. The relationships we maintain with concert pianists are a defining trait of our brand—and we actively build and strengthen these ties through our Steinway Artist program. This program forms a community of approximately 1,900 premier pianists from every genre and includes such acclaimed artists as Martha Argerich, Ahmad Jamal, Billy Joel, Diana Krall, Charlie Puth and Yuja Wang. Our Steinway Artists are selected through a rigorous application process which requires every applicant to independently own a *Steinway* piano; we do not provide a piano to our Steinway Artists in exchange for an endorsement. We believe this program serves to cement our artist relationships while deepening our credibility among leisure piano consumers.

In addition, we sell used and restored *Steinway* pianos and we recently introduced a certified pre-owned program for *Steinway* pianos. Due to both the potential savings associated with buying a used instrument and the durability of the *Steinway* piano, a relatively large market exists for used *Steinway* instruments. We have developed the infrastructure to sell certified pre-owned *Steinway* pianos directly to our customers. Our certified pre-owned business has two distinct advantages relative to other resellers: we are able to certify that the *Steinway* piano has undergone a rigorous 74-point quality assessment to ensure authenticity, condition and performance and that any repair or replacement is done with 100% genuine *Steinway* parts, establishing peace of mind; and we offer a three-year limited warranty covering any defects in material or workmanship.

*Boston* 

In 1992, we introduced the *Boston* piano to provide our dealers with quality pianos that retail at a more attainable price point than our *Steinway* models. We offer five models of grand pianos and five models of upright pianos under our *Boston* brand. Our performance edition *Boston* pianos are geared towards pianists and institutions, and include many of the unique design specifications developed by our *Steinway* engineers, such as the *Steinway-*patented, vertically laminated maple bridge that yields

------

##### [**Table of Contents**](#toc)
 *Boston's* characteristic richer, fuller tone. We also offer the *Boston* upright models, which are designed for those customers who appreciate the quality of our pianos but desire a lower price point and footprint. We exercised great care in developing and engineering our *Boston* pianos, and have patented three specific components of the *Boston* piano design. We believe our *Boston* grand and upright pianos achieve a superior playing experience at a highly competitive price level. At retail, the price of our *Boston* grand pianos ranges from approximately $15,000 to approximately $60,000. The price of our *Boston* uprights at retail ranges from approximately $10,000 to approximately $20,000.

*Essex* 

We believe that beautiful piano styles and finishes can and should be possible in every price range, and in 2001 we introduced the *Essex* line of pianos, priced below our *Boston* line. At retail, the price of our *Essex* grand pianos ranges from approximately $10,000 to approximately $20,000. The price of our *Essex* uprights at retail ranges from approximately $5,000 to approximately $10,000.

Our *Essex* brand includes three grand pianos, ranging in various sizes. We offer our largest assortment of upright pianos under the *Essex* brand umbrella, with eleven upright piano models in total. Our *Essex* pianos are also based on exclusive *Steinway-*patented design specifications and feature a special wide-tail design that enriches their sound, enabling the musician to play with maximum expression and control.

Neither our *Boston* nor *Essex* pianos are available with our *Steinway Spirio* technology, but all *Boston* and *Essex* pianos are sold with the Steinway Promise: a trade-up program that varies across regions and channels but generally allows *Boston* and *Essex* pianos to be traded up for more expensive *Steinway* pianos, with a trade-in credit up to an amount equal to the original purchase price. This is particularly attractive to parents of young children—who may want to trade up to a *Steinway* as their child progresses in their piano studies and ability.

Our *Essex* customers include individual households and professional artists that are typically earlier in their careers than our *Steinway* concert artists. Both our *Boston* and *Essex* pianos are also a popular choice for schools, teaching studios and students.

***Band Segment***

Through our Band segment, we sell musical instruments and accessories under highly regarded brand names widely recognized throughout our industry. In fiscal year 2022 and 2021, the Band segment represented approximately 26.0% and 24.5%, respectively, of total net sales. These brands, consolidated under the Conn-Selmer umbrella, include:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• *Bach* trombones, trumpets, cornets and flugelhorns;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• *C.G. Conn* flugelhorns, French horns, trombones and tubas;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• *Glaesel* string instruments (i.e., cellos, double bass, violas, and violins);

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• *Holton* baritones, euphoniums, French horns and tubas;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• *King* band and marching brass instruments (i.e., sousaphones, trombones, trumpets and tubas);

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• *Leblanc* clarinets;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• *Ludwig* and *Ludwig-Musser* drums and other percussion instruments;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• *Prelude* woodwind and brass instruments;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• *Scherl & Roth* string instruments (i.e., cellos, double bass, violas and violins);

------

##### [**Table of Contents**](#toc)
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• *Selmer* bassoons, clarinets, flutes, oboes, piccolos and saxophones *;* 

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• *Henri Selmer Paris* clarinets and saxophones; and

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• *Yanagisawa* saxophones

![LOGO](g212165g25v00.jpg)

We enjoy leading market positions through many of our Conn-Selmer brands, including the largest market share in B-flat professional trumpets and student low brass instruments, such as sousaphones and euphoniums in the U.S. market. Over 54% of Conn-Selmer sales in fiscal year 2022 were generated through our preferred dealer network to schools and families who participate in beginning music education programs. Of the remaining sales, many are used by students in marching bands, concert bands, orchestras, and other school-related performances.

**Our Legacy of Innovation** 

Our company is built on a legacy of innovation, which continues today. The first Steinway patent was granted in 1857, and since that time we have added over 150 patents to our portfolio. We believe we have disrupted our industry at each stage of our journey—from inventing the iconic curved shape of the grand piano in 1880, to most recently introducing what we believe to be the world's finest high-resolution player piano, *Steinway Spirio*. The introduction of the *Spirio* technology was a culmination of years of investment, research and development and technological expertise.

We introduced the *Steinway Spirio* in 2015, followed by the launch of *Spirio \| r* in 2019. *Spirio \| r* enables recording, high-resolution editing and playback. Our *Steinway Spirio* technology features:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• A comprehensive music library, with thousands of performances from current Steinway Artists and Steinway Artist Immortals
including Duke Ellington and Glenn Gould, as well as *Spirio* sync videos, available at the touch of a button on an accompanying iPad. Every month the library expands, with new music automatically uploaded to each *Steinway Spirio* piano
every month.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• With *Spirio \| r,* customers have the capability to record and listen to performances in state-of-the-art high-resolution. Customers also have the ability to save and share recordings in multiple file formats.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• With *Spirio \| r,* customers have access to high-resolution editing on an accompanying iPad, allowing them to modify
note velocity and note duration, correct wrong notes, change pedal data and delete or add time.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• Seamless connectivity, as *Spirio* integrates into multiple musical environments via WiFi, Ethernet, Bluetooth, USB, MIDI-In & MIDI-Out, and HDMI video out connections.

------

##### [**Table of Contents**](#toc)
Furthermore, in 2021, we launched *Spiriocast*, a feature which permits customers to instantly stream live performances, synched with video and audio, from one *Spirio \| r* piano to another—or to many at the same time—across the world.

![LOGO](g212165g62c00.jpg)

We also continue to innovate in our manufacturing facilities. In recent years, we have invested millions of dollars across our factories to improve our instruments. Specific recent investments include new facilities and machinery for our O.S. Kelly cast iron plate foundry in Springfield, OH, and a new Rim Computer Numerical Control ("CNC") machine in our Astoria, New York facility. We are also investing in a new lacquer application facility in Hamburg, Germany. As a result of these and other investments and improvements, the *Steinway* pianos we are building today are significantly better than those we made even just a decade ago. These improvements and innovations provide us with a competitive advantage relative to used *Steinways* and offer compelling reasons for customers to pay more for a new piano when they are in the market for a *Steinway*.

**Our Manufacturing Process** 

Our *Steinway* pianos are still handmade at our manufacturing facilities in Astoria, New York, and Hamburg, Germany, as they have been since 1873 and 1880, respectively. Our meticulous production process requires at least six months per piano.

We believe our production process for our *Steinway* pianos sets the industry standard for craftsmanship and quality. We exercise extreme care at every step of the process. This starts from choosing only the highest quality wood, which we dry for over two years, allowing water to evaporate naturally to achieve the world's best acoustic quality. From there, our technicians fixate on each detail, from manually nailing hundreds of parallel coded pins to each *Steinway* piano bridge to guide the piano strings, to measuring the precise weight and balance of each piano key, to playing each piano up to 3,200 times to adjust and fine tune the sound. The culture at our *Steinway* facilities is not a race against time; we are committed to building the best piano possible.

Like *Steinway* pianos, the *Boston* and *Essex* models use all-wood action parts and incorporate Steinway & Sons' latest design specifications, engineering standards and commitment to high-quality sound. The original *Boston* piano was designed from the ground up at our Astoria, New York facility and today our *Boston* pianos are produced in Hamamatsu, Japan and near Jakarta, Indonesia, while our *Essex* pianos are manufactured in Guangzhou, China.

Our Conn-Selmer portfolio of instruments is manufactured in our U.S. production facilities in Elkhart, Indiana, Eastlake, Ohio and Monroe, North Carolina as well as at facilities in China, Taiwan and Vietnam. Conn-Selmer also serves as U.S. distributor for Henri Selmer Paris woodwinds and Yanagisawa saxophones.

------

##### [**Table of Contents**](#toc)
**Our Distribution Networks** 

***Piano Segment***

We sell our new pianos directly to consumers through company-operated showrooms and directly to select institutional accounts. We also sell through a global, expansive network of approximately 200 experienced third-party dealers.

*Retail.* We currently operate a network of 34 company-owned retail showrooms globally and employ knowledgeable salespeople, many of whom are musicians, to assist customers and represent our brand. We have strategically selected our showroom locations, focusing on wealthy metro areas ranging from New York to Beverly Hills, Chicago, San Francisco and Miami; across Europe with locations in cultural hubs including London, Paris, Vienna and throughout Germany; and in key APAC locations including Tokyo and Shanghai and in Beijing, where we launched our APAC flagship store in 2017. Our retail sales have increased at a CAGR of 15.2% from $75.9 million to $177.5 million between fiscal year 2016 and fiscal year 2022, reaching 41.7% of our total Piano segment net sales in fiscal year 2022. The outsized growth of this channel has ushered in higher profitability, as pianos sold through direct channels capture a significantly larger share of margin compared to traditional wholesale channels, with the added benefit that we build stronger, longer-lasting ties with our customers.

![LOGO](g212165g63e00.jpg)

*Third-Party Dealers.* We have also cultivated a network of approximately 200 third-party dealers with intimate local market knowledge and close ties to local musical communities. We believe that our dealer network is difficult to replicate and represents a key competitive advantage. The breadth of our brands across multiple price points has allowed us to displace lower-priced brands and to facilitate more exclusive arrangements with our dealers. We serve as the exclusive supplier to many of our piano dealers, and our dealers are also awarded exclusive territories to promote robust marketing and sales programs, promotional expenditures and loyalty. We work directly with our dealers and bolster their operations through the provision of marketing and sales programs and materials, inventory management and support, sales training, customer service and technical assistance.

*Underserved Markets.* We are also implementing unique distribution methods to reach smaller markets that were previously underserved by our traditional distribution network. We have created a team of Educational Sales Managers that travel and sell directly to institutions or territories not represented by a retail showroom location or dealer. By creating this program, institutions that are not geographically close to our existing dealer network or are otherwise not in close contact with us are now handled directly by Steinway. Educational Sales Managers even sell direct to individual customers in those untouched territories. Like sales from our company-owned retail stores, sales direct to institutions capture a significantly larger share of the margin compared to traditional wholesale channels.

------

##### [**Table of Contents**](#toc)
***Band Segment***

Our band, string and percussion instruments and related accessories are distributed worldwide through over 1,300 independent musical instrument dealers and distributors. In addition, we maintain a dedicated institutional sales team that provides a suite of customized resources to public and private education institutions, colleges, universities and conservatories, including inventory analysis tools, supplemental educational resources through our MusicProfessor product, fundraising programs and accredited professional development resources.

**Marketing and Customer Support** 

***Piano Segment***

Our success has been driven organically by many of the world's most beloved musicians who choose to use our pianos time and again on the world's biggest stages, reinforcing our well-established brand. We have found that the experience people have watching their favorite artists perform on our pianos generates exceptional demand for our products. We have created a number of programs to support our brand ambassadors and further promote our brands.

*Steinway Artist Program.* Steinway Artists are world-class pianists who voluntarily endorse Steinway by selecting the *Steinway* piano. Our Steinway Artist program is unique in that we do not pay artists to endorse our instruments. To become a Steinway Artist, a pianist must not only meet certain performance and professional criteria—he or she must also own a *Steinway* piano. The involvement of these renowned artists in our marketing programs helps reinforce recognition of the *Steinway* brand and its association with quality. The Steinway Artist program currently includes approximately 1,900 of the world's finest pianists who perform on *Steinway* pianos.

*Young Steinway Artist Program and All-Steinway Schools.* Often a formal affiliation with *Steinway* has not been possible for an emerging artist since all Steinway Artists must personally own a *Steinway* piano. In an effort to reach out to young pianists at an early point in their burgeoning careers, we developed the Young Steinway Artist program. This program allows us to consider pianists between 16 and 35 years of age who own either a *Boston* or an *Essex* piano. The select group of talented musicians chosen for the Young Steinway Artist program has the distinction of an affiliation with the Steinway Artist family as well as access to the worldwide resources of Steinway. Similar to the Young Steinway Artist program, we build relationships with the next generation of artists through our All-Steinway School program. These schools include some of the world's leading conservatories and through them we offer students and young artists the opportunity to play and study music on our instruments. All-Steinway schools exclusively use *Steinway* and *Steinway*-designed instruments, enabling music education on some of the world's finest piano models.

*Concert and Artist Piano Bank.* To ensure that all pianists, especially Steinway Artists, have a broad selection of instruments to meet their individual touch and tonal preferences, we maintain the Concert and Artist Piano Bank. The Concert and Artist Piano Bank includes approximately 330 instruments worldwide. Of these instruments, approximately 235 are located in the United States. Many of these pianos are housed at prominent concert venues such as Lincoln Center and Carnegie Hall. The Concert and Artist Piano Bank promotes our instruments in the music industry and provides management with continual feedback on the quality and performance of recently produced instruments from our most critical customer, the professional pianist. The Concert and Artist Piano Bank instruments are generally sold after five years and replaced with new pianos.

*Steinway Service Program.* We offer technician services directly to owners of our *Steinway* and *Spirio* pianos. Our *Steinway*-approved piano technicians have many years of experience and are able to give expert advice to ensure the highest-level of service for our pianos, ranging from standard tuning

------

##### [**Table of Contents**](#toc)
to providing adjustments for the optimization of touch and tone. Our customers rely on us to connect them with technicians in their area equipped to meet the maintenance needs of a *Steinway* piano. Through these services, we maintain a relationship directly with our customers even after they have purchased one of our pianos and continue to work with them to make sure their *Steinway* experience remains at the highest quality.

*Events and Recitals.* Sharing the *Steinway* experience through live performances on our pianos is an important part of our business. Most of our *Steinway* showrooms have recital rooms precisely for this purpose, gathering music students and music enthusiasts alike to share in the inspiring sound and quality of our pianos. Events can also be a significant source of sales leads and we are able to track the success of these events in bolstering our net sales and reach. Supporting local artists and musicians is important to us. We provide instruments and technical services for hundreds of concerts and events each year, ranging from concert hall recitals to houses of worship to private events.

*Website and Customer Conversion.* In recent years, we have rebuilt our website to enhance our lead generation capabilities. Our leads are very valuable for our business and our system enables us to track and redirect relevant leads to retail stores and dealers for follow-up. Our technology also allows us to track the life of a lead. We use the statistics gathered on lead conversion in order to better tailor our sales training programs and strategies to provide the best customer experience and enhance our sales generation.

***Band Segment*** 

Sales to educational institutions have historically represented a large portion of our Band segment net sales. In North America, we market our products through pods of district sales managers, educational support managers, and inside sales engineers, who are responsible for sales within assigned geographic territories through a dealer network. Each pod is also responsible for developing relationships with band and orchestral directors. These directors represent all levels of music educators, from those who teach elementary school children to those involved at the college and professional levels. These individuals are the primary influencers in the choice of an instrument brand as they will generally refer students to designated dealers for the purchase of instruments.

We believe that our well-established, long-standing relationships with influential music educators are an important component of our marketing and distribution strategy. As part of our band director outreach and support, we operate a Division of Education to provide an educational forum that supports the day-to-day aspects of music classroom management. Led by our Vice President of Education, our educational clinicians travel extensively throughout the United States, lecturing and motivating students, educators and parents on the value of music in a child's development. Within our Education Division, we continue to operate Conn-Selmer Institute ("CSI"), a program which assists graduating music education majors transitioning into teaching careers. CSI also offers refresher courses to experienced music educators, further enhancing our relationships with these key influencers. Through our coast-to-coast School Partnership Program, Conn-Selmer maintains a specialized team of Educational Support Managers who provide personalized service and support, customized lease and purchase programs, as well as artist and clinician funding. Conn-Selmer also provides partnering schools with free access to our instrument inventory management system, which helps customers manage their long-term supply needs and track inventory age and condition. Conn-Selmer continues to invest in tools and resources for educators with the 2021 acquisition of the MusicProfessor business, a digital music lesson tool, adding supplemental teaching resources for music educators.

We also support our dealers and distributors through advertising and promotional activities. We reach our customers through trade shows, educator conferences, print media, direct mail, online

------

##### [**Table of Contents**](#toc)
advertising and promotions, and via personal sales calls. Through content partnerships with our world-class artists, Conn-Selmer connects with beginners, aspiring musicians, and professionals through a range of targeted artists content. We also actively advertise in educator and trade publications and provide educational materials, catalogs and product specifications to students, educators, dealers and distributors.

**Competition** 

***Piano Segment***

*Steinway Pianos.* Our *Steinway* pianos compete with different competitors depending on the markets and regions in which they are sold. We believe *Steinway* pianos hold a unique position at the top of the grand piano market, both in terms of quality and price. While there are many makers of pianos, only a few compete directly with our *Steinway* brand, including Bösendorfer, Fazioli, Kawai and Yamaha.

Because *Steinway* pianos are built to last for generations, a relatively large market exists for used *Steinways,* particularly in the Americas and in Europe. It is difficult to estimate the size of the used piano market because many of these sales are conducted in the private aftermarket, but we believe that used *Steinway* pianos provide the most significant competition in the high-end piano market for our Americas and EMEA regions. Competition from used *Steinways* is less prevalent in China and most of APAC because there is not as large of an installed base of *Steinway* pianos and because of a consumer preference for new products.

In addition, because our *Steinway Spirio* high-resolution player piano opened up a new category of consumers for our company, we are also now competing with other luxury goods outside of the high-end piano market.

*Boston and Essex Pianos.* Our mid-priced pianos compete with brands such as Bechstein and Schimmel, as well as Kawai and Yamaha, who also produce high-end pianos that compete with *Steinway* pianos. By working with manufacturers in Asia, we have been able to benefit from labor costs and manufacturing efficiencies similar to those of some of our primary competitors while offering consumers the added benefit of being able to afford pianos designed by Steinway.

***Band Segment***

We are the largest domestic producer of band, string, and percussion instruments and we have leading market shares in many professional-level instrument markets. Yamaha, a Japanese corporation, is our largest competitor, but we also compete with other manufacturers such as Eastman, Jupiter and Buffet Crampon. We own the rights to distribute Henri Selmer Paris instruments in the U.S. but compete with this brand in the international market. New entrants into the domestic market generally experience difficulty competing due to the need for brand recognition, music educator approval and an effective distribution system.

Competition for sales of student-level instruments in the United States has intensified in recent years. Offshore producers benefit from low labor costs, enabling these producers to offer instruments at highly competitive prices. Imported instruments have also allowed dealers to source their own proprietary lines in an attempt to improve their margins.

**Intellectual Property** 

Steinway pioneered the development of the modern piano with over 150 utility and design patents granted since its founding. In the United States, utility patents generally have a term of 20 years from

------

##### [**Table of Contents**](#toc)
their priority filing date, and design patents generally have a term of 15 years from the date of issuance. The term of foreign patents is similar, but may vary from jurisdiction to jurisdiction. We currently own 22 United States utility patents, five United States design patents, two United States utility patent applications, three United States design patent applications, 18 foreign utility patents, 13 foreign design patents, two foreign utility patent applications and one foreign design patent application. The issued patents in our current portfolio have varying expiry dates, ranging from 2024 to 2036. We do not believe our business is materially dependent upon any single patent. We also have some of the most well-known brand names in the music industry. Our piano trademarks include *Steinway*, *Steinway & Sons*, the *Lyre* design, *Spirio*, *Spiriocast* (registration pending), *Boston*, *Heirloom* Collection, *Crown Jewel* Collection, *Essex, Renner* and *Certified Pre-Owned Steinway* (registration pending). Our band & orchestral trademarks include *Bach, Selmer, C.G. Conn, Leblanc, King, Armstrong, Ludwig, Musser, Holton, Glaesel, Scherl & Roth*, and *WM Lewis & Son*. We consider our trademarks to be important and valuable assets. In the United States and certain other countries, "common law" trademark rights are of indefinite duration, for so long as the marks remain in use in commerce. Trademark registrations in the United States have an initial term of 10 years, and subject to timely filings, fee payments, and other legal requirements, they potentially can be renewed for an indefinite number of renewal terms. The terms of foreign trademark registrations are generally similar, although they may vary from jurisdiction to jurisdiction. It is possible that the termination, expiration or infringement of one or more of our trademarks may have an adverse effect on our business, depending on the trademark and the jurisdiction. Accordingly, we maintain trademark registrations in appropriate jurisdictions on an ongoing basis and vigorously pursue any infringement by competitors or other third parties.

In addition, we generally secure rights to music, videos, and other content in our *Spirio* library and on our platform by obtaining rights and licenses from, and paying royalties or other consideration to, rights holders or their agents. Such licenses typically cover rights with respect to musical compositions and video content, including mechanical rights, public performance rights, synchronization rights, publicity rights, and distribution rights.

Regardless of term length, there is a risk that our patents, trademarks and other intellectual property rights may be invalidated or cancelled as a result of third-party challenges. In addition, we cannot guarantee that we currently hold, or will always hold, every necessary right to use all of the music, videos, and other content that is used or accessed through our *Spirio* library and our platform, and we cannot assure you that we are not infringing or violating any third-party intellectual property rights, or that we will not do so in the future. See "Risk Factors—Risks Related to our Intellectual Property."

**Raw Materials, Component Parts, and Sourced Products** 

Our raw materials consist primarily of metals and woods. The majority of these materials are sourced from the United States and Europe, with the balance coming from Asia. Electronic components are becoming more important with the increase in production of our *Spirio* pianos. For these pianos, we also source semiconductor chips. We manufacture our own piano plates, piano actions and keys to ensure quality and availability of these component parts. Component parts for string and percussion instruments are imported from Europe and Asia. Our *Boston* brand and our *Essex* brand are each sole sourced from manufacturers in Asia. Our *Henri Selmer Paris* instruments, certain component parts, and some of our entry-level band instruments are also sourced from single manufacturers. We continually scrutinize these suppliers and the quality of products that they manufacture for us. We have had adequate supplies of raw materials in the past and continue to monitor the effect of COVID-19 on global supply chains and potential impacts on our business.

**Human Capital** 

Human capital is a crucial factor in our success, in terms of building on our position as a global leader in the ultra-premium piano and musical instrument sector and creating long-term, sustainable

------

##### [**Table of Contents**](#toc)
value. At Steinway, many of our talented employees and craftspeople have been with us for decades, and the average tenure of our production employees in each of our Astoria, New York and Hamburg, Germany factories is approximately 13 years. Our craftspeople do not just feel like family, but often are family, passing down their unique skillset from one generation to the next. To recognize excellence, encourage professional development, and create equal opportunities, we have adopted a number of initiatives. For instance, at our factory in Astoria, New York, we commenced an apprenticeship program in 2019 to emulate the long success of apprentices in our Hamburg factory. In this two-year program, apprentices rotate through the various stations of our full production line. We are proud that our first graduating class of apprentices has now joined our production line in specific roles. We have also recently overhauled and improved our William Steinway University, a comprehensive sales training program for our own retail staff and dealer sales staff, which now includes global training options both in-person and online. In addition, in 2020, we formed our first Diversity and Inclusion committee to cultivate an environment of belonging and inclusion in our workplace and to attract and retain a diverse staff. The work of this committee also aims to forge meaningful relationships with organizations and to develop a Steinway Artist roster that spans broad intersections of genre, background, musical style and personal identities. We have also undertaken an important initiative in our Hamburg manufacturing facility to establish a new remuneration system with the goal of increasing transparency and raising productivity.

As of December 31, 2022, we employed 2,170 people, consisting of 669 salaried employees and 1,501 hourly employees who work primarily in production. Of the 2,170 employees, 1,242 were employed in the United States, 850 were employed in Europe and 78 were employed in Asia. We have over 300 employees working in production at our Astoria, New York manufacturing facility and over 400 employees working in production at our Hamburg, Germany manufacturing facility.

Approximately 46% of our workforce in the United States is represented by labor unions. The following table indicates the union representation and the current status of our collective bargaining agreements in the United States:

---

| | | | | |
|:---|:---|:---|:---|:---|
| **Location** | **Union Affiliation** | **Type of Manufacturing** | **Number of<br>Employees** | **Agreement<br>Expiration** |
|  Springfield, OH | Glass, Molders, Pottery, Plastics & Allied Workers | Piano Plates | 88 | September 30, 2023 |
|  Astoria, NY | United Furniture Workers | Pianos | 259 | December 31, 2024 |
|  Eastlake, OH | United Auto Workers | Band Instruments | 230 | February 13, 2026 |

---

In Germany, the workers' council represents all employees other than management. Most employment contract conditions are settled in collective bargaining agreements made between various trade unions and the employer organizations to which we belong. Our agreement with employees at our piano facility in Hamburg, Germany expires on November 30, 2023. We believe that relations with our employees and these unions are generally good.

**Environmental Matters and Regulation** 

We are subject to various federal, state and local environmental laws and regulations governing, among other things, protection of the environment and natural resources and the use, generation, storage, handling, release and disposal of hazardous substances. These laws and regulations impose numerous obligations that are applicable to us, including acquisition of a permit or other approval required for our manufacturing activities or other regulated activities; restrictions on the types,

------

##### [**Table of Contents**](#toc)
quantities or concentration of materials that can be released into the environment; the handling and disposal of solid and hazardous waste; limitations on the use or importation of endangered plants or animals; imposition of specific health and safety standards addressing public and worker health and safety; or imposition of significant liabilities for contamination or pollution, including investigation, remedial and clean-up costs.

We believe that we are in material compliance with the environmental laws and regulations applicable to our business; however, there can be no assurance that we are in full compliance with all environmental laws and regulations or that we will be able to comply with any future requirements or changes in such laws and regulations without significant costs. Failure to comply with these requirements, including any new environmental laws or regulations that may be enacted or may become more stringent over time, may expose us to regulatory enforcement actions, fines, civil or criminal penalties, revocations of our permits and/or interruptions in our operations, among other sanctions, that could have a material adverse effect on our financial position, capital expenditures, results of operations and cash flows.

In addition to the above, many environmental laws impose strict, joint and several liability for costs required to clean up and restore sites where hazardous substances have been disposed or otherwise released into the environment, even under circumstances where the hazardous substances were released by prior owners or operators or the activities conducted, and from which a release emanated, complied with applicable law. We currently have obligations and liabilities with respect to the remediation of current and former properties and third-party waste disposal sites, some of which is covered under applicable insurance policies. We have accrued liabilities for sites where the liability is probable and can be estimated (taking into account reasonably anticipated insurance coverage or contributions from other responsible parties). While such liabilities are not expected to be material, there can be no assurance that we will not be required in the future to conduct or fund additional remedial programs in connection with other current, former or future facilities, which could have a material adverse effect on our financial position, capital expenditures, results of operations and cash flows. See "Risk Factors—Risks Related to Regulation—Our operations may subject us to liabilities for environmental or other regulatory matters, the costs of which could be material."

**Properties** 

We own most of our manufacturing and warehousing facilities. Our remaining retail stores are leased. Substantially all of the domestic real estate has been pledged to secure our debt. The following table lists our significant owned and leased manufacturing, office and warehouse facilities as of December 31, 2022:

---

| | | | |
|:---|:---|:---|:---|
| **Location** | **Owned/<br>Leased** | **Approximate Floor<br>Space (Square Feet)** | **Type of Facility and Activity Performed** |
|  Astoria, NY, USA | Owned | 397000 | Piano manufacturing, offices, selection room and used piano showroom |
|  Springfield, OH, USA | Owned | 110000 | Piano plate manufacturing |
|  Elkhart, IN, USA | Owned | 25000 | Corporate offices |
|  | Owned | 54668 | Band instrument manufacturing |
|  | Owned | 81000 | Warehouse |
|  | Owned | 43904 | Band instrument manufacturing |
|  | Leased | 28120 | Warehouse |
|  Monroe, NC, USA | Leased | 114000 | Percussion instrument manufacturing |
|  Eastlake, OH, USA | Owned | 160000 | Brass instrument manufacturing |

---

------

##### [**Table of Contents**](#toc)

---

| | | | |
|:---|:---|:---|:---|
| **Location** | **Owned/<br>Leased** | **Approximate Floor<br>Space (Square Feet)** | **Type of Facility and Activity Performed** |
|  Wilkow, Poland | Owned | 10000 | Piano key manufacturing, office, warehouse |
|  Hamburg, Germany | Owned | 221000 | Piano manufacturing, office, warehouse, selection room |
|  Remscheid, Germany | Leased | 25000 | Piano key manufacturing |
|  Gärtringen, Germany | Owned | 125110 | Piano action manufacturing |
|  Meuselwitz, Germany | Owned | 160858 | Piano action manufacturing |
|  Tokyo, Japan | Leased | 79083 | Office, warehouse |
|  Shanghai, China | Leased | 68383 | Warehouse, showroom, office |
|  Tianjin City, China | Leased | 6598 | Band instrument office, warehouse |
|  Uxbridge, England | Leased | 8000 | Band instrument office, warehouse |
|  Elkhorn, WI | Owned | 58000 | Former brass instrument manufacturing, held for sale |

---

We also have leased properties in select cities around the world that serve as our 34 retail showroom locations, including 15 showrooms in the United States, ten in the EMEA region and nine in the APAC region.

**Legal Proceedings** 

From time to time, we may become involved in legal or regulatory proceedings arising in the ordinary course of our business. Management believes that we do not have any pending or threatened litigation which, individually or in the aggregate, would have a material adverse effect on our business, results of operations, financial condition and/or cash flows.

------

##### [**Table of Contents**](#toc)
**MANAGEMENT** 

The following table sets forth information regarding our executive officers, directors and director nominees as of the date of this prospectus.

---

| | | |
|:---|:---|:---|
| **Name** | **Age** | **Position** |
|  Benjamin Steiner | 37 | President, Chief Executive Officer and Director |
|  Maia Moutopoulos | 46 | Chief Financial Officer |
|  Eric Feidner | 60 | Chief Technology Officer and Chief Innovation Officer |
|  John Paulson | 67 | Director |
|  Michael Waldorf | 52 | Director |
|  Wei Wei | 44 | Director |
|  Howard Gurvitch | 64 | Director Nominee\* |
|  Benjamin Mensah | 34 | Director Nominee\* |

---

\* To be elected to the board of directors following the effectiveness of the registration statement of which this prospectus forms a part

**Executive Officers** 

Our executive officers are appointed by, and serve at the discretion of, our board of directors. Each executive officer is an employee of the Company or one of its subsidiaries. The following information provides a brief description of the business experience of each of our executive officers and directors. The current executive officers are as follows:

**Benjamin Steiner** was appointed director of the Company in April 2022 and has served as the President and Chief Executive Officer of the Company since April 2022. Mr. Steiner has been President and Chief Executive Officer of SMI since September 2021, and served as the Chief Financial Officer and Chief Operating Officer of SMI prior thereto. Mr. Steiner was a partner at Paulson & Co. from 2016 until December 2021. Paulson & Co. is an investment management firm specializing in merger arbitrage and distressed debt, which manages and provides oversight of investments in public and private companies, both domestically and internationally. Entities affiliated with Paulson & Co. have been the sole stockholders of the Company since 2013 and will continue to control the Company upon the completion of this offering. Mr. Steiner has served as a director of A.C.T. Lighting, Inc., a private manufacturer and distributor of lighting products, since March 2020. Mr. Steiner received an A.B., *magna cum laude*, in Government and Public Policy from Princeton University, a J.D from Harvard Law School, *magna cum laude*, and an M.B.A. from Harvard Business School, where he was a Baker Scholar. Mr. Steiner is qualified to serve on our Board of Directors because of his financial expertise and his management and board experience.

**Maia Moutopoulos** has served as the Chief Financial Officer of the Company since April 2022. Ms. Moutopoulos has been Chief Financial Officer of SMI since September 2021, and joined SMI's corporate finance team in 2014. Prior to September 2021, Ms. Moutopoulos served as SMI's VP Chief Accounting Officer/Corporate Controller. From 2016 to 2017, Ms. Moutopoulos was the Director of Financial Planning & Analysis. Prior to 2014 she was the Accounting Manager at Steinway, Inc., the company's Americas piano division, which she joined in 2006. Ms. Moutopoulos received a B.B.A., *magna cum laude*, in Accounting from Baruch College School of Business.

**Eric Feidner** has served as the Chief Technology Officer and Chief Innovation Officer of the Company since April 2022 and has held the same title at SMI since October 2021. Mr. Feidner manages the teams responsible for music technology in product development, web and app development, information technology, recorded music production, and content creation. Mr. Feidner previously served as Senior Vice President, Music Technology and President of Steinway's former

------

##### [**Table of Contents**](#toc)
subsidiary, ArkivMusic, which he founded in 2001 and sold to Steinway, Inc. in 2008. Prior to 2001, Mr. Feidner held executive positions at start-ups, including N2K, Inc. and Winstar Communications, where he managed large teams developing music, technology, and e-commerce platforms. Mr. Feidner received a BFA, *magna cum laude*, in music performance from SUNY Purchase and attended the Baruch College School of Business.

**Directors** 

**John Paulson** was appointed director of the Company in April 2022 and has served as a director of SMI since 2013. Since 1994, Mr. Paulson has been the President of Paulson & Co., a private investment company. Entities affiliated with Paulson & Co. have been the sole stockholders of the Company since 2013 and will continue to control the Company upon the completion of this offering. Mr. Paulson has served as a director of PFC Associates LLC, a casual dining restaurant chain, since March 2019, and as a director of BrightSphere investment Group Inc., an asset management company, since November 2018. Since June 2017, Mr. Paulson served as a director of Bausch Health Companies Inc., a specialty pharmaceutical company. From May 2016 to July 2017, Mr. Paulson also served as a director of American International Group, Inc., an insurance organization. Mr. Paulson received a B.S. in Business from New York University and an M.B.A. from Harvard Business School. Mr. Paulson is qualified to serve on our Board of Directors because of his financial expertise and his management and board experience.

**Michael Waldorf** was appointed director of the Company in April 2022 and has served as a director of SMI since 2013. Since January 2002, Mr. Waldorf has been a Partner, Managing Director and Senior Counsel at Paulson & Co., an investment management firm specializing in merger arbitrage and distressed debt. Entities affiliated with Paulson & Co. have been the sole stockholders of the Company since 2013 and will continue to control the Company upon the completion of this offering. Mr. Waldorf has served as a director of PFC Associates LLC, a casual dining restaurant chain, since March 2019. Mr. Waldorf received a B.A., *magna cum laude*, in Economics and Russian & Soviet Studies from Harvard College and a J.D., *cum laude*, from Harvard Law School. Mr. Waldorf is qualified to serve on our Board of Directors because of his financial and legal expertise and his management and board experience.

**Wei Wei** was appointed director of the Company in April 2022. Ms. Wei has served as the President of Steinway Piano Asia Pacific Co., Ltd., a subsidiary of the Company, since 2017, and previously served as Steinway Piano Asia Pacific Co., Ltd.'s Marketing & Sales Manager, Director of Marketing & Sales and Vice President Marketing & Sales, General Manager. From 2002 to 2003, Ms. Wei served as the Senior Administrator and Assistant to Chief Representative at Steinway & Sons' representative office in Beijing. Ms. Wei received a Bachelor's Degree in German Language and Literature from Nanjing University and an E.M.B.A from Tsinghua University. Ms. Wei is qualified to serve on our Board of Directors because of her experience in developing the Steinway business in APAC and her international business acumen.

**Howard Gurvitch** has been nominated to serve as a director of the Company following the effectiveness of the registration statement of which this prospectus forms a part. Since January 2006, Mr. Gurvitch has been the founder and sole managing member of a privately-held, New York based, "family office" that manages a diversified investment portfolio of both direct and fund investments in public and private securities, including equities, credit, real estate and venture capital. From 1987 through 2005, Mr. Gurvitch served as a Managing Director at Bear, Stearns & Co. Inc., specializing in corporate finance and M&A as well as the provision of wealth management services and solutions. Mr. Gurvitch received a B.A. with high distinction, Phi Beta Kappa, in Economics and Political Science from the University of Rhode Island and a J.D. with honors from The National Law Center of the George Washington University. Mr. Gurvitch is qualified to serve on our Board of Directors because of his financial expertise and his management experience.

------

##### [**Table of Contents**](#toc)
**Benjamin Mensah** has been nominated to serve as a director of the Company following the effectiveness of the registration statement of which this prospectus forms a part. Since February 2020, Mr. Mensah has worked as an investment professional at The Carlyle Group where he is responsible for sourcing and executing private and public investments across a variety of industries. From June 2016 until December 2019, Mr. Mensah worked as an investment analyst at Paulson & Co., an investment management firm specializing in merger arbitrage and distressed debt. Entities affiliated with Paulson & Co. have been the sole stockholders of the Company since 2013 and will continue to control the Company upon the completion of this offering. Prior to his time at Paulson & Co., Mr. Mensah was an investment analyst at SVP Global and investment banker at Goldman Sachs. Mr. Mensah received a dual B.S. from the Massachusetts Institute of Technology and an MBA from Harvard Business School. Mr. Mensah is qualified to serve on our Board of Directors because of his financial expertise and his management experience.

**Corporate Governance** 

***Board Composition***

Our board of directors will consist of six directors following the effectiveness of the registration statement of which this prospectus forms a part. Our directors will be divided into three classes with staggered three-year terms. At each annual meeting of stockholders after the initial classification, the successors to the directors whose terms will then expire will be elected to serve from the time of election and qualification until the third annual meeting following their election and until their successors are duly elected and qualified.

The Stockholders Agreement will provide John Paulson and certain affiliated entities with certain rights relating to the composition of our board of directors. See "Certain Relationships and Related Party Transactions—Relationship with John Paulson and Certain Affiliated Entities Following this Offering—Stockholders Agreement."

Subject to the provisions of the Stockholders Agreement, so long as John Paulson and certain affiliated entities own, in the aggregate, (i) at least 35% of the total outstanding shares of our common stock owned by them immediately following the consummation of this offering (including the sale of any shares pursuant to the underwriters' option to purchase additional shares), they will be entitled to nominate four directors, (ii) less than 35% but at least 25% of the total outstanding shares of our common stock owned by them immediately following the consummation of this offering (including the sale of any shares pursuant to the underwriters' option to purchase additional shares), they will be entitled to nominate three directors, (iii) less than 25%, but at least 15% of the total outstanding shares of our common stock owned by them immediately following the consummation of this offering (including the sale of any shares pursuant to the underwriters' option to purchase additional shares), they will be entitled to nominate two directors, (iv) less than 15%, but at least 5% of the total outstanding shares of our common stock owned by them immediately following the consummation of this offering (including the sale of any shares pursuant to the underwriters' option to purchase additional shares), they will be entitled to nominate one director and (v) less than 5% of the total outstanding shares of our common stock owned by them immediately following the consummation of this offering (including the sale of any shares pursuant to the underwriters' option to purchase additional shares), they will not be entitled to nominate a director. Additionally, so long as John Paulson and certain affiliated entities have the right to designate at least one director for nomination to the board of directors, they will be entitled to have one director designated by them to serve on each committee of the board of directors.

Each director shall hold office until his or her successor has been duly elected and qualified, or until his or her earlier death, resignation or removal.

------

##### [**Table of Contents**](#toc)
In accordance with our amended and restated certificate of incorporation to be in effect prior to the closing of this offering, our board of directors will be divided into three classes of directors. At each annual meeting of stockholders, a class of directors will be elected for a three-year term to succeed the class whose terms are then expiring, to serve from the time of election and qualification until the third annual meeting following their election or until their earlier death, resignation or removal. Upon the closing of this offering, our directors will be divided among the three classes as follows:

The Class I directors will be John Paulson and Michael Waldorf, and their terms will expire at our first annual meeting of stockholders following this offering.

The Class II directors will be Benjamin Steiner and Wei Wei, and their terms will expire at our second annual meeting of stockholders following this offering.

The Class III directors will be Howard Gurvitch and Benjamin Mensah, and their terms will expire at our third annual meeting of stockholders following this offering.

Our amended and restated certificate of incorporation will provide that the authorized number of directors may be changed only by resolution of our board of directors or as provided in the Stockholders Agreement. See "Certain Relationships and Related Party Transactions—Relationship with John Paulson and Certain Affiliated Entities Following this Offering—Stockholders Agreement." Any additional directorships resulting from an increase 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. The division of our board of directors into three classes with staggered three-year terms may delay or prevent a change of our management or a change in control. See the section of this prospectus captioned "Description of Capital Stock—Anti-Takeover Provisions" for a discussion of these and other anti-takeover provisions found in our amended and restated certificate of incorporation and amended and restated bylaws, which will become effective prior to the closing of this offering.

***Director Independence***

After the consummation of this offering, John Paulson and certain affiliated entities will hold approximately % of the total combined voting power of our outstanding common stock (or approximately % if the underwriters exercise in full their option to purchase additional shares of our Class A common stock from the selling stockholder) through their ownership of all of the Class B common stock. Accordingly, we will be a "controlled company" under the rules of the NYSE.

Even though we will be a controlled company, we are required to comply with the rules of the SEC and the NYSE relating to the membership, qualifications and operations of the audit committee, as discussed below. If we cease to be a controlled company and the Class A common stock continues to be listed on the NYSE, we will be required to comply with these requirements by the date our status as a controlled company changes or within specified transition periods applicable to certain provisions, as the case may be.

In connection with this offering, our board of directors has undertaken a review of the independence of each director and considered whether each director has a material relationship with us that could compromise his or her ability to exercise independent judgment in carrying out his or her responsibilities. As a result of this review, our board of directors determined that Messrs. Paulson, Waldorf, Gurvitch and Mensah are "independent directors" as defined under the applicable rules and regulations of the SEC and the listing requirements and rules of the NYSE, representing four of our six directors.

------

##### [**Table of Contents**](#toc)
***Board Committees***

Our board of directors has an audit committee, a compensation committee and nominating and corporate governance committee, each of which has the composition and the responsibilities described below. In addition, from time to time, special committees may be established under the direction of our board of directors when necessary to address specific issues.

Each of the audit committee, the compensation committee and nominating and corporate governance committee will operate under a written charter that will be approved by our board of directors in connection with this offering. A copy of each of the audit committee, compensation committee and nominating and corporate governance committee charters will be available on our corporate website. The reference to our website address in this prospectus does not include or incorporate by reference the information on our website into this prospectus.

***Audit Committee***

Our audit committee oversees our corporate accounting and financial reporting process and assists our board of directors in monitoring our financial systems. Our audit committee will be responsible for, among other things:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• appointing, compensating, retaining, evaluating, terminating and overseeing our independent registered public accounting
firm;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• discussing with our independent registered public accounting firm their independence;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• reviewing with our independent registered public accounting firm the scope and results of their audit;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• approving all audit and permissible non-audit services to be performed by our
independent registered public accounting firm;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• overseeing the financial reporting process and discussing with management and our independent registered public accounting
firm the interim and annual financial statements that we file with the SEC;

&nbsp;&nbsp;&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;&nbsp;&nbsp;• reviewing related party transactions;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• overseeing our financial and accounting controls and compliance with legal and regulatory requirements; and

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• establishing procedures for the confidential anonymous submission of concerns regarding questionable accounting, internal
controls or auditing matters.

Our audit committee consists of Messrs. Gurvitch, Mensah and Waldorf, with Mr. Gurvitch serving as chair. Rule 10A-3 of the Exchange Act requires us to have one independent audit committee member upon the listing of our Class A common stock, a majority of independent directors on our audit committee within 90 days of the effective date of the registration statement of which this prospectus forms a part and an audit committee composed entirely of independent directors within one year of the effective date of the registration statement of which this prospectus forms a part. In order to be considered independent for purposes of Rule 10A-3, a member of an audit committee of a listed company may not, other than in his or her capacity as a member of the audit committee, the board of directors, or any other board committee, accept, directly or indirectly, any consulting, advisory, or other compensatory fee from the listed company or any of its subsidiaries or otherwise be an affiliated person of the listed company or any of its subsidiaries. Our board of directors has determined that each of Messrs. Gurvitch and Mensah are independent directors under the rules of the NYSE and the

------

##### [**Table of Contents**](#toc)
additional independence standards applicable to audit committee members established pursuant to Rule 10A-3 under the Exchange Act. Our board of directors has also determined that each of Messrs. Gurvitch, Mensah and Waldorf meets the "financial literacy" requirement for audit committee members under the rules of the NYSE.

***Compensation Committee***

Our compensation committee oversees our compensation policies, plans and benefits programs. Our compensation committee will be responsible for, among other things:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• reviewing and approving corporate goals and objectives relevant to the compensation of our Chief Executive Officer,
evaluating the performance of our Chief Executive Officer in light of these goals and objectives and setting or making recommendations to the Board regarding the compensation of our Chief Executive Officer;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• reviewing and setting or making recommendations to our board of directors regarding the compensation of our other executive
officers;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• making recommendations to our board of directors regarding the compensation of our directors;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• reviewing and approving or making recommendations to our board of directors regarding our incentive compensation and equity-based plans and arrangements; and

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• appointing and overseeing any compensation consultants.

Our compensation committee consists of Messrs. Waldorf, Gurvitch and Mensah, with Mr. Waldorf serving as chair. The composition of our compensation committee meets the requirements for independence under the current listing standards and SEC rules and regulations. Each of Messrs. Gurvitch and Mensah is a non-employee director, as defined in Section 16b-3 of the Exchange Act.

***Nominating and Corporate Governance Committee***

Our nominating and corporate governance committee oversees and assists our board of directors in reviewing and recommending nominees for election as directors. Our nominating and corporate governance committee will be responsible for, among other things:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• identifying individuals qualified to become members of our board of directors, consistent with criteria approved by our
board of directors;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• recommending to our board of directors the nominees for election to our board of directors at annual meetings of our
stockholders;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• overseeing an evaluation of our board of directors and its committees; and

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• developing and recommending to our board of directors a set of corporate governance guidelines.

Our nominating and corporate governance committee consists of Messrs. Paulson, Waldorf and Gurvitch, with Mr. Paulson serving as chair. The composition of our nominating and corporate governance committee meets the requirements for independence under the current NYSE listing standards and SEC rules and regulations.

***Role of the Board in Risk Oversight***

Our board of directors has an active role, as a whole and also at the committee level, in overseeing the management of our risks. Our board of directors is responsible for general oversight of

------

##### [**Table of Contents**](#toc)
risks and regular review of information regarding our risks, including credit risks, liquidity risks and operational risks. The compensation committee is responsible for overseeing the management of risks relating to our executive compensation plans and arrangements. The audit committee is responsible for overseeing the management of financial and cybersecurity risks. The nominating and corporate governance committee is responsible for overseeing the management of risks associated with the independence of our board of directors and potential conflicts of interest. Although each committee is responsible for evaluating certain risks and overseeing the management of such risks, the entire board of directors is regularly informed through discussions from committee members about such risks. Our board of directors believes its administration of its risk oversight function has not negatively affected our board of directors' leadership structure.

***Code of Business Conduct and Ethics***

We have adopted a written code of business conduct and ethics that applies to our directors, officers and employees, including our principal executive officer, principal financial officer, principal accounting officer or controller, or persons performing similar functions prior to the completion of this offering. Following this offering, a current copy of the code will be posted on the investor section of our website.

***Compensation Committee Interlocks and Insider Participation***

None of the members of our compensation committee is or has been within the past three years an officer or one of our employees. 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 (or other board committee performing equivalent functions or, in the absence of any such committee, the entire board of directors) of any entity that has one or more executive officers serving on our board of directors or compensation committee.

------

##### [**Table of Contents**](#toc)
**EXECUTIVE COMPENSATION** 

This section discusses the material components of the executive compensation program for our executive officers who are named in the "2022 Summary Compensation Table" below (each, an "NEO"). In fiscal year 2022, our NEOs and their positions were as follows:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• Benjamin Steiner, Chief Executive Officer;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• Maia Moutopoulos, Chief Financial Officer; and

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• Eric Feidner, Chief Technology and Innovation Officer.

This discussion may contain forward-looking statements that are based on our current plans, considerations, expectations and determinations regarding future compensation programs. Actual compensation programs that we adopt following the completion of this offering may differ materially from the currently planned programs summarized in this discussion. As an "emerging growth company" as defined in the JOBS Act, we are not required to include a Compensation Discussion and Analysis section and have elected to comply with the scaled disclosure requirements applicable to emerging growth companies.

**2022 Summary Compensation Table** 

The following table sets forth information concerning the compensation of our NEOs for fiscal years 2021 and 2022.

---

| | | | | | | |
|:---|:---|:---|:---|:---|:---|:---|
| **Name and Principal <br>Position** | **Year** | **Salary**<br>**($)** | **Stock<br>Awards<br>($)** | **Non-Equity<br>Incentive Plan <br>Compensation<br>Earnings ($)(1)** | **All Other<br>Compensation<br>($)** | **Total** |
|  Benjamin Steiner | 2022 | 600000 |  | 1378000 | 21149<sup>(2)</sup> | 1999149 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; *Chief Executive Officer* | 2021 | 505000 | 0 | 1243200 | 40708 | 1788908 |
|  Maia Moutopoulos | 2022 | 400000 |  | 510520 | 16373<sup>(3)</sup> | 926893 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; *Chief Financial Officer*  | 2021 | 275000 |  | 471240 | 15849 | 762089 |
|  Eric Feidner | 2022 | 400000 |  | 755032 | 29513<sup>(4)</sup> | 1184545 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; *Chief Technology*<br> *and Innovation Officer* | 2021 | 300000 |  | 648720 | 27765 | 976485 |

---

------

(1) Amounts reflect annual cash performance-based bonuses earned during the applicable fiscal year. For the year ended
December 31, 2022, amounts reflect (i) for Mr. Steiner, a standard annual cash bonus of $678,000 and an "additional bonus" of $700,000, (ii) for Ms. Moutopoulos, a standard annual cash bonus of $230,520 and an "additional bonus"
of $280,000, and (iii) for Mr. Feidner, a standard annual cash bonus of $510,032 and an "additional bonus" of $245,000. For additional information about the annual cash performance-based bonuses, including both the standard annual cash
bonuses and the "additional bonuses", please see the section titled "2022 Bonuses" below.

(2) Amount reflects (i) $4,920 as the rental value of a loaner piano provided to Mr. Steiner for personal use,
(ii) $16,013 in employer contributions under the Company's 401(k) plan, and (iii) $216 in group term life insurance premiums

(3) Amount reflects (i) $16,013 in employer contributions under the Company's 401(k) plan and (ii) $360 in
group term life insurance premiums.

(4) Amount reflects (i) $11,916 as the rental value of a loaner piano provided to Mr. Feidner for research and
development purposes and personal use, (ii) $16,013 in employer contributions under the Company's 401(k) plan and (iii) $1,584 in group term life insurance premiums.

**Narrative To Summary Compensation Table** 

***2022 Salaries***

The NEOs receive a base salary to compensate them for services rendered to our company. The base salary payable to each NEO is intended to provide a fixed component of compensation reflecting

------

##### [**Table of Contents**](#toc)
the executive's skill set, experience, role and responsibilities. As of December 31, 2022, the annual base salaries for our named executives officers were:

---

| | |
|:---|:---|
| **Name** | **2022 Annual Base Salary ($)** |
|  Benjamin Steiner | 600000 |
|  Maia Moutopoulos | 400000 |
|  Eric Feidner | 400000 |

---

Effective January 1, 2022, we instituted new compensation plans to align with our transition to becoming a public company. Under these new compensation plans, Mr. Steiner's base salary was increased from $560,000 to $600,000, Ms. Moutopoulos' base salary was increased from $275,000 to $400,000, and Mr. Feidner's salary was increased from $300,000 to $400,000, in each case effective January 1, 2022.

The actual base salary amounts paid to the named executive officers during fiscal years 2021 and 2022 are set forth in the 2022 Summary Compensation Table in the column titled "Salary."

***2022 Bonuses***

We maintain an annual performance-based cash bonus program in which each of our NEOs participated in fiscal years 2021 and 2022. Under this program, each NEO receives a number of "profit points" based on either a percentage of his or her base salary or a negotiated amount. These profit points are then multiplied by two bonus multiples to calculate the NEO's annual performance-based cash bonus. The bonus multiples are determined based on (i) individual performance reviews and (ii) the amount by which an NEO's business unit(s) exceed unit-specific minimum EBITDA targets. In the event an NEO's applicable business unit does not exceed its minimum EBITDA target, the NEO will not receive any bonus with respect to the profit points associated with such business unit; however, once the minimum EBITDA target for a business unit has been met, the bonus multiple for such business unit is not subject to any maximum limit.

For fiscal 2022, the applicable business unit(s) of each NEO exceeded their minimum EBITDA targets and, as a result, each NEO qualified for an annual performance-based cash bonus. Additionally, Mr. Steiner, Ms. Moutopoulos, and Mr. Feidner received individual performance bonus multiples of 100%, 102%, and 100.4%, respectively. The annual performance-based cash bonus amounts are generally paid after the end of the fiscal year in which they were earned.

It was contemplated under the new compensation plans effective January 1, 2022 that, upon the company's completion of the initial public offering, each of the NEO's would receive a restricted stock unit grant that would vest annually over time. For fiscal year 2022, because the company did not complete an initial public offering in 2022, in lieu of vested restricted stock units, each of our NEO's was also eligible to receive an "additional bonus" determined by multiplying a base additional bonus amount ($625,000 for Mr. Steiner, $250,000 for Ms. Moutopoulos and $218,750 for Mr. Feidner) by a multiplier based on the excess of 2022 adjusted EBITDA over 2021 adjusted EBITDA. Based on this formula, additional bonuses of $700,000, $280,000, and $245,000 were paid to Mr. Steiner, Ms. Moutopoulos, and Mr. Feidner, respectively. The actual annual cash bonuses awarded to each NEO for fiscal year 2022 performance, including both the standard annual cash bonus program and the additional bonuses described above, are set forth above in the 2022 Summary Compensation Table in the column titled "Non-Equity Incentive Plan Compensation."

***Equity Compensation***

Mr. Steiner holds a 5% Class B1 membership interest, which is treated for tax purposes as a profits interest, in Parent, which were the only Class B membership interests issued by Parent and

------

##### [**Table of Contents**](#toc)
which we refer to as "Class B Units." During fiscal year 2021, Mr. Steiner was issued the Class B Units representing 5% of Parent's total membership interests, 25% of which (or 1.25% of Parent's total membership interests) vested on the grant date, an additional 25% of which vested on April 30, 2022, and the remaining 50% of which vests in two equal installments on April 30, 2023 and April 30, 2024, subject to Mr. Steiner's continued service through the applicable vesting date. In the event Mr. Steiner's employment is terminated by us without cause (as defined in his employment letter agreement) or due to his death or disability, Mr. Steiner is entitled to payment in redemption of any vested Class B Units held by him at the time of such termination (including any Class B Units that would have otherwise vested through the date of his termination had the Class B Units vested on a daily straight-line basis between vesting dates) in an amount determined according to a preset formula provided in Parent's operating agreement with such amount to be paid no later than sixty days following the end of the year of such termination. In the event Mr. Steiner's employment is terminated by us with cause, Mr. Steiner is entitled to payment in redemption of only those Class B Units held by him that are vested at the time of such termination in an amount determined according to the same preset formula. In connection with this offering, Parent will liquidate (as further discussed in "Prospectus Summary—Distribution") and Mr. Steiner will receive (i) fully-vested shares of our Class A common stock in exchange for his fully-vested Class B Units and (ii) restricted shares of our Class A common stock in exchange for his unvested Class B Units, in each case determined immediately prior to the liquidation and on a value-for-value basis, with such restricted shares subject to the same time-vesting conditions as Mr. Steiner's unvested Class B Units as of immediately prior to the liquidation.

We have not granted any equity or equity-based compensation to our employees, including to our NEOs, other than the Class B Units granted to Mr. Steiner and no Class B Units were granted in fiscal year 2022.

***Other Elements of Compensation***

**Retirement Plans.** We maintain a 401(k) retirement savings plan for our employees, including our NEOs, who satisfy certain eligibility requirements. Our NEOs are eligible to participate in the 401(k) plan on the same terms as other full-time employees. The Code allows eligible employees to defer a portion of their compensation, within prescribed limits, on a pre-tax basis through contributions to the 401(k) plan. We believe that providing a vehicle for tax-deferred retirement savings though our 401(k) plan adds to the overall desirability of our executive compensation package and further incentivizes our employees, including our NEOs, in accordance with our compensation policies.

**Employee Benefits and Perquisites.** All of our full-time employees, including our NEOs, are eligible to participate in our health and welfare plans, including medical, dental and vision benefits, medical and dependent care flexible spending accounts, short-term and long-term disability insurance, and life insurance.

Additionally, certain of our executive officers, including each of our NEOs, are entitled to a piano loan, free of charge, for personal use. Both Mr. Steiner and Mr. Feidner are currently taking advantage of this program.

**No Tax Gross-Ups.** We do not make gross-up payments to cover our NEOs' personal income taxes that may pertain to any of the compensation or perquisites paid or provided by our company.

------

##### [**Table of Contents**](#toc)
**Outstanding Equity Awards at 2022 Fiscal Year-End** 

The following table summarizes the number of Class B Units underlying outstanding equity incentive plan awards for each NEO as of December 31, 2022.

---

| | | |
|:---|:---|:---|
|  | **Stock Awards** | **Stock Awards** |
| **Name** | **Number of Shares<br>or Units of Stock<br>That Have Not<br>Vested (#)(1)** | **Market Value of<br>Shares or Units of<br>Stock That Have<br>Not Vested ($)(2)** |
|  Benjamin Steiner |  | 9399750 |

---

------

(1) Represents the unvested Class B Units in Parent held by Mr. Steiner as of December 31, 2022, which were granted on a
percentage basis. As of December 31, 2022, Parent was not unitized and the Class B Units did not represent a specific number of membership interests with respect to Parent. As of December 31, 2022, 50% of Mr. Steiner's Class B Units (or 2.5% of
Parent's total membership interests) were unvested. The unvested Class B Units vest in two equal installments on April 30, 2023 and April 30, 2024, subject to Mr. Steiner's continued service through each applicable vesting
date. In the event Mr. Steiner is terminated by us without cause (as defined in his employment letter agreement) or due to his death or disability, Mr. Steiner is entitled to payment in redemption of any vested Class B Units held by
him at the time of such termination (including any Class B Units that would have otherwise vested through the date of his termination had the Class B Units vested on a daily straight-line basis between vesting dates) in an amount determined
according to a preset formula provided in Parent's operating agreement with such amount to be paid no later than sixty days following the end of the year of such termination. In the event Mr. Steiner is terminated by us with cause, Mr. Steiner
is entitled to payment in redemption of only those Class B Units held by him that are vested at the time of such termination in an amount determined according to the same preset formula.

(2) The Class B Units are not publicly traded and, as a result, there was no ascertainable public market value for the Class B
Units as of December 31, 2022. Therefore, the Class B Units have been valued in accordance with FASB ASC Topic 718, Compensation — Stock Compensation, based on financial results for 2022.

**Executive Compensation Arrangements** 

We have entered into employment agreements with each of our named executive officers except Ms. Moutopoulos, the key terms of which are described below. The following is a summary of the material terms of each agreement. For complete terms, please see the respective agreements attached as exhibits to the registration statement of which this prospectus forms a part.

***Benjamin Steiner Employment Letter Agreement***

Mr. Steiner is subject to an employment letter agreement effective as of May 1, 2016 and amended January 9, 2019 by and among Mr. Steiner, Paulson & Co. and Steinway Musical Instruments, Inc., which letter agreement continues to govern Mr. Steiner's employment following his appointment as Chief Executive Officer, effective as of September 1, 2021. Mr. Steiner's letter agreement contains standard employment terms, including at-will employment, base salary, and bonus eligibility. Under this letter agreement, in the event Mr. Steiner is terminated due to death, disability, or by us without cause (as defined in the letter agreement), Mr. Steiner is entitled to (i) a pro-rata portion of the cash bonus payable to him for the year of termination and (ii) vesting of a pro-rata portion of his Class B Units, if any, due to vest during the year of his termination, in each case subject to Mr. Steiner's execution and non-revocation of a release of claims and continued compliance with restrictive covenants, including a perpetual confidentiality restriction, an invention assignment provision, a 90 day post-employment non-competition covenant, and a six month post-employment non-solicitation covenant.

On April 13, 2022, the parties to Mr. Steiner's employment letter agreement entered into a new letter agreement, pursuant to which Mr. Steiner's existing employment letter agreement will terminate immediately prior to the effectiveness of the registration statement of which this prospectus is a part. Following this offering, Mr. Steiner's employment with us will continue at-will.

------

##### [**Table of Contents**](#toc)
***Eric Feidner Employment Agreement***

Mr. Feidner is subject to an employment agreement dated May 16, 2008 by and between Mr. Feidner and ArkivMusic, LLC (which was later merged into Steinway, Inc.), pursuant to which Mr. Feidner was initially employed as the President of ArkivMusic, LLC and which employment agreement continues to govern Mr. Feidner's employment following his appointment as Chief Technology and Innovation Officer, effective as of October 1, 2021. Mr. Feidner's employment agreement contains standard employment terms, including an indefinite term and a base salary. Under this employment agreement, in the event Mr. Feidner is terminated due to death, disability, or by us without cause or by Mr. Feidner for good reason (each as defined in the employment agreement), Mr. Feidner is entitled to six months of continued base salary, payable in six equal monthly installments, subject to Mr. Feidner's execution and non-revocation of a release of claims and continued compliance with restrictive covenants, including one-year post-employment confidentiality, non-competition, and non-solicitation covenants. In addition, upon Mr. Feidner's termination of employment for any reason, he is entitled to continued participation, at his own expense, in health and medical plans at employee rates until he becomes a participant in another plan or for as long as permitted by applicable law.

**2022 Director Compensation** 

For all of 2022, a loaner piano (the rental value of which for the year was $14,208) was provided to John Paulson for personal use. Additionally, Mr. Paulson received a second loaner piano (the annualized rental value of which is $18,000) on December 14, 2022. Other than these loaner pianos, none of our non-employee directors received any compensation for his or her service as a non-employee director during fiscal year 2022 and none of our non-employee directors held equity awards (vested or unvested) as of December 31, 2022.

In connection with this offering, we have approved and intend to implement a compensation policy that, effective upon the closing of this offering, will be applicable to all of our non-employee directors who are not employees or equityholders of Paulson & Co., Inc. Under this compensation policy, each such non-employee director will receive an annual cash retainer of $65,000. In addition, (i) the Chairperson of the Board shall receive an additional annual retainer of $40,000, (ii) the Chairpersons of the Audit Committee, Compensation Committee, and Nominating and Corporate Governance Committee, shall receive additional annual retainers of $20,000, $15,000, and $10,000, respectively, and (ii) non-Chairperson members of the Audit Committee, Compensation Committee, and Nominating and Corporate Governance Committee shall receive additional annual retainers of $10,000, $5,000, and $7,500, respectively. In addition, each such non-employee director will receive an annual restricted stock unit award with a grant date value of $110,000 (or, in the case of the Chairperson of the Board, $150,000) on the date of each annual meeting, with all such annual restricted stock unit awards vesting on the first anniversary of the grant date of the award (or immediately prior to the date of the annual shareholder meeting immediately following the date of grant, if sooner), subject to such non-employee director continuing in service through such date. The vesting of all restricted stock unit awards under the policy will accelerate and vest in full upon a change in control (as defined in the 2023 Plan, described below).

**New Equity Plans** 

***2023 Incentive Award Plan***

In connection with this offering, we intend to adopt and have our shareholders approve the 2023 Incentive Award Plan, or the 2023 Plan, under which we may grant cash and equity incentive awards to eligible employees and other service providers in order to attract, motivate and retain the talent for which we compete. The material terms of the 2023 Plan are summarized below. The description below

------

##### [**Table of Contents**](#toc)
is meant to be general in nature and is qualified in its entirety by reference to the full text of the 2023 Plan, a form of which has been filed as an exhibit to the registration statement of which this prospectus is a part.

*Eligibility and Administration.* Our employees, consultants and directors, and the employees and consultants of our subsidiaries, will be eligible to receive awards under the 2023 Plan. Following our initial public offering, the 2023 Plan will be administered by our board of directors with respect to awards to non-employee directors and by our compensation committee with respect to other participants, each of which may delegate its duties and responsibilities to committees of our directors and/or officers (referred to collectively as the "plan administrator" below), subject to certain limitations that may be imposed under the 2023 Plan, Section 16 of the Exchange Act, and/or stock exchange rules, as applicable. The plan administrator will have the authority to make all determinations and interpretations under, prescribe all forms for use with, and adopt rules for the administration of, the 2023 Plan, subject to its express terms and conditions. The plan administrator will also set the terms and conditions of all awards under the 2023 Plan, including any vesting and vesting acceleration conditions.

*Limitation on Awards and Shares Available.* We expect a total of shares of our Class A common stock (intended to be equal to 10% of the total shares of our Class A common stock and Class B common stock outstanding immediately prior to this offering) will initially be available for issuance under the 2023 Plan. The number of shares initially available for issuance will be increased by an annual increase on January 1 of each calendar year beginning in 2023 and ending in and including 2032, equal to the lesser of (A) 5% of the total number of combined shares of our Class A common stock and Class B common stock outstanding on the final day of the immediately preceding calendar year and (B) a smaller number of shares as determined by our board of directors. No more than shares of Class A common stock may be issued under the 2023 Plan upon the exercise of incentive stock options. Shares available under the 2023 Plan may be authorized but unissued shares, shares purchased on the open market or treasury shares.

If any shares subject to an award under the 2023 Plan are forfeited, expire, are converted to shares of another entity in connection with certain corporate events, are surrendered pursuant to an "exchange program" (as described below), are tendered or withheld to satisfy the exercise price or tax withholding obligations associated with an award or if such award is settled for cash, any shares subject to such award may, to the extent of such forfeiture, expiration or cash settlement, be used again for new grants under the 2023 Plan. However, the following shares may not be used again for grant under the 2023 Plan: (i) shares subject to a stock appreciation right, or SAR, or other stock-settled award that are not issued in connection with the stock settlement of the SAR or other stock-settled award on its exercise; and (ii) shares purchased on the open market with the cash proceeds from the exercise of options.

Awards granted under the 2023 Plan upon the assumption of, or in substitution for, outstanding equity awards previously granted by an entity in connection with a corporate transaction, such as a merger, combination, consolidation or acquisition of property or stock, will not reduce the shares available for grant under the 2023 Plan.

The 2023 Plan will provide that the sum of any cash compensation and the aggregate grant date fair value (determined as of the date of the grant under ASC 718 or any successor thereto) of all awards granted to a non-employee director pursuant to the 2023 Plan as compensation for services as a non-employee director during any calendar year shall not exceed the amount equal to $750,000 (with such amount increased to $1,000,000 for the calendar year of a non-employee director's initial service). The plan administrator may make exceptions to this limit for individual non-employee directors in extraordinary circumstances, as the plan administrator may determine in its discretion, provided that

------

##### [**Table of Contents**](#toc)
the non-employee director receiving such additional compensation may not participate in the decision to award such compensation or in other contemporaneous compensation decisions involving non-employee directors.

*Awards.* The 2023 Plan provides for the grant of stock options, including incentive stock options, or ISOs, and nonqualified stock options, or NSOs, restricted stock, dividend equivalents, restricted stock units, or RSUs, other stock-based awards, SARs, and cash awards. Certain awards under the 2023 Plan may constitute or provide for a deferral of compensation, subject to Section 409A of the Code, which may impose additional requirements on the terms and conditions of such awards. All awards under the 2023 Plan (other than cash awards) will be set forth in award agreements, which will detail all terms and conditions of the awards, including any applicable vesting and payment terms and post-termination exercise limitations. Awards other than cash awards generally will be settled in shares of our Class A common stock, but the plan administrator may provide for cash settlement of any award. A brief description of each award type follows.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• *Stock Options.* Stock options provide for the purchase of shares of our Class A common stock
in the future at an exercise price set on the grant date. ISOs, by contrast to NSOs, may provide tax deferral beyond exercise and favorable capital gains tax treatment to their holders if certain holding period and other requirements of the Code are
satisfied. The exercise price of a stock option may not be less than 100% of the fair market value of the underlying share on the date of grant (or 110% in the case of ISOs granted to certain significant stockholders), except with respect to certain
substitute options granted in connection with a corporate transaction. The term of a stock option may not be longer than ten years (or five years in the case of ISOs granted to certain significant stockholders). Vesting conditions determined by the
plan administrator may apply to stock options and may include continued service, performance and/or other conditions.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• *SARs.* SARs entitle their holder, upon exercise, to receive from us an amount equal to the
appreciation of the shares subject to the award between the grant date and the exercise date. The exercise price of a SAR may not be less than 100% of the fair market value of the underlying share on the date of grant (except with respect to certain
substitute SARs granted in connection with a corporate transaction) and the term of a SAR may not be longer than ten years. Vesting conditions determined by the plan administrator may apply to SARs and may include continued service, performance
and/or other conditions.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• *Restricted Stock and RSUs.* Restricted stock is an award of nontransferable shares of our
Class A common stock that remain forfeitable unless and until specified conditions are met, and which may be subject to a purchase price. RSUs are contractual promises to deliver shares of our Class A common stock in the future, which may also
remain forfeitable unless and until specified conditions are met. Delivery of the shares underlying RSUs may be deferred under the terms of the award or at the election of the participant, if the plan administrator permits such a deferral.
Conditions applicable to restricted stock and RSUs may be based on continuing service, the attainment of performance goals and/or such other conditions as the plan administrator may determine. Holders of restricted stock generally have all of the
rights of a stockholder upon the issuance of restricted stock, but dividends paid with respect to a share of restricted stock prior to such share vesting shall be paid to the holder only to the extent such share subsequently vests. RSU holders have
no rights of a stockholder with respect to shares subject to RSUs unless and until such shares are delivered in settlement of the RSUs. In the sole discretion of the plan administrator, RSUs may also be settled for an amount of cash equal to the
fair market value of the shares underlying the RSU on the RSU's maturity date, or a combination of cash and shares.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• *Other Stock or Cash-Based Awards.* Other stock or cash-based awards are awards of cash, fully
vested shares of our Class A common stock and other awards denominated in, linked to,

------

##### [**Table of Contents**](#toc)
or derived from shares of our Class A common stock or value metrics related to our shares. Other stock or cash-based awards may be granted to participants and may also be available as a payment form in the settlement of other awards, as standalone payments and as payment in lieu of base salary, bonus, fees or other cash compensation otherwise payable to any individual who is eligible to receive awards. Conditions applicable to other stock or cash-based awards may be based on continuing service, the attainment of performance goals and/or such other conditions as the plan administrator may determine. <br>

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• *Dividend Equivalents.* Dividend equivalents represent the right to receive the equivalent
value of dividends paid on shares of our Class A common stock and may be granted alone or in tandem with awards other than restricted stock, stock options or SARs. Dividend equivalents are credited as of dividend record dates during the period
between the date an award is granted and the date such award terminates or expires, as determined by the plan administrator.

*Performance Awards.* Performance awards include any of the foregoing awards that are granted subject to vesting and/or payment based on the attainment of specified performance goals or other criteria the plan administrator may determine, which may or may not be objectively determinable. Performance criteria upon which performance goals are established by the plan administrator may include but are not limited to: net earnings or losses (either before or after one or more of interest, taxes, depreciation, amortization, and non-cash equity-based compensation expense); gross or net sales or revenue or sales or revenue growth; net income (either before or after taxes) or adjusted net income; profits (including but not limited to gross profits, net profits, profit growth, net operation profit or economic profit), profit return ratios or operating margin; budget or operating earnings (either before or after taxes or before or after allocation of corporate overhead and bonus); cash flow (including operating cash flow and free cash flow or cash flow return on capital); return on assets; return on capital or invested capital; cost of capital; return on stockholders' equity; total stockholder return; return on sales; costs, reductions in costs and cost control measures; expenses; working capital; earnings or loss per share; adjusted earnings or loss per share; price per share or dividends per share (or appreciation in or maintenance of such price or dividends); regulatory achievements or compliance; implementation, completion or attainment of objectives relating to research, development, regulatory, commercial, or strategic milestones or developments; market share; economic value or economic value added models; division, group or corporate financial goals; customer satisfaction/growth; customer service; employee satisfaction; recruitment and maintenance of personnel; human resources management; environmental, social and governance measures; supervision of litigation and other legal matters; strategic partnerships and transactions; financial ratios (including those measuring liquidity, activity, profitability or leverage); debt levels or reductions; sales-related goals; financing and other capital raising transactions; cash on hand; acquisition activity; investment sourcing activity; marketing initiatives; or any combination of the foregoing, any of which may be measured either in absolute terms for us or any operating unit of our company or as compared to any incremental increase or decrease or as compared to results of a peer group or to market performance indicators or indices.

*Certain Transactions and Adjustments.* The plan administrator will have broad discretion to take action under the 2023 Plan, as well as make adjustments to the terms and conditions of existing and future awards, to prevent the dilution or enlargement of intended benefits and facilitate necessary or desirable changes in the event of certain transactions and events affecting our Class A common stock, such as stock dividends, stock splits, mergers, acquisitions, consolidations and other corporate transactions. In addition, in the event of certain non-reciprocal transactions with our stockholders known as "equity restructurings," the plan administrator will make equitable adjustments to the 2023 Plan and outstanding awards. In the event of a "change in control" of our company (as defined in the 2023 Plan), to the extent that the surviving entity declines to continue, convert, assume or replace outstanding awards and, provided a given participant remains employed through such change in control, any such awards held by such participant shall become fully vested, exercisable and/or

------

##### [**Table of Contents**](#toc)
payable, as applicable, and all forfeiture, repurchase and other restrictions on such award shall lapse. In the event an outstanding award is assumed or substituted for an equivalent award in connection with a change in control and the holder of such award terminates employment without "cause" (as such term is defined in the 2023 Plan or as set forth in the award agreement relating to such award) within the 12 months following the change in control, then such award will become fully vested and exercisable upon such termination of employment. Individual award agreements may provide for additional accelerated vesting and payment provisions.

*Foreign Participants, Claw-Back Provisions, Transferability, and Participant Payments.* The plan administrator may modify award terms, establish subplans and/or adjust other terms and conditions of awards, subject to the share limits described above, in order to facilitate grants of awards subject to the laws and/or stock exchange rules of countries outside of the United States. All awards will be subject to the provisions of any claw-back policy implemented by our company to the extent set forth in such claw-back policy and/or in the applicable award agreement. With limited exceptions for estate planning, domestic relations orders, certain beneficiary designations and the laws of descent and distribution, awards under the 2023 Plan are generally non-transferable, and are exercisable only by the participant. With regard to tax withholding, exercise price and purchase price obligations arising in connection with awards under the 2023 Plan, the plan administrator may, in its discretion, accept cash or check, provide for net withholding of shares, allow shares of our Class A common stock that meet specified conditions to be repurchased, allow a "market sell order" or such other consideration as it deems suitable.

*Plan Amendment and Termination.* Our board of directors may amend or terminate the 2023 Plan at any time; however, except in connection with certain changes in our capital structure, stockholder approval will be required for any amendment that increases the number of shares available under the 2023 Plan. No award may be granted pursuant to the 2023 Plan after the tenth anniversary of the date on which our board of directors adopts the 2023 Plan.

***New Equity Awards***

In connection with this offering, we intend to grant equity awards with respect to shares of our Class A common stock under the 2023 Plan to certain of our employees, including certain of our named executive officers. These equity awards are expected to consist of restricted stock unit awards, which awards are expected to vest in four equal annual installments on the first four anniversaries of the offering. The aggregate number of shares of Class A common stock subject to these awards will be determined based on the initial public offering price per share of our Class A common stock in this offering and will be approximately (based on the midpoint of the price range of our Class A common stock set forth on the cover page of the prospectus ($ per share)). A form of restricted stock unit agreement has been filed as an exhibit to the registration statement of which this prospectus is a part.

***ESPP***

In connection with this offering, we intend to adopt and have our shareholders approve the 2023 Employee Stock Purchase Plan, or ESPP. The material terms of the ESPP are summarized below. The description below is intended to be general in nature and is qualified in its entirety by reference to the full text of the ESPP, a form of which has been filed as an exhibit to the registration statement of which this prospectus is a part.

The ESPP will be comprised of two distinct components in order to provide increased flexibility to grant options to purchase shares under the ESPP. Specifically, the ESPP will authorize (1) the grant of options to employees that are intended to qualify for favorable U.S. federal tax treatment under Section

------

##### [**Table of Contents**](#toc)
423 of the Code (the "Section 423 Component"), and (2) the grant of options that are not intended to be tax-qualified under Section 423 of the Code to facilitate participation for employees who are not eligible to benefit from favorable U.S. federal tax treatment and, to the extent applicable, to provide flexibility to comply with non-U.S. laws and other considerations (the "Non-Section 423 Component"). The Non-Section 423 Component will generally be operated and administered on terms and conditions similar to the Section 423 Component, except as otherwise required by applicable law, rule or regulation.

*Shares Available; Administration.* We expect a total of shares of our Class A common stock (intended to be equal to 1.5% of the total shares of our Class A common stock and Class B common stock outstanding immediately prior to this offering) will initially be available for issuance under our ESPP. In addition, the number of shares available for issuance under the ESPP will be annually increased on January 1 of each calendar year beginning in 2023 and ending in 2032, by an amount equal to the lesser of: (i) 1% of the aggregate number of total shares of our Class A common stock and Class B common stock outstanding on the final day of the immediately preceding calendar year and (ii) such smaller number of shares as is determined by our board of directors. Subject to adjustment upon certain changes in our capitalization, no more than shares of our Class A common stock will be available for issuance under the Section 423 Component.

The compensation committee of our board of directors will be the plan administrator of the ESPP and will have authority to interpret the terms of the ESPP and determine eligibility of participants.

*Eligibility.* The plan administrator may designate certain of our subsidiaries as participating "designated subsidiaries" in the ESPP and may change these designations from time to time. Employees of our company and our designated subsidiaries are eligible to participate in the ESPP if they meet the eligibility requirements under the ESPP established from time to time by the plan administrator. However, an employee may not be granted rights to purchase stock under the ESPP if such employee, immediately after the grant, would own (directly or through attribution) stock possessing 5% or more of the total combined voting power or value of all classes of our common or other class of stock.

If the grant of a purchase right under the ESPP to any eligible employee who is a citizen or resident of a foreign jurisdiction would be prohibited under the laws of such foreign jurisdiction or the grant of a purchase right to such employee in compliance with the laws of such foreign jurisdiction would cause the ESPP to violate the requirements of Section 423 of the Code, as determined by the plan administrator in its sole discretion, such employee will not be permitted to participate in the Section 423 Component.

Eligible employees become participants in the ESPP by enrolling and authorizing payroll deductions by the deadline established by the plan administrator prior to the relevant offering date. Directors who are not employees, as well as consultants, are not eligible to participate in the ESPP. Employees who choose not to participate, or are not eligible to participate at the start of an offering period but who become eligible thereafter, may enroll in any subsequent offering period.

*Participation in an Offering.* Stock will be offered under the ESPP during offering periods. The length of offering periods under the ESPP will be determined by the plan administrator and may be up to 27 months long. Employee payroll deductions will be used to purchase shares on the last day of each offering period (or such other date as set forth in the offering document). Offering periods under the ESPP will commence when determined by the plan administrator. The plan administrator may, in its discretion, modify the terms of future offering periods. To the extent applicable, in non-U.S. jurisdictions where participation in the ESPP through payroll deductions is prohibited, the plan administrator may provide that an eligible employee may elect to participate through contributions to

------

##### [**Table of Contents**](#toc)
the participant's account under the ESPP in a form acceptable to the plan administrator in lieu of or in addition to payroll deductions.

The ESPP will permit participants to purchase our Class A common stock through payroll deductions of up to 40% of their eligible compensation (or such other amount as determined by the compensation committee), which will include a participant's gross base compensation for services to us. The maximum number of shares that may be purchased by a participant during any offering period or purchase period is 5,000 shares. In addition, no employee will be permitted to accrue the right to purchase stock under the Section 423 Component at a rate in excess of $25,000 worth of shares during any calendar year during which such a purchase right is outstanding (based on the fair market value per share of our Class A common stock as of the first day of the offering period).

On the first trading day of each offering period, each participant automatically will be granted an option to purchase shares of our Class A common stock. The option will be exercised on the applicable purchase date(s) during the offering period, to the extent of the payroll deductions accumulated during the applicable purchase period. The purchase price of the shares, in the absence of a contrary determination by the plan administrator, will be 85% of the lower of the fair market value of our Class A common stock on the first trading day of the offering period or on the applicable purchase date, which will be the final trading day of the applicable purchase period.

Participants may voluntarily end their participation in the ESPP at any time at least one week prior to the end of the applicable offering period (or such longer or shorter period specified by the plan administrator), and will be paid their accrued payroll deductions that have not yet been used to purchase shares of Class A common stock. Participation ends automatically upon a participant's termination of employment.

*Transferability.* A participant may not transfer rights granted under the ESPP other than by will, the laws of descent and distribution or as otherwise provided in the ESPP.

*Certain Transactions.* In the event of certain transactions or events affecting our Class A common stock, such as any stock dividend or other distribution, change in control, reorganization, merger, consolidation or other corporate transaction, the plan administrator will make equitable adjustments to the ESPP and outstanding rights. In addition, in the event of the foregoing transactions or events or certain significant transactions, including a change in control, the plan administrator may provide for (i) either the replacement of outstanding rights with other rights or property or termination of outstanding rights in exchange for cash, (ii) the assumption or substitution of outstanding rights by the successor or survivor corporation or parent or subsidiary thereof, (iii) the adjustment in the number and type of shares of stock subject to outstanding rights, (iv) the use of participants' accumulated payroll deductions to purchase stock on a new purchase date prior to the next scheduled purchase date and termination of any rights under ongoing offering periods or (v) the termination of all outstanding rights.

*Plan Amendment; Termination.* The plan administrator may amend, suspend or terminate the ESPP at any time. However, stockholder approval of any amendment to the ESPP must be obtained for any amendment which increases the aggregate number or changes the type of shares that may be sold pursuant to rights under the ESPP or changes the corporations or classes of corporations whose employees are eligible to participate in the ESPP.

------

##### [**Table of Contents**](#toc)
**PRINCIPAL AND SELLING STOCKHOLDER** 

The following tables set forth information as of , 2023 with respect to the ownership of our common stock by:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• the selling stockholder and certain of its affiliates, which represent the only persons or group of affiliated persons
known by us to beneficially own more than five percent of our common stock;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• each of our directors and director nominees;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• each of our named executive officers; and

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• all of our executive officers, directors and director nominees as a group.

The amounts and percentages of shares beneficially owned are reported on the basis of regulations of the SEC governing the determination of beneficial ownership of securities. Under SEC rules, a person is deemed to be a "beneficial owner" of a security if that person has or shares "voting power," which includes the power to vote or direct the voting of such security, or "investment power," which includes the power to dispose of or direct the disposition of such security. A person is also deemed to be a beneficial owner of any securities of which that person has a right to acquire beneficial ownership within 60 days of , 2023.

Securities that can be so acquired are deemed to be outstanding for purposes of computing such person's ownership percentage, but not for purposes of computing any other person's percentage. Under these rules, more than one person may be deemed to be a beneficial owner of the same securities, and a person may be deemed to be a beneficial owner of securities as to which such person has no economic interest.

Percentage computations are based on approximately shares of our Class A common stock and shares of our Class B common stock outstanding as of , 2023 (reflecting the Distribution, Stock Split and Reclassification), and shares of our Class A common stock (or shares, if the underwriters exercise in full their option to purchase additional shares of our Class A common stock) and shares of our Class B common stock outstanding following this offering (or shares, if the underwriters exercise in full their option to purchase additional shares of our Class A common stock). Additionally, the table below assumes no purchases of our Class A common stock by the beneficial owners identified therein through our Reserved Share Program. See "Underwriting—Reserved Share Program."

------

##### [**Table of Contents**](#toc)
Except as otherwise indicated in these footnotes, each of the beneficial owners listed has, to our knowledge, sole voting and investment power with respect to the indicated shares of common stock. Unless otherwise set forth in the footnotes to the table, the address for each listed stockholder is c/o Steinway Musical Instruments Holdings, Inc., 1 Steinway Place, Astoria, New York 11105.

---

| | | | | | | | | | | | | | | | | |
|:---|:---|:---|:---|:---|:---|:---|:---|:---|:---|:---|:---|:---|:---|:---|:---|:---|
| | **Shares Beneficially Owned**<br>**Before the Offering** | **Shares Beneficially Owned**<br>**Before the Offering** | **Shares Beneficially Owned**<br>**Before the Offering** | **Shares Beneficially Owned**<br>**Before the Offering** | **Shares Beneficially Owned**<br>**Before the Offering** | **Shares<br>Offered<br>Hereby** | **Shares Beneficially Owned**<br>**After the Offering Assuming** <br>**No Exercise of Underwriters'**<br>**Option** | **Shares Beneficially Owned**<br>**After the Offering Assuming** <br>**No Exercise of Underwriters'**<br>**Option** | **Shares Beneficially Owned**<br>**After the Offering Assuming** <br>**No Exercise of Underwriters'**<br>**Option** | **Shares Beneficially Owned**<br>**After the Offering Assuming** <br>**No Exercise of Underwriters'**<br>**Option** | **Shares Beneficially Owned**<br>**After the Offering Assuming** <br>**No Exercise of Underwriters'**<br>**Option** | **Shares Beneficially Owned**<br>**After the Offering Assuming**<br>**Full Exercise of Underwriters'**<br>**Option** | **Shares Beneficially Owned**<br>**After the Offering Assuming**<br>**Full Exercise of Underwriters'**<br>**Option** | **Shares Beneficially Owned**<br>**After the Offering Assuming**<br>**Full Exercise of Underwriters'**<br>**Option** | **Shares Beneficially Owned**<br>**After the Offering Assuming**<br>**Full Exercise of Underwriters'**<br>**Option** | **Shares Beneficially Owned**<br>**After the Offering Assuming**<br>**Full Exercise of Underwriters'**<br>**Option** |
| | **Class A<br>Common<br>Stock** | **Class A<br>Common<br>Stock** | **Class B**<br>**Common<br>Stock** | **Class B**<br>**Common<br>Stock** | **% of Total<br>Voting<br>Power<br>Before the<br>Offering(1)** | **Shares<br>Offered<br>Hereby** | **Class A** | **Class A** | **Class B** | **Class B** | **% of Total<br>Voting<br>Power<br>After<br>Offering(1)** | **Class A** | **Class A** | **Class B** | **Class B** | **% of Total<br>Voting<br>Power<br>After<br>Offering(1)** |
| | **Shares** | **%** | **Shares** | **%** | **% of Total<br>Voting<br>Power<br>Before the<br>Offering(1)** | **Shares<br>Offered<br>Hereby** | **Shares** | **%** | **Shares** | **%** | **% of Total<br>Voting<br>Power<br>After<br>Offering(1)** | **Shares** | **%** | **Shares** | **%** | **% of Total<br>Voting<br>Power<br>After<br>Offering(1)** |
|  **5% Stockholders and Selling Stockholder** |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
|  John Paulson and certain affiliated entities(2)<br>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;% |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
|  **Directors, Director Nominees and Named Executive Officers** |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
|  Benjamin Steiner(3)% |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
|  Maia Moutopoulos% |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
|  Eric Feidner% |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
|  John Paulson(2)% |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
|  Michael Waldorf% |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
|  Wei Wei% |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
|  Howard Gurvitch% |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
| Benjamin Mensah% |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
|  **All Current Directors, Director Nominees and Executive Officers as a Group (Eight Persons)**% |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |

---

------

\* Less than one percent. 

(1) Percentage of total voting power represents voting power with respect to all shares of our Class A common stock and
Class B common stock, as a single class. The holders of our Class B common stock are entitled to ten votes per share, and holders of our Class A common stock are entitled to one vote per share. For more information about the voting
rights of our Class A and Class B common stock, see "Description of Capital Stock—Common Stock."

(2) Represents shares held
directly by John Paulson and shares held directly by Paulson Advantage Plus Master Ltd. John Paulson exercises sole voting and investment power over the
shares listed above. The address for the person and entity named in this footnote is c/o Paulson & Co. Inc., 1133 Avenue of the Americas, New York, NY 10036.

(3) Represents shares of
Class A common stock and shares of restricted Class A common stock.

------

##### [**Table of Contents**](#toc)
**CERTAIN RELATIONSHIPS AND RELATED PARTY TRANSACTIONS** 

Other than compensation arrangements for our executive officers and directors that are described elsewhere in this prospectus, below we describe transactions since January 1, 2020 to which we were or will be a participant and in which:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• The amounts involved exceeded or will exceed $120,000; and

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• Any of our directors, executive officers or holders of more than 5% of our capital stock, or any member of the immediate
family of, or person sharing the household with, the foregoing persons, had or will have a direct or indirect material interest.

**Relationship with John Paulson and Certain Affiliated Entities Following this Offering** 

Following this offering, John Paulson and certain affiliated entities will continue to hold more than a majority of the total combined voting power of our outstanding common stock. As a result, John Paulson and certain affiliated entities will continue to have significant control of our business, including pursuant to the agreements described below. See "Risk Factors—Risks Related to This Offering and Ownership of Our Class A Common Stock—The dual class structure of our common stock and the existing ownership of Class B common stock by John Paulson and certain affiliated entities have the effect of concentrating voting control with John Paulson and certain affiliated entities for the foreseeable future, which will limit or preclude your ability to influence corporate matters."

***Stockholders Agreement***

The Stockholders Agreement will require us to, among other things, nominate a number of individuals for election as our directors at any meeting of our stockholders, designated by John Paulson and certain affiliated entities (each such individual a "Paulson Designee"), such that, upon the election of such individual and each other individual nominated by or at the direction of our board of directors or a duly-authorized committee of the board, as a director of our company, the number of: Paulson Designees serving as directors will be equal to (i) four directors, if John Paulson and certain affiliated entities continue to beneficially own at least 35% of the aggregate number of shares of common stock outstanding immediately following this offering, (ii) three directors, if John Paulson and certain affiliated entities continue to beneficially own less than 35% but at least 25% of the aggregate number of shares of common stock outstanding immediately following this offering, (iii) two directors, if John Paulson and certain affiliated entities continue to beneficially own less than 25% but at least 15% of the aggregate number of shares of common stock outstanding immediately following this offering, or (iv) one director, if John Paulson and certain affiliated entities continue to beneficially own less than 15% but more than 5% of the aggregate number of shares of common stock outstanding immediately following this offering.

If the number of individuals that John Paulson and certain affiliated entities have the right to designate is decreased because of the decrease in their ownership, then one or more Paulson Designees will immediately tender his or her resignation for consideration by our board of directors and, if such resignation is requested by the board of directors, such director shall resign within thirty days of the date on which John Paulson and certain affiliated entities' right to designate individuals for election as our directors was decreased pursuant to the terms of the Stockholders Agreement. Notwithstanding the foregoing, a director may resign at any time regardless of the period of time left in his or her then current term.

***Registration Rights Agreement***

We intend to enter into a registration rights agreement with John Paulson and certain affiliated entities and Mr. Steiner (the "Registration Rights Agreement") prior to the consummation of this

------

##### [**Table of Contents**](#toc)
offering. The Registration Rights Agreement will provide for demand registration rights, S-3 registration rights and piggyback registration rights. For a description of these registration rights, see the section titled "Description of Capital Stock—Registration Rights."

**Relationships with Other Directors, Executive Officers and Affiliates** 

In May 2016, Mr. Steiner, our Chief Executive Officer, entered into an employment letter agreement, which agreement was updated via letter amendment in January 2018, with Paulson & Co., pursuant to which, in addition to certain cash salary and bonuses, Mr. Steiner was granted a 4% profits interest in Paulson & Co.'s equity in SMI (increasing to 6% upon Mr. Steiner becoming Chief Executive Officer of SMI) that vested over a four-year period ending on May 1, 2020. Upon full vesting of the awards, or upon termination, the awards permitted settlement in stock of SMI or in cash, at the election of Mr. Steiner. During 2020, Paulson & Co. settled the compensation arrangements on SMI's behalf in cash for $17.6 million.

In July 2021, Mr. Steiner entered into an equity participation arrangement with Parent, whereby Parent awarded Mr. Steiner a 5% profits interest in Parent (the "Class B Units"). 25% of the Class B Units vested upon execution of the agreement, an additional 25% vested on April 30, 2022, and the remaining 50% vests in two equal installments on April 30 of each of 2023 and 2024. Upon full vesting of the Class B Units Mr. Steiner, at his election, has the option to liquidate the Class B Units in the form of a redemption by Parent at the price specified therein. In connection with this offering, Parent will be liquidated and Mr. Steiner will receive shares of our common stock in exchange for his Class B Units, as further described in "Executive Compensation—Equity Compensation" and Note 15 to our consolidated financial statements appearing elsewhere in this prospectus.

**Sublease Agreement** 

In December 2017, our subsidiary, Steinway, Inc., entered into a sublease agreement with Paulson & Co., pursuant to which Paulson & Co. subleases an office facility located at 1133 Avenue of the Americas, New York, New York 10036 from Steinway, Inc. The sublease commenced on January 1, 2018 and extended through December 31, 2022. On October 24, 2022, Paulson & Co. extended the terms of the sublease through December 31, 2023, which can be extended for additional one-year periods, and thereafter through the expiration date of the original lease. Paulson & Co., as sublessee, must directly remit to the landlord any rent and incidental charges.

**Director Indemnification Agreements** 

We have entered into, and plan on entering into, indemnification agreements with each of our directors and executive officers. See "Description of Capital Stock—Limitations on Liability and Indemnification Matters."

**Reserved Share Program** 

At our request, an affiliate of BofA Securities, Inc., a participating underwriter, has reserved for sale, at the initial public offering price, up to 5% of the shares offered by this prospectus for sale to some of our directors, officers, employees, distributors, dealers, business associates and related persons. For additional information, see "Underwriting—Reserved Share Program."

**Policies and Procedures for Related Party Transactions** 

Our board of directors will adopt a written related person transaction policy, which will become effective upon the closing of this offering, setting forth the policies and procedures for the review and

------

##### [**Table of Contents**](#toc)
approval or ratification of related person transactions. This policy covers, with certain exceptions set forth in Item 404 of Regulation S-K under the Securities Act, any transaction, arrangement or relationship, or any series of similar transactions, arrangements or relationships, in which we were or are to be a participant, where the amount involved exceeds $120,000 in any fiscal year and a related person had, has or will have a direct or indirect material interest, including without limitation, purchases of goods or services by or from the related person or entities in which the related person has a material interest, indebtedness, guarantees of indebtedness and employment by us of a related person. In reviewing and approving any such transactions, our audit committee is tasked to consider all relevant facts and circumstances, including, but not limited to, whether the transaction is on terms comparable to those that could be obtained in an arm's length transaction and the extent of the related person's interest in the transaction. All of the transactions described in this section occurred prior to the adoption of this policy.

------

##### [**Table of Contents**](#toc)
**DESCRIPTION OF CAPITAL STOCK** 

The following description of our capital stock and certain provisions of our amended and restated certificate of incorporation and amended and restated bylaws are summaries and are qualified by reference to the amended and restated certificate of incorporation and the amended and restated bylaws that will be in effect prior to the closing of this offering. Copies of these documents will be filed with the SEC as exhibits to our registration statement, of which this prospectus forms a part. The descriptions of our Class A common stock, Class B common stock and preferred stock reflect changes to our capital structure that will occur upon the closing of this offering.

**General** 

Upon the closing of this offering, our authorized capital stock will consist of 500,000,000 shares of Class A common stock, par value of $0.0001 per share, 100,000,000 shares of Class B common stock, par value $0.0001 per share, and 50,000,000 shares of preferred stock, par value $0.0001 per share.

As of , 2023, after giving effect to (i) the Distribution, (ii) the filing and effectiveness of our amended and restated certificate of incorporation (ii) the Reclassification and (iii) the Stock Split, there were shares of our Class A common stock outstanding held by one stockholder of record and shares of our Class B common stock outstanding, held by three stockholders of record, and no shares of our preferred stock outstanding.

**Common Stock** 

We have two classes of authorized common stock, Class A common stock and Class B common stock. The rights of the holders of Class A common stock and Class B common stock are generally identical, except with respect to voting and conversion.

***Dividend Rights***

The DGCL permits a corporation to declare and pay dividends out of "surplus" or, if there is no "surplus," out of its net profits for the fiscal year in which the dividend is declared or the preceding fiscal year. "Surplus" is defined as the excess of the net assets of the corporation over the amount determined to be the capital of the corporation by the board of directors. The capital of the corporation is typically calculated to be (and cannot be less than) the aggregate par value of all issued shares of capital stock. Net assets equal the fair value of the total assets minus total liabilities. The DGCL also provides that dividends may not be paid out of net profits if, after the payment of the dividend, capital is less than the capital represented by the outstanding stock of all classes having a preference upon the distribution of assets.

Declaration and payment of any dividend will be subject to the discretion of our board of directors. The time and amount of dividends will depend upon our financial condition, operations, cash requirements and availability, debt repayment obligations, capital expenditure needs, restrictions in our debt instruments, industry trends, the provisions of Delaware law affecting the payment of distributions to shareholders and any other factors our board of directors may consider relevant.

Any decision to declare and pay dividends in the future will be made at the sole discretion of our board of directors and will depend on, among other things, our results of operations, cash requirements, financial condition, contractual restrictions and other factors that our board of directors may deem relevant. Our ability to pay dividends will be limited by covenants in our existing indebtedness and may be limited by the agreements governing other indebtedness that we or our subsidiaries incur in the future. See "Management's Discussion and Analysis of Financial Condition

------

##### [**Table of Contents**](#toc)
and Results of Operations—Liquidity and Capital Resources—Debt." In addition, because we are a holding company and have no direct operations, we will only be able to pay dividends from funds we receive from our subsidiaries. See the section titled "Dividend Policy" for additional information.

***Voting Rights***

Holders of our Class A common stock are entitled to one vote for each share of Class A common stock held on all matters submitted to a vote of stockholders and holders of our Class B common stock are entitled to ten votes for each share of Class B common stock held on all matters submitted to a vote of stockholders. Following this offering, the holders of our outstanding Class B common stock will hold % of the voting power of our outstanding capital stock. Holders of shares of our Class A common stock and Class B common stock vote together as a single class on all matters (including the election of directors) submitted to a vote of stockholders, unless otherwise required by Delaware law or our amended and restated certificate of incorporation. Delaware law could require either holders of our Class A common stock or Class B common stock to vote separately as a single class in the following circumstances:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• if we were to seek to amend our amended and restated certificate of incorporation to increase or decrease the par value of
a class of our capital stock, then that class would be required to vote separately to approve the proposed amendment; and

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• 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 class of our capital stock in a manner that affected its holders adversely, then that class would be required to vote separately to approve the proposed amendment.

Our amended and restated certificate of incorporation does not provide for cumulative voting for the election of directors. As a result, the holders of a majority of the voting power of our outstanding capital stock can elect all of the directors then standing for election. Our amended and restated certificate of incorporation establishes a classified board of directors, to 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.

***Board Designation Rights***

Pursuant to the Stockholders Agreement, John Paulson and certain affiliated entities will have certain board designation rights following this offering. See "Certain Relationships and Related Party Transactions—Relationship with John Paulson and Certain Affiliated Entities Following this Offering—Stockholders Agreement."

***No Preemptive or Similar Rights***

Our common stock is not entitled to preemptive rights and is not subject to redemption or sinking fund provisions.

***Right to Receive Liquidation Distributions***

Upon our liquidation, dissolution, or winding up, the assets legally available for distribution to our stockholders would be distributable ratably among the holders of our Class A common stock, Class B common stock and any participating preferred stock outstanding at that time, subject to the prior satisfaction of all outstanding debt and liabilities and the preferential rights of and the payment of liquidation preferences, if any, on any shares of preferred stock outstanding at that time, and unless

------

##### [**Table of Contents**](#toc)
disparate or different treatment of the shares of each class of common stock is approved by the affirmative vote of the holders of a majority of the outstanding shares of Class A common stock and Class B common stock, each voting as a separate class.

***Change of Control Transactions***

In the case of any distribution or payment in respect of the shares of our Class A common stock or Class B common stock upon a merger or consolidation with or into any other entity, or other substantially similar transaction, the holders of our Class A common stock and Class B common stock will be treated equally and identically with respect to shares of Class A common stock or Class B common stock owned by them; provided, however, shares of each class may receive, or have the right to elect to receive, different or disproportionate consideration if (i) the only difference in the per share consideration is that the shares to be distributed to a holder of a share of Class B common stock have equal or greater voting power than any securities distributed to a holder of a share of Class A common stock or (ii) such disparate consideration is approved by the affirmative vote of the holders of a majority of the outstanding shares of Class A common stock and Class B common stock, each voting separately as a class.

***Subdivisions and Combinations***

If we subdivide or combine in any manner outstanding shares of Class A common stock or Class B common stock, the outstanding shares of the other class will be subdivided or combined in the same manner, unless different treatment of the shares of each class is approved by the affirmative vote of the holders of a majority of the outstanding shares of Class A common stock and Class B common stock, each voting as a separate class.

***Conversion***

Each outstanding share of Class B common stock is convertible at any time at the option of the holder into one share of Class A common stock. In addition, each share of Class B common stock will convert automatically into one share of Class A common stock upon any transfer, whether or not for value, which occurs after the closing of this offering, except for certain permitted transfers described in our amended and restated certificate of incorporation. Permitted transfers include transfers made to John Paulson and certain affiliated entities and any trust, general partnership, limited partnership, limited liability company, corporation or other entity over which John Paulson exercises beneficial ownership in accordance with Rule 13d-3 under the Exchange Act. Once converted or transferred and converted into Class A common stock, the Class B common stock may not be reissued.

All the outstanding shares of our Class B common stock will convert automatically into shares of our Class A common stock upon the date that is the earlier of (i) ten (10) years from the filing and effectiveness of our amended and restated certificate of incorporation in connection with this offering, (ii) the first date the aggregate number of outstanding shares of Class B common stock ceases to represent at least 5% of the aggregate number of outstanding shares of our common stock and (iii) the death or disability, as defined in our amended and restated certificate of incorporation, of John Paulson. Following such conversion, each share of Class A common stock will have one vote per share and the rights of the holders of all outstanding common stock will be identical. Once converted into Class A common stock, the Class B common stock may not be reissued.

**Preferred Stock** 

Following the completion of this offering, our board of directors will be authorized, subject to limitations prescribed by Delaware law, to issue preferred stock in one or more series, to establish from time to time the number of shares to be included in each series, and to fix the designation, powers (including voting powers), preferences, and rights of the shares of each series and any of its

------

##### [**Table of Contents**](#toc)
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 series of preferred stock, but not below the number of shares of that series 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 Class A common stock.

**Restricted Stock Units** 

As of , 2023, we had no outstanding RSUs. In connection with this offering, we intend to grant the IPO RSUs, which grants will become effective immediately following the effectiveness of the registration statement on Form S-8 for the shares of our Class A common stock reserved for issuance under our 2023 Plan. Based on an assumed initial public offering price of $ per share, which is the midpoint of the price range set forth on the cover page of this prospectus, shares of our Class A common stock will be issuable upon the vesting and settlement of the IPO RSUs. See "Executive Compensation" for additional information regarding the IPO RSUs.

**Registration Rights Agreement** 

The Registration Rights Agreement will grant the parties thereto certain registration rights in respect of the "registrable securities" held by them, which securities include, among others, (1) the shares of our common stock issued or issuable, or that are otherwise issuable upon exercise, conversion or exchange of any option, warrant or convertible security, (2) the shares of our common stock held by such parties and (3) any shares of common stock issued as a dividend or in connection with a combination of shares, recapitalization, merger, consolidation or other reorganization. The registration of shares of our common stock pursuant to the exercise of these registration rights would enable the holders thereof to sell such shares without restriction under the Securities Act when the applicable registration statement is declared effective. Under the Registration Rights Agreement, we will pay all expenses relating to such registrations, including the fees and disbursements of one counsel for the parties requesting that their shares be registered pursuant to the applicable registration statement. The Registration Rights Agreement also includes customary indemnification and procedural terms.

The Registration Rights Agreement will terminate on the earliest of (i) the election of John Paulson and certain affiliated entities holding a majority of the outstanding shares, (ii) with respect to John Paulson and certain affiliated entities, when they cease to hold any shares and (iii) with respect to any stockholder other than John Paulson and certain affiliated entities that is or becomes a signatory to the Registration Rights Agreement, when such stockholder may sell all of its shares without regard to volume restrictions under Rule 144 under the Securities Act.

Following the completion of this offering, the holders of an aggregate of shares of our Class B common stock, which represents % of our outstanding shares of common stock after the offering, are entitled to registration rights pursuant to the Registration Rights Agreement.

***Demand Registration Rights***

Following the completion of this offering, John Paulson and certain affiliated entities, who collectively hold an aggregate of shares of our common stock, which represents % of our outstanding shares of common stock after the offering, will be entitled to certain demand registration

------

##### [**Table of Contents**](#toc)
rights. John Paulson and certain affiliated entities may request that we prepare and file a registration statement to register their registrable securities. Following such a request, pursuant to the "piggyback" registration rights in the Registration Rights Agreement, we will provide Mr. Steiner and any other stockholders that may become party to the Registration Rights Agreement prompt written notice thereof at least five days prior to the anticipated filing date of the registration statement relating to such registration. We are not obligated to effect the proposed demand registration if (i) the demand is made within 90 days after the pricing date of a previous underwritten registered offering or (ii) the aggregate market value of the registrable shares to be sold by John Paulson and certain affiliated entities is under $50 million (provided that John Paulson and certain affiliated entities may demand registration of shares having a lesser aggregate market value if they have proposed to sell all of their registrable shares in such offering). If we determine that it would be detrimental to us and our stockholders to effect a requested registration, we may postpone each such registration for a period of up to 60 days; provided that any such delays in any 12-month period should not exceed 120 days in the aggregate.

The foregoing demand registration rights are subject to a number of additional exceptions and limitations.

***Piggyback Registration Rights***

In the event that we propose to register any of our securities under the Securities Act, either for our own account or for the account of other stockholders, the stockholders party to the Registration Rights Agreement will be entitled to certain "piggyback" registration rights, entitling them to notice of the registration and allowing them to include their registrable securities in such registration. These rights will apply whenever we propose to file a registration statement under the Securities Act other than with respect to (i) a registration on Form S-4 or S-8 or any similar successor forms, (ii) where the shares are not being sold for cash or (iii) where the offering is a bona fide offering of securities other than shares, even if such securities are convertible into or exchangeable or exercisable for shares.

The foregoing piggyback registration rights are subject to a number of additional exceptions and limitations.

***Shelf Registration Rights***

Following the completion of this offering, John Paulson and certain affiliated entities will be entitled to certain shelf registration rights. John Paulson and certain affiliated entities may request that we register their shares on a shelf registration statement if we are eligible to file such registration statement, and demand we effect a "takedown" of such shares. We are not obligated to effect a shelf takedown if (i) the demand is made within 90 days after the pricing date of a previous underwritten registered offering or (ii) the aggregate market value of the registrable shares to be sold by John Paulson and certain affiliated entities is under $50 million (provided that John Paulson and certain affiliated entities may demand a takedown of shares having a lesser aggregate market value if they have proposed to sell all of their registrable shares in such offering). If we determine that it would be detrimental to us and our stockholders to effect a requested registration, we may postpone such registration, not more than 120 days in any 12-month period, for a period of up to 60 days.

**Anti-Takeover Provisions** 

Our amended and restated certificate of incorporation and our amended and restated bylaws, which will become effective prior to the completion of this offering, which are summarized below, may have the effect of delaying, deferring or discouraging another person from acquiring control of us. 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

------

##### [**Table of Contents**](#toc)
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.

***Section 203 of the Delaware General Corporation Law***

Our amended and restated certificate of incorporation will contain a provision opting out of Section 203 of the Delaware General Corporation Law. However, our amended and restated certificate of incorporation will contain provisions that are similar to Section 203. Specifically, our amended and restated certificate of incorporation will provide that, subject to certain exceptions, we will not be able to engage in a "business combination" with any "interested stockholder" for three years following the date that the person became an interested stockholder, unless:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• prior to such time, our board of directors approved either the business combination or the transaction that resulted in the
stockholder becoming an interested stockholder;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• upon consummation of the transaction that resulted in the stockholder becoming an interested stockholder, the interested
stockholder owned at least 85% of our voting stock outstanding at the time the transaction commenced, excluding certain shares; or

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• at or subsequent to that time, the business combination is approved by our board of directors and by the affirmative vote
of holders of at least 66 2/3% of our outstanding voting stock that is not owned by the interested stockholder.

Generally, a "business combination" includes a merger, asset or stock sale, consolidation involving us and the "interested stockholder" or other transactions resulting in a financial benefit to the interested stockholder. Subject to certain exceptions, an "interested stockholder" is any entity or person who, together with that entity's or person's affiliates and associates, owns or within the previous three years owned, 15% or more of our outstanding voting stock. For purposes of this section only, "voting stock" has the meaning given to it in Section 203.

Under certain circumstances, this provision will make it more difficult for a person who would be an "interested stockholder" to effect various business combinations with us for a period of three years. This provision may encourage companies interested in acquiring us to negotiate in advance with our board of directors. These provisions also may have the effect of preventing changes in our board of directors and may make it more difficult to accomplish transactions that stockholders may otherwise deem to be in their best interests.

Our amended and restated certificate of incorporation will provide that John Paulson and certain affiliated entities, and any group as to which such persons are a party, will not be deemed to be "interested stockholders" for purposes of this provision.

***Amended and Restated Certificate of Incorporation and Amended and Restated Bylaws***

Our amended and restated certificate of incorporation and our amended and restated bylaws, which will become effective prior to the completion of this offering, 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:

*Dual Class Stock* 

As described above in "—Common Stock—Voting Rights," our amended and restated certificate of incorporation provides for a dual class common stock structure, which will provide holders of our

------

##### [**Table of Contents**](#toc)
Class B common stock with significant influence over matters requiring stockholder approval, including the election of directors and significant corporate transactions, such as a merger or other sale of our company or its assets.

*Classified Board* 

Our amended and restated certificate of incorporation will further provide that our board of directors is divided into three classes, Class I, Class II and Class III, with each class serving staggered three-year terms. Our amended and restated certificate of incorporation provides that directors may be removed with or without cause upon the affirmative vote of a majority of the voting power of our outstanding capital stock entitled to vote generally in the election of directors, voting together as a single class; provided, however, that at any time when the holders of our Class B common stock no longer beneficially own, in the aggregate, at least the majority of the voting power of our outstanding capital stock entitled to vote generally in the election of directors, directors may only be removed for cause and upon the affirmative vote of a majority of the voting power of our outstanding capital stock entitled to vote generally in the election of directors, voting together as a single class. The existence of a classified board could delay a potential acquirer from obtaining majority control of our board of directors, and the prospect of that delay might deter a potential acquirer. See "Management—Corporate Governance—Board Composition."

*Board of Directors Vacancies* 

Subject to the rights of the holders of any series of preferred stock to elect directors and the rights granted pursuant to the Stockholders Agreement, our amended and restated certificate of incorporation and amended and restated bylaws will authorize our board of directors to fill vacant directorships, including newly created seats, and the number of directors constituting our board of directors will be permitted to be set only by a resolution adopted by our board of directors. These provisions would prevent a stockholder 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. This will make it more difficult to change the composition of our board of directors and will promote continuity of management.

*Stockholder Action; Special Meeting of Stockholders* 

Our amended and restated certificate of incorporation will provide that at any time when the holders of our Class B common stock no longer beneficially own, in the aggregate, at least the majority of the voting power of our outstanding capital stock, our stockholders may not take action by written consent, but may only take action at annual or special meetings of our stockholders. As a result, a holder controlling a majority of our capital stock would not be able to amend our amended and restated bylaws or remove directors without holding a meeting of our stockholders called in accordance with our amended and restated bylaws. Our amended and restated certificate of incorporation will further provide that at any time when the holders of our Class B common stock no longer beneficially own, in the aggregate, at least the majority of the voting power of our outstanding capital stock, special meetings of our stockholders may be called only by a majority of our board of directors, the chairperson of our board of directors and our Chief Executive Officer, thus prohibiting a stockholder from calling a special meeting. Additionally, so long as the holders of our Class B common stock beneficially own, in the aggregate, at least the majority of the voting power of our outstanding capital stock, the holders of at least a majority of the voting power of the then outstanding shares of our capital stock may take action by written consent or request that a special meeting of stockholders be called. These provisions might delay the ability of our stockholders to force consideration of a proposal or for stockholders controlling a majority of our capital stock to take any action, including the removal of directors.

------

##### [**Table of Contents**](#toc)
*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 will not apply to John Paulson and certain affiliated entities so long as the Stockholders Agreement remains in effect. 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.

*No Cumulative Voting* 

The Delaware General Corporation Law 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 does not provide for cumulative voting.

*Amendment of Charter and Bylaws Provisions* 

Our amended and restated certificate of incorporation will provide that, at any time when the holders of our Class B common stock no longer beneficially own, in the aggregate, at least the majority of the voting power of our outstanding capital stock, amendments to certain provisions of our amended and restated certificate of incorporation will require the approval of 66 2/3% of the voting power of our outstanding capital stock, voting as a single class. In addition, for so long as any shares of our Class B common stock remain outstanding, the approval of a majority of the voting power of our outstanding shares of Class B common stock, voting as a separate class, will be required to amend the provisions of our amended and restated certificate of incorporation relating to the terms of our Class A common stock or Class B common stock and the provisions relating to corporate opportunities. Our amended and restated certificate of incorporation and amended and restated bylaws will provide that, at any time when the holders of our Class B common stock no longer beneficially own, in the aggregate, at least the majority of the voting power of our outstanding capital stock, approval of stockholders holding 66 2/3% of the voting power of our outstanding capital stock, voting as a single class, is required for stockholders to amend or adopt any provision of our bylaws.

*Issuance of Undesignated Preferred Stock* 

Our board of directors will have the authority, without further action by our stockholders, to issue up to 50,000,000 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.

*Exclusive Forum* 

Our amended and restated certificate of incorporation will provide that, unless we consent in writing to the selection of an alternative forum, (A) (i) any derivative action or proceeding brought on behalf of the Company, (ii) any action asserting a claim of breach of a fiduciary duty owed by any current or former director, officer, other employee or stockholder of the Company to the Company or the Company's stockholders, (iii) any action asserting a claim arising pursuant to any provision of the Delaware General Corporation Law, our amended and restated certificate of incorporation or our

------

##### [**Table of Contents**](#toc)

**Corporate Opportunity Doctrine** 

Delaware law permits corporations to adopt provisions renouncing any interest or expectancy in certain opportunities that are presented to the corporation or its officers, directors or stockholders. Our amended and restated certificate of incorporation will, to the fullest extent permitted from time to time by Delaware law, renounce any interest or expectancy that we otherwise would have in, all rights to be offered an opportunity to participate in, any business opportunity that are from time to time may be presented to John Paulson and certain affiliated entities (other than us and our subsidiaries), and any of their respective principals, members, directors, partners, stockholders, officers, employees or other representatives (other than any such person who is also our employee or an employee of our subsidiaries), or any director or stockholder who is not employed by us or our subsidiaries (each such person, an "exempt person"). Our amended and restated certificate of incorporation will provide that, to the fullest extent permitted by law, no exempt person will have any duty to refrain from (1) engaging in a corporate opportunity in the same or similar lines of business in which we or our subsidiaries now engage or propose to engage or (2) otherwise competing with us or our subsidiaries. In addition, to the fullest extent permitted by law, if an exempt person acquires knowledge of a potential transaction or other business opportunity which may be a corporate opportunity for itself or himself or its or his affiliates or for us or our subsidiaries, such exempt person will have no duty to communicate or offer such transaction or business opportunity to us or any of our subsidiaries and such exempt person may take any such opportunity for themselves or offer it to another person or entity. To the fullest extent permitted by Delaware law, no potential transaction or business opportunity may be deemed to be a corporate opportunity of the corporation or its subsidiaries unless (1) we or our subsidiaries would be permitted to undertake such transaction or opportunity in accordance with the amended and restated certificate of incorporation, (2) we or our subsidiaries, at such time have sufficient financial resources to undertake such transaction or opportunity, (3) we or our subsidiaries have an interest or expectancy in such transaction or opportunity, and (4) such transaction or opportunity would be in the same or similar line of our or our subsidiaries' business in which we or our subsidiaries are engaged or a line of business that is reasonably related to, or a reasonable extension of, such line of business. Our amended and restated certificate of incorporation will not renounce our interest in any business opportunity that is expressly offered to a director solely in his or her capacity as a director of the Company.

**Limitations on Liability and Indemnification Matters** 

Our amended and restated certificate of incorporation will limit the liability of our directors and officers to the fullest extent permitted by the Delaware General Corporation Law, and our amended and restated bylaws will provide that we will indemnify them to the fullest extent permitted by such law.

------

##### [**Table of Contents**](#toc)
We expect to enter into indemnification agreements with our current directors and executive officers prior to the completion of this offering and expect to enter into a similar agreement with any new directors or executive officers. Further, pursuant to our indemnification agreements and directors' and officers' liability insurance, our directors and executive officers will be indemnified and insured against the cost of defense, settlement or payment of a judgment under certain circumstances. In addition, as permitted by Delaware law, our amended and restated certificate of incorporation will include provisions that eliminate the personal liability of our directors and officers for monetary damages resulting from certain breaches of fiduciary duties as a director or officer. The effect of this provision is to restrict our rights and the rights of our stockholders to recover monetary damages against a director or officer for breach of fiduciary duties as a director or officer in certain circumstances.

These provisions may be held not to be enforceable for violations of the federal securities laws of the United States.

**Listing** 

We have applied to list our Class A common stock on the NYSE under the symbol "STWY."

**Transfer Agent and Registrar** 

The transfer agent and registrar for our Class A common stock is American Stock Transfer & Trust Company, LLC.

------

##### [**Table of Contents**](#toc)
**SHARES AVAILABLE FOR FUTURE SALE** 

Immediately prior to this offering, there was no public market for our Class A common stock. Sales of substantial amounts of our Class A common stock in the public market, or the perception that such sales may occur, could adversely affect the prevailing market price of our Class A common stock. Some shares of our Class A common stock will not be available for sale for a certain period of time after this offering because they are subject to contractual and legal restrictions on resale, some of which are described below. Sales of substantial amounts of Class A common stock in the public market after these restrictions lapse, or the perception that these sales could occur, could adversely affect the prevailing market price of our Class A common stock and our ability to raise equity capital in the future.

**Sales of Restricted Securities** 

Based on the number of shares of our capital stock outstanding as of , 2023, after giving effect to (i) the Distribution, (ii) the filing and effectiveness of our amended and restated certificate of incorporation, (iii) the Reclassification and (iv) the Stock Split, on the completion of this offering, shares of our Class A common stock and shares of our Class B common stock will be outstanding. Of these shares, all of the Class A common stock sold in this offering by the selling stockholder, plus any shares of Class A common stock sold by the selling stockholder upon the exercise of the underwriters' option to purchase additional shares of Class A common stock, will be freely tradable without restriction under the Securities Act, unless these shares are purchased by our "affiliates," as that term is defined in Rule 144 under the Securities Act.

The remaining shares of Class A common stock and all shares of Class B common stock outstanding after this offering will be "restricted securities" within the meaning of Rule 144 under the Securities Act. Restricted securities may be sold in the public market only if they are registered under the Securities Act or are sold pursuant to an exemption from registration under Rule 144 or Rule 701 under the Securities Act, which are summarized below. Restricted securities may also be sold outside the United States to non-U.S. persons in accordance with Rule 904 of Regulation S. Subject to the lock-up agreements described below, shares held by our affiliates that are not restricted securities or that have been owned for more than one year may be sold subject to compliance with Rule 144 of the Securities Act without regard to the prescribed one-year holding period under Rule 144.

**Form S-8 Registration Statements** 

Upon the completion of this offering, we intend to file one or more registration statements on Form S-8 under the Securities Act to register the shares of Class A common stock to be issued under our 2023 Plan. These registration statements will become effective immediately on filing. Shares covered by these registration statements will then be eligible for sale in public markets, subject to vesting restrictions, the lock-up agreements described below and Rule 144 limitations applicable to affiliates.

**Lock-up Agreements** 

We, the selling stockholder, all of our directors and executive officers and all other holders of our Class A common stock, Class B common stock and securities exercisable for or convertible into our Class A common stock and Class B common stock outstanding immediately prior to the completion of this offering have agreed that, without the prior consent of Goldman Sachs & Co. LLC, BofA Securities, Inc. and Barclays Capital Inc., on behalf of the underwriters, we and they will not, subject to certain exceptions, for a period of 180 days after the date of this prospectus, among other things, offer, sell, contract to sell, pledge, grant any option to purchase, lend or otherwise dispose of, or engage in

------

##### [**Table of Contents**](#toc)
hedging activities in relation to, any shares of our Class A common stock or Class B common stock, or any options or warrants to purchase any shares of our Class A common stock or Class B common stock, or any securities convertible into, exchangeable for or that represent the right to receive shares of our Class A common stock or Class B common stock. Goldman Sachs & Co. LLC, BofA Securities, Inc. and Barclays Capital Inc. may, in their sole discretion, release all or any portion of the securities subject to these lock-up agreements at any time. These agreements are subject to certain exceptions, including a price-based release, and are described below under "Underwriting."

**Registration Rights** 

John Paulson and certain affiliated entities and Mr. Steiner will have the right to require us to register their shares of common stock for resale, subject to the lock-up agreements described above. Registration of these shares under the Securities Act would result in the shares becoming freely tradable without restriction under the Securities Act immediately on the effectiveness of the registration. See "Certain Relationships and Related Party Transactions—Relationship with John Paulson and Certain Affiliated Entities Following this Offering—Registration Rights Agreement."

**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 (or persons whose shares are aggregated) who is not deemed to be or 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 an affiliate, is entitled to sell such shares without registration, subject to compliance with the public information requirements of Rule 144. If such a person has beneficially owned the shares proposed to be sold for at least one year, including the holding period of a prior owner other than an affiliate, then such person is entitled to sell such 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, who have met the six-month holding period for beneficial ownership of "restricted shares" of our Class A common stock, are entitled to sell upon the expiration of the lock-up agreements described in this prospectus, within any three-month period, a number of shares that does not exceed the greater of:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• 1% of the number of shares of our Class A common stock then outstanding, which will equal approximately
 shares immediately after this offering (or shares if
the underwriters exercise in full their option to purchase additional shares of Class A common stock from the selling stockholder); and

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• the average reported weekly trading volume of our Class A common stock on the NYSE during the four calendar weeks
preceding the date of filing a Notice of Proposed Sale of Securities Pursuant to Rule 144 with respect to the 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. The sale of these shares, or the perception that sales will be made, could adversely affect the price of our Class A common stock after this offering because a great supply of shares would be, or would be perceived to be, available for sale in the public market.

**Rule 701** 

Any of our employees, officers or directors who acquired shares under a written compensatory plan or contract may be entitled to sell them in reliance on Rule 701. Rule 701 permits affiliates to sell

------

##### [**Table of Contents**](#toc)
their Rule 701 shares under Rule 144 without complying with the holding period requirements of Rule 144. Rule 701 further provides that non-affiliates may sell these shares in reliance on Rule 144 without complying with the holding period, public information, volume limitation or notice provisions of Rule 144. However, all shares issued under Rule 701 are subject to lock-up agreements and will only become eligible for sale when the 180-day lock-up agreements expire.

------

##### [**Table of Contents**](#toc)
**MATERIAL U.S. FEDERAL INCOME TAX CONSEQUENCES TO NON-U.S. HOLDERS** 

The following discussion is a summary of the material U.S. federal income tax consequences to Non-U.S. Holders (as defined below) of the purchase, ownership, and disposition of our Class A common stock offered for purchase pursuant to this offering, but does not purport to be a complete analysis of all potential tax effects. The effects of other U.S. federal tax laws, such as estate and gift tax laws, and any applicable state, local, or non-U.S. tax laws are not discussed. This discussion is based on the U.S. Internal Revenue Code of 1986, as amended (the "Code"), Treasury Regulations promulgated thereunder, judicial decisions, and published rulings and administrative pronouncements of the U.S. Internal Revenue Service (the "IRS"), in each case in effect as of the date hereof. These authorities may change or be subject to differing interpretations. Any such change or differing interpretation may be applied retroactively in a manner that could adversely affect a Non-U.S. Holder. We have not sought and will not seek any rulings from the IRS regarding the matters discussed below. There can be no assurance the IRS or a court will not take a contrary position to that discussed below regarding the tax consequences of the purchase, ownership, and disposition of our Class A common stock.

This discussion is limited to Non-U.S. Holders that hold our Class 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 U.S. federal income tax consequences relevant to a Non-U.S. Holder's particular circumstances, including the impact of the Medicare contribution tax on net investment income and the alternative minimum tax. In addition, it does not address consequences relevant to Non-U.S. Holders subject to special rules, including, without limitation:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• U.S. expatriates and former citizens or long-term residents of the United States;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• persons holding our Class A common stock as part of a hedge, straddle, or other risk reduction strategy or as part of
a conversion transaction or other integrated investment;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• banks, insurance companies, and other financial institutions;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• brokers, dealers, or traders in securities;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• "controlled foreign corporations," "passive foreign investment companies," and corporations that
accumulate earnings to avoid U.S. federal income tax;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• partnerships or other entities or arrangements treated as partnerships for U.S. federal income tax purposes (and investors
therein);

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• tax-exempt organizations or governmental organizations;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• persons deemed to sell our Class A common stock under the constructive sale provisions of the Code;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• persons who hold or receive our Class A common stock pursuant to the exercise of any employee stock option or
otherwise as compensation;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• tax-qualified retirement plans; and

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• "qualified foreign pension funds" as defined in Section 897(l)(2) of the Code and entities all of the
interests of which are held by qualified foreign pension funds.

If an entity treated as a partnership for U.S. federal income tax purposes holds our Class A common stock, the tax treatment of a partner in the partnership will depend on the status of the partner, the activities of the partnership, and certain determinations made at the partner level. Accordingly, partnerships holding our Class A common stock and the partners in such partnerships should consult their tax advisors regarding the U.S. federal income tax consequences to them.

**THIS DISCUSSION IS FOR INFORMATIONAL PURPOSES ONLY AND IS NOT TAX ADVICE. INVESTORS SHOULD CONSULT THEIR TAX ADVISORS WITH RESPECT TO THE APPLICATION** 

------

##### [**Table of Contents**](#toc)
 **OF THE U.S. FEDERAL INCOME TAX LAWS TO THEIR PARTICULAR SITUATIONS AS WELL AS ANY TAX CONSEQUENCES OF THE PURCHASE, OWNERSHIP, AND DISPOSITION OF OUR CLASS A COMMON STOCK ARISING UNDER THE U.S. FEDERAL ESTATE OR GIFT TAX LAWS OR UNDER THE LAWS OF ANY STATE, LOCAL, OR NON-U.S. TAXING JURISDICTION OR UNDER ANY APPLICABLE INCOME TAX TREATY.** 

**Definition of a Non-U.S. Holder** 

For purposes of this discussion, a "Non-U.S. Holder" is any beneficial owner of our Class A common stock that is neither a "U.S. person" nor an entity treated as a partnership for U.S. federal income tax purposes. A U.S. person is any person that, for U.S. federal income tax purposes, is or is treated as any of the following:

&nbsp;&nbsp;&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;&nbsp;&nbsp;• a corporation created or organized under the laws of the United States, any state thereof, or the District of Columbia;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• an estate, the income of which is subject to U.S. federal income tax regardless of its source; or

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• a trust that (1) is subject to the primary supervision of a U.S. court and the control of one or more "United
States persons" (within the meaning of Section 7701(a)(30) of the Code), or (2) has a valid election in effect to be treated as a United States person for U.S. federal income tax purposes.

**Distributions** 

Distributions of cash or property on our Class A common stock 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. Amounts not treated as dividends for U.S. federal income tax purposes will constitute a return of capital and first be applied against and reduce a Non-U.S. Holder's adjusted tax basis in its Class A common stock, but not below zero. Any excess will be treated as capital gain and will be treated as described below under "—Sale or Other Taxable Disposition."

Subject to the discussion below on effectively connected income, dividends paid to a Non-U.S. Holder will be subject to U.S. federal withholding tax at a rate of 30% of the gross amount of the dividends (or such lower rate specified by an applicable income tax treaty, provided the Non-U.S. Holder furnishes a valid IRS Form W-8BEN or W-8BEN-E (or other applicable documentation) certifying qualification for the lower treaty rate). A Non-U.S. Holder that does not timely furnish the required documentation, but that qualifies for a reduced treaty rate, may obtain a refund of any excess amounts withheld by timely filing an appropriate claim for refund with the IRS. Non-U.S. Holders should consult their tax advisors regarding their entitlement to benefits under any applicable income tax treaty.

If dividends paid to a Non-U.S. Holder are effectively connected with the Non-U.S. Holder's conduct of a trade or business within the United States (and, if required by an applicable income tax treaty, the Non-U.S. Holder maintains a permanent establishment in the United States to which such dividends are attributable), the Non-U.S. Holder will be exempt from the U.S. federal withholding tax described above. To claim the exemption, the Non-U.S. Holder must furnish to the applicable withholding agent a valid IRS Form W-8ECI, certifying that the dividends are effectively connected with the Non-U.S. Holder's conduct of a trade or business within the United States.

Any such effectively connected dividends will be subject to U.S. federal income tax on a net income basis at the regular rates. A Non-U.S. Holder that is a corporation also may be subject to a branch profits tax at a rate of 30% (or such lower rate specified by an applicable income tax treaty) on such effectively connected dividends, as adjusted for certain items. Non-U.S. Holders should consult their tax advisors regarding any applicable tax treaties that may provide for different rules.

------

##### [**Table of Contents**](#toc)
**Sale or Other Taxable Disposition** 

Subject to the discussions below regarding FATCA and backup withholding, a Non-U.S. Holder will not be subject to U.S. federal income tax (including withholding thereof) on any gain realized upon the sale or other taxable disposition of our Class A common stock unless:

&nbsp;&nbsp;&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 within the United States (and, if required by an applicable income tax treaty, the Non-U.S. Holder maintains a permanent establishment in the United States to which such gain is
attributable);

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• the Non-U.S. Holder is a nonresident alien individual present in the United States
for 183 days or more during the taxable year of the disposition and certain other requirements are met; or

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• our Class A common stock constitutes a U.S. real property interest ("USRPI") by reason of our status as a
U.S. real property holding corporation ("USRPHC") for U.S. federal income tax purposes at any time during the shorter of the five-year period ending on the date of the sale or other taxable disposition of, or the Non-U.S. Holder's holding period for, our Class A common stock.

Gain described in the first bullet point above generally will be subject to U.S. federal income tax on a net income basis at the regular rates. A Non-U.S. Holder that is a corporation also may be subject to a branch profits tax at a rate of 30% (or such lower rate specified by an applicable income tax treaty) on such effectively connected gain, as adjusted for certain items.

A Non-U.S. Holder described in the second bullet point above will be subject to U.S. federal income tax at a rate of 30% (or such lower rate specified by an applicable income tax treaty) on gain realized upon the sale or other taxable disposition of our Class A common stock, which may be offset by U.S. source capital losses of the Non-U.S. Holder (even though the individual is not considered a resident of the United States), provided the Non-U.S. Holder has timely filed U.S. federal income tax returns with respect to such losses.

With respect to the third bullet point above, we believe we currently are not, and do not anticipate becoming, a USRPHC. Because the determination of whether we are a USRPHC depends, however, on the fair market value of our USRPIs relative to the fair market value of our non-U.S. real property interests and our other business assets, there can be no assurance we currently are not a USRPHC or will not become one in the future. Even if we are or were to become a USRPHC, gain arising from the sale or other taxable disposition of our Class A common stock by a Non-U.S. Holder will not be subject to U.S. federal income tax if our Class A common stock is "regularly traded," as defined by applicable Treasury Regulations, on an established securities market and such Non-U.S. Holder owned, actually and constructively, 5% or less of our Class A common stock throughout the shorter of the five-year period ending on the date of the sale or other taxable disposition or the Non-U.S. Holder's holding period.

Non-U.S. Holders should consult their tax advisors regarding potentially applicable income tax treaties that may provide for different rules.

**Information Reporting and Backup Withholding** 

Payments of dividends on our Class A common stock will not be subject to backup withholding, provided the applicable withholding agent does not have actual knowledge or reason to know the holder is a United States person and the holder either certifies its non-U.S. status, such as by furnishing a valid IRS Form W-8BEN, W-8BEN-E, or W-8ECI (or other applicable form), or otherwise establishes an exemption. However, information returns are required to be filed with the IRS in

------

##### [**Table of Contents**](#toc)
connection with any distributions on our Class A common stock paid to the Non-U.S. Holder, regardless of whether such distributions constitute dividends or whether any tax was actually withheld. In addition, proceeds of the sale or other taxable disposition of our Class A common stock within the United States or conducted through certain U.S.-related brokers generally will not be subject to backup withholding or information reporting if the applicable withholding agent receives the certification described above and does not have actual knowledge or reason to know that such holder is a United States person or the holder otherwise establishes an exemption. Proceeds of a disposition of our Class A common stock conducted through a non-U.S. office of a non-U.S. broker generally will not be subject to backup withholding or information reporting.

Copies of information returns that are filed with the IRS may also be made available under the provisions of an applicable treaty or agreement with the tax authorities of the country in which the Non-U.S. Holder resides or is established.

Backup withholding is not an additional tax. Any amounts withheld under the backup withholding rules may be allowed as a refund or a credit against a Non-U.S. Holder's U.S. federal income tax liability, provided the required information is timely furnished to the IRS.

**Additional Withholding Tax on Payments Made to Foreign Accounts** 

Withholding taxes may be imposed under Sections 1471 to 1474 of the Code (such Sections commonly referred to as the Foreign Account Tax Compliance Act, or "FATCA") on certain types of payments made to non-U.S. financial institutions and certain other non-U.S. entities. Specifically, a 30% withholding tax may be imposed on dividends on, or (subject to the proposed Treasury Regulations discussed below) gross proceeds from the sale or other disposition of, our Class A common stock paid to a "foreign financial institution" or a "non-financial foreign entity" (each as defined in the Code), unless (1) the foreign financial institution undertakes certain diligence and reporting obligations, (2) the non-financial foreign entity either certifies it does not have any "substantial United States owners" (as defined in the Code) or furnishes identifying information regarding each substantial United States owner, or (3) the foreign financial institution or non-financial foreign entity otherwise qualifies for an exemption from these rules. If the payee is a foreign financial institution and is subject to the diligence and reporting requirements in (1) above, it must enter into an agreement with the U.S. Department of the Treasury requiring, among other things, that it undertake to identify accounts held by certain "specified United States persons" or "United States owned foreign entities" (each as defined in the Code), annually report certain information about such accounts, and withhold 30% on certain payments to non-compliant foreign financial institutions and certain other account holders. Foreign financial institutions located in jurisdictions that have an intergovernmental agreement with the United States governing FATCA may be subject to different rules.

Under the applicable Treasury Regulations and administrative guidance, withholding under FATCA generally applies to payments of dividends on our Class A common stock. While withholding under FATCA would have applied also to payments of gross proceeds from the sale or other disposition of stock on or after January 1, 2019, proposed Treasury Regulations eliminate FATCA withholding on payments of gross proceeds entirely. Taxpayers generally may rely on these proposed Treasury Regulations until final Treasury Regulations are issued.

Prospective investors should consult their tax advisors regarding the potential application of withholding under FATCA to their investment in our Class A common stock.

------

##### [**Table of Contents**](#toc)
**UNDERWRITING** 

We, the selling stockholder and the underwriters named below have entered into an underwriting agreement with respect to the shares of Class A common stock being offered by this prospectus. Subject to certain conditions, each underwriter has severally agreed to purchase from the selling stockholder the number of shares of Class A common stock indicated in the following table. Goldman Sachs & Co. LLC, BofA Securities, Inc. and Barclays Capital Inc. are the representatives of the underwriters.

---

| | |
|:---|:---|
| **Name** | **Number of<br>Shares** |
|  Goldman Sachs & Co. LLC |  |
|  BofA Securities, Inc. |  |
|  Barclays Capital Inc. |  |
| Evercore Group L.L.C. |  |
| Cowen and Company, LLC |  |
| Stifel, Nicolaus & Company, Incorporated |  |
| Sanford C. Bernstein & Co., LLC |  |
| Telsey Advisory Group LLC |  |
| Commerz Markets LLC |  |
| Loop Capital Markets LLC |  |
| Total |  |

---

The underwriters are committed to take and pay for all of the shares of Class A common stock being offered, if any are taken, other than the shares of Class A common stock covered by the option described below unless and until this option is exercised. The underwriting agreement also provides that if an underwriter defaults, the purchase commitments of non-defaulting underwriters may also be increased or the offering may be terminated.

The underwriters have an option to buy up to an additional shares of Class A common stock from the selling stockholder to cover sales by the underwriters of a greater number of shares of Class A common stock than the total number set forth in the table above. They may exercise that option for 30 days from the date of this prospectus. If any shares of Class A common stock are purchased pursuant to this option, the underwriters will severally purchase shares of Class A common stock 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 selling stockholder. Such amounts are shown assuming both no exercise and full exercise of the underwriters' option to purchase up to additional shares of Class A common stock from the selling stockholder.

---

| | | |
|:---|:---|:---|
|  | **Paid by Selling<br>stockholder** | **Paid by Selling<br>stockholder** |
|  | **No<br>Exercise** | **Full<br>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 of Class A common stock sold by the

------

##### [**Table of Contents**](#toc)
underwriters to securities dealers may be sold at a discount of up to $ per share from the initial public offering price. After the initial offering of the shares of Class A common stock, the representatives may change the offering price and the other selling terms.

The offering of the shares of Class A common stock by the underwriters is subject to receipt and acceptance and subject to the underwriters' right to reject any order in whole or in part. Sales of shares of Class A common stock made outside of the United States may be made by affiliates of the underwriters.

A prospectus in electronic format may be made available on websites maintained by one or more underwriters, or selling group members, if any, participating in this offering. The representative may agree to allocate a number of shares of our Class A common stock to underwriters and selling group members for sale to their online brokerage account holders. Internet distributions will be allocated by the representative to underwriters and selling group members that may make Internet distributions on the same basis as other allocations.

We, the selling stockholder, all of our directors and executive officers and other holders (each, a "Lock-Up Party") of our Class A common stock, Class B common stock and securities exercisable for or convertible into our Class A common stock and Class B common stock outstanding immediately prior to the completion of this offering (collectively, the "Restricted Securities") have agreed with the underwriters not to, and not to cause or direct any of our or their affiliates to, without the prior written consent of Goldman Sachs & Co. LLC, BofA Securities, Inc. and Barclays Capital Inc. on behalf of the underwriters, during the period ending 180 days after the date of this prospectus (the "Lock-Up Period"), (i) offer, sell, contract to sell, pledge, grant any option to purchase, lend or otherwise dispose of, directly or indirectly, or file with the Securities and Exchange Commission a registration statement under the Securities Act relating to, any Restricted Securities, (ii) engage in any hedging or other transaction or arrangement which is designed to or which reasonably could be expected to lead to or result in a sale, loan, pledge or other disposition, or transfer of any of the economic consequences of ownership of the Restricted Securities or (iii) publicly announce any intention to engage in the foregoing.

The restrictions described above (the "Lock-Up Restrictions") do not apply to transfers of Restricted Securities:

(i) as a result of the redemption, repurchase or forfeiture by us or our affiliates of Restricted Securities held by or on behalf of an employee or other service provider of our company in connection with the death, disability or termination of such employee or service provider, in each case pursuant to an employment agreement, employee benefit plan or other contractual arrangement in existence on the date of effectiveness of the registration statement of which this prospectus is a part and described herein; provided that any filing under Section 16(a) of the Exchange Act or any other public filing or disclosure of such transfer by or on behalf of the Lock-Up Party, shall clearly indicate in the footnotes thereto the nature and conditions of such transfer;

(ii) acquired by the Lock-Up Party in the open market after the completion of this offering or from the underwriters;

(iii) by bona fide gift or gifts, will, intestacy or charitable contribution, provided that the donee or donees, beneficiary or beneficiaries, heir or heirs or legal representatives thereof agree to be bound in writing by the Lock-Up Restrictions for the balance of the Lock-Up Period, and provided further that any such transfer shall not involve a disposition for value;

(iv) to any trust, partnership, limited liability company or other entity for the direct or indirect benefit of the Lock-Up Party or the immediate family of the Lock-Up Party, provided that the trustee of the trust or

------

##### [**Table of Contents**](#toc)
the partnership or limited liability company or other entity agrees to be bound in writing by the Lock-Up Restrictions for the balance of the Lock-Up Period, and provided further that any such transfer shall not involve a disposition for value;

(v) to any immediate family member or other dependent; provided, that the transferee agrees to be bound in writing by the Lock-Up Restrictions for the balance of the Lock-Up Period, and provided further that any such transfer shall not involve a disposition for value;

(vi) by operation of law or court order, such as pursuant to a qualified domestic order, divorce settlement, divorce decree or separation agreement;

(vii) if the Lock-Up Party is a corporation, partnership, limited liability company or other business entity, (A) to another corporation, partnership, limited liability company or other business entity that is an affiliate (as defined in Rule 405 promulgated under the Securities Act) of the Lock-Up Party, (B) to the Lock-Up Party's wholly-owned subsidiaries, partners, limited partners, managers, members, equityholders, shareholders, trustors or beneficiaries, or to any investment fund or other entity that controls, is controlled by, manages, is managed by or is under common control with the Lock-Up Party (including, if the Lock-Up Party is a partnership, to its general partner or a successor partnership or fund, or any other funds managed by such partnership and, if the Lock-Up Party is a trust, to a trustor or beneficiary of the trust) or (C) as part of a distribution by the Lock-Up Party to its stockholders, partners, members or other equityholders or to the estate of any such stockholders, partners, members or other equityholders; provided, that the transferee agrees to be bound in writing by the Lock-Up Restrictions for the balance of the Lock-Up Period, and provided further that any such transfer shall not involve a disposition for value, and provided further that any such transfer shall not involve a disposition for value;

(viii) to a nominee or custodian of a person or entity to whom a disposition or transfer would be permissible under clauses (iii) through (vii) above; provided, that the transferee agrees to be bound in writing by the Lock-Up Restrictions for the balance of the Lock-Up Period, and provided further that any such transfer shall not involve a disposition for value;

(ix) (A) to us for the purposes of exercising (including for the payment of tax withholdings or remittance payments due as a result of such exercise) on a "net exercise" or "cashless" basis options or warrants to purchase the Restricted Securities that are due to expire during the Lock-Up Period, or (B) in connection with the vesting or settlement of restricted stock units or restricted stock awards, any transfer to us for the payment of tax withholdings or remittance payments due as a result of the vesting or settlement of such restricted stock units or restricted stock awards, in each case pursuant to employee benefit plans disclosed herein; provided that any filing under Section 16(a) of the Exchange Act or any other public filing or disclosure of such transfer by or on behalf of the Lock-Up Party, shall clearly indicate in the footnotes thereto the nature and conditions of such transfer; and provided further that any shares of Class A Common Stock, Class B Common Stock or other securities received upon the exercise, settlement or vesting of the Lock-Up Party's Restricted Securities and options or warrants to purchase Restricted Securities shall be subject to the Lock-Up Restrictions;

(x) to any third-party pledgee in a bona fide transaction as collateral to secure obligations pursuant to lending or other arrangements, including any bona fide purpose (margin) or bona fide non-purpose loan that is in effect on the date hereof (including any replacement, amendment or modification thereof), between such third parties (or their affiliates or designees) and the Lock-Up Party and/or its affiliates or any similar arrangement relating to a financing agreement for the benefit of the Lock-Up Party and/or its affiliates, provided, that any such pledgee or other transferee to which the pledged Restricted Securities are transferred shall agree to execute and deliver to the representatives an agreement in the form of the lock-up agreements entered into by the Lock-Up Parties;

------

##### [**Table of Contents**](#toc)
(xi) to the extent the Lock-Up Party is a selling stockholder in this offering, to the underwriters pursuant to the terms of the underwriting agreement in connection with this offering; and

(xii) (A) the conversion or reclassification of our outstanding common stock or other classes of capital stock into shares of Class A common stock or Class B common stock in connection with this offering and (B) the completion of the Distribution; provided that any Restricted Securities and any securities convertible into or exercisable or exchangeable for Restricted Securities received in connection with the organizational transactions in connection with this offering remain subject to the Lock-Up Restrictions; provided further that, to the extent an announcement or filing under the Exchange Act, if any, is required of or voluntarily made by or on behalf of the Lock-Up Party or us regarding the conversion, reclassification or the Distribution, as applicable, such announcement or filing shall include a statement to the effect that such conversion, reclassification or Distribution occurred pursuant to the organizational transactions in connection with this offering and no transfer of shares of common stock or other securities received in connection thereto may be made during the Lock-Up Period;

provided, that in connection with any transfers pursuant to clauses (i), (iii) through (viii) and (ix) above, no filing under Section 16(a) of the Exchange Act shall, during the Lock-Up Period, be required or voluntarily made, and provided further that in connection with any other transfers, to the extent a filing under Section 16(a) of the Exchange Act is required in connection with any such transfers of the Lock-Up Party's Securities, the Lock-Up Party shall disclose therein the reason for such filing.

Notwithstanding the foregoing, subject to compliance with applicable securities laws, including without limitation Rule 144 under the Securities Act, each Lock-Up Party may sell in the public market beginning at the commencement of the second trading day on which the New York Stock Exchange and the Nasdaq Stock Market are open for the buying and selling of securities (each, a "Trading Day") after we publicly announce our earnings (which for this purpose shall include reporting of financial results on a press release or a Form 10-Q but shall not include reporting of "flash" numbers or preliminary or partial earnings) for the first completed quarterly period following the most recent period for which financial statements are included in this prospectus, which earnings release is at least 60 days following the pricing of this offering (the "Earnings Release"), a number of shares of Restricted Securities not in excess of 30% of the Restricted Securities owned by such Lock-Up Party on the date of its lock-up agreement, calculated after giving effect to any sales of shares by the Lock-Up Party to the underwriters in this offering; provided that the last reported closing price of our Class A common stock is at least 33% greater than the initial public offering price per share set forth on the cover of this prospectus for 10 out of any 15-consecutive full Trading Days beginning on or after the Trading Day of the Earnings Release.

The Lock-Up Restrictions also do not apply to us with respect to certain transactions, including (A) the sale of our Class A common stock to the underwriters pursuant to the underwriting agreement (including sales by us to the underwriters in connection with the Reserved Share Program), (B) the issuance of Class A common stock upon the exercise of an option or warrant, in connection with the vesting and/or settlement of restricted stock, or the conversion of a security outstanding on the date of the underwriting agreement as described in this prospectus, (C) the grant of compensatory equity-based awards, and/or the issuance of shares of Class A common stock with respect thereto, made pursuant to compensatory equity-based plans disclosed in this prospectus, (D) any shares of Class A common stock issued pursuant to any non-employee director compensation plan or program disclosed in this prospectus, (E) the purchase of shares of Class A common stock pursuant to employee stock purchase plans described in this prospectus, (F) the filing of a registration statement on Form S-8 to register Class A common stock issuable pursuant to any employee benefit plans, qualified stock option plans or other employee compensation plans, described in this prospectus, (G) Class A common stock or any securities convertible into, or exercisable or exchangeable for, Class A common stock, or the entrance into an agreement to issue Class A common stock or any securities convertible into, or

------

##### [**Table of Contents**](#toc)
exercisable or exchangeable for, Class A common stock, in connection with any merger, joint venture, strategic alliances, commercial or other collaborative transaction or the acquisition or license of the business, property, technology or other assets of another individual or entity or the assumption of an employee benefit plan in connection with a merger or acquisition; provided that the aggregate number of Class A common stock or any securities convertible into, or exercisable or exchangeable for, Class A common stock that we may issue or agree to issue pursuant to this clause (G) shall not exceed 5% of our total outstanding share capital immediately following the completion of this offering; and provided further, that the recipients of any such shares of Class A common stock and securities issued pursuant to this clause (G) during the Lock-Up Period shall enter into an agreement substantially in the form of the lock-up agreements entered into by the Lock-Up Parties on or prior to such issuance, or (H) facilitating the establishment of a trading plan on behalf of a stockholder, officer or director of our Company pursuant to Rule 10b5-1 under the Exchange Act for the transfer of shares of Class A common stock, provided that (i) such plan does not provide for the transfer of Class A common stock during the Lock-Up Period and (ii) no public announcement or filing under the Exchange Act shall be voluntarily made by our Company regarding the establishment of such plan during the Lock-Up Period and to the extent a public announcement or filing under the Exchange Act, if any, is required of our Company regarding the establishment of such plan, such announcement or filing shall include a statement to the effect that no transfer of Class A common stock may be made under such plan during the Lock-Up Period; provided that each recipient of any Class A common stock pledged, issued or sold pursuant to clauses (B), (C) and (D) above executes and delivers to the representatives prior to such pledge, issuance or sale, as the case may be, an agreement having substantially the same terms as the lock-up agreements entered into by the Lock-Up Parties.

Goldman Sachs & Co. LLC, BofA Securities, Inc. and Barclays Capital Inc. may, in their sole discretion, release all or any portion of the securities subject to these lock-up agreements at any time.

Prior to the offering, there has been no public market for the shares of Class A common stock. The initial public offering price will be negotiated among the selling stockholder and the representatives. Among the factors to be considered in determining the initial public offering price of the shares of Class A common stock, in addition to prevailing market conditions, will be our historical performance, estimates of our business potential and earnings prospects, an assessment of our management, and the consideration of the above factors in relation to market valuation of companies in related businesses.

We have applied to list our Class A common stock on the NYSE under the symbol "STWY."

------

##### [**Table of Contents**](#toc)
market. A naked short position is more likely to be created if the underwriters are concerned that there may be downward pressure on the price of the Class A common stock in the open market after pricing that could adversely affect investors who purchase in the offering. Stabilizing transactions consist of various bids for or purchases of Class A common stock made by the underwriters in the open market prior to the completion of the offering.

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 of our Class A common stock 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 our Class A common stock, and together with the imposition of the penalty bid, may stabilize, maintain, or otherwise affect the market price of the Class A common stock. As a result, the price of the Class 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 the NYSE, in the over-the-counter market or otherwise.

We estimate that our share of the total expenses of the offering, excluding underwriting discounts and commissions, will be approximately $. We have agreed to reimburse the underwriters for certain of their expenses relating to the clearance of this offering with the Financial Industry Regulatory Authority in an amount up to $35,000.

We and the selling stockholder have agreed to indemnify the several underwriters against certain liabilities, including liabilities under the Securities Act.

**Other Relationships** 

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.

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 traded 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, or instruments of the issuer (directly, as collateral securing other obligations or otherwise) 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 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.

**Reserved Share Program** 

At our request, an affiliate of BofA Securities, Inc., a participating underwriter, has reserved for sale, at the initial public offering price, up to 5% of the shares offered by this prospectus for sale to some of our

------

##### [**Table of Contents**](#toc)
directors, officers, employees, distributors, dealers, business associates and related persons. If these persons purchase reserved shares it will reduce the number of shares available for sale to the general public. Any reserved shares that are not so purchased will be offered by the underwriters to the general public on the same terms as the other shares offered by this prospectus. Any of our directors, officers and other Lock-Up Parties buying shares of Class A common stock through the Reserved Share Program will be subject to a 180-day lock-up period with respect to such shares, subject to certain exceptions described herein.

Other than the underwriting discount described on the front cover of this prospectus, the underwriters will not be entitled to any commission with respect to shares of Class A common stock sold pursuant to our Reserved Share Program. We will agree to indemnify the underwriters against certain liabilities and expenses, including liabilities under the Securities Act, in connection with sales of the shares reserved for our Reserved Share Program.

**Selling Restrictions** 

***European Economic Area***

In relation to each Member State of the European Economic Area (each an "EEA State"), no shares of Class A common stock have been offered or will be offered pursuant to the offering to the public in that EEA State prior to the publication of a prospectus in relation to the shares of Class A common stock which has been approved by the competent authority in that EEA State or, where appropriate, approved in another EEA State and notified to the competent authority in that EEA State, all in accordance with the EU Prospectus Regulation, except that shares of Class A common stock may be offered to the public in that EEA State at any time under the following exemptions under the EU Prospectus Regulation:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• to any legal entity which is a "qualified investor" as defined under Article 2 of the EU Prospectus Regulation;

&nbsp;&nbsp;&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 EU Prospectus
Regulation), subject to obtaining the prior consent of the representatives for any such offer; or

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• in any other circumstances falling within Article 1(4) of the EU Prospectus Regulation,

provided that no such offer of the shares of Class A common stock shall require the Company or any underwriter to publish a prospectus pursuant to Article 3 of the EU Prospectus Regulation or supplement a prospectus pursuant to Article 23 of the EU Prospectus Regulation.

Each person in an EEA State who initially acquires any shares of Class A common stock or to whom any offer is made will be deemed to have represented, acknowledged and agreed to and with the Company and the representatives that it is a qualified investor within the meaning of the EU Prospectus Regulation.

In the case of any shares of Class A common stock being offered to a financial intermediary as that term is used in Article 5(1) of the EU Prospectus Regulation, each such financial intermediary will be deemed to have represented, acknowledged and agreed that the shares of Class A common stock acquired by it in the offer have not been acquired on a non-discretionary basis on behalf of, nor have they been acquired with a view to their offer or resale to, persons in circumstances which may give rise to an offer to the public other than their offer or resale in an EEA State to qualified investors, in circumstances in which the prior consent of the representatives has been obtained to each such proposed offer or resale.

The Company, the underwriters and their affiliates will rely upon the truth and accuracy of the foregoing representations, acknowledgements and agreements.

------

##### [**Table of Contents**](#toc)
For the purposes of this provision, the expression an "offer to the public" in relation to the shares of Class A common stock in any EEA State means the communication in any form and by any means of sufficient information on the terms of the offer and any shares of Class A common stock to be offered so as to enable an investor to decide to purchase or subscribe for any shares, and the expression "EU Prospectus Regulation" means Regulation (EU) 2017/1129.

The above selling restriction is in addition to any other selling restrictions set out below.

***United Kingdom***

In relation to the United Kingdom, no shares of Class A common stock have been offered or will be offered pursuant to the offering to the public in the United Kingdom prior to the publication of a prospectus in relation to the shares of Class A common stock which has been approved by the Financial Conduct Authority in accordance with the UK Prospectus Regulation, except that shares of Class A common stock may be offered to the public in the United Kingdom at any time under the following exemptions under the UK Prospectus Regulation:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(i) to any legal entity which is a qualified investor as defined under Article 2 of the UK Prospectus Regulation;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(ii) to fewer than 150 natural or legal persons (other than qualified investors as defined under the UK Prospectus
Regulation), subject to obtaining the prior consent of the representatives for any such offer; or

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(iii) at any time in other circumstances falling within section 86 of the FSMA,

provided that no such offer of shares of Class A common stock shall require the Company or any underwriter to publish a prospectus pursuant to Section 85 of the FSMA or Article 3 of the UK Prospectus Regulation or supplement a prospectus pursuant to Article 23 of the UK Prospectus Regulation.

Each person in the United Kingdom who initially acquires any shares of Class A common stock or to whom any offer is made will be deemed to have represented, acknowledged and agreed to and with the Company and the representatives that it is a qualified investor within the meaning of the UK Prospectus Regulation.

In the case of any shares of Class A common stock being offered to a financial intermediary as that term is used in Article 5(1) of the UK Prospectus Regulation, each such financial intermediary will be deemed to have represented, acknowledged and agreed that the shares of Class A common stock acquired by it in the offer have not been acquired on a non-discretionary basis on behalf of, nor have they been acquired with a view to their offer or resale to, persons in circumstances which may give rise to an offer to the public other than their offer or resale in the United Kingdom to qualified investors, in circumstances in which the prior consent of the representatives has been obtained to each such proposed offer or resale.

The Company, the representatives and their affiliates will rely upon the truth and accuracy of the foregoing representations, acknowledgements and agreements.

For the purposes of this provision, the expression an "offer to the public" in relation to any shares of Class A common stock in the UK means the communication in any form and by any means of sufficient information on the terms of the offer and any shares of Class A common stock to be offered so as to enable an investor to decide to purchase or subscribe for any shares, the expression "UK Prospectus Regulation" means Regulation (EU) 2017/1129 as it forms part of domestic law by virtue of

------

##### [**Table of Contents**](#toc)
the European Union (Withdrawal) Act 2018, and the expression "FSMA" means the Financial Services and Markets Act 2000.

This document is for distribution only to persons who (i) have professional experience in matters relating to investments and who qualify as investment professionals within the meaning of Article 19(5) of the Financial Services and Markets Act 2000 (Financial Promotion) Order 2005 (as amended, the "Financial Promotion Order"), (ii) are persons falling within Article 49(2)(a) to (d) ("high net worth companies, unincorporated associations etc.") of the Financial Promotion Order, (iii) are outside the United Kingdom, or (iv) are persons to whom an invitation or inducement to engage in investment activity (within the meaning of Section 21 of the FSMA) in connection with the issue or sale of any securities may otherwise lawfully be communicated or caused to be communicated (all such persons together being referred to as "relevant persons"). This document is directed only at relevant persons and must not be acted on or relied on by persons who are not relevant persons. Any investment or investment activity to which this document relates is available only to relevant persons and will be engaged in only with relevant persons.

***Canada***

The shares of Class A common stock 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 shares of Class A common stock must be made in accordance with an exemption from, 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 for particulars 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 Class A common stock have not been offered or sold and will 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) (the "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) (the "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 Class A 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 Class A common stock which are or are intended to be disposed of

------

##### [**Table of Contents**](#toc)
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 Class A common stock may not be circulated or distributed, nor may the shares of Class A 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 (the "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 Class A 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, 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 Class A 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 (the "Regulation 32").

Where the shares of Class A 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 Class A 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 S$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.

Singapore SFA Product Classification—In connection with Section 309B of the SFA and the CMP Regulations 2018, unless otherwise specified before an offer of shares of our common stock, we have determined, and hereby notify, all relevant persons (as defined in Section 309A(1) of the SFA), that shares of our Class A common stock are "prescribed capital markets products" (as defined in the CMP Regulations 2018) and Excluded Investment Products (as defined in MAS Notice SFA 04-N12: Notice on the Sale of Investment Products and MAS Notice FAA-N16: Notice on Recommendations on Investment Products).

------

##### [**Table of Contents**](#toc)
***Japan***

The shares of Class A common stock have not been and will not be registered under the Financial Instruments and Exchange Act of Japan (Act No. 25 of 1948, as amended), or the FIEA. The shares of Class A common stock 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.

***Australia***

No placement document, prospectus, product disclosure statement or other disclosure document has been lodged with the Australian Securities and Investments Commission ("ASIC"), in relation to the offering. This prospectus does not constitute a prospectus, product disclosure statement or other disclosure document under the Corporations Act 2001 (the "Corporations Act"), and does not purport to include the information required for a prospectus, product disclosure statement or other disclosure document under the Corporations Act.

Any offer in Australia of the shares of Class A common stock may only be made to persons (the "Exempt Investors") who are "sophisticated investors" (within the meaning of section 708(8) of the Corporations Act), "professional investors" (within the meaning of section 708(11) of the Corporations Act) or otherwise pursuant to one or more exemptions contained in section 708 of the Corporations Act so that it is lawful to offer the shares of Class A common stock without disclosure to investors under Chapter 6D of the Corporations Act.

The shares of Class A common stock applied for by Exempt Investors in Australia must not be offered for sale in Australia in the period of 12 months after the date of allotment under the offering, except in circumstances where disclosure to investors under Chapter 6D of the Corporations Act would not be required pursuant to an exemption under section 708 of the Corporations Act or otherwise or where the offer is pursuant to a disclosure document which complies with Chapter 6D of the Corporations Act. Any person acquiring shares of Class A common stock must observe such Australian on-sale restrictions.

This prospectus contains general information only and does not take account of the investment objectives, financial situation or particular needs of any particular person. It does not contain any securities recommendations or financial product advice. Before making an investment decision, investors need to consider whether the information in this prospectus is appropriate to their needs, objectives and circumstances, and, if necessary, seek expert advice on those matters.

***Dubai International Financial Centre***

This prospectus relates to an Exempt Offer in accordance with the Offered Securities Rules of the Dubai Financial Services Authority ("DFSA"). This prospectus is intended for distribution only to persons of a type specified in the Offered Securities Rules of the DFSA. It must not be delivered to, or relied on by, any other person. The DFSA has no responsibility for reviewing or verifying any documents in connection with Exempt Offers. The DFSA has not approved this prospectus nor taken steps to verify the information set forth herein and has no responsibility for the prospectus. The shares of Class A common stock to which this prospectus relates may be illiquid and/or subject to restrictions on their resale. Prospective purchasers of the shares of Class A common stock offered should conduct their own due diligence on the shares of Class A common stock. If you do not understand the contents of this prospectus you should consult an authorized financial advisor.

------

##### [**Table of Contents**](#toc)
***Switzerland***

We have not and will not register with the Swiss Financial Market Supervisory Authority ("FINMA") as a foreign collective investment scheme pursuant to Article 119 of the Federal Act on Collective Investment Scheme of 23 June 2006, as amended ("CISA"), and accordingly the shares of Class A Common Stock being offered pursuant to this prospectus have not and will not be approved, and may not be licenseable, with FINMA. Therefore, the shares of Class A common stock have not been authorized for distribution by FINMA as a foreign collective investment scheme pursuant to Article 119 CISA and the shares of Class A common stock offered hereby may not be offered to the public (as this term is defined in Article 3 CISA) in or from Switzerland. The shares of Class A common stock may solely be offered to "qualified investors," as this term is defined in Article 10 CISA, and in the circumstances set out in Article 3 of the Ordinance on Collective Investment Scheme of 22 November 2006, as amended ("CISO"), such that there is no public offer. Investors, however, do not benefit from protection under CISA or CISO or supervision by FINMA. This prospectus and any other materials relating to the shares of Class A common stock are strictly personal and confidential to each offeree and do not constitute an offer to any other person. This prospectus may only be used by those qualified investors to whom it has been handed out in connection with the offer described herein and may neither directly or indirectly be distributed or made available to any person or entity other than its recipients. It may not be used in connection with any other offer and shall in particular not be copied and/or distributed to the public in Switzerland or from Switzerland. This prospectus does not constitute an issue prospectus as that term is understood pursuant to Article 652a and/or 1156 of the Swiss Federal Code of Obligations. We have not applied for a listing of the shares of Class A common stock on the SIX Swiss Exchange or any other regulated securities market in Switzerland, and consequently, the information presented in this prospectus does not necessarily comply with the information standards set out in the listing rules of the SIX Swiss Exchange and corresponding prospectus schemes annexed to the listing rules of the SIX Swiss Exchange.

------

##### [**Table of Contents**](#toc)
**VALIDITY OF COMMON STOCK** 

The validity of the shares of our Class A common stock offered hereby and certain legal matters in connection with this offering will be passed upon for us by Latham & Watkins LLP, New York, New York. Certain legal matters in connection with this offering will be passed upon for the underwriters by Kirkland & Ellis LLP, New York, New York.

**EXPERTS** 

The consolidated financial statements as of December 31, 2021 and 2022 and the years then ended included in this prospectus have been so included in reliance on the report of Crowe LLP, independent registered public accounting firm, given on the authority of said firm as experts in auditing and accounting.

**WHERE YOU CAN FIND MORE INFORMATION** 

We have filed with the SEC a registration statement on Form S-1 under the Securities Act with respect to the shares of Class A common stock offered hereby. This prospectus, which constitutes a part of the registration statement, does not contain all of the information set forth in the registration statement or the exhibits filed therewith. For further information about us and the shares of Class A common stock offered hereby, reference is made to the registration statement and the exhibits filed therewith. Statements contained in this prospectus regarding the contents of any contract or any other document that is filed as an exhibit to the registration statement are not necessarily complete, and in each instance, we refer you to the copy of such contract or other document filed as an exhibit to the registration statement. The SEC maintains a website that contains reports, proxy and information statements and other information regarding registrants that file electronically with the SEC. The address of the 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 and information statements and other information with the SEC. These periodic reports, proxy and information statements and other information will be available for inspection at the website of the SEC referred to above. We also maintain a website at www.steinway.com. Upon completion of this offering, you may access these materials free of charge as soon as reasonably practicable after they are filed electronically with, or furnished to, the SEC. The inclusion of our website address in this prospectus is an inactive textual reference only. The information contained on, or that can be accessed through, our website is not incorporated by reference into, and is not a part of, this prospectus or the registration statement of which this prospectus forms a part. Investors should not rely on any such information in deciding whether to purchase our Class A common stock.

------

##### [**Table of Contents**](#toc)
**STEINWAY MUSICAL INSTRUMENTS HOLDINGS, INC.** 

**INDEX TO CONSOLIDATED FINANCIAL STATEMENTS** 

---

| | |
|:---|:---|
|  | **Page** |
|  [Report of Independent Registered Public Accounting Firm](#fin212165_1) | F-2 |
|  Consolidated Financial Statements as of and for the Years Ended December 31, 2021 and 2022: |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; [Consolidated Balance Sheets](#fin212165_2) | F-3 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; [Consolidated Statements of Operations](#fin212165_3) | F-4 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; [Consolidated Statements of Comprehensive Income](#fin212165_4) | F-5 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; [Consolidated Statements of Stockholders' Equity](#fin212165_5) | F-6 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; [Consolidated Statements of Cash Flows](#fin212165_6) | F-7 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; [Notes to Consolidated Financial Statements](#fin212165_7) | F-8 |

---

------

##### [**Table of Contents**](#toc)
**REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM** 

To the Board of Directors and Stockholders of

Steinway Musical Instruments Holdings, Inc.

New York, New York

***Opinion on the Financial Statements***

We have audited the accompanying consolidated balance sheets of Steinway Musical Instruments Holdings, Inc. (the "Company") as of December 31, 2022 and 2021, the related consolidated statements of operations, comprehensive income, stockholders' equity, and cash flows for each of the years then ended, 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, 2022 and 2021, and the results of its operations and its cash flows for each of the years then ended, in conformity with accounting principles generally accepted in the United States of America.

**Explanatory Paragraph - Adoption of New Accounting Standard** 

As discussed in Note 9 to the consolidated financial statements, the Company has changed its method of accounting for leases for the year ended December 31, 2022, due to the adoption of Accounting Standards Update ("ASU") 2016-02, Leases (Topic 842).

**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. 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.

/s/ Crowe LLP

We have served as the Company's auditor since 2016.

Livingston, New Jersey

March 17, 2023

------

##### [**Table of Contents**](#toc)
**STEINWAY MUSICAL INSTRUMENTS HOLDINGS, INC.** 

**CONSOLIDATED BALANCE SHEETS** 

**(In thousands, except share and per share data)** 

---

| | | |
|:---|:---|:---|
|  | **December 31,** | **December 31,** |
|  | **2021** | **2022** |
|  **ASSETS** |  |  |
|  Current assets: |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Cash and cash equivalents | $43718 | $56689 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Accounts and notes receivable, net | 39050 | 54881 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Inventories, net | 168007 | 189722 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Prepaid expenses and other current assets | 13866 | 8500 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Total current assets | 264641 | 309792 |
|  Property, plant and equipment, net | 138502 | 139049 |
|  Intangible assets, net | 133221 | 130337 |
|  Goodwill | 91767 | 91154 |
|  Operating lease right-of-use assets |  | 70447 |
|  Deferred tax assets | 7483 | 4408 |
|  Other long-term assets | 10436 | 12517 |
|  Total assets | $646050 | $757704 |
|  **LIABILITIES AND STOCKHOLDERS' EQUITY** |  |  |
|  Current liabilities: |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Accounts payable | 20734 | 23298 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Debt—current | 2122 | 1988 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Operating lease liability—current |  | 13270 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Other current liabilities | 123183 | 115632 |
|  Total current liabilities | $146039 | $154188 |
|  Debt—noncurrent | 48382 | 24793 |
|  Operating lease liability—noncurrent |  | 65092 |
|  Deferred tax liabilities | 20481 | 19678 |
|  Pension and other post-retirement benefit liabilities | 42470 | 24722 |
|  Other noncurrent liabilities | 18282 | 7890 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Total liabilities | 275654 | 296363 |
|  Commitments and contingencies (Note 11) |  |  |
|  Stockholders' equity: |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Preferred stock, $0.01 par value, 1,000 shares authorized, December 31, 2021 and December 31, 2022; no shares issued and outstanding |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Common stock, $0.01 par value; 1,000 shares authorized as of December 31, 2021 and December 31, 2022; 1,000 shares issued and outstanding as of December 31, 2021 and December 31, 2022 |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Additional paid-in capital | 233170 | 233170 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Retained earnings | 170027 | 256551 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Accumulated other comprehensive loss | (32801) | (28380) |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Total stockholders' equity | 370396 | 461341 |
|  Total liabilities and stockholders' equity | $646050 | $757704 |

---

*The accompanying notes are an integral part of these consolidated financial statements.*

------

##### [**Table of Contents**](#toc)
**STEINWAY MUSICAL INSTRUMENTS HOLDINGS, INC.** 

**CONSOLIDATED STATEMENTS OF OPERATIONS** 

**(In thousands, except share and per share data)** 

---

| | | |
|:---|:---|:---|
|  | **Year Ended<br>December 31,** | **Year Ended<br>December 31,** |
|  | **2021** | **2022** |
|  Net sales | $538350 | $575537 |
|  Cost of sales | 313735 | 336904 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Gross profit | 224615 | 238633 |
|  Selling, general and administrative expenses | 136385 | 142325 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Total operating expense | 136385 | 142325 |
|  Income from operations | 88230 | 96308 |
|  Other expense (income), net: |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Interest expense (income), net | 5237 | (3648) |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Other pension benefit | (341) | (1580) |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Other income | (1606) | (8252) |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Total other expense (income), net | 3290 | (13480) |
|  Income before provision for income taxes | $84940 | $109788 |
|  Income tax expense | 25677 | 23264 |
|  Net income | $59263 | $86524 |
|  Net income per share: |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Basic and diluted | $59263 | $86524 |
|  Weighted-average common shares used in computing net income per share: |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Basic and diluted | 1000 | 1000 |

---

*The accompanying notes are an integral part of these consolidated financial statements.* 

------

##### [**Table of Contents**](#toc)
**STEINWAY MUSICAL INSTRUMENTS HOLDINGS, INC.** 

**CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME** 

**(In thousands)** 

---

| | | |
|:---|:---|:---|
|  | **Year Ended<br>December 31,** | **Year Ended<br>December 31,** |
|  | **2021** | **2022** |
|  Net income | $59263 | $86524 |
|  Other comprehensive income (loss), net of tax: |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Foreign currency translation adjustments | (3776) | (6754) |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Pension and other post-retirement benefit plans activity | 9436 | 11175 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Total other comprehensive income | 5660 | 4421 |
|  Total comprehensive income | $64923 | $90945 |

---

*The accompanying notes are an integral part of these consolidated financial statements.* 

------

##### [**Table of Contents**](#toc)
**STEINWAY MUSICAL INSTRUMENTS HOLDINGS, INC.** 

**CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY** 

**(In thousands, except share data)** 

---

| | | | | | | | | |
|:---|:---|:---|:---|:---|:---|:---|:---|:---|
|  | **Preferred Stock** | **Preferred Stock** | **Common Stock** | **Common Stock** | **Additional**<br>**Paid-in Capital** | **Retained**<br>**Earnings** | **Accumulated Other**<br>**Comprehensive Loss** | **Total**<br>**Stockholders'**<br>**Equity** |
|  | **Shares** | **Amount** | **Shares** | **Amount** | **Additional**<br>**Paid-in Capital** | **Retained**<br>**Earnings** | **Accumulated Other**<br>**Comprehensive Loss** | **Total**<br>**Stockholders'**<br>**Equity** |
|  Balance—January 1, 2021 |  | $— | 1000 | $— | $233170 | $110764 | $(38461) | $305473 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Pension and other post-retirement benefit plans activity, net of taxes |  |  |  |  |  |  | 9436 | 9436 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Foreign currency translation adjustments |  |  |  |  |  |  | (3776) | (3776) |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Net income |  |  |  |  |  | 59263 |  | 59263 |
|  Balance—December 31, 2021 |  | $— | 1000 | $— | $233170 | $170027 | $(32801) | $370396 |
|  Balance—January 1, 2022 |  | $— | 1000 | $— | $233170 | $170027 | $(32801) | $370396 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Pension and other post-retirement benefit plans activity, net of taxes |  |  |  |  |  |  | 11175 | 11175 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Foreign currency translation adjustments |  |  |  |  |  |  | (6754) | (6754) |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Net income |  |  |  |  |  | 86524 |  | 86524 |
|  Balance—December 31, 2022 |  | $— | 1000 | $— | $233170 | $256551 | $(28380) | $461341 |

---

*The accompanying notes are an integral part of these consolidated financial statements.* 

------

##### [**Table of Contents**](#toc)
**STEINWAY MUSICAL INSTRUMENTS HOLDINGS, INC.** 

**CONSOLIDATED STATEMENTS OF CASH FLOWS** 

**(In thousands)** 

---

| | | |
|:---|:---|:---|
|  | **Year Ended<br>December 31,** | **Year Ended<br>December 31,** |
|  | **2021** | **2022** |
|  **Cash flows from operating activities:** |  |  |
|  Net income | $59263 | $86524 |
|  Adjustments to reconcile net income to cash flows from operating activities: |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Depreciation and amortization | 14889 | 15840 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Non-cash interest expense and other | 2206 | 242 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Share-based compensation | 7644 | 4889 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Decrease (increase) in fair value of derivative instruments | (4685) | (5710) |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Deferred income tax | (1156) | (1108) |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Provision for (recovery of) doubtful accounts | (149) | (282) |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Amortization of pension through other comprehensive income | 2758 | 1475 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Gain on sale of intangible assets |  | (5062) |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Loss/(gain) on sale of assets | (23) |  |
| &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;&nbsp;&nbsp;&nbsp;&nbsp; Accounts and notes receivables | (6845) | (14487) |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Inventories, net | 15407 | (29640) |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Prepaid expenses and other assets | (7925) | 809 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Accounts payable | 1912 | 3830 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Other current and noncurrent liabilities | 39189 | (6039) |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Operating lease assets and liabilities, net |  | (254) |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Net cash provided by (used in) operating activities | 122485 | 51027 |
|  **Cash flows from investing activities:** |  |  |
|  Capital expenditures | (21991) | (18965) |
|  Capitalization of software development costs | (958) | (17) |
|  Acquisition of land development rights | (1297) |  |
|  Proceeds from sales of property, plant and equipment | 108 | 342 |
|  Proceeds from sale of land development rights |  | 6360 |
|  Other investments | (849) |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Net cash provided by (used in) investing activities | (24987) | (12280) |
|  **Cash flows from financing activities:** |  |  |
|  Net borrowings (repayments) under domestic lines of credit | (500) | (19500) |
|  Borrowings of long-term debt | 945 |  |
|  Net borrowings under foreign lines of credit | 1501 | 788 |
|  Repayments of long-term debt | (98306) | (1956) |
|  Debt issuance cost |  | (583) |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Net cash provided by (used in) financing activities | (96360) | (21251) |
|  Effects of foreign exchange rate changes on cash and cash equivalents | (1204) | (4525) |
|  Net increase (decrease) in cash and cash equivalents | (66) | 12971 |
|  Cash and cash equivalents, beginning of period | 43784 | 43718 |
|  Cash and cash equivalents, end of period | $43718 | $56689 |
|  **Supplemental disclosure of cash flow information:** |  |  |
|  Cash paid for interest | $8143 | $2132 |
|  Cash paid for income taxes | 20814 | 28209 |
|  **Supplemental disclosure for non-cash information:** |  |  |
|  Accrued capital expenditures | (440) | (397) |
|  Right of use assets obtained in exchange for new operating lease liabilities |  | (7651) |

---

*The accompanying notes are an integral part of these consolidated financial statements.*

------

##### [**Table of Contents**](#toc)
**1. Organization and Description of Business** 

Steinway Musical Instruments Holdings, Inc. ("SMIH" or the "Company") was previously incorporated under the name Pianissimo Holdings Corp. On November 29, 2021, the Company changed its name from Pianissimo Holdings Corp. to Steinway Musical Instruments Holdings, Inc.

SMIH is a manufacturer of musical instruments. The Company, through its piano ("Steinway") and band ("Conn-Selmer") divisions, manufactures and distributes products within the musical instrument industry, as well as the personal luxury goods industry. Steinway pianos are primarily manufactured in facilities in the United States and Germany. The Company's Boston and Essex brand pianos are manufactured in Asia at third-party manufacturing facilities. Conn-Selmer is a manufacturer of band and orchestral instruments and related accessories, offering complete lines of brass, woodwind, percussion, and string instruments. The Company maintains its United States headquarters in New York and operates globally throughout the Americas, Europe, Middle East, and Africa ("EMEA"), and Asia-Pacific.

***Emerging Growth Company Status***

The Company is an "emerging growth company" as defined in Section 2(a) of the Securities Act, as modified by the Jumpstart Our Business Startups Act of 2012 (the "JOBS Act"), and it may take advantage of certain exceptions from various reporting requirements that are applicable to other public companies that are not emerging growth companies including, but not limited to, not being required to comply with the auditor attestation requirements of Section 404 of the Sarbanes-Oxley Act of 2002, reduced disclosure obligations regarding executive compensation in its periodic reports and proxy statements, and exemptions from the requirements of holding a nonbinding advisory vote on executive compensation and shareholder approval of any golden parachute payments not previously approved.

Further, Section 102(b)(1) of the JOBS Act exempts emerging growth companies from being required to comply with new or revised financial accounting standards until private companies (that is, those that have not had a Securities Act registration statement declared effective or do not have a class of securities registered under the Exchange Act) are required to comply with the new or revised financial accounting standards. The JOBS Act provides that a company can elect to opt out of the extended transition period and comply with the requirements that apply to non-emerging growth companies, but any such election to opt out is irrevocable. The Company has elected not to opt out of such extended transition period, which means that when a standard is issued or revised and it has different application dates for public or private companies, the Company, as an emerging growth company, can adopt the new or revised standard at the time private companies adopt the new or revised standard. This may make comparison of the Company's consolidated financial statements with another public company, which is neither an emerging growth company, nor an emerging growth company which has opted out of using the extended transition period, difficult or impossible because of the potential differences in accounting standards used.

**2. Summary of Significant Accounting Policies** 

***Basis of Presentation***

These consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States (U.S. GAAP) and include the accounts of the Company and its wholly owned subsidiaries. All intercompany balances and transactions have been eliminated.

***Use of Estimates***

The preparation of financial statements in conformity with U.S. GAAP requires management to make significant estimates and assumptions that affect the reported amounts of assets and liabilities, the disclosure of

------

##### [**Table of Contents**](#toc)
assets and contingent liabilities at the date of the financial statements, and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates. The significant estimates in the consolidated financial statements include determining the sufficiency of the reserve for sales discounts and returns, the evaluation of the recoverability of goodwill, indefinite life intangible assets, long-lived assets, pension and other post-retirement benefit cost assumptions, deferred income tax asset valuation allowances, uncertain tax positions, and the measurement to fair value of the share-based compensation liability.

***Segment Information***

Operating segments are defined as components of an enterprise about which separate financial information is available that is evaluated regularly by the chief operating decision maker, or decision-making group, in deciding how to allocate resources and in assessing performance. The Company operates in two operating segments: Piano and Band. The Company considers these two segments as operating segments since they are managed separately, and the operating results of each segment are separately reviewed and evaluated by senior management on a regular basis.

***Basic and Diluted Net Income per Share***

Basic income per share is computed by dividing net income by the weighted-average number of shares of common stock outstanding during the period. Diluted income per share is computed by dividing net income by the weighted-average number of shares of common stock together with the number of additional shares of common stock that would have been outstanding if all potentially dilutive shares of common stock had been issued. The Company does not have any other participating equity instruments outstanding. Accordingly, basic and diluted net income per share is the same for all periods.

***Risk and Uncertainties***

On March 11, 2020, the World Health Organization characterized the outbreak of COVID-19 as a global pandemic and recommended containment and mitigation measures. In response, extraordinary actions were taken by international, federal, state, and local public health and governmental authorities to contain and combat the outbreak and spread of COVID-19 in regions throughout the world. These actions included travel bans, quarantines, "stay-at-home" orders, and similar mandates for many individuals to substantially restrict daily activities and for many businesses to curtail or cease normal operations. Some of these measures have since been rescinded, but the Company continues to take precautionary measures in order to minimize the risk of the virus to its employees and the communities in which it operates. While the impacts of COVID-19 had generally stabilized by the end of 2021 in many parts of the world, there remains uncertainty around the broader implications of the COVID-19 pandemic on the Company's results of operations and overall financial performance, including the Company's ability to offset higher costs of suppliers as a result of inflation or disruptions in the supply chain. During 2022, the Company's business was negatively impacted by the imposition of new COVID-19 related lockdowns in certain parts of China. While most restrictions in China were lifted toward the end of 2022, similar measures in the future could adversely affect its business and operating results. The COVID-19 pandemic negatively impacted the Company's supply chain, leading to longer lead times and increasing freight costs. The Company also experienced decreasing microchip availability leading to increased material costs for *Spirio* pianos. The COVID-19 pandemic has, to date, not had a material adverse impact on the Company's ability to raise funds to sustain operations. The economic effects of the pandemic and resulting long-term societal changes are currently not predictable, and the future financial impacts could vary from those we have experienced.

As the Company expands globally, it becomes more exposed to global social and macroeconomic risks, including geopolitical events such as the Russia-Ukraine conflict. For the years ended December 31, 2021 and 2022, the Company's net sales in Russia and Ukraine were immaterial. However, the economic effects of the geopolitical events are currently not predictable, and the future financial impacts could vary from those the Company has experienced.

------

##### [**Table of Contents**](#toc)
***Business Combinations***

The Company accounts for its business combinations using the acquisition method of accounting, which requires, among other things, allocation of the fair value of purchase consideration to the tangible and intangible assets acquired and liabilities assumed at their estimated fair values on the acquisition date. The excess of the fair value of purchase consideration over the values of these identifiable assets and liabilities is recorded as goodwill. When determining the fair value of assets acquired and liabilities assumed, management makes significant estimates and assumptions, especially with respect to intangible assets. Management's estimates of fair value are based upon assumptions believed to be reasonable, but which are inherently uncertain and unpredictable and, as a result, actual results may differ from estimates. During the measurement period, not to exceed one year from the date of acquisition, the Company may record adjustments to the assets acquired and liabilities assumed, with a corresponding offset to goodwill if new information is obtained related to facts and circumstances that existed as of the acquisition date. After the measurement period, any subsequent adjustments are reflected in the consolidated statements of operations and comprehensive loss. Acquisition costs, such as legal and consulting fees, are expensed as incurred.

***Cash and Cash Equivalents***

The Company considers all investments purchased with maturities of three months or less to be cash equivalents. Cash equivalents consist primarily of investments in highly liquid securities. As of December 31, 2021 and 2022, the Company maintained $36.9 million and $43.3 million of cash in foreign countries, respectively.

***Concentration of Credit Risk***

Financial instruments that potentially subject the Company to concentrations of credit risk consist primarily of cash and cash equivalents, and accounts and notes receivable. The Company maintains cash and cash equivalents with various domestic and foreign financial institutions of high credit quality. Management believes that the Company is not exposed to significant credit risk due to the financial strength of the depository institution in which the cash is held.

***Accounts and Notes Receivable, net***

The Company's accounts receivable and notes receivable are derived from contracts with customers and are recorded per the terms of the agreement or sales contract. Certain creditworthy institutional customers are offered extended financing through notes receivable. The Company's notes receivables generally range 1 to 5 years. The Company classifies its notes receivable as accounts and notes receivables, net or other long-term assets based on the underlying due dates. The notes receivables bear interest with rates ranging from 0—12%, and any imputed interest income recognized for long term notes receivables for the years ended December 31, 2021 and 2022 were immaterial. See Note 5.

The Company's policy for estimating the allowance for doubtful accounts on accounts receivable and notes receivable is to reserve for all receivables that are in excess of one year past due. For certain institutional customers, the Company performs a specific reserve analysis on a case-by-case basis. Adjustments to the allowance doubtful accounts are recorded in selling, general and administrative expenses.

***Inventories, net***

Inventories are stated at the lower of cost or net realizable value, which is defined as estimated selling prices in the ordinary course of business, less reasonably predictable costs of completion, disposal and transportation. Cost is determined on a first-in, first-out basis. Once inventory is written-down, a new, lower cost basis for that inventory is established and subsequent changes in facts and circumstances do not result in the restoration or

------

##### [**Table of Contents**](#toc)
increase in that newly established cost basis. The Company also estimates for obsolescence and slow-moving inventory. Changes in the Company's inventory provision are included in cost of sales.

***Fair Value of Financial Instruments***

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. Valuation techniques used to measure fair value must maximize the use of observable inputs and minimize the use of unobservable inputs. The guidance describes a fair value hierarchy based on three levels of inputs, of which the first two are considered observable and the last unobservable, that may be used to measure fair value.

*Level 1*—Inputs are unadjusted quoted prices in active markets for identical assets or liabilities at the measurement date.

*Level 2*—Inputs are observable, unadjusted quoted prices in active markets for similar assets or liabilities; unadjusted quoted prices for identical or similar assets or liabilities in markets that are not active; or other inputs that are observable or can be corroborated by observable market data for substantially the full term of the related assets or liabilities.

*Level 3*—Unobservable inputs that are supported by little or no market data for the related assets or liabilities.

The categorization of a financial instrument within the fair value hierarchy is based upon the lowest level of input that is significant to the fair value measurement. The Company's financial instruments include cash and cash equivalents, accounts and notes receivable, accounts payable and accrued liabilities, other current assets and liabilities, debt and interest rate swaps. At December 31, 2021 and 2022, the carrying amounts of accounts and notes receivable, accounts payable and accrued liabilities and other current assets and liabilities approximated at their fair values because of their short-term nature. At December 31, 2022, the carrying amount of the Company's long-term debt approximates fair value as the stated interest rate approximates market rates currently available to the Company. See Note 4.

***Derivative Instruments***

The Company uses derivative financial instruments to manage its exposure to fluctuations in interest rates. The Company currently does not engage in speculative derivative activities or derivative trading activities. All financial derivative instruments are recorded on the consolidated balance sheets at fair value. The estimated fair values of derivative financial instruments are calculated based on market rates. These values represent the estimated amounts the Company would receive or pay on termination of agreements, taking into consideration current market rates and the current creditworthiness of the counterparty or the Company. The Company has not formally documented or designated its interest rate swaps as hedges and therefore does not apply hedge accounting to these instruments. All derivative financial instruments have been marked-to-market and the related unrealized gain or loss is included in interest expense (income), net in the consolidated statements of operations. There was no cash collateral received or pledged as of December 31, 2021 and 2022 related to the Company's derivative financial instruments. During 2022, the Company terminated its interest rate swap contracts. See Note 14.

***Property, Plant and Equipment, net***

Property, plant and equipment are recorded at cost less accumulated depreciation and amortization. Cost basis includes certain assets acquired in business combinations that were initially recorded at fair value as of the date of acquisition. Depreciation is provided using the straight-line method over the estimated useful lives of the assets. Leasehold improvements are amortized using the straight-line method over the estimated useful lives of the improvements or the remaining term of the respective lease, whichever is shorter.

------

##### [**Table of Contents**](#toc)
Concert and artist, and rental pianos are periodically transferred between inventories and property, plant and equipment. These pianos are classified in inventory at the point which they are available for sale.

***Software and Software Development Costs***

The Company incurs costs to develop software for internal use, as well as software integrated as a component of its products. For computer software developed for internal use, costs that are incurred in the preliminary project and post implementation stages of software development are expensed as incurred. Costs incurred during the application and development stage, which could include compensation, consulting and related expenses, costs of computer hardware and software, and costs incurred in developing features and functionality are capitalized. Cloud computing implementation costs incurred in hosting arrangements are capitalized and reported as a component of both prepaid expenses and other current assets and other long-term assets, while all other capitalized internal-use software development costs are reported as a component of computer software within property, plant and equipment, net. Capitalized costs are amortized using the straight-line method over the estimated useful life of the software, ranging from three to five years, beginning in the period in which the software is available for use.

Software incorporated in the Company's products (i.e. Spirio software) are integrated components, not sold or marketed separately. These costs consist primarily of third-party consulting costs, are expensed as incurred until technological feasibility has been established. The Company's process for developing software is completed concurrently with the establishment of technological feasibility. During the years ended December 31, 2021 and 2022, the Company capitalized $1.0 million and nil, respectively, of internally generated software development costs.

***Impairment of Long-Lived Assets***

Long-lived assets, including property, plant and equipment and definite-lived intangible assets, are reviewed for impairment whenever events or changes in circumstances indicate that the carrying amount of such assets or asset groups (collectively "asset groups") may not be recoverable. This includes but is not limited to significant adverse changes in business climate, market conditions, or other events that indicate an asset groups' carrying amount may not be recoverable. Recoverability of asset groups to be held and used is measured first by a comparison of the carrying amount of an asset to future undiscounted net cash flows expected to be generated by the asset group. If such asset groups were considered to be impaired, an impairment loss would be recognized when the carrying amount of the asset exceeds the fair value of the asset. No impairment losses for long-lived assets have been recognized in any of the periods presented.

***Goodwill and Indefinite Lived Intangible Assets***

Goodwill represents the excess of the cost of an acquired business over the fair value of the assets acquired and liabilities assumed at the date of acquisition. The Company also holds trademarks with indefinite lives as the Company expects the usefulness to continue indefinitely with no issues of renewal. Goodwill and indefinite lived intangible assets are not subject to amortization but are subject to impairment testing on an annual basis, as of October 1, or whenever events and circumstances indicate the carrying value of the reporting unit or the indefinite lived intangible assets asset may be in excess of their fair value. The Company has two reporting units and tests for goodwill and indefinite lived intangible assets for impairment at the reporting unit level. As part of the goodwill and indefinite lived intangible assets impairment test, the Company first performs a qualitative assessment to determine whether further impairment testing is necessary. If, as a result of its qualitative assessment, it is more-likely-than not that the fair value of the Company's reporting unit or indefinite lived intangible assets is less than its carrying amount, the impairment test uses a single step approach.

If factors indicate that the fair value of the reporting unit or indefinite lived intangible assets is less than its carrying amount, the Company performs a quantitative assessment and the fair value of the reporting unit is

------

##### [**Table of Contents**](#toc)
determined by analyzing the expected present value of future cash flows. If the carrying value of the reporting unit continues to exceed its fair value, the implied fair value of the reporting unit's goodwill is calculated and an impairment loss equal to the excess is recorded. During the years ended December 31, 2021 and 2022, the Company performed a qualitative assessment of goodwill and indefinite lived intangible assets, and as a result no such impairment charges were recognized. See Note 8.

***Environmental Obligations***

The Company accrues for its environmental investigation, remediation, operating and maintenance costs when it is probable that a liability has been incurred and the amount can be reasonably estimated. For environmental matters, the most likely cost to be incurred is accrued based on an evaluation of currently available facts with respect to each individual site, current laws and regulations and prior remediation experience. For sites with multiple potentially responsible parties, the Company considers its likely proportionate share of the anticipated remediation costs and the ability of the other parties to fulfill obligations in establishing a provision for those costs. Where no amount within a range of estimates is more likely to occur than another, the minimum undiscounted amount is accrued.

The uncertain nature inherent in such remediation and the possibility that initial estimates may not reflect the outcome could result in additional costs being recognized by the Company in future periods.

***Leases***

Effective January 1, 2022, the Company adopted the new lease accounting standard, Accounting Standards Codification ("ASC") Topic 842 – Leases ("ASC 842"). For periods prior to the adoption of ASC 842, the Company recorded rent expense on a straight-line basis over the term of the related lease. The difference between straight-line rent expense and the payments made in accordance with the operating lease agreements were recognized as a deferred rent liability within other current liabilities and other noncurrent liabilities on the accompanying consolidated balance sheets.

Per the guidance of ASC 842, a contract is, or contains, a lease if the contract conveys the right to control the use of an identified asset. The Company recognizes a lease liability and a related ROU asset at the commencement date for leases on its consolidated balance sheet, excluding short-term leases as noted below. The lease liability is equal to the present value of unpaid lease payments over the remaining lease term. The Company's lease term at the commencement date may reflect options to extend or terminate the lease when it is reasonably certain that such options will be exercised. To determine the present value of the lease liability, the Company uses an incremental borrowing rate, which is defined as the rate of interest that the Company would have to pay to borrow (on a collateralized basis over a similar term) an amount equal to the lease payments in similar economic environments. The ROU asset is based on the corresponding lease liability adjusted for certain costs such as initial direct costs, prepaid lease payments and lease incentives received. Both operating and finance lease ROU assets are reviewed for impairment, consistent with other long-lived assets, whenever events or changes in circumstances indicate that the carrying amount may not be recoverable. After an ROU asset is impaired, any remaining balance of the ROU asset is amortized on a straight-line basis over the shorter of the remaining lease term or the estimated useful life.

After the lease commencement date, the Company evaluates lease modifications, if any, that could result in a change in the accounting for leases. For a lease modification, an evaluation is performed to determine if it should be treated as either a separate lease or a change in the accounting of an existing lease. In addition, significant changes in events or circumstances within the Company's control are assessed to determine whether a change in the accounting for leases is required.

Certain of the Company's leases provide for variable lease payments for the right to use an underlying asset that vary due to changes in facts and circumstances occurring after the commencement date, other than the

------

##### [**Table of Contents**](#toc)
passage of time. Variable lease payments that are dependent on an index or rate (e.g., Consumer Price Index) are included in the initial measurement of the lease liability, the initial measurement of the ROU asset, and the lease classification test based on the index or rate as of the commencement date. Any changes from the commencement date estimation of the index- and rate-based variable payments are expensed as incurred in the period of the change. Variable lease payments that are not known at the commencement date and are determinable based on the performance or use of the underlying asset, are not included in the initial measurement of the lease liability or the ROU asset, but instead are expensed as incurred. The Company's variable lease payments primarily include common area maintenance based on the percentage of the total square footage leased by the Company.

Certain of the Company's contracts contain lease components as well as non-lease components. For purposes of allocating contract consideration, the Company does not separate the lease components from non-lease components.

Short-term leases (i.e., leases with a term of 12 months or less) are not recorded as ROU assets or lease liabilities on the Company's consolidated balance sheets, and the related lease payments are recognized in net income on a straight-line basis over the lease term. See Note 9 – Leases for discussion.

***Revenue Recognition***

The Company recognizes revenue in accordance with the following five steps: (i) identify the contract(s) with a customer, (ii) identify the performance obligations in the contract, (iii) determine the transaction price, (iv) allocate the transaction price to the performance obligations in the contract, and (v) recognize revenue when (or as) the entity satisfies a performance obligation. The Company applies the five-step model to arrangements that meet the definition of a contract under the standard, including when it is probable that the entity will collect the consideration it is entitled to in exchange for the goods or services it transfers to the customer. At contract inception, once the contract is determined to be within the scope of revenue accounting, the Company evaluates the goods or services promised within each contract related performance obligation and assesses whether each promised good or service is distinct. The Company recognizes as revenue, the amount of the transaction price that is allocated to the respective performance obligation when (or as) the performance obligation is satisfied.

The Company recognizes revenue from contracts with customers when (or as) control of the promised goods or services transfers to the customer. For wholesale revenue, this generally occurs when the product is shipped to the dealer after receipt of a valid order. For retail revenue, this generally occurs when the product is delivered to the customer in accordance with the purchase agreement.

Revenue is recorded at the amount of consideration the Company expects to be entitled to in exchange for the delivered goods or services, which includes an estimate of expected returns or refunds when applicable. The Company records estimates for sales discounts, returns and allowances in the period the related revenue is recognized. The provision for sales discounts, returns and allowances is recorded as a reduction from gross sales and the corresponding reserves are presented within other current liabilities on the consolidated balance sheets. While unit prices are generally fixed, the Company provides variable consideration for some customers, typically in the form of promotional incentives at the time of sale. The Company utilizes the most likely amount to estimate the effect of uncertainty on the amount of variable consideration to which it would be entitled based upon the contractual terms of the incentives and historical experience with each customer.

The Company evaluates contracts with customers to determine if there are separate performance obligations related to timing of product shipment that will be satisfied in different accounting periods. Revenue is deferred until control of the performance obligation has been transferred to the customer. The Company applies the practical expedient in Accounting Standards Codification ("ASC") 606, *Revenue from Contracts with Customers,* and does not disclose information about remaining performance obligations that have original expected durations of one year or less, for which work has not yet been performed.

------

##### [**Table of Contents**](#toc)
Steinway *Spirio* pianos include *Spirio* software as an integrated component of the piano and that cannot be removed, retrofitted, or used separately; therefore, it is not considered a distinct performance obligation. Upon purchase of a *Spirio* piano, the Company's customers are given lifetime access to the Company's *Spirio* library and, for *Spirio \| r* customers, additional *Spiriocast* content. No subscription or recurring fees are charged to access the *Spirio* content. The *Spirio* functionality represents a right to receive, on a when-and-if-available basis, future unspecified upgrades and additions relating to the *Spirio* library contents. The Company has determined that the digital music library is a separate performance obligation, under ASC 606. However, the revenues attributable to these promised services are not material and therefore the Company does not treat these services as separate performance obligations in accordance with ASC 606.

Typical payment terms vary based on the customer and the type of goods and services in the contract or purchase order. The period of time between invoicing and when payment is due is not significant. Amounts billed and due from customers are classified as account receivables on the consolidated balance sheets. Standard payment terms are less than one year hence, the Company has elected the practical expedient under ASC 606 to not assess whether a contract has a significant financing component. For contracts with terms of one year or more where a significant financing component exists, the Company records the difference between the amount to be paid by the customer and the standalone price of the product sold as interest income or interest expense over the contractual period using the effective interest rate method.

The Company recognizes an immaterial amount of revenue related to instrument rentals, service contracts, tuning and other services and royalties on the Company's trademarks. Revenues associated with instrument rental, service contracts, and royalties on the Company's trademarks are recognized over time as the performance obligation is satisfied. Revenues associated with one-time tuning services are recognized at a point in time once the performance obligation is completed, which is typically the same day the service is provided. See Note 3 for further details.

The Company has elected the practical expedient whereby any incremental costs of obtaining contracts are recognized as an expense when incurred if the amortization period of the assets the Company otherwise would have recognized is one year or less. Certain taxes assessed by governmental authorities on revenue producing transactions, such as sales taxes and value added taxes, are excluded from revenue and recorded on a net basis. The Company has elected to account for any shipping and handling activities that occur after the customer has obtained control of goods as a fulfillment cost rather than as a separate performance obligation.

***Product Warranties***

The Company provides product warranty coverage to the end-user for parts and labor on products sold under its warranty policy. The standard length of the warranty is between one and ten years, depending on the product classification. The Company does not sell or otherwise issue warranties or warranty extensions as stand-alone products. Product warranty is not a separate performance obligation and the estimated cost is recognized at the time of revenue recognition. The accrued expense recorded is generally based on historical warranty costs as a percentage of sales and is adjusted periodically following an analysis of warranty activity.

***Costs of Sales***

Cost of sales comprises the cost to manufacture our products, including raw materials, direct labor, and overhead, plus freight, duties, warehousing, distribution, and non-refundable taxes incurred in delivering the goods to distribution centers managed by third parties or to our retail stores.

***Selling, General and Administrative Expenses***

Selling, general and administrative expenses include payroll and payroll related expenses, share-based compensation, occupancy costs for our retail locations and corporate headquarters, including utilities,

------

##### [**Table of Contents**](#toc)
depreciation, amortization, marketing expense, sales commissions, and other operating costs. Payroll includes both fixed compensation and variable compensation. Costs associated with the Company's advertising and sales promotions are expensed as incurred. During the years ended December 31, 2021 and 2022, the Company recognized advertising costs of $10.3 million and $12.4 million, respectively.

***Income Taxes***

The Company provides for income taxes using the asset and liability approach. The Company computes deferred income tax assets and liabilities for differences between the financial statement and tax bases of assets and liabilities that will result in taxable or deductible amounts in the future based on enacted tax laws and rates applicable to the periods in which the differences are expected to affect taxable income. When necessary, the Company establishes valuation allowances to reduce deferred tax assets to the amount that more likely than not will be realized.

The Company reports income tax-related interest and penalties as a component of income tax expense. The Company files income tax returns at the U.S. federal, state, and local levels, as well as in several foreign jurisdictions. With few exceptions, the Company's tax returns are no longer subject to examinations for years before 2017.

The calculation of tax liabilities involves dealing with uncertainties in the application of complex tax laws and regulations in a multitude of jurisdictions across the Company's global operations. A tax benefit from an uncertain tax position may be recognized when it is more likely than not that the position will be sustained upon examination, including resolutions of any appeals or litigation processes, on the basis of the technical merits.

The Company records unrecognized tax benefits as uncertain tax liabilities when it is not more likely than not the position will be sustained and adjusts these liabilities when its judgment changes as a result of new information not previously available. Because of the complexity of some of these uncertainties, the ultimate resolution may result in a payment that is materially different from current estimates of the unrecognized tax benefit liabilities. These differences will be reflected as increases or decreases to income tax expense in the period in which new information is available. The Company reevaluates these uncertain tax positions on a quarterly basis. Interest and penalties incurred associated with unresolved income tax positions are included in income tax expense. During the year ended December 31, 2021 and 2022, the Company recorded $2.7 million and $3.4 million, respectively, of non-current liabilities related to uncertain tax liabilities.

***Foreign Currency***

The consolidated financial statements are presented in U.S. dollars. The Company's non-U.S. subsidiaries have a functional currency (i.e., the currency in which operational activities are primarily conducted) that is other than the U.S. dollar, generally the currency of the country in which such subsidiaries are domiciled. Transactions denominated in currencies other than the functional currency are remeasured at period-end using the period-end exchange rate. Gains and losses on transactions denominated in currencies other than the functional currency are included in determining net income for the period. The Company translates assets and liabilities of non-U.S. operations into U.S. dollars using the exchange rates in effect at the balance sheet date, and revenues and expenses at average exchange rates during the year. The Company reports the resulting translation adjustments as a separate component of accumulated other comprehensive income or loss. Transaction (gains)/losses included in other income for the years ended December 31, 2021 and 2022 were $(0.4) million and $(1.0) million, respectively.

***Retirement Plans***

The Company has defined benefit or defined contribution pension plans covering the majority of our employees, including certain employees in foreign countries. Certain domestic hourly employees are covered by

------

##### [**Table of Contents**](#toc)
multi-employer defined benefit pension plans to which the Company makes contributions. The Company also provides post-retirement life insurance benefits to certain eligible hourly retirees and their dependents. The Company has a non-qualified Supplemental Executive Retirement Plan ("SERP") for a select group of former executives. On March 5, 2021, the Company's Board of Directors approved the termination of the Company's SERP. In conjunction with the termination of the SERP, all participants were fully vested in the awards granted, and benefit accruals ceased. During 2021, the Company liquidated the plan assets and finalized the asset distributions to all participants during 2022. See Note 12.

Benefits under the pension and other post-retirement benefit plans are generally based on age at retirement and years of service and, for some pension plans, benefits are also based on the employee's annual earnings. The net cost of pension and other post-retirement benefit plans is determined using the projected unit credit method and several actuarial assumptions, the most significant of which are the discount rate, the long-term rate of asset return, and current rate trends. A portion of these costs is not recognized in net income in the year incurred because it is allocated to product costs and reflected in inventory at the end of a reporting period.

***Share-Based Compensation***

During the years ended December 31, 2021 and 2022, shareholders of the Company or their affiliates (including such affiliates, the "Owner") were party to profit participation agreements with an executive. The Company recognizes compensation expense for these profit participation awards as selling, general and administrative expense since the executive provides services to the Company.

The awards are liability classified due to the executive's ability to require the Company to cash settle the awards. As a nonpublic entity, the Company elected to measure the awards based on their intrinsic value as permitted under ASC 718. The Company measured the intrinsic value of the awards based on the estimated settlement value of the awards at each reporting period. The Company continued to record changes in the intrinsic value of the awards up to the date on which the Company ceased to be a nonpublic entity as defined in ASC 718. Upon becoming a public entity in December 2021, as a result of filing its initial registration statement with the Securities and Exchange Commission ("SEC") and for each reporting period thereafter, the Company measured the awards using the fair value-based method as required under ASC 718. The impact from the change in valuation methods on the date on which the Company became a public entity was accounted for as compensation cost during that period, see Note 15. The Company recognizes the compensation cost of share-based awards on a straight-line basis over the requisite service period (typically the vesting period) of each award. The Company has elected to recognize forfeitures as they occur.

***Accumulated Other Comprehensive (Loss) Income***

Comprehensive income is comprised of net income and other comprehensive (loss) income. Other comprehensive (loss) income includes foreign currency translation adjustments and pension and other post-retirement benefit activity, both net of income taxes.

------

##### [**Table of Contents**](#toc)
The following table summarizes the changes in the components of accumulated other comprehensive (loss) income for the years ended December 31, 2021 and 2022:

---

| | | | |
|:---|:---|:---|:---|
|  | **Foreign Currency**<br>**Translation**<br>**Adjustments** | **Minimum Pension**<br>**Liability and Other**<br>**Post-Retirement**<br>**Benefits** | **Accumulated Other**<br>**Comprehensive Loss** |
|  Balance at January 1, 2021 | $(2904) | $(35557) | $(38461) |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Other comprehensive (loss) income before reclassifications | (3776) | 6683 | 2907 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Amounts reclassified from AOCI |  | 2753 | 2753 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Other comprehensive (loss) income, net of tax | (3776) | 9436 | 5660 |
|  Balance at December 31, 2021 | $(6680) | $(26121) | $(32801) |
|  | **Foreign Currency**<br>**Translation**<br>**Adjustments** | **Minimum Pension**<br>**Liability and Other**<br>**Post-Retirement**<br>**Benefits** | **Accumulated Other**<br>**Comprehensive Loss** |
|  Balance at January 1, 2022 | $(6680) | $(26121) | $(32801) |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Other comprehensive (loss) income before reclassifications | (6754) | 9700 | 2946 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Amounts reclassified from AOCI |  | 1475 | 1475 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Other comprehensive (loss) income, net of tax | (6754) | 11175 | 4421 |
|  Balance at December 31, 2022 | $(13434) | $(14946) | $(28380) |

---

***Recently Adopted Accounting Pronouncements***

In February 2016, the FASB issued ASU No. 2016-02, *Leases (Topic 842),* which supersedes the guidance in former ASC 840*, Leases*. This standard requires lessees to apply a dual approach, classifying leases as either finance or operating leases based on the principle of whether or not the lease is effectively a financed purchase by the lessee. This classification will determine whether lease expense is recognized based on an effective interest method or on a straight-line basis over the term of the lease. A lessee is also required to record a right-of-use asset and a lease liability for all leases with a term of greater than 12 months regardless of their classification. Leases with a term of 12 months or less may be accounted for similar to existing guidance for operating leases today. Originally, a modified retrospective transition approach was required for leases existing at, or entered into after, the beginning of the earliest comparative period presented in the financial statements. In July 2018, the FASB issued guidance to permit an alternative transition method for Topic 842, which allows transition to the new lease standard by recognizing a cumulative-effect adjustment to the opening balance of retained earnings in the period of adoption. Entities may elect to apply either approach. The standard is effective January 1, 2022. On January 1, 2022, the Company adopted ASC 842, see Note 9 for further discussion.

In August 2018, the FASB issued ASU 2018-14, *Compensation—Retirement Benefits—Defined Benefit Plans—General (Subtopic 715-20): Disclosure Framework—Changes to the Disclosure Requirements for Defined Benefit Plans*, that applies to all employers that sponsor defined benefit pension or other postretirement plans. The amendments modify the disclosure requirements for employers that sponsor defined benefit pension or other postretirement plans. Disclosure requirements, including but not limited to, the following were removed from Subtopic 715-20: the amounts in accumulated other comprehensive income expected to be recognized as components of net periodic benefit cost over the next fiscal year; the amount and timing of plan assets expected to be returned to the employer and for public entities, the effects of a one-percentage-point change in assumed health care cost trend rates on the (a) aggregate of the service and interest cost components of net periodic benefit

------

##### [**Table of Contents**](#toc)
costs and (b) benefit obligation for postretirement health care benefits. The following disclosure requirements were added to Subtopic 715-20: (1) the weighted-average interest crediting rates for cash balance plans and other plans with promised interest crediting rates; and (2) an explanation of the reasons for significant gains and losses related to changes in the benefit obligation for the period. The amendments also clarify the disclosure requirements in paragraph 715-20-50-3, which state that the following information for defined benefit pension plans should be disclosed: (1) the projected benefit obligation (PBO) and fair value of plan assets for plans with PBOs in excess of plan assets; and (2) the accumulated benefit obligation (ABO) and fair value of plan assets for plans with ABOs in excess of plan assets. The amendments in this ASU are effective for the Company for the fiscal year beginning January 1, 2022, and on January 1, 2022, the Company adopted this update on a prospective basis. The adoption did not have a material impact on the financial statements.

In December 2019, the FASB issued ASU 2019-12, *Income Taxes (Topic 740): Simplifying the Accounting for Income Taxes* ("ASU 2019-12"), which is intended to simplify various aspects related to accounting for income taxes. ASU 2019-12 removes certain exceptions to the general principles in Topic 740 and also clarifies and amends existing guidance to improve consistent application. ASU 2019-12 is effective for public business entities for fiscal years beginning after December 15, 2021, with early adoption permitted. The Company adopted this update on January 1, 2022, on a prospective basis. The adoption did not have a material impact on the financial statements.

***Recently Issued Accounting Pronouncements***

In June 2016, the FASB issued ASU 2016-13, Financial Instruments-Credit Losses (Topic 326): *Measurement of Credit Losses on Financial Instruments* ("Topic 326"), in order to improve financial reporting of expected credit losses on financial instruments and other commitments to extend credit. Topic 326 requires that an entity measure and recognize expected credit losses for financial assets held at amortized cost and replaces the incurred loss impairment methodology in current GAAP with a methodology that requires consideration of a broader range of information to estimate credit losses. The guidance is effective for annual periods beginning after December 15, 2022, including interim periods within those fiscal years. The Company will adopt this standard effective January 1, 2023. The Company does not expect this standard to have a material impact on its financial statements.

In April 2019, the FASB issued ASU 2019-04, *Codification Improvements to Topic 326, Financial Instruments—Credit Losses (Topic 815) Derivatives and Hedging, and Topic 825, Financial Instruments* ("ASU 2019-04"). This update provides clarifications for three topics related to financial instruments accounting, some of which could be applied to the Company. The standard is effective for annual periods beginning after December 15, 2022 and interim periods within those fiscal years. The Company will adopt this standard effective January 1, 2023. The Company is currently assessing the impact that adopting this standard will have on its financial statements but does not expect it to be material.

In March 2020, the FASB issued ASU 2020-04, *Reference Rate Reform* (Topic 848), which provides optional expedients and exceptions to contract modifications and hedging relationships that reference the London Interbank Offered Rate or another reference rate expected to be discontinued. The standard is effective upon issuance through December 31, 2024, as extended through the FASB's issuance of ASU 2022-06, *Deferral of the Sunset Date of Topic 848*, and may be applied at the beginning of the interim period that includes March 12, 2020 or any date thereafter. As disclosed in Note 10, the Company amended its existing credit agreements that were subject to LIBOR and replaced it with Secured Overnight Financing Rate ("SOFR"). Therefore, the Company does not expect this guidance to have any future impact on the consolidated financial statements.

------

##### [**Table of Contents**](#toc)
**3. Revenue Recognition** 

The following table summarizes the Company's disaggregated net sales by segment, nature, amount, and timing:

---

| | | | |
|:---|:---|:---|:---|
|  | **Year Ended December 31, 2021** | **Year Ended December 31, 2021** | **Year Ended December 31, 2021** |
|  | **Piano** | **Band** | **Total** |
|  Product sales, net | $393196 | $131234 | $524430 |
|  Service and restoration | 9455 | 256 | 9711 |
|  Revenue recognized at a point in time | 402651 | 131490 | 534141 |
|  Other | 3950 | 259 | 4209 |
|  Revenue recognized over time | 3950 | 259 | 4209 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Net sales | $406601 | $131749 | $538350 |

---

---

| | | | |
|:---|:---|:---|:---|
|  | **Year Ended December 31, 2022** | **Year Ended December 31, 2022** | **Year Ended December 31, 2022** |
|  | **Piano** | **Band** | **Total** |
|  Product sales, net | $411298 | $149250 | $560548 |
|  Service and restoration | 10805 | 118 | 10923 |
|  Revenue recognized at a point in time | 422103 | 149368 | 571471 |
|  Other | 3802 | 264 | 4066 |
|  Revenue recognized over time | 3802 | 264 | 4066 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Net sales | $425905 | $149632 | $575537 |

---

**Contract Liabilities** 

Timing may differ between the satisfaction of performance obligations and the invoicing and collection of amounts related to contracts with customers. Contract liabilities consist of customer deposits and are recorded for amounts that are collected in advance of the satisfaction of performance obligations. These liabilities are classified as current liabilities and are recognized as revenue within 12 months.

**4. Fair Values of Financial Instruments** 

The following tables present information about the Company's assets and liabilities measured at fair value on a recurring basis as of December 31, 2021 and 2022 and the fair value hierarchy of the valuation techniques utilized. The Company classifies these assets and liabilities as either short- or long-term based on maturity and anticipated realization dates.

---

| | | | | |
|:---|:---|:---|:---|:---|
|  | **December 31, 2021** | **December 31, 2021** | **December 31, 2021** | **December 31, 2021** |
|  | **Level 1** | **Level 2** | **Level 3** | **Total** |
|  **Financial assets:** |  |  |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Cash equivalents—prepaid expenses and other current assets | $2861 | $— | $— | $2861 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Total financial assets | $2861 | $— | $— | $2861 |
|  **Financial liabilities:** |  |  |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Interest rate swaps—other current liabilities | $— | $553 | $— | $553 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Share-based compensation liability—other current liabilities |  |  | 7644 | 7644 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Interest rate swaps—other noncurrent liabilities |  | 5157 |  | 5157 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Total financial liabilities | $— | $5710 | $7644 | $13354 |

---

------

##### [**Table of Contents**](#toc)

---

| | | | | |
|:---|:---|:---|:---|:---|
|  | **December 31, 2022** | **December 31, 2022** | **December 31, 2022** | **December 31, 2022** |
|  | **Level 1** | **Level 2** | **Level 3** | **Total** |
|  **Financial liabilities:** |  |  |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Share-based compensation liability—other current liabilities | $— | $— | $12533 | $12533 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Total financial liabilities | $— | $— | $12533 | $12533 |

---

There were no transfers into or out of Level 3 liabilities during 2021 or 2022.

As of December 31, 2021, the Company maintained cash equivalents of $2.9 million related to the SERP. SERP related cash equivalents are included in prepaid expenses and other current assets on the consolidated balance sheets. Cash equivalents are held in a rabbi trust. As of December 31, 2021, the Company recorded a corresponding liability for the same amount in the consolidated financial statements, which represents the Company's obligation to SERP participants. As noted in Note 12, the Company finalized the asset distributions to all participants during 2022.

The fair value of the Company's interest rate swap agreement is estimated with the assistance of a third-party valuation specialist, using inputs that can be corroborated by observable market data. In May 2022, the company terminated its interest rate swap contracts. See Note 14.

As of December 31, 2021 and 2022, the fair value of the Company's debt approximated carrying value.

During December 2021, in connection with the Company's filing its initial registration statement with the SEC and changing its status to a public entity as defined by ASC 718, the Company's share-based compensation liability was remeasured to fair value using a probability-weighted expected return method ("PWERM") whereby the Company's total settlement obligation under the equity participation agreement was determined based on the estimated enterprise and equity value of the entity under various scenarios. The PWERM's output is determined based on inputs not observable in the market, which represented a Level 3 measurement within the fair value hierarchy. The PWERM contemplated two scenarios: i) completing an IPO in the near term or ii) continuing operations as a private company. An assessed likelihood of occurrence was assigned to each scenario based on the Company's estimate of the probability of each event occurring. The settlement value of the awards under the IPO scenario was based on the estimated total enterprise and equity value of the Company in an IPO, which was determined by considering similar market transactions. The settlement value under the staying private scenario was based on an Option Pricing Model. The Company uses the Black-Scholes model in its option pricing calculation. The Black-Scholes option pricing model requires inputs based on certain subjective assumptions, including (i) the fair value of the Company's equity, (ii) the risk-free interest rate, (iii) volatility of returns, and (iv) expected dividends. The Black-Scholes option pricing model inputs for the year ended December 31, 2021, assumed risk-free interest rate of 0.39%, volatility of returns of 30%, expected dividends yield of 0% and expected term of one year. The fair value of the Company's total enterprise and equity was estimated using both a market approach and an income approach. Upon changing the Company's status to a public entity as defined by ASC 718, the liability was remeasured from its intrinsic value of $7.0 million to its fair value of $7.6 million, an increase of $0.6 million, with a corresponding compensation charge being recorded in the period.

As of December 31, 2022, the Company continued its use of the Black-Scholes option pricing model to determine the settlement value of the share-based compensation liability. The Black-Scholes option pricing model inputs assumed risk-free interest rate of 4.73%, volatility of returns of 40%, expected dividends yield of 0% and expected term of one year. The fair value of the Company's total enterprise and equity was estimated using both a market approach and an income approach. The fair value of the share-based payment liability was $12.5 million. (Note 15)

------

##### [**Table of Contents**](#toc)
*Level 3 Financial Liabilities* 

The following table summarizes the change in the fair value of the share-based compensation liability balance for the years ended December 31, 2021 and 2022:

---

| | | |
|:---|:---|:---|
|  | **December 31,** | **December 31,** |
|  | **2021** | **2022** |
|  Beginning balance | $— | $7644 |
|  Change in fair value | 7016 | 4889 |
|  Change upon remeasurement to fair value | 628 |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Ending balance | $7644 | $12533 |

---

**5. Balance Sheet Components** 

***Accounts and Notes Receivable, net***

Accounts and notes receivable, net is comprised of the following:

---

| | | |
|:---|:---|:---|
|  | **December 31,** | **December 31,** |
|  | **2021** | **2022** |
|  Accounts receivable | $38528 | $51909 |
|  Notes receivable from customers | 3708 | 5617 |
|  Allowance for doubtful accounts | (3186) | (2645) |
|  Total accounts and notes receivable, net | $39050 | $54881 |

---

***Allowance for Doubtful Accounts***

The following table summarizes the activity of the Company's allowance for doubtful accounts for its accounts and notes receivable:

---

| | | |
|:---|:---|:---|
|  | **December 31,** | **December 31,** |
|  | **2021** | **2022** |
|  Beginning of period | $(3492) | $(3186) |
|  Allowance, net of recoveries | 172 | 278 |
|  Foreign currency translation | 64 | 22 |
|  Net write-offs and other | 70 | 241 |
|  Total allowance for doubtful accounts | $(3186) | $(2645) |

---

***Other Long-Term Assets***

Other long-term assets are comprised of the following:

---

| | | |
|:---|:---|:---|
|  | **December 31,** | **December 31,** |
|  | **2021** | **2022** |
|  Notes receivable, net | $772 | $979 |
|  Deposits | 4386 | 4417 |
|  Benefits insurance | 1690 | 2002 |
|  Net pension benefit asset | 2420 | 4181 |
|  Prepayments and other assets | 1168 | 938 |
|  Total other long-term assets | $10436 | $12517 |

---

------

##### [**Table of Contents**](#toc)
Deposits include $1.7 million related to a rental deposit for distribution and retail facilities in China and $2.1 million for environmental remediation as of December 31, 2021 and 2022, respectively.

***Other Current Liabilities***

Other current liabilities are comprised of the following:

---

| | | |
|:---|:---|:---|
|  | **December 31,** | **December 31,** |
|  | **2021** | **2022** |
|  Accrued payroll and related benefits | $29253 | $29533 |
|  Customer deposits and prepayments | 42832 | 38741 |
|  Income and other taxes payable | 14564 | 9246 |
|  Share-based compensation liability | 7644 | 12533 |
|  Sales and use taxes payable | 3375 | 4097 |
|  Deferred compensation liability (SERP) | 2861 |  |
|  Reserve for sales discounts, returns and allowances | 2070 | 1683 |
|  Current portion of pension and other post-retirement benefit liabilities | 1529 | 1377 |
|  Accrued warranty expense (a) | 1194 | 1101 |
|  Other accrued expenses | 17861 | 17321 |
|  Total other current liabilities | $123183 | $115632 |

---

------

(a) A summary of the activity in accrued warranty expense is as follows:

---

| | | |
|:---|:---|:---|
|  | **December 31,** | **December 31,** |
|  | **2021** | **2022** |
|  Beginning balance | $1092 | $1194 |
|  Additions | 1046 | 649 |
|  Claims and reversals | (916) | (699) |
|  Foreign currency translation adjustments | (28) | (43) |
|  Ending balance | $1194 | $1101 |

---

***Other Noncurrent Liabilities***

Other noncurrent liabilities are comprised of the following:

---

| | | |
|:---|:---|:---|
|  | **December 31,** | **December 31,** |
|  | **2021** | **2022** |
|  Interest rate swap liability—noncurrent | $5157 | $— |
|  Deferred rent—noncurrent | 6099 |  |
|  Environmental liabilities | 2890 | 2902 |
|  Uncertain tax provision liabilities | 2951 | 4091 |
|  Other long-term liabilities | 1185 | 897 |
|  Total other noncurrent liabilities | $18282 | $7890 |

---

------

##### [**Table of Contents**](#toc)
**6. Inventories, net** 

A summary of the inventories, net is as follows:

---

| | | |
|:---|:---|:---|
|  | **December 31,** | **December 31,** |
|  | **2021** | **2022** |
|  Raw materials | $28273 | $39817 |
|  Work-in-process | 62747 | 69306 |
|  Finished goods | 87876 | 91365 |
|  Total inventories | 178896 | 200488 |
|  Provision (a) | (10889) | (10766) |
|  Total inventories, net | $168007 | $189722 |

---

------

(a) Inventory Provision

The following table summarizes the activity of the Company's inventory provision:

---

| | | |
|:---|:---|:---|
|  | **December 31,** | **December 31,** |
|  | **2021** | **2022** |
|  Beginning of period | $(11033) | $(10889) |
|  Provision | (1708) | (804) |
|  Net write-offs and other | 1785 | 800 |
|  Foreign currency translation adjustments | 67 | 127 |
|  Total inventory provision | $(10889) | $(10766) |

---

**7. Property, Plant and Equipment, net** 

Property, plant and equipment, net consists of the following:

---

| | | | |
|:---|:---|:---|:---|
|  | | **December 31,** | **December 31,** |
|  | **Estimated**<br>**Useful Lives**<br>**(Years)** | **2021** | **2022** |
|  Land | N/A | $26317 | $26223 |
|  Buildings and improvements | 15—40 | 59668 | 73638 |
|  Leasehold improvements | Shorter of useful<br>life or term of<br>lease | 34643 | 35225 |
|  Machinery, equipment and tooling | 3—10 | 57591 | 64949 |
|  Office furniture and fixtures | 5—7 | 10473 | 10998 |
|  Concert and artist, and rental pianos | 7—15 | 29272 | 26170 |
|  Construction-in-progress | N/A | 19597 | 10959 |
|  Total property, plant and equipment |  | 237561 | 248162 |
|  Less: Accumulated depreciation and amortization |  | (99059) | (109113) |
|  Total property, plant and equipment, net |  | $138502 | $139049 |

---

Depreciation expense relating to property, plant and equipment amounts was $13.9 million and $14.6 million for the years ended December 31, 2021 and 2022, respectively. Construction-in-progress is primarily related to machinery and equipment which has not been placed in operation.

------

##### [**Table of Contents**](#toc)
**8. Trademarks, Goodwill, and Other Intangible Assets** 

*Goodwill* 

The changes in the carrying amount of goodwill are as follows:

---

| | | | |
|:---|:---|:---|:---|
|  | **Piano** | **Band** | **Total** |
|  Balance—January 1, 2021 | $92536 | $– $| 92536 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Goodwill acquired as part of acquisitions during the year |  | – |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Foreign currency translation adjustments | (769) | – | (769) |
|  Balance—December 31, 2021 | $91767 | $– $| 91767 |

---

---

| | | | |
|:---|:---|:---|:---|
|  | **Piano** | **Band** | **Total** |
|  Balance—January 1, 2022 | $91767 | $– $| 91767 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Goodwill acquired as part of acquisitions during the year |  | – |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Foreign currency translation adjustments | (613) | – | (613) |
|  Balance—December 31, 2022 | $91154 | $– $| 91154 |

---

The Company's gross goodwill balance was $105.4 million and $104.8 million for the years ended December 31, 2021 and 2022. The Company's accumulated impairment losses were $13.6 million for the years ended December 31, 2021 and 2022 and were generated through historical impairments related to the Band segment.

*Intangible Assets, net* 

Details of the Company's intangible assets subject to amortization and indefinite-lived intangible assets and their respective carrying amounts are as follows:

---

| | | | | | | |
|:---|:---|:---|:---|:---|:---|:---|
|  | **Weighted-<br>Average**<br>**Remaining**<br>**Useful Life<br>(in years)** | **Gross Carrying**<br>**Amount,<br>January 1, 2021** | **Additions** | **Accumulated<br>Amortization** | **Dispositions** | **Net Book Value<br>December 31, 2021** |
|  *Finite-lived intangibles assets:* |  |  |  |  |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Music copyright | 2.2 | $890 | $60 | $(787) | $— | $163 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Acquired digital lessons platform | 4.3 |  | 400 | (57) |  | 343 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Internal use software | 4.2 | 6893 | 898 | (4373) |  | 3418 |
|  *Indefinite lived intangible assets:* |  |  |  |  |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Indefinite-lived trademarks |  | 128000 |  |  |  | 128000 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Land development rights(1) |  |  | 1297 |  |  | 1297 |
|  Total intangible assets | 4.1 | $135783 | $2655 | $(5217) | $— | $133221 |

---

------

##### [**Table of Contents**](#toc)

---

| | | | | | | |
|:---|:---|:---|:---|:---|:---|:---|
|  | **Weighted-<br>Average**<br>**Remaining**<br>**Useful Life<br>(in years)** | **Gross Carrying**<br>**Amount,<br>January 1, 2022** | **Additions** | **Accumulated**<br>**Amortization** | **Dispositions** | **Net Book Value**<br>**December 31, 2022** |
|  *Finite-lived intangibles assets:* |  |  |  |  |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Music copyright | 2.4 | $950 | $17 | $(844) | $— | 123 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Acquired digital lessons platform | 3.3 | 400 |  | (137) |  | 263 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Internal use software | 2.1 | 7457 |  | (5506) |  | 1951 |
|  *Indefinite lived intangible assets:* |  |  |  |  |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Indefinite-lived trademarks |  | 128000 |  |  |  | 128000 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Land development rights(1) |  | 1297 |  |  | (1297) |  |
|  Total intangible assets | 2.6 | $138104 | $17 | $(6487) | $(1297) | $130337 |

---

------

(1) During 2022, the Company completed the sale of land development rights for $6.6 million and realized a net
gain of $5.1 million. The land development rights had been included in the total assets of the Company's piano reporting segment.

Amortization expense related to finite-lived intangible assets amounted to $0.9 million and $1.3 million in 2021 and 2022, respectively.

As of December 31, 2022, expected amortization of intangible assets is as follows:

---

| | |
|:---|:---|
|  Year Ending December 31, |  |
| 2023 | $873 |
| 2024 | 574 |
| 2025 | 502 |
| 2026 | 385 |
| 2027 | 3 |
|  Thereafter |  |
|  Total future amortization | $2337 |

---

**9. Leases** 

Effective January 1, 2022, the Company adopted ASC 842 using the modified retrospective transition approach permitted under the new standard for leases that existed at January 1, 2022 and, accordingly, the prior comparative periods were not restated. Under this method, the Company was required to assess the remaining future payments of existing leases as of January 1, 2022. Additionally, as of the date of adoption, the Company elected the package of practical expedients that did not require the Company to assess whether expired or existing contracts contain leases as defined in ASC 842 and did not require reassessment of the lease classification (i.e. operating lease vs. finance lease) for expired or existing leases, and did not require a change to the accounting for previously capitalized initial direct costs.

The adoption of this standard impacted the Company's consolidated balance sheet due to the recognition of right-of-use ("ROU") assets and associated lease liabilities related to operating leases as compared to the previous accounting. The accounting for finance leases under ASC 842 is consistent with the prior accounting for capital leases. The impact of the adoption of this standard on the Company's consolidated statements of earnings and consolidated statement of cash flows was not material.

------

##### [**Table of Contents**](#toc)
Upon the adoption of ASC 842, the Company made the following accounting policy elections:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• Certain of the Company's contracts contain lease components as well as non-lease components. Unless an accounting policy is elected to the contrary, the contract consideration must be allocated to the separate lease and non-lease components
in accordance with ASC 842. For purposes of allocating contract consideration, the Company elected not to separate the lease components from non-lease components for all asset classes. This was applied to all
existing leases as of January 1, 2022 and will be applied to new leases on an ongoing basis.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• The Company elected not to apply the measurement and recognition requirements of ASC 842 to short-term leases
(i.e. leases with a term of 12 months or less). Accordingly, short-term leases will not be recorded as ROU assets or lease liabilities on the Company's consolidated balance sheets, and the related lease payments will be recognized in net
earnings on a straight-line basis over the lease term.

As a result of the adoption of ASC 842, the Company recognized operating lease ROU assets and liabilities of $78.2 million and $86.4 million, respectively, as of January 1, 2022. The company does not have any finance leases. The Company did not record a cumulative adjustment at the adoption date.

The Company has several non-cancelable operating leases, primarily for retail space, offices, warehouses, and transportation and office equipment that expire over the next 10 years. These leases generally contain renewal options for periods ranging from 1 to 10 years. Because the Company is not reasonably certain to exercise these renewal options, the options are not considered in determining the lease term, and associated potential option payments are excluded from lease payments. The Company's leases generally do not include termination options for either party to the lease or restrictive financial or other covenants. Payments due under the lease contracts include fixed base rent payments, and where explicitly identified, fixed payments for non-lease components.

The Company's lease assets and liabilities as of December 31, 2022, were as follows:

---

| | |
|:---|:---|
|  | **December 31, 2022** |
|  Operating leases: |  |
|  Operating lease right-of-use assets | $70447 |
|  Operating lease liability—current | $13270 |
|  Operating lease liability—noncurrent | 65092 |
|  Total operating lease liabilities | $78362 |

---

The components of lease cost for the year ended December 31, 2022 were as follows:

---

| | |
|:---|:---|
|  | **December 31, 2022** |
|  Operating lease cost | $15179 |
|  Variable lease cost | 116 |
|  Short-term lease cost | 694 |
|  Total lease cost | $15989 |

---

Other information related to leases as of December 31, 2022 was as follows:

---

| | |
|:---|:---|
|  | **December 31, 2022** |
|  Cash paid for amounts included in the measurement of lease liabilities | $14569 |
|  Weighted-average remaining lease term | 6.75 yrs |
|  Weighted-average discount rate | 2.26% |

---

------

##### [**Table of Contents**](#toc)
Amounts disclosed for ROU assets obtained in exchange for lease obligations include amounts added to the carrying amount of ROU assets resulting from lease modifications and reassessments.

Maturities of lease liabilities under non-cancelable leases as of December 31, 2022 are as follows:

---

| | |
|:---|:---|
|  Year Ending December 31, |  |
| 2023 | $14607 |
| 2024 | 13651 |
| 2025 | 12751 |
| 2026 | 10983 |
| 2027 | 9179 |
|  Thereafter | 23035 |
|  Total minimum lease payments | $84206 |
|  Less imputed interest | (5844) |
|  Total | $78362 |

---

Future minimum lease payments for non-cancelable operating leases as of December 31, 2021, were as follows:

---

| | |
|:---|:---|
|  Year Ending December 31, |  |
| 2022 | $15482.0 |
| 2023 | 14338.0 |
| 2024 | 13048.0 |
| 2025 | 11852.0 |
| 2026 | 10117.0 |
|  Thereafter | 30670.0 |
|  Total | $95507.0 |

---

The Company is a party to a sublease agreement with the Owner for the sublease of an office facility in New York. See Note 16.

As of December 31, 2022, the Company also has additional operating leases that have not yet commenced, primarily for retail stores, with fixed payments over their non-cancelable terms of $2.1 million for the operating leases. These operating leases will commence in 2023 with non-cancelable terms of 5 years to 6 years.

**10. Long-Term Debt** 

Long-term debt consists of the following:

---

| | | | |
|:---|:---|:---|:---|
|  | | **December 31,** | **December 31,** |
|  | <br>**Maturity Date** | **2021** | **2022** |
|  2022 Amended ABL Facility | June 2027 | $19500 | $— |
|  2022 Amended German ABL Facility | January 2026 | 11373 | 10702 |
|  German Term Loan Facility | December 2026 | 19264 | 16254 |
|  Japanese Revolving Credit Facility |  | 131 |  |
|  Japanese Term Loan Facility | January 2028 | 665 | 583 |
|  Less: deferred financing costs, net |  | (429) | (758) |
|  Total debt, net |  | 50504 | 26781 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Less: Debt—current |  | (2122) | (1988) |
|  Debt—noncurrent |  | $48382 | $24793 |

---

------

##### [**Table of Contents**](#toc)
***Domestic Credit Facilities***

Throughout the period ended December 31, 2021, the Company was a party to two credit agreements in the United States, the First Lien Term Loan (as subsequently amended, the "First Lien Term Loan") and an asset-based lending credit facility (as subsequently amended, the "ABL Facility," and together with the First Lien Term Loan, "domestic credit facilities"). Each of these agreements is with a syndicate of lenders.

On February 16, 2018, the Company refinanced both the First Lien Term Loan and ABL Facility. The amended First Lien Term Loan provided an aggregate principal amount of $235.0 million at an interest rate of either LIBOR plus 3.75% (subject to a LIBOR floor of 1.0%) or a Base Rate plus 2.75% (subject to a Base Rate floor of 2.0%). The repayment terms of the First Lien Term Loan required quarterly installment payments of approximately $0.6 million beginning June 30, 2018. The First Lien Term Loan also required mandatory annual excess cash flow prepayments starting December 31, 2019 equal to 50%, 25% or 0% of Excess Cash Flow (as defined therein). As a result of previous period additional prepayments made by the Company, there were no additional mandatory quarterly principal payments required on or after December 31, 2020, and there was no excess cash flow payment required for 2021. During the year ended December 31, 2021, the Company prepaid the remaining balance of the First Lien Term Loan and recorded a loss of $1.4 million to write-off the related deferred financing costs.

The ABL Facility provided a total commitment of $110.0 million. The ABL Facility provided for borrowings at either LIBOR plus a range from 1.50% to 2.00% or as-needed borrowings at an alternate base rate, plus a range from 0.50% to 1.00%; both ranges depended upon availability at the time of borrowing. The applicable interest rate with respect to the ABL Facility was 1.6% as of December 31, 2021. The amount outstanding under the ABL Facility amounted to $19.5 million as of December 31, 2021. Borrowings under the facility were repayable within 30 days, with all outstanding borrowings being repaid at maturity. The amount available on the ABL Facility, net of letters of credit and borrowing restrictions, was $42.5 million as of December 31, 2021. Commitment fees for the unused credit line were $0.3 million for the year ended December 31, 2021.

In June 2022, the Company amended its existing asset-based lending credit facility (the "2022 Amended ABL Facility") for a total commitment of $110.0 million with a syndicate of lenders and extended the maturity date to June 2027. The 2022 Amended ABL Facility provides for borrowings at either the SOFR plus a range from 1.6% to 2.25% or as-needed borrowings at an alternate base rate, as defined in the agreement, plus a range from 0.5% to 1.0%; these ranges depend upon availability at the time of borrowing and length of the interest period. As of December 31, 2022, the applicable interest rate with respect to the 2022 Amended ABL Facility was 5.9%. All outstanding borrowings under the facility are due when the facility matures in June 2027. In connection with the amendment, the Company incurred $0.4 million of upfront and professional fees. As of December 31, 2022, the amount available on the 2022 Amended ABL Facility, net of letters of credit and borrowing restrictions, was $69.8 million. Commitment fees for the unused credit line were $0.3 million for the year ended December 31, 2022.

***Foreign Credit Facilities***

<u>German ABL Facility</u> 

In 2019, the Company's German subsidiary (Steinway & Sons, Hamburg Branch) entered into a credit facility with a foreign bank which entitles it to borrow up to the amount of €18.0 million. This credit facility, which was guaranteed by Steinway Musical Instruments, Inc., originally expired on December 31, 2019 and was extended to April 15, 2020. In April 2020, the Company's German subsidiary refinanced this credit facility, resulting in a €30.0 million borrowing base facility (the "German ABL Facility"). The German ABL facility provided for borrowings at 3.25% interest or LIBOR plus 3.25% interest, depending on the currency of borrowings. The applicable interest rate with respect to the German ABL facility was 3.25% as of December 31, 2021. Commitment fees for the borrowing base facility were $0.1 million for the year ended December 31, 2021.

------

##### [**Table of Contents**](#toc)
The outstanding debt issuance costs related to the Company's foreign credit facilities was $0.2 million as of December 31, 2021. The total outstanding balance of the Company's German ABL Facility was $11.4 million as of December 31, 2021. The amount available on the German ABL facility, net of letters of credit, was $21.7 million as of December 31, 2021.

In June 2022, the German ABL Facility was amended (the "2022 Amended German ABL Facility") to extend the maturity date to January 2026 and replace the LIBOR alternate borrowing base rate with an alternate borrowing base rate based on SOFR. The facility's total borrowing commitment remained at €30.0 million. The 2022 Amended German ABL Facility provides for borrowings at either the Euro Interbank Offered Rate ("EURIBOR"), plus 2.25%, with a EURIBOR floor of 0% or as-needed borrowings at an alternate rate of EURIBOR plus 3.25% interest, with a EURIBOR floor of 0%, or SOFR plus 3.25% interest, with a SOFR floor of 0%, depending on the currency of borrowings. The applicable interest rate with respect to the 2022 Amended German ABL Facility was 3.57% as of December 31, 2022. Commitment fees for the unused credit line were nil for the year ended December 31, 2022. In connection with the amendment, the Company incurred $0.2 million of upfront fees. The total outstanding balance of the Company's German ABL Facility was $10.7 million as of December 31, 2022. The amount available on the 2022 Amended German ABL Facility, net of letters of credit, was $20.3 million as of December 31, 2022.

<u>German Term Loan Facility</u> 

In April 2020, the Company's German subsidiary refinanced its credit facility, resulting in a €20.0 million term loan (the "German Term Loan"). The German Term Loan provides for borrowings at the Euro Interbank Offered Rate ("EURIBOR") plus 1.80%, with a EURIBOR floor of 0%. The applicable interest rate with respect to the German Term Loan was 1.80% and 2.99% as of December 31, 2021 and 2022, respectively. The outstanding balance of the German Term Loan was $19.3 million and $16.3 million as of December 31, 2021 and 2022, respectively.

<u>Japanese Revolving Credit Facility</u> 

As of December 31, 2021 and 2022, the Company's Japanese subsidiary was a party to a ¥600.0 million revolving credit facility (the "Japanese Revolving Credit Facility"). The Japanese Revolving Credit Facility provides for borrowings at the Tokyo Interbank Offered Rate ("TIBOR"), plus 0.8%, with a TIBOR floor of 0%. As of December 31, 2021, the total Japanese Revolving Credit Facility outstanding balance was $0.1 million. As of December 31, 2022, the Japanese Revolving Credit Facility was fully undrawn, with $4.6 million available. As of December 31, 2021 and 2022, the applicable interest rate was 0.9%.

<u>Japanese Term Loan Facility</u> 

As of December 31, 2021 and 2022, the Company's Japanese subsidiary was also a party to a ¥98.0 million term loan (the "Japanese Term Loan"), which was entered into in January 2021 and bears interest at a rate of 1.5% per annum. As of December 31, 2021, the Company's Japanese subsidiary had $0.7 million outstanding under the Japanese Term Loan Facility. As of December 31, 2022, the Company's Japanese subsidiary had $0.6 million outstanding under the Japanese Term Loan Facility.

*Debt Modifications* 

Both the 2022 Amended ABL Facility and the 2022 Amended German ABL Facility, mentioned above, were accounted for as a debt modification, as the borrowing capacity and the major legal terms of the credit agreements for both facilities remained the same. The Company applied modification accounting principles in accordance with ASC 470 – Debt and all pre-existing unamortized deferred financing costs associated with the existing facilities of $0.2 million were added to the newly incurred deferred financing costs of $0.6 million and their total of $0.8 million will be amortized in accordance with the straight-line method over the term of 2022 amended facilities through their respective maturities.

------

##### [**Table of Contents**](#toc)
Capitalized debt issuance costs are reflected net of amortization in debt—noncurrent on the consolidated balance sheets.

Current portion of debt represents scheduled installments within the next twelve months for the German Term Loan and Japanese Term Loan.

*Financial Covenants* 

The 2022 Amended German ABL Facility and the German Term Loan require the Company's German subsidiary (Steinway & Sons, Hamburg Branch) to maintain certain financial covenants, including a requirement to maintain a capital ratio of 20% as of each reporting date as defined in the agreement. As of December 31, 2021 and 2022, the Company's German subsidiary (Steinway & Sons, Hamburg Branch) was in compliance with all financial covenants.

*Restrictive covenants* 

The 2022 Amended ABL Facility and 2022 Amended German ABL Facility agreements contain various restrictive covenants that, among other things, restrict or limit our ability to (subject to certain negotiated exceptions): incur additional indebtedness; grant liens; make fundamental changes; sell assets; make restricted payments including cash dividends to shareholders; make investments; prepay subordinated indebtedness; enter into transactions with affiliates; and enter into restrictive agreements.

The German Term Loan contains various restrictive covenants that restrict the Company's ability to make fundamental changes, sell assets, or change the control of the German subsidiary.

As of December 31, 2021 and 2022, the Company was in compliance with all restrictive covenants.

Scheduled debt repayments as of December 31, 2022 are as follows:

---

| | |
|:---|:---|
|  Year Ending December 31, |  |
| 2023 | $1988.0 |
| 2024 | 1988.0 |
| 2025 | 1988.0 |
| 2026 | 12690.0 |
| 2027 | 8877.0 |
|  Thereafter | 8.0 |
|  Total | $27539.0 |

---

**11. Commitments and Contingencies** 

***Standby Letters of Credit***

As of December 31, 2021 and 2022, the Company was contingently liable under standby letters of credit of $5.8 million and $5.6 million, respectively. These letters of credit are subject to the terms of our credit agreements (Note 10).

***Legal Matters***

In the ordinary course of business, the Company is a party to various legal actions that we believe are routine in nature and incidental to the operation of our business. While the outcome of such actions cannot be predicted with certainty, the Company believes that, based on its experience in dealing with these matters, their ultimate resolution will not have a material adverse impact on our business, financial condition, results of operations or prospects.

------

##### [**Table of Contents**](#toc)
**12. Retirement Plans** 

The Company has defined benefit or defined contribution pension plans covering the majority of our employees, including certain employees in foreign countries. Certain domestic hourly employees are covered by multi-employer defined benefit pension plans to which the Company makes contributions. The corresponding pension plan assets and liabilities belong to third parties and, accordingly, are not reflected in the consolidated financial statements.

All of the benefit accruals under the domestic pension plans are frozen and all of the assets have been combined under a master trust, "The Steinway Musical Pension Plan," to facilitate plan monitoring and plan investment management.

The funded status of all of the pension and other post-retirement benefit plans is measured as the difference between each plan's assets at fair value and the projected benefit obligation. The Company has recognized the aggregate of all underfunded plans in pension and other post-retirement benefit liabilities on the consolidated balance sheets. The portion of the amount by which the actuarial present value of benefits included in the projected benefit obligation exceeds the fair value of plan assets, payable in the next twelve months, is reflected in other current liabilities. The balance of the liability is included in pension and other post-retirement benefit liabilities. The measurement date for pension and other post-retirement plans is December 31.

The following table sets forth the funded status and amounts recognized for the Company's defined benefit pension plans:

---

| | | | | |
|:---|:---|:---|:---|:---|
|  | **December 31, 2021** | **December 31, 2021** | **December 31, 2022** | **December 31, 2022** |
|  | **Domestic**<br>**Plan** | **Foreign**<br>**Plan** | **Domestic**<br>**Plan** | **Foreign**<br>**Plan** |
|  Change in benefit obligation: |  |  |  |  |
|  Projected benefit obligation, beginning | $82256 | $55948 | $77340 | $50712 |
|  Service cost |  | 1326 |  | 418 |
|  Interest cost | 1444 | 466 | 1718 | 581 |
|  Actuarial loss (gain) | (1989) | (2369) | (14351) | (12960) |
|  Participant contributions | 1 | 28 |  | 22 |
|  Plan amendments |  |  |  |  |
|  Benefits paid | (4372) | (2054) | (4799) | (1804) |
|  Foreign currency translation adjustments |  | (2633) |  | (3618) |
|  Projected benefit obligation, end of year | $77340 | $50712 | $59908 | $33351 |
|  Change in plan assets: |  |  |  |  |
|  Fair value of plan assets, beginning | $60000 | $18254 | $67500 | $19535 |
|  Return on plan assets | 8871 | 1926 | (5201) | (3180) |
|  Employer contributions | 3000 | 1795 |  | 1554 |
|  Employee contributions | 1 | 28 |  | 22 |
|  Benefits paid | (4372) | (2054) | (4799) | (1776) |
|  Foreign currency translation adjustments |  | (414) |  | (1819) |
|  Fair value of plan assets, end of year | $67500 | $19535 | $57500 | $14336 |
|  Benefits obligation | $77340 | $50712 | $59908 | $33351 |
|  Fair value of plan assets | 67500 | 19535 | 57500 | 14336 |
|  Funded status | $(9840) | $(31177) | $(2408) | $(19015) |
|  Amounts recognized on the statement of financial position consist of: |  |  |  |  |
|  Pension assets | $— | $2420 | $— | $4181 |
|  Pension and other post-retirement benefits liabilities | (9840) | (33597) | (2408) | (23196) |
|  Net amount recognized | $(9840) | $(31177) | $(2408) | $(19015) |

---

------

##### [**Table of Contents**](#toc)
As of December 31, 2021, other assets include pension benefits of $2.4 million, other current liabilities include the current portion of pension benefit liabilities of $1.5 million, and noncurrent liabilities include the noncurrent portion of pension benefit liabilities of $41.9 million. As of December 31, 2022, other assets include pension benefits of $4.2 million, other current liabilities include the current portion of pension benefit liabilities of $1.4 million, and noncurrent liabilities include the noncurrent portion of pension benefit liabilities of $24.3 million.

The weighted-average assumptions used to determine the Company's benefit obligations are as follows:

---

| | | | | |
|:---|:---|:---|:---|:---|
|  | **December 31, 2021** | **December 31, 2021** | **December 31, 2022** | **December 31, 2022** |
|  | **Domestic**<br>**Plan** | **Foreign**<br>**Plan** | **Domestic**<br>**Plan** | **Foreign**<br>**Plan** |
|  Discount rate | 2.85% | 2.05% | 5.16% | 4.94% |
|  Rate of compensation increase | n/a | 3.57% | n/a | 3.19% |

---

The weighted-average assumptions used to determine the Company's net periodic benefit cost are as follows:

---

| | | | | |
|:---|:---|:---|:---|:---|
|  | **December 31, 2021** | **December 31, 2021** | **December 31, 2022** | **December 31, 2022** |
|  | **Domestic**<br>**Plan** | **Foreign**<br>**Plan** | **Domestic**<br>**Plan** | **Foreign**<br>**Plan** |
|  Discount rate | 2.51% | 1.38% | 2.85% | 2.04% |
|  Expected return on assets | 7.25% | 4.28% | 7.00% | 4.25% |
|  Rate of compensation increase | n/a | 3.19% | n/a | 3.56% |

---

The net periodic pension (benefit) expense is as follows:

---

| | | | | |
|:---|:---|:---|:---|:---|
|  | **December 31, 2021** | **December 31, 2021** | **December 31, 2022** | **December 31, 2022** |
|  | **Domestic**<br>**Plan** | **Foreign**<br>**Plan** | **Domestic**<br>**Plan** | **Foreign**<br>**Plan** |
|  Service cost | $— | $1326 | $— | $418 |
|  Interest cost | 1444 | 466 | 1718 | 581 |
|  Expected return on plan assets | (4280) | (768) | (4627) | (766) |
|  Amortization of actuarial loss | 1361 | 1392 | 970 | 504 |
|  Other |  | 49 |  | 39 |
|  Net periodic pension (benefit) expense | $(1475) | $2465 | $(1939) | $776 |

---

Amounts recognized in accumulated other comprehensive loss as of December 31, 2021 and 2022 are as follows:

---

| | | | | |
|:---|:---|:---|:---|:---|
|  | **December 31, 2021** | **December 31, 2021** | **December 31, 2022** | **December 31, 2022** |
|  | **Domestic**<br>**Plan** | **Foreign**<br>**Plan** | **Domestic**<br>**Plan** | **Foreign**<br>**Plan** |
|  Pension and other post-retirement benefit obligation | $26497 | $8317 | $20917 | $(1430) |
|  Income taxes | (6342) | (2351) | (5022) | 481 |
|  Total | $20155 | $5966 | $15895 | $(949) |

---

The projected benefit obligation, accumulated benefit obligation, and fair value of plan assets for pension plans with accumulated benefit obligations in excess of plan assets were as follows:

---

| | | |
|:---|:---|:---|
|  | **December 31,** | **December 31,** |
|  | **2021** | **2022** |
|  Projected benefit obligation | $111914 | $84113 |
|  Accumulated benefit obligation | 111739 | 83875 |
|  Fair value of plan assets | 68477 | 58509 |

---

------

##### [**Table of Contents**](#toc)
The projected benefit obligation, accumulated benefit obligation, and fair value of plan assets for pension plans with pension plan assets in excess of accumulated benefit obligations were as follows:

---

| | | |
|:---|:---|:---|
|  | **December 31,** | **December 31,** |
|  | **2021** | **2022** |
|  Projected benefit obligation | $16138 | $9146 |
|  Accumulated benefit obligation | 15770 | 8969 |
|  Fair value of plan assets | 18558 | 13327 |

---

The accumulated benefit obligation for the Company's domestic pension plan was $77.3 million and $59.9 million as of December 31, 2021 and 2022, respectively. The accumulated benefit obligation for the Company's foreign pension plans was $50.2 million and $32.9 million as of December 31, 2021 and 2022, respectively.

Domestic pension plan assets are held in a master trust and are overseen by the Investment Committee. The Investment Committee is assisted by a registered investment advisory firm.

The Investment Committee is responsible for setting the policy that provides the framework for management of the plan assets. In accordance with its responsibilities and charter, the Investment Committee meets on a regular basis to review the performance of the plan assets and compliance with the investment policy. The policy sets forth an investment structure for managing plan assets, including setting the asset allocation ranges, which are expected to provide an appropriate level of diversification and investment return over the long term while maintaining sufficient liquidity to pay the benefits of the plan. Asset allocation ranges are set to produce the highest overall return taking into account investment risks that are prudent and reasonable given prevailing market conditions. In developing the asset allocation ranges, third-party asset allocation studies are periodically performed that consider the current and expected positions of the plan assets and funded status. Based on these studies and other appropriate information, the Investment Committee establishes asset allocation ranges taking into account acceptable risk targets and associated returns.

The investment policy asset allocation ranges for the plan, as set by the Investment Committee, for the years ended December 31, 2021 and 2022, were as follows:

---

| | | | | |
|:---|:---|:---|:---|:---|
|  | **December 31, 2021** | **December 31, 2021** | **December 31, 2022** | **December 31, 2022** |
|  | **Minimum** | **Maximum** | **Minimum** | **Maximum** |
|  Domestic equity securities | 25.00% | 90.00% | 25.00% | 90.00% |
|  International and other equity securities | 0.00% | 50.00% | 0.00% | 50.00% |
|  International debt securities | 0.00% | 20.00% | 0.00% | 20.00% |
|  Domestic debt securities | 10.00% | 50.00% | 10.00% | 50.00% |
|  Other | 0.00% | 10.00% | 0.00% | 10.00% |
|  Cash | 0.00% | 5.00% | 0.00% | 5.00% |

---

The Investment Committee determines the specific allocation of the plan's investments within various asset classes. The plan utilizes select investment strategies which are executed through separate account or fund structures with external investment managers who demonstrate experience and expertise in the appropriate asset classes and styles. The selection of investment managers is done with careful evaluation of all aspects of performance and risk, due diligence of internal operations and controls, reputation, systems evaluation and a review of investment manager's policies and processes. The plan also utilizes unleveraged exchange traded funds that track indices. Investment performance is monitored frequently against appropriate benchmarks and compared to compliance guidelines with the assistance of third-party performance evaluation tools and metrics.

Consistent with the objective of maximizing return while minimizing risk, multiple investment strategies are employed to diversify risk such that no single investment or investment manager presents a significant exposure to the total investment portfolio. Plan assets are invested in numerous diversified strategies with the intent to minimize correlations. This allows for diversification of returns. Further, within each strategy, guidelines are

------

##### [**Table of Contents**](#toc)
established which set forth the list of authorized investments, the typical portfolio characteristics and diversification required by limiting the amount that can be invested by sector, country and issuer. As a result, the plan is not significantly exposed to any single entity, investment manager, sector or international location.

The Investment Committee reviews the domestic benefit obligations no less than annually with the objective of maintaining a 90% funded status for the projected benefit obligation. Whenever possible, the Company's annual contribution is expected to cover the short-term liquidity requirements of the plan, so as to maintain the plan's assets for long-term investment. The performance goal set for the plan's assets is to achieve a long-term rate of return no less than 8.5%.

For the years ended December 31, 2021 and 2022, the Company used an assumed long-term rate of return on plan assets of 7.25% and 7.00%, respectively. This rate is based on the long-term (20 years) rates of return for the assets held. Accordingly, the Company expects that the actual rate of return for any given year will differ from the assumed rate and, therefore, does not adjust this assumption based on such differences. Because our monitoring criteria creates a bias in favor of funds that out-perform their benchmarks, the Company limits the adjustment to the rate of return assumption to changes in the underlying long-term rate of return for stocks generally.

The domestic pension plan assets are stated at fair value. Investments in equity securities are valued at the last reported sales price. Investments in debt securities are generally valued using methods based upon market transactions for comparable securities and various relationships between securities which are generally recognized by institutional traders.

The Company purchased member interests in several limited liability corporations. These corporations' investments include municipal bonds and short positions on U.S. Treasury Obligations, long-dated out-of-the-money options and swaps, privately placed mezzanine transactions consisting of subordinated debt with equity features, fully collateralized debt of energy companies, and the origination of short-term and medium-term high-yield notes receivables.

The Company's investments in municipal bonds, U.S. Treasury Obligations, and long-dated out-of-the-money options and swaps are valued monthly at a net asset value per membership unit by the custodian. Municipal bonds are valued using recently executed transactions, market price quotations and pricing models that factor in, where applicable, interest rates, and bond or default risk spreads. U.S. Treasury Obligations are valued using quoted market prices. Long-dated out of the money options are valued using market price quotations, recently executed transactions, and option pricing models. These investments can be redeemed at net asset value by providing written notice to the fund managers and are considered Level 1 investments.

The Company's additional investments in limited liability corporations are estimated at fair market value based on the most recent available financial statements of the corporations and updated for known capital contributions, distributions, and other market observations, if any, to determine the value as of December 31. These investments are presented at fair value using the net asset value practical expedient due to the absence of readily available market prices. Accordingly, these investments have not been classified in the fair value hierarchy.

As of December 31, 2021 and 2022, the domestic pension plan had $2.1 million unfunded investment commitment to private equity partnerships described above.

------

##### [**Table of Contents**](#toc)
The fair value of domestic pension plan assets by asset category and by level at December 31, 2021 and 2022 were as follows:

---

| | | | | |
|:---|:---|:---|:---|:---|
|  | **December 31, 2021** | **December 31, 2021** | **December 31, 2021** | **December 31, 2021** |
|  | **Level 1** | **Level 2** | **Level 3** | **Total** |
|  Cash and cash equivalents | $400 | $— | $— | $400 |
|  Equity securities: |  |  |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; U.S. large-cap | 37500 |  |  | 37500 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; International large-cap | 7400 |  |  | 7400 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Emerging markets | 3800 |  |  | 3800 |
|  Debt securities: |  |  |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Intermediate government bond | 7600 |  |  | 7600 |
|  Other types of investments |  |  |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Private equity (1) |  |  |  |  |
|  Total | $56700 | $— | $— | $56700 |

---

------

(1) Investments in private equity are through partnership interests in limited liability corporations and consist
of 30% investments in mezzanine debt, 13% investments in collateralized debt of energy companies, and 57% from the origination of notes receivables. As of December 31, 2021, the Company has investments of $10.8 million based on the net
asset value.

---

| | | | | |
|:---|:---|:---|:---|:---|
|  | **December 31, 2022** | **December 31, 2022** | **December 31, 2022** | **December 31, 2022** |
|  | **Level 1** | **Level 2** | **Level 3** | **Total** |
|  Cash and cash equivalents | $500 | $— | $— | $500 |
|  Equity securities: |  |  |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; U.S. large-cap | 31000 |  |  | 31000 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; International large-cap | 6300 |  |  | 6300 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Emerging markets | 3000 |  |  | 3000 |
|  Debt securities: |  |  |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Intermediate government bond | 6200 |  |  | 6200 |
|  Other types of investments |  |  |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Private equity (1) |  |  |  |  |
|  Total | $47000 | $— | $— | $47000 |

---

------

(1) Investments in private equity are through partnership interests in limited liability corporations and consist
of 29% investments in mezzanine debt, 22% investments in collateralized debt of energy companies, and 49% from the origination of notes receivables. As of December 31, 2022, the Company has investments of $10.5 million based on the net
asset value.

There were no transfers into or out of Level 1, Level 2, or Level 3 during the years ended December 31, 2021 and 2022.

The Company made contributions of $3.0 million to the domestic pension plan in 2021 and did not make any contributions in 2022. Based on the current funded status, the Company expects to make a voluntary contribution of $2.0 million to the domestic plan in 2023.

The foreign pension plans in Germany and the U.K. are governed locally in accordance with specific jurisdictional requirements. The German plans pay participant benefits when due and are not required to hold assets. However, in order to limit exposure to a large pension annuity obligation which became payable in January 2013, the Company entered into two insurance contracts valued at $1.1 million and $1.0 million as of December 31, 2021 and 2022, respectively. These contracts are with two German insurance companies and provide annuity payments to the Company's German subsidiary at a guaranteed interest rate. The duration of

------

##### [**Table of Contents**](#toc)
these contracts matches the expected pension obligation to the single participant to which they relate. The guaranteed interest returns within these contracts are based on market rates of products with similar duration and risk at the time the Company entered into the contracts. The Company considers these assets Level 2 investments. We anticipate contributing $1.4 million to the German plans in 2023.

Assets held in the U.K. plan are stated at fair value. These assets are the responsibility of trustees, who consist of a management member participant and a third-party professional trustee. The U.K. plan invests primarily in foreign corporate bonds and foreign equities that approximate the trustees' target allocation of 40% debt securities and 60% equity securities. Target allocations have been designed to cover the U.K. plan's future benefit obligation and are reviewed annually. Investment performance is monitored regularly to attain the funding goals.

The U.K. plan invests in private funds owned by a life insurance company that acts as the plan's third-party administrator. The funds have limited availability but are valued daily at a unit level based on bid and offer prices. These funds are liquid and bought and sold regularly. A majority of the underlying securities within the funds held by the U.K. plan are traded on a market exchange. The fair values of the U.K. plan assets by asset category at December 31, 2021 and 2022 were as follows:

---

| | | | | |
|:---|:---|:---|:---|:---|
|  | **December 31, 2021** | **December 31, 2021** | **December 31, 2021** | **December 31, 2021** |
|  | **Level 1** | **Level 2** | **Level 3** | **Total** |
|  Cash | $46 | $— | $— | $46 |
|  Equity securities: |  |  |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; U.K. equity |  | 7994 |  | 7994 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; European equity |  | 695 |  | 695 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; U.S. equity |  | 970 |  | 970 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Pacific equity |  | 322 |  | 322 |
|  Debt securities: |  |  |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; U.K. treasuries | 8531 |  |  | 8531 |
|  Total | $8577 | $9981 | $— | $18558 |
|  | **December 31, 2022** | **December 31, 2022** | **December 31, 2022** | **December 31, 2022** |
|  | **Level 1** | **Level 2** | **Level 3** | **Total** |
|  Cash | $56 | $— | $— | $56 |
|  Equity securities: |  |  |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; U.K. equity |  | 6629 |  | 6629 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; European equity |  | 564 |  | 564 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; U.S. equity |  | 768 |  | 768 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Pacific equity |  | 266 |  | 266 |
|  Debt securities: |  |  |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; U.K. treasuries | 5044 |  |  | 5044 |
|  Total | $5100 | $8227 | $— | $13327 |

---

The Company assumed long-term rates of return on the U.K. plan assets of 4.5% for the years ended December 31, 2021 and 2022, respectively. Contributions to this plan totaled $0.2 million in 2021 and 2022. The Company anticipates contributing $0.2 million to this plan in 2023.

------

##### [**Table of Contents**](#toc)
The domestic and foreign pension plans expect to pay benefits in each year from 2023 through 2032 as follows:

---

| | | |
|:---|:---|:---|
| Year Ending December 31, | **Domestic**<br>**Plan** | **Foreign**<br>**Plan** |
| 2023 | $4737 | $1764 |
| 2024 | 4736 | 1948 |
| 2025 | 4707 | 1974 |
| 2026 | 4717 | 1910 |
| 2027 | 4667 | 2009 |
| 2028—2032 | 22450 | 11625 |
|  | $46014 | $21230 |

---

The Company provides post-retirement life insurance benefits to a limited number of certain eligible hourly retirees and their dependents. This plan and the activity contained therein are not material to the consolidated financial statements.

The Company sponsors several 401(k) retirement savings plans for eligible employees. Contributions by the Company to these plans, with one exception, are discretionary. Contributions are determined annually by the Board of Directors. The amount of cost recognized for these plans for the years ended December 31, 2021 and 2022 were $1.6 million and $2.0 million, respectively. Non-discretionary contributions were immaterial.

The Company had a SERP for a select group of former executives who constitute a "top hat" group as defined by the Employee Retirement Income Security Act of 1974, as amended ("ERISA"). Discretionary employer contributions made to this plan, as determined annually by the Board of Directors, were held in a rabbi trust. The SERP assets and the corresponding liability are presented in the consolidated balance sheets within prepaid expenses and other current assets and other current liabilities as of December 31, 2021 (Note 5). No contributions were made to this plan for the years ended December 31, 2021 and 2022. As of December 31, 2021, the total SERP liability was $2.9 million. During 2021, the Company terminated the SERP plan and liquidated the associated plan assets. In April 2022, the Company finalized the asset distributions to all participants.

The Company contributes to multiemployer defined benefit pension plans under the terms of collective bargaining agreements that cover certain domestic hourly employees. The corresponding pension plan assets and liabilities belong to third parties and, accordingly, are not reflected in the consolidated financial statements. The risks of participating in these multiemployer plans are different from single-employer plans in the following aspects:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;a. Assets contributed to the multiemployer plan by one employer may be used to provide benefits to employees of
other participating employers.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;b. If a participating employer stops contributing to the plan, the unfunded obligations of the plan may be borne
by the remaining participating employers.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;c. If the Company chooses to stop participating in these multiemployer plans, the Company may be required to pay
those plans an amount based on the underfunded status of the plan, referred to as a withdrawal liability.

The Company's participation in the United Furniture Worker's ("UFW") Pension Fund A that covers hourly workers of the Company's piano manufacturing facility in New York, NY is outlined in the table below:

---

| | | | | | |
|:---|:---|:---|:---|:---|:---|
|  |  | **Pension Protection<br>Act Zone Status** | **Pension Protection<br>Act Zone Status** |  | **Expiration Date of**<br>**Collective Bargaining**<br>**Agreement** |
| **Pension Fund** | **EIN/Pension**<br>**Plan Number** | **2021** | **2022** | **Rehabilitation<br>Plan** | **Expiration Date of**<br>**Collective Bargaining**<br>**Agreement** |
|  UFW Pension Fund A | 13-5511877-001 | Red | Red | Implemented | 12/31/2024 |

---

------

##### [**Table of Contents**](#toc)
The most recent Pension Protection Act ("PPA") zone status available is for the plan's year ended February 28, 2022 and February 28, 2021. The zone status is based on information received from the plan and is certified by the plan's actuary. Plans in the red zone are generally less than 65% funded. A rehabilitation plan was adopted by the plan's trustees effective March 2009. The rehabilitation plan is designed to improve the plan's funding status over time. This rehabilitation plan removed some adjustable benefits (pre-retirement lump sum death benefit, withdrawal benefit, 36 month guarantee option and subsidized early retirement for terminated vested members). Effective March 1, 2018, the Company is required to increase its total contributions to the UFW Pension Fund A by 1.5% (previously 5.5% under the prior rehabilitation plan).

Below is the amount of cost recognized for the UFW Pension Fund A for the years ended December 31, 2021 and 2022:

---

| | | | | |
|:---|:---|:---|:---|:---|
| **Pension Fund** | **2021** | **2022** | **Surcharge<br>Imposed** | **Plan Exceeded More**<br>**Than 5 Percent of<br>Total Contributions** |
|  UFW Pension Fund A | 1452 | 1579 | Yes | 2021 and 2022 |

---

On February 28, 2017, the UFW plan trustees filed an application with the Pension Benefit Guaranty Corporation ("PBGC") to partition the UFW Pension Fund A in accordance with Section 4233 of ERISA. This request was approved effective September 1, 2017, at which point the PBGC has partitioned 56% of the UFW Pension Fund A's in-pay participants' liabilities and 100% of the terminated vested participants' liabilities to a successor pension plan. On March 15, 2017, the trustees also filed an application with the U.S. Treasury to suspend benefits in accordance with Section 432(e)(9) of the Internal Revenue Code, the application was approved effective September 1, 2017. As a result of the partition and the benefits suspension, the UFW Pension Fund A's actuaries project that, on the basis of reasonable assumptions, the UFW Pension Fund A will not become insolvent, and will emerge from "critical status" under the PPA in or around the plan year ending February 29, 2044.

If the hourly employees covered by this plan and the Company's management agree to stop participating in the UFW Pension Fund A through the collective bargaining process, then the Company's portion of the estimated unfunded vested benefit as determined by the plan's actuary would be $49.1 million and $52.1 million as of February 28, 2021 and February 28, 2022, respectively. The Company's withdrawal liability is based on unfunded status of the plan and our contribution history. Based on the 20-year annual payment limitation, it is estimated that it would require 80 quarterly payments of $0.3 million to discharge this liability. While the Company currently believes it is unlikely to choose to withdraw from this plan, should the rehabilitation effort not be successful or if other participating employers decide to leave the plan, the Company may elect to do so in the future. The Company was listed in the Form 5500 as providing more than 5% of the total contributions for the above plan as of the plan years ended February 28, 2022. As of the date the consolidated financial statements were issued, the Form 5500 was not available for the plan year ended February 28, 2023.

------

##### [**Table of Contents**](#toc)
**13. Income Taxes** 

The components of the income tax expense (benefit) are as follows:

---

| | | |
|:---|:---|:---|
|  | **Year Ended** | **Year Ended** |
|  | **December 31,** | **December 31,** |
|  | **2021** | **2022** |
|  U.S. federal: |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Current | $7105 | $5519 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Deferred | 514 | (510) |
|  U.S. state and local: |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Current | 699 | 2599 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Deferred | (1380) | (155) |
|  Foreign: |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Current | 19116 | 14170 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Deferred | (377) | 1641 |
|  Total income tax provision | $25677 | $23264 |

---

The components of income before income taxes are as follows:

---

| | | |
|:---|:---|:---|
|  | **Year Ended** | **Year Ended** |
|  | **December 31,** | **December 31,** |
|  | **2021** | **2022** |
|  U.S. operations | $39491 | $66519 |
|  Non-US operations | 45449 | 43269 |
|  Total income before income taxes | $84940 | $109788 |

---

The Company's income tax provision differed from that using the statutory U.S. federal rate of 21% as follows:

---

| | | |
|:---|:---|:---|
|  | **Year Ended** | **Year Ended** |
|  | **December 31,** | **December 31,** |
|  | **2021** | **2022** |
|  Federal statutory rate applied to income before income taxes | $17837 | $23056 |
|  State income taxes (net of federal tax benefit) | (3225) | 1423 |
|  Foreign income taxes (net of federal tax benefit) | (2679) | 8019 |
|  Foreign withholding tax | 1154 | (2500) |
|  Valuation allowances | 6898 | (6113) |
|  Uncertain tax position | 2951 | 1140 |
|  Share-based compensation | 1606 | 1027 |
|  Permanent items | 1191 | 1011 |
|  Other | (56) | (3799) |
|  Total income tax provision | $25677 | $23264 |

---

Accumulated retained earnings of the Company's non-U.S. subsidiaries, net of any deficits, totaled $53.7 million and $53.6 million as of December 31, 2021 and 2022, respectively. Included in this amount is $18.7 million and $23.1 million as of December 31, 2021 and 2022, respectively, related to the Company's subsidiaries in Germany which are treated as disregarded entities for U.S. tax purposes. It also included $40.4 million and $37.4 million as of December 31, 2021 and 2022, respectively, related to the Company's subsidiaries in China and Japan. Income taxes related to the China and Japan subsidiaries, comprised of $11.1 million and $5.9 million of the gross income tax expense as of December 31, 2021 and 2022, respectively.

------

##### [**Table of Contents**](#toc)
No additional provision has been made for undistributed earnings of non-U.S. subsidiaries, other than China, because the Company's current intention is to indefinitely reinvest the remaining earnings of these subsidiaries.

The components of net deferred taxes are as follows:

---

| | | |
|:---|:---|:---|
|  | **Year Ended** | **Year Ended** |
|  | **December 31,** | **December 31,** |
|  | **2021** | **2022** |
|  Deferred tax assets: |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Uniform capitalization and reserve adjustments to inventory | $4465 | $3875 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Pension and other post-retirement benefits | 12192 | 6561 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Allowance for doubtful accounts and other reserves | 731 | 724 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Accrued expenses and other current liabilities | 6465 | 5852 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; State net operating losses | 1412 | 1278 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Foreign tax credits | 23103 | 18894 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; R&D Capitalization | 512 | 2742 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Other | 6647 | 6803 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Total deferred tax assets | 55527 | 46729 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Less: valuation allowances | (23103) | (16991) |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Total deferred tax assets, net | $32424 | $29738 |
|  Deferred tax liabilities: |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Property, plant and equipment | $(12307) | $(12493) |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Intangibles | (30659) | (30582) |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Other | (2456) | (1933) |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Total deferred tax liabilities | $(45422) | $(45008) |
|  Net deferred tax liabilities | $(12998) | $(15270) |

---

Gross state tax net operating loss carryforwards totaled $13.1 million and $11.1 million as of December 31, 2021 and 2022, respectively, and expire in varying amounts for taxable years between 2023 and 2040. Because the acquisition of SMI in 2013 constituted a change of control, the Company's ability to use state net operating loss carryforwards and Foreign Tax Credits subsequent to the acquisition date is subject to limits under section 382 and 383 of the Internal Revenue Code. As of December 31, 2021 and 2022, the Company has foreign tax credit carryforwards of $23.1 million and $18.9 million, respectively. The Company's foreign tax credit carryforward expire in varying amounts from 2023 through 2032. A valuation allowance of $23.1 million and $17.0 million, respectively, was established for foreign tax credit carryforwards due to the Company's assessment that it is more likely than not that the absorption of the carryforwards will not be realized.

Certain income earned by the Company's foreign subsidiaries, known as global intangible low-tax income ("GILTI"), must be included in the gross income of their U.S. shareholder. The FASB allows an accounting policy election of either recognizing deferred taxes for differences expected to reverse as GILTI in future years or recognizing such taxes as a current-period expense when incurred. The Company elected to treat the tax effect of GILTI as a current-period expense when incurred which resulted in additional income tax expense of nil in both 2021 and 2022, respectively. A related foreign tax credit was also generated during the years ended December 31, 2021 and 2022, subject to limitation, of $2.9 million and $4.6 million, respectively.

------

##### [**Table of Contents**](#toc)
A reconciliation of the beginning and ending amounts of gross unrecognized tax benefits follows:

---

| | | |
|:---|:---|:---|
|  | **Year Ended** | **Year Ended** |
|  | **December 31,** | **December 31,** |
|  | **2021** | **2022** |
|  Unrecognized tax benefits, beginning | $— | $2665 |
|  Increase as a result of tax positions taken during the current period | 2665 | 749 |
|  Unrecognized tax benefits, end of year | $2665 | $3414 |

---

Under the provisions of ASC 740, the Company determined that there was $2.7 million and $3.4 million of unrecognized tax benefit as of December 31, 2021 and 2022, respectively, if recognized, would affect the annual effective tax rate. The uncertain tax positions result from the Company's treatment of a gain for certain real estate property and air rights in New York in 2020 and 2022, and the Research and Development ("R&D") tax credit.

The accrued liability for interest expense related to income tax matters and income tax penalties related to the above unrecognized tax benefits was $0.3 million and $0.7 million for the years ended December 31, 2021 and 2022, respectively. The Company recognized $0.3 million and $0.4 million of expense for interest and penalties as a component of the provision for income taxes for the years ended December 31, 2021 and 2022, respectively. Although it is possible that the amount of unrecognized benefits with respect to our uncertain tax position will increase or decrease in the next twelve months, the Company does not expect material changes.

The Company files Federal income tax returns, as well as multiple state, local and foreign jurisdiction tax returns. As of December 31, 2022, the Company was not under audit examination in federal, state, or local jurisdictions. As of December 31, 2022, the Company was currently under audit in foreign jurisdictions for 2017-2021 tax years. On February 11, 2022, the New York state audit for Pianissimo Holdings Corporation Inc.'s 2015-2016 tax returns was closed with no material adjustments. Otherwise, the Company is no longer subject to examination of its federal, state and local tax matters for years before 2019 and foreign jurisdictions for the years before 2017.

**14. Interest Rate Swaps** 

On February 16, 2018, in conjunction with the debt refinancing, the Company entered into multiple interest rate swaps to manage interest rate risk on the debt. The interest rate swaps allowed the Company to effectively convert LIBOR and other variable rate-based interest expenses into a fixed interest expense, and had annual maturities between 2023 and 2025. The Company did not designate its interest rate swaps as hedging instruments.

The Company's aggregate notional amount as of December 31, 2021 was $185.0 million. As of December 31, 2021, $0.5 million of derivative liabilities were included other current liabilities on the consolidated balance sheet, and $5.2 million were included in other noncurrent liabilities on the consolidated balance sheet.

In May 2022, the Company terminated its interest rate swap contracts and in consideration of the termination, the Company recognized the impact within interest expense (income), net on the consolidated statements of operations during the year ended December 31, 2022. For the year ended December 31, 2022, the Company recognized a gain of $5.7 million, from the remeasurement and the final termination of derivative financial instruments, and this is reflected in interest (income) expense, net on the consolidated statements of operations.

**15. Executive Compensation** 

In July 2021, the Owner entered into a profits interest agreement with an executive. The profits interest award granted to the executive vests over four years with 25% vested upon execution of the agreement and the

------

##### [**Table of Contents**](#toc)
remaining 75% vesting in three equal installments on April 30, 2022, April 30, 2023, and April 30, 2024. Upon full vesting of the profits interest award and a request of the executive, or automatically upon termination, the vested award will be settled in cash by the limited liability company that owns the Company. If the Company executes an initial public offering ("IPO"), the vested portion of the profits interest award will be valued at the IPO price and converted into shares in the Company and the unvested portion of the award will be converted into restricted stock in the Company, subject to the same vesting requirements as the profits interest award. The profits interest award is classified as a liability due to the executive's ability to require the Company to settle the award in cash and is remeasured at fair value as of each reporting date. The fair value of the award is determined based on the Company's estimate of the fair value of the settlement obligation. This is determined by using the PWERM method applied to the Company's estimate of its settlement obligations in either an IPO or private company settlement scenario. The settlement value of the award under the IPO scenario was based on the estimated total enterprise and equity value of the Company in an IPO. The settlement value under the staying private scenario was based on a Black-Scholes model (Note 4). The Company estimated the fair value of the vested portion of the settlement obligation on December 31, 2021 and 2022 to be $7.6 million and $12.5 million, respectively.

For the years ended December 31, 2021 and 2022, the Company recognized compensation expense of $7.6 million and $4.9 million, respectively, in connection with the profits interest award. No settlement payments were made for this award during the period. Settlement payments will be reflected as contributions by the Owner.

**16. Related Party Transactions** 

In December 2017, the Company entered into a sublease agreement with the Owner. Pursuant to the agreement, the related party will sublease the office facility in New York starting January 1, 2018, through December 31, 2022. In 2022, the Owner extended the terms of the sublease through December 31, 2023, which may be extended for additional one-year periods through the expiration date of the original lease. The Owner has agreed to pay the full amount of the obligation per the sublease by directly remitting to the landlord any rent and incidental charges. Per the agreement the base rent for the subleased premises for 2021 and 2022 would have been $2.0 million and $2.0 million, respectively.

Certain compensation related arrangements existed between an executive of the Company and Owner. See Note 15 for a description of these arrangements.

**17. Segment Information** 

The Company has identified two operating segments: Piano and Band.

Income from operations for the operating segments includes certain corporate costs allocated to the segments based on revenue, assets and headcount. There were no transactions within the segments which would require elimination. The primary measurement of profitability used by the chief operating decision maker (CODM) to assess the performance of the segment and to allocate resources is Adjusted Earnings Before Interest, Taxes, Depreciation and Amortization ("Adjusted EBITDA").

------

##### [**Table of Contents**](#toc)
The following tables present information about the Company's operating segments:

---

| | | | |
|:---|:---|:---|:---|
|  | **Year Ended December 31, 2021** | **Year Ended December 31, 2021** | **Year Ended December 31, 2021** |
|  | **Piano** | **Band** | **Consolidated** |
|  Net sales: |  |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Americas | $162913 | $125771 | $288684 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Asia-Pacific | 149904 | 3267 | 153171 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; EMEA | 93784 | 2711 | 96495 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Total Net Sales | 406601 | 131749 | 538350 |
|  Gross profit | 196483 | 28132 | 224615 |
|  Gross profit margin | 48.3% | 21.4% | 41.7% |
|  Adjusted EBITDA | $106805 | $10657 | $117462 |
|  Adjusted EBITDA margin | 26.3% | 8.1% | 21.8% |
|  Less addbacks: |  |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Interest expense (income), net |  |  | $5237 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Income tax expense |  |  | 25677 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Depreciation and amortization |  |  | 14889 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Foreign exchange (gain)/loss |  |  | (438) |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Purchase accounting adjustments |  |  | 71 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Non-cash stock-based and other compensation expense |  |  | 7644 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Potential transaction / acquisition costs |  |  | 512 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Initial public offering expense |  |  | 1513 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Non-operating legal costs |  |  | 184 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Other charges |  |  | 2910 |
|  Total addbacks |  |  | $58199 |
|  Net income |  |  | $59263 |
|  Cash capital expenditures | $17213 | $4778 | $21991 |
|  Property, plant, and equipment, net |  |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Americas | $57742 | $19950 | $77692 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Asia-Pacific | 5358 | 27 | 5385 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; EMEA | 55425 |  | 55425 |
|  Total property, plant and equipment, net | $118525 | $19977 | $138502 |
|  Total assets | $518889 | $127161 | $646050 |

---

------

##### [**Table of Contents**](#toc)

---

| | | | |
|:---|:---|:---|:---|
|  | **Year Ended December 31, 2022** | **Year Ended December 31, 2022** | **Year Ended December 31, 2022** |
|  | **Piano** | **Band** | **Consolidated** |
|  Net sales: |  |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Americas | $191358 | $141083 | $332441 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Asia-Pacific | 134569 | 4015 | 138584 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; EMEA | 99978 | 4534 | 104512 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Total Net Sales | 425905 | 149632 | 575537 |
|  Gross profit | 211451 | 27182 | 238633 |
|  Gross profit margin | 49.6% | 18.2% | 41.5% |
|  Adjusted EBITDA | $119169 | $5863 | $125032 |
|  Adjusted EBITDA margin | 28.0% | 3.9% | 21.7% |
|  Less addbacks: |  |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Interest expense (income), net |  |  | $(3648) |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Income tax expense |  |  | 23264 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Depreciation and amortization |  |  | 15840 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Foreign exchange (gain)/loss |  |  | (1043) |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Purchase accounting adjustments |  |  | 15 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Non-cash stock-based and other compensation expense |  |  | 4889 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Gain on sale of intangible assets |  |  | (5062) |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Initial public offering expense |  |  | 3586 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Dealer termination expense |  |  | 316 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Non-operating legal costs, net of reimbursement |  |  | (444) |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Other charges |  |  | 795 |
|  Total addbacks |  |  | $38508 |
|  Net income |  |  | $86524 |
|  Cash capital expenditures | $14627 | $4338 | $18965 |
|  Property, plant, and equipment, net |  |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Americas | $54921 | $19607 | $74528 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Asia-Pacific | 5271 | 2 | 5273 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; EMEA | 59241 | 7 | 59248 |
|  Total property, plant and equipment, net | $119433 | $19616 | $139049 |
|  Total assets | $609224 | $148480 | $757704 |

---

**18. Stockholders' Capital** 

The Company is authorized to issue 1,000 shares of Preferred Stock at $0.01 par value, but has no shares issued or outstanding as of December 31, 2021 and 2022.

In addition, the Company is authorized to issue 1,000 shares of Common Stock at $0.01 par value.

**19. Net Income Per Share** 

The Company has only issued common stock and does not have any potentially dilutive instrument as of December 31, 2021 and 2022.

------

##### [**Table of Contents**](#toc)
The following table presents the calculation of basic and diluted earnings per share:

---

| | | |
|:---|:---|:---|
|  | **Year Ended** | **Year Ended** |
|  | **December 31,** | **December 31,** |
| *In thousands, except share and per share data* | **2021** | **2022** |
|  Numerator: |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Net income | $59263 | $86524 |
|  Denominator: |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Weighted-average common shares outstanding—basic and diluted | 1000 | 1000 |
|  Net income per share: |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Basic and diluted | $59263 | $86524 |

---

**20. Subsequent Events** 

The Company has evaluated subsequent events from the balance sheet date through March 17, 2023, the date which these consolidated financial statements were available to be issued, and has concluded that there were no such events that require adjustments to these consolidated financial statements or to the disclosures in the notes thereto.

------

##### [**Table of Contents**](#toc)
![LOGO](g212165g14v00.jpg)

------

##### [**Table of Contents**](#toc)
![LOGO](g212165g15t00.jpg)

------

##### [**Table of Contents**](#toc)

------

**Through and including , 2023 (the 25<sup>th</sup> day after the date of this prospectus), all dealers effecting transactions in the Class A common stock, whether or not participating in this offering, may be required to deliver a prospectus. This delivery requirement is in addition to a dealer's obligation to deliver a prospectus when acting as an underwriter and with respect to an unsold allotment or subscription.** 

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

![LOGO](g212165g24s24.jpg)

**Steinway Musical Instruments Holdings, Inc.** 

Class A Common Stock

**Goldman Sachs & Co. LLC** 

**BofA Securities** 

**Barclays** 

**Evercore ISI** 

**TD Cowen** 

**Stifel** 

**Bernstein** 

**Telsey Advisory Group** 

**Commerzbank** 

**Loop Capital Markets** 

------

##### [**Table of Contents**](#toc)
**Part II** 

**INFORMATION NOT REQUIRED IN PROSPECTUS** 

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**(1) Item 13. Other Expenses of Issuance and Distribution.** 

The following table indicates the expenses to be incurred in connection with the offering described in this registration statement, other than the underwriting discounts and commissions, all of which will be paid by us. All amounts are estimated except the Securities and Exchange Commission registration fee, the Financial Industry Regulatory Authority, Inc., or FINRA, filing fee and the New York Stock Exchange listing fee.

---

| | |
|:---|:---|
|  | **Amount** |
| ● Securities and Exchange Commission registration fee | $9270 |
| ● FINRA filing fee | 15500 |
| ● Initial New York Stock Exchange listing fee | \* |
| ● Accountants' fees and expenses | \* |
| ● Legal fees and expenses | \* |
| ● Blue Sky fees and expenses | \* |
| ● Transfer Agent's fees and expenses | \* |
| ● Printing and engraving expenses | \* |
| ● Miscellaneous | \* |
| ● Total expenses | $\* |

---

------

\* To be filed by amendment

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**(2) Item 14. Indemnification of Directors and Officers.** 

The registrant is governed by the Delaware General Corporation Law (the "DGCL"). Section 145 of the DGCL provides that a corporation may indemnify any person, including an officer or director, who was or is, or is threatened to be made, a party to any threatened, pending or completed legal action, suit or proceeding, whether civil, criminal, administrative or investigative (other than an action by or in the right of such corporation), by reason of the fact that such person was or is an officer, director, employee or agent of such corporation or is or was serving at the request of such corporation as a director, officer, employee or agent of another corporation or enterprise. The indemnity may include expenses (including attorneys' fees), judgments, fines and amounts paid in settlement actually and reasonably incurred by such person in connection with such action, suit or proceeding, provided such officer, director, employee or agent acted in good faith and in a manner such person reasonably believed to be in, or not opposed to, the corporation's best interest and, for criminal proceedings, had no reasonable cause to believe that such person's conduct was unlawful. A Delaware corporation may indemnify any person, including an officer or director, who was or is, or is threatened to be made, a party to any threatened, pending or contemplated action or suit by or in the right of such corporation, under the same conditions, except that such indemnification is limited to expenses (including attorneys' fees) actually and reasonably incurred by such person, and except that no indemnification is permitted without judicial approval if such person is adjudged to be liable to such corporation. Where an officer or director of a corporation is successful, on the merits or otherwise, in the defense of any action, suit or proceeding referred to above, or any claim, issue or matter therein, the corporation must indemnify that person against the expenses (including attorneys' fees) which such officer or director actually and reasonably incurred in connection therewith.

The registrant's amended and restated certificate of incorporation will authorize the indemnification of its officers and directors, consistent with Section 145 of the DGCL.

------

##### [**Table of Contents**](#toc)
Reference is made to Section 102(b)(7) of the DGCL, which enables a corporation in its original certificate of incorporation or an amendment thereto to eliminate or limit the personal liability of a director or officer for violations of such person's fiduciary duty, except (i) for any breach of such person's duty of loyalty to the corporation or its stockholders, (ii) for acts or omissions not in good faith or which involve intentional misconduct or a knowing violation of law, (iii) with respect to a director, pursuant to Section 174 of the DGCL, which provides for liability of directors for certain unlawful payments of dividends of unlawful stock purchase or redemptions, (iv) for any transaction from which a director or officer derived an improper personal benefit or (v) with respect to an officer, in any action by or in the right of the corporation. The registrant's amended and restated certificate of incorporation will include such an exculpation provision, consistent with Section 102(b)(7) of the DGCL.

We have entered into indemnification agreements with each of our directors and officers. These indemnification agreements may require us, among other things, to indemnify our directors and officers for some expenses, including attorneys' fees, judgments, fines and settlement amounts incurred by a director or officer in any action or proceeding arising out of his or her service as one of our directors or officers, or any of our subsidiaries or any other company or enterprise to which the person provides services at our request.

We maintain a general liability insurance policy that covers certain liabilities of directors and officers of our corporation arising out of claims based on acts or omissions in their capacities as directors or officers.

In any underwriting agreement we enter into in connection with the sale of Class A common stock being registered hereby, the underwriters will agree to indemnify, under certain conditions, us, our directors, our officers and persons who control us, within the meaning of the Securities Act against certain liabilities.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**(3) Item 15. Recent Sales of Unregistered Securities.** 

None.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**(4) Item 16. Exhibits and Financial Statement Schedules.** 

Exhibits.

The following documents are filed as exhibits to this registration statement.

---

| | |
|:---|:---|
| **Exhibit<br>Number** | **Description of Exhibit** |
| &nbsp;&nbsp;&nbsp;&nbsp;1.1† | [Form of Underwriting Agreement](http://www.sec.gov/Archives/edgar/data/1897640/000119312522104954/d212165dex11.htm) |
| &nbsp;&nbsp;&nbsp;&nbsp;3.1† | [Certificate of Incorporation, as currently in effect](http://www.sec.gov/Archives/edgar/data/0001897640/000119312522104954/d212165dex31.htm) |
| &nbsp;&nbsp;&nbsp;&nbsp;3.2 | [Form of Amended and Restated Certificate of Incorporation, to be effective prior to the closing of this offering](d212165dex32.htm) |
| &nbsp;&nbsp;&nbsp;&nbsp;3.3† | [Bylaws, as currently in effect](http://www.sec.gov/Archives/edgar/data/0001897640/000119312522104954/d212165dex33.htm) |
| &nbsp;&nbsp;&nbsp;&nbsp;3.4 | [Form of Amended and Restated Bylaws, to be effective prior to the closing of this offering](d212165dex34.htm) |
| &nbsp;&nbsp;&nbsp;&nbsp;4.1† | [Form of Certificate of Class A Common Stock](http://www.sec.gov/Archives/edgar/data/0001897640/000119312522104954/d212165dex41.htm) |
| &nbsp;&nbsp;&nbsp;&nbsp;4.2† | [Form of Stockholders Agreement](http://www.sec.gov/Archives/edgar/data/0001897640/000119312522104954/d212165dex42.htm) |
| &nbsp;&nbsp;&nbsp;&nbsp;4.3† | [Form of Registration Rights Agreement](http://www.sec.gov/Archives/edgar/data/0001897640/000119312522104954/d212165dex43.htm) |
| &nbsp;&nbsp;&nbsp;&nbsp;5.1\* | Opinion of Latham & Watkins LLP |
| 10.1#† | [Form of Indemnification and Advancement Agreement between Steinway Musical Instruments Holdings, Inc. and its directors and officers](http://www.sec.gov/Archives/edgar/data/0001897640/000119312522104954/d212165dex101.htm) |
| 10.2# | [Form of Steinway Musical Instruments Holdings, Inc. 2023 Incentive Award Plan](d212165dex102.htm) |

---

------

##### [**Table of Contents**](#toc)

---

| | |
|:---|:---|
| **Exhibit<br>Number** | **Description of Exhibit** |
| 10.3# | [Form of Steinway Musical Instruments Holdings, Inc. 2023 Employee Stock Purchase Plan](d212165dex103.htm) |
| 10.4# | [Form of Steinway Musical Instruments Holdings, Inc. Non-Employee Director Compensation Policy](d212165dex104.htm) |
| 10.5# | [Form of Stock Option Grant Notice and Agreement under the 2023 Incentive Award Plan](d212165dex105.htm) |
| 10.6# | [Form of Restricted Stock Unit Grant Notice and Agreement under the 2023 Incentive Award Plan](d212165dex106.htm) |
| 10.7#† | [Letter Agreement, dated April 13, 2022, by and between Benjamin Steiner, Paulson & Co., Inc., and Steinway Musical Instruments, Inc.](http://www.sec.gov/Archives/edgar/data/0001897640/000119312522104954/d212165dex107.htm) |
| 10.8#† | [Form of Share Restriction Agreement, by and between Benjamin Steiner and Steinway Musical Instruments Holdings, Inc., to be effective prior to the closing of this offering](http://www.sec.gov/Archives/edgar/data/1897640/000119312522150054/d212165dex108.htm) |
| 10.9#† | [Employment Agreement, dated May 16, 2008, by and between Eric Feidner and ArkivMusic, LLC](http://www.sec.gov/Archives/edgar/data/1897640/000119312522150054/d212165dex109.htm) |
| 10.10 | [ABL Credit Agreement among Steinway Musical Instruments, Inc., Steinway, Inc., Conn-Selmer, Inc., Pianissimo Holdings Corp., Bank of America, N.A. and the lenders from time to time party thereto, dated September 19, 2013](d212165dex1010.htm) |
| 10.11 | [ABL Guarantee Agreement among Pianissimo Holdings Corp., Pianissimo Acquisition Corp., Steinway Musical Instruments, Inc., Steinway, Inc. Conn-Selmer, Inc., the subsidiary guarantors from time to time party thereto and Bank of America, N.A., dated September 19, 2013](d212165dex1011.htm) |
| 10.12 | [ABL Pledge and Security Agreement among Pianissimo Holdings Corp., Steinway Musical Instruments, Inc., Steinway, Inc. Conn-Selmer, Inc., The O.S. Kelly Company, ArkivMusic, LLC, the subsidiaries of Pianissimo Holdings Corp. from time to time party thereto and Bank of America, N.A., dated September 19, 2013](d212165dex1012.htm) |
| 10.13 | [First Amendment to the ABL Credit Agreement between Steinway Musical Instruments, Inc., Steinway, Inc., Conn-Selmer, Inc., Pianissimo Holdings Corp., Bank of America, N.A. and the lenders from time to time party thereto, dated October 31, 2017](d212165dex1013.htm) |
| 10.14 | [Second Amendment to the ABL Credit Agreement among Steinway Musical Instruments, Inc., Steinway, Inc., Conn-Selmer, Inc., Pianissimo Holdings Corp., The O.S. Kelly Company, Bank of America, N.A. and the lenders from time to time party thereto, dated February 16, 2018](d212165dex1014.htm) |
| 10.15 | [Third Amendment to the ABL Credit Agreement among Steinway Musical Instruments, Inc., Steinway, Inc., Conn-Selmer, Inc., Pianissimo Holdings Corp., The O.S. Kelly Company, Bank of America, N.A. and the lenders from time to time party thereto, dated June 27, 2022](d212165dex1015.htm) |
| 10.16† | [Instalment Loan Agreement between Steinway & Sons, New York, Hamburg Branch, Steinway Retail Deutschland GmbH, Louis Renner GmbH, Boston Piano GmbH and Commerzbank Aktiengesellschaft, dated March 20, 2020](http://www.sec.gov/Archives/edgar/data/1897640/000119312522150054/d212165dex1016.htm) |
| 10.17 | [Borrowing Base Facility Agreement between Steinway & Sons, New York, Hamburg Branch, Steinway Retail Deutschland GmbH, Louis Renner GmbH, Boston Piano GmbH and Commerzbank Aktiengesellschaft, dated March 20, 2020](d212165dex1017.htm) |
| 10.18 | [First Addendum to the Agreement relating to a Borrowing Base Facility between Steinway & Sons, New York, Hamburg Branch, Steinway Retail Deutschland GmbH, Louis Renner GmbH, Boston Piano GmbH and Commerzbank Aktiengesellschaft, dated June 22, 2022](d212165dex1018.htm) |

---

------

##### [**Table of Contents**](#toc)

---

| | |
|:---|:---|
| **Exhibit<br>Number** | **Description of Exhibit** |
| 21.1 | [List of subsidiaries of Steinway Musical Instruments Holdings, Inc.](d212165dex211.htm) |
| 23.1\* | Consent of Latham & Watkins LLP (included in Exhibit 5.1) |
| 23.2 | [Consent of Crowe LLP, independent registered public accounting firm](d212165dex232.htm) |
| 24.1† | [Power of Attorney (included on signature page)](http://www.sec.gov/Archives/edgar/data/1897640/000119312522104954/d212165ds1.htm#sig) |
| 99.1† | [Consent of Howard Gurvitch to be listed as a director nominee](http://www.sec.gov/Archives/edgar/data/0001897640/000119312522104954/d212165dex991.htm) |
| 99.2† | [Consent of Benjamin Mensah to be listed as a director nominee](http://www.sec.gov/Archives/edgar/data/0001897640/000119312522104954/d212165dex992.htm) |
| 107† | [Filing Fee Table](http://www.sec.gov/Archives/edgar/data/1897640/000119312522104954/d212165dexfilingfees.htm) |

---

------

\* To be filed by amendment.

# Indicates management contract or compensatory plan.

† Previously filed.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b) Financial Statement Schedules.

Schedules not listed above have been omitted because the information required to be set forth therein is not applicable or is shown in the financial statements or notes thereto.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**(5) Item 17. Undertakings.** 

The undersigned registrant hereby undertakes to provide to the underwriter, at the closing specified in the underwriting agreement, certificates in such denominations and registered in such names as required by the underwriter to permit prompt delivery to each purchaser.

Insofar as indemnification 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.

The undersigned hereby undertakes that:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;a) 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;&nbsp;&nbsp;b) 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.

------

##### [**Table of Contents**](#toc)
**SIGNATURES** 

Pursuant to the requirements of the Securities Act, the registrant has duly caused this registration statement to be signed on its behalf by the undersigned, thereunto duly authorized, in the City of New York, State of New York, on this 17th day of March, 2023.

---

| | |
|:---|:---|
| STEINWAY MUSICAL INSTRUMENTS HOLDINGS, INC. | STEINWAY MUSICAL INSTRUMENTS HOLDINGS, INC. |
| By: | /s/ Benjamin Steiner |
|  | Benjamin Steiner |
|  | President and Chief Executive Officer |

---

------

##### [**Table of Contents**](#toc)
Pursuant to the requirements of the Securities Act of 1933, as amended, this Registration Statement has been signed below by the following persons on behalf of the Registrant and in the capacities and on the dates indicated.

---

| | | |
|:---|:---|:---|
| **Signature** | **Title** | **Date** |
| /s/ Benjamin Steiner<br> Benjamin Steiner | President, Chief Executive Officer and Director<br> (*Principal Executive Officer*) | March 17, 2023 |
| /s/ Maia Moutopoulos<br> Maia Moutopoulos | Chief Financial Officer<br> (*Principal Financial Officer and Accounting Officer*) | March 17, 2023 |
| \*<br> John Paulson | Director | March 17, 2023 |
| \*<br> Michael Waldorf | Director | March 17, 2023 |
| \*<br> Wei Wei | Director | March 17, 2023 |

---

---

| | |
|:---|:---|
| \*By: | /s/ Maia Moutopoulos |
|  | Maia Moutopoulos |
|  | Attorney-in-fact |

---

## Exhibit 3.2

**Exhibit 3.2** 

**AMENDED AND RESTATED CERTIFICATE OF INCORPORATION** 

**OF** 

**STEINWAY MUSICAL INSTRUMENTS HOLDINGS, INC.** 

Steinway Musical Instruments Holdings, Inc. (the "<u>Corporation</u>"), a corporation organized and existing under the General Corporation Law of the State of Delaware (the "<u>DGCL</u>"), does hereby certify as follows:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;1. The name of the Corporation is Steinway Musical Instruments Holdings, Inc. The Corporation was incorporated by the filing of its original Certificate of Incorporation with the Secretary of State of the State of Delaware on August 8, 2013, under the name Pianissimo Holdings Corp.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;2. This Amended and Restated Certificate of Incorporation (the "<u>Certificate of Incorporation</u>"), which restates, integrates and further amends the certificate of incorporation of the Corporation as heretofore in effect, has been adopted by the Corporation in accordance with Sections 242 and 245 of the DGCL, and has been adopted by the written consent of the stockholders of the Corporation in accordance with Section 228 of the DGCL.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;3. The text of the certificate of incorporation of the Corporation, as heretofore amended, is hereby amended and restated by this Certificate of Incorporation to read in its entirety as set forth in <u>EXHIBIT A</u> attached hereto.

IN WITNESS WHEREOF, Steinway Musical Instruments Holdings, Inc. has caused this Certificate of Incorporation to be signed by a duly authorized officer of the Corporation, on [ ⚫ ], 2023.

---

| |
|:---|
| **Steinway Musical Instruments Holdings, Inc.**,<br> a Delaware corporation |
| By: |
| Name: Jennifer Wang |
| Title: Chief Legal Officer |

---

[Signature Page to Steinway Musical Instruments Holdings, Inc. Certificate of Incorporation]

------

**<u>EXHIBIT A</u>**

**ARTICLE I** 

The name of the corporation is Steinway Musical Instruments Holdings, Inc. (the "<u>Corporation</u>").

**ARTICLE II** 

The address of the Corporation's registered office in the State of Delaware is 1209 Orange Street, in the city of Wilmington, County of New Castle, postal code 19801. The name of its registered agent at such address is The Corporation Trust Company.

**ARTICLE III** 

The purpose of the Corporation is to engage in any lawful act or activity for which corporations may be organized under the General Corporation Law of the State of Delaware (the "<u>DGCL</u>") as it now exists or may hereafter be amended and supplemented.

**ARTICLE IV** 

The total number of shares of all classes of capital stock which the Corporation shall have authority to issue is 650,000,000 shares, consisting of 500,000,000 shares of Class A Common Stock, par value $0.0001 per share (the "<u>Class</u> <u>A Common Stock</u>"), 100,000,000 shares of Class B Common Stock, par value $0.0001 per share (the "<u>Class</u> <u>B Common Stock</u>" and together with the Class A Common Stock, the "<u>Common Stock</u>"), and 50,000,000 shares of Preferred Stock, par value $0.0001 per share (the "<u>Preferred Stock</u>").

The number of authorized shares of Class A Common Stock, Class B Common Stock or Preferred Stock may be increased or decreased (but not below (i) the number of shares thereof then outstanding and (ii) with respect to the Class A Common Stock, the number of shares of Class A Common Stock reserved pursuant to Section 8 of Part A of Article V) by the affirmative vote of the holders of capital stock representing a majority of the voting power of all of the then-outstanding shares of capital stock of the Corporation entitled to vote thereon, subject to the terms of any certificate of designation relating to any series of Preferred Stock, irrespective of the provisions of Section 242(b)(2) of the DGCL.

Immediately upon the filing and effectiveness of this Certificate of Incorporation with the Secretary of State of the State of Delaware (the "<u>Effective Time</u>"), automatically and without further action on the part of holders of capital stock of the Corporation, each share of the common stock, par value $0.0001 per share, of the Corporation outstanding as of immediately prior to the Effective Time (the "<u>Old Common Stock</u>") shall be reclassified as, and become, respectively, (i) one (1) validly issued, fully paid and non-assessable share of Class A Common Stock for each share of Old Common Stock held by Benjamin Steiner (the "<u>Class</u> <u>A Recapitalization</u>") and (ii) one (1) validly issued, fully paid and nonassessable share of Class B Common Stock for each share of Old Common Stock held by the Paulson Stockholders (as defined herein) (the "<u>Class</u> <u>B Reclassification</u>" and, together with the Class A Recapitalization, the "<u>Reclassification</u>"). The Reclassification shall occur automatically as of the Effective Time without any further action by

------

the Corporation or the holders of the shares affected thereby and whether or not any certificates representing such shares are surrendered to the Corporation. Upon the Effective Time, each certificate that as of immediately prior to the Effective Time represented shares of Old Common Stock shall be deemed to represent an equivalent number of shares of Class A Common Stock or Class B Common Stock, as applicable.

**ARTICLE V** 

The designations and the powers, preferences, privileges and rights, and the qualifications, limitations or restrictions thereof in respect of each class of capital stock of the Corporation are as follows:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;A. <u>Class</u> <u>A Common Stock and Class</u> <u>B Common Stock</u>.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;1. <u>Equal Status; General</u>. Except as otherwise provided herein or required by law, shares of Class A Common Stock and Class B Common Stock shall have the same rights, privileges, preferences and powers, rank equally (including as to dividends and distributions, and upon any liquidation, dissolution, distribution of assets or winding up of the Corporation), share ratably and be identical in all respects and as to all matters. The voting, dividend, liquidation and other rights, preferences and powers of the holders of Class A Common Stock and Class B Common Stock are subject to and qualified by the rights, powers and preferences of any series of Preferred Stock as may be designated by the Board of Directors of the Corporation (the "<u>Board of Directors</u>") and outstanding from time to time.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;2. <u>Voting</u>. Except as otherwise provided herein or expressly required by law, at all meetings of stockholders and on all matters submitted to a vote of stockholders of the Corporation generally, each holder of Class A Common Stock, as such , shall have the right to one (1) vote per share of Class A Common Stock held of record by such holder as of the applicable record date and each holder of Class B Common Stock, as such, shall have the right to ten (10) votes per share of Class B Common Stock held of record as of the applicable record date by such holder. Except as otherwise provided herein or required by law, the holders of shares of Class A Common Stock and Class B Common Stock, as such, shall (a) at all times vote together as a single class on all matters (including the election of directors) submitted to a vote of the stockholders of the Corporation generally, (b) be entitled to notice of any stockholders' meeting in accordance with the Amended and Restated Bylaws of the Corporation (as the same may be amended and/or restated from time to time, the "<u>Bylaws</u>"), and (c) be entitled to vote upon such matters and in such manner as may be provided by law; *provided, however*, that, except as otherwise required by law, holders of Class A Common Stock and Class B Common Stock, as such, shall not be entitled to vote on any amendment to this Certificate of Incorporation that relates solely to the terms of one or more outstanding series of Preferred Stock if the holders of such affected series are entitled, either separately or together with the holders of one or more other such series, to vote thereon pursuant to this Certificate of Incorporation (including any Certificate of Designation (as defined herein)) or pursuant to the DGCL. There shall be no cumulative voting.

------

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;3. <u>Dividend Rights</u>. Shares of Class A Common Stock and Class B Common Stock shall be treated equally, identically and ratably, on a per share basis, with respect to any dividends as may be declared and paid from time to time by the Board of Directors out of any assets of the Corporation legally available therefor; *provided, however*, that in the event a dividend is paid in the form of shares of Class A Common Stock or Class B Common Stock (or rights to acquire, or securities convertible into or exchangeable for, such shares), then holders of Class A Common Stock shall be entitled to receive shares of Class A Common Stock (or rights to acquire, or securities convertible into or exchangeable for, such shares, as the case may be), and holders of Class B Common Stock shall be entitled to receive shares of Class B Common Stock (or rights to acquire, or securities convertible into or exchangeable for, such shares, as the case may be), with holders of shares of Class A Common Stock and Class B Common Stock receiving, on a per share basis, an identical number of shares of Class A Common Stock or Class B Common Stock (or rights to acquire, or securities convertible into or exchangeable for, such shares, as the case may be), as applicable. Notwithstanding the foregoing, the Board of Directors may pay or make a disparate dividend per share of Class A Common Stock or Class B Common Stock (whether in the amount of such dividend payable per share, the form in which such dividend is payable, the timing of the payment, or otherwise) if such disparate dividend is approved by the affirmative vote of the holders of a majority of the outstanding shares of Class A Common Stock and Class B Common Stock, each voting separately as a class.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;4. <u>Subdivisions, Combinations or Reclassifications</u>. Shares of Class A Common Stock or Class B Common Stock may not be subdivided, combined or reclassified unless the shares of the other class are concurrently therewith proportionately subdivided, combined or reclassified in a manner that maintains the same proportionate equity ownership between the holders of the outstanding Class A Common Stock and Class B Common Stock on the record date for such subdivision, combination or reclassification; *provided, however*, that shares of one such class may be subdivided, combined or reclassified in a different or disproportionate manner if such subdivision, combination or reclassification is approved by the affirmative vote of the holders of a majority of the outstanding shares of Class A Common Stock and Class B Common Stock, each voting separately as a class.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;5. <u>Liquidation, Dissolution or Winding Up</u>. Subject to the preferential or other rights of any holders of Preferred Stock then outstanding and after payment or provision for payment of the debts and other liabilities of the Corporation, upon the dissolution, distribution of assets, liquidation or winding up of the Corporation, whether voluntary or involuntary, holders of Class A Common Stock and Class B Common Stock will be entitled to receive ratably all assets of the Corporation available for distribution to its stockholders unless disparate or different treatment of the shares of each such class with respect to distributions upon any such liquidation, dissolution, distribution of assets or winding up is approved by the affirmative vote of the holders of a majority of the outstanding shares of Class A Common Stock and Class B Common Stock, each voting separately as a class.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;6. <u>Merger or Consolidation</u>. In the case of any distribution or payment in respect of the shares of Class A Common Stock or Class B Common Stock, or any consideration into which such shares are converted, upon the consolidation or merger of the Corporation with or into any other entity, such distribution, payment or consideration that the holders of shares of Class A Common Stock or Class B Common Stock have the right to receive, or the right to elect to receive, shall be made ratably on a per share basis among the holders of the Class A Common Stock and

------

Class B Common Stock as a single class; *provided, however*, that shares of such classes may receive, or have the right to elect to receive, different or disproportionate consideration in connection with such consolidation, merger or other transaction if (i) the only difference in the per share consideration to the holders of the Class A Common Stock and Class B Common Stock is that any securities distributed to the holder of, or issuable upon the conversion of, a share of Class B Common Stock have equal or greater voting power than any securities distributed to the holder of, or issuable upon the conversion of, a share of Class A Common Stock, or (ii) such different or disproportionate consideration is approved by the affirmative vote of the holders of a majority of the outstanding shares of Class A Common Stock and Class B Common Stock, each voting separately as a class.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;7. <u>Conversion</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;&nbsp;&nbsp;&nbsp;&nbsp;7.1. <u>Optional Conversion of Class</u> <u>B Common Stock</u>. Each share of Class B Common Stock shall be convertible into one (1) fully paid and nonassessable share of Class A Common Stock at the option of the holder thereof at any time upon written notice to the Corporation or, if the written notice specifies a future effective time, including a time determined upon the happening of a specific future event, upon the occurrence of such time or event (an "<u>Optional Class</u> <u>B Conversion Event</u>"). Before any holder of Class B Common Stock shall be entitled to convert any shares of Class B Common Stock into shares of Class A Common Stock, such holder shall surrender the certificate or certificates therefor (if any), duly endorsed, at the principal corporate office of the Corporation or of any transfer agent for the Class B Common Stock, and shall provide written notice to the Corporation at its principal corporate office, of such conversion election and shall state therein the name or names (i) in which the certificate or certificates representing the shares of Class A Common Stock into which the shares of Class B Common Stock are so converted are to be issued (if such shares of Class A Common Stock are certificated) or (ii) in which such shares of Class A Common Stock are to be registered in book-entry form (if such shares of Class A Common Stock are uncertificated). If the shares of Class A Common Stock into which the shares of Class B Common Stock are to be converted are to be issued in a name or names other than the name of the holder of the shares of Class B Common Stock being converted, such notice shall be accompanied by a written instrument or instruments of transfer, in form satisfactory to the Corporation, duly executed by the holder. The Corporation shall, as soon as practicable thereafter, issue and deliver at such office to such holder, or to the nominee or nominees of such holder, a certificate or certificates representing the number of shares of Class A Common Stock to which such holder shall be entitled upon such conversion (if such shares of Class A Common Stock are certificated) or shall register such shares of Class A Common Stock in book-entry form (if such shares of Class A Common Stock are uncertificated). Such conversion shall be deemed to be effective immediately prior to the close of business on the date of the provision of written notice of such conversion election as required by this Subsection 7.1 (or, if the written notice specifies a future effective time, including a time determined upon the happening of a specific future event, such conversion shall be deemed to be effective upon the occurrence of such time or event), the shares of Class A Common Stock issuable upon such conversion shall be deemed to be outstanding as of such time, and the Person (as defined in Article XII) or Persons entitled to receive the shares of Class A Common Stock issuable upon such conversion shall be deemed to be the record holder or holders of such shares of Class A Common Stock as of such time. Notwithstanding anything herein to the contrary, shares of Class B Common Stock represented by a lost, stolen or destroyed stock certificate may be converted pursuant to an Optional Class B Conversion Event if the holder thereof notifies the Corporation or its transfer agent that such certificate has been lost, stolen or destroyed and makes an affidavit of that fact acceptable to the Corporation and executes an agreement acceptable to the Corporation to indemnify the Corporation from any loss incurred by it in connection with 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;&nbsp;&nbsp;&nbsp;&nbsp;7.2. <u>Automatic Conversion of Class</u> <u>B Common Stock</u>. Each share of Class B Common Stock shall automatically convert into one (1) fully paid and nonassessable share of Class A Common Stock upon the earliest of the following (a "<u>Mandatory Class</u> <u>B Conversion Event</u>"):

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;i. <u>Reduction in Voting Power</u>. 11:59 p.m. Eastern Time on the first date on which the aggregate number of
outstanding shares of Class B Common Stock ceases to represent at least 5% of the then-outstanding shares of Common Stock.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;ii. <u>Transfers</u>. The occurrence of a Transfer (as defined in Section 9), other than a Permitted Transfer
(as defined in Section 9), of such share of Class B Common Stock.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;iii. <u>Final Conversion of Class</u> <u>B Common Stock</u>. 11:59 p.m. Eastern Time on the date that is
ten (10) years following the Effective Time.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;iv. <u>Death or Disability of John Paulson</u>. The date fixed by the Board of Directors that is no less than 61
days and no more than 180 days following the date of the death or Disability (as defined in Section 9) of John Paulson.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;7.3. <u>Certificates</u>. Each outstanding stock certificate (if shares are in certificated form) that, immediately prior to the occurrence of a Mandatory Class B Conversion Event, represented one or more shares of Class B Common Stock subject to such Mandatory Class B Conversion Event shall, upon such Mandatory Class B Conversion Event, be deemed to represent an equal number of shares of Class A Common Stock, without the need for surrender or exchange thereof. The Corporation shall, upon the request of any holder whose shares of Class B Common Stock have been converted into shares of Class A Common Stock as a result of an Optional Class B Conversion Event or a Mandatory Class B Conversion Event (either of the foregoing, a "<u>Conversion Event</u>") and upon surrender by such holder to the Corporation of the outstanding certificate(s) formerly representing such holder's shares of Class B Common Stock, if any (or, in the case of any lost, stolen or destroyed certificate, upon such holder providing an affidavit of that fact acceptable to the Corporation and executing an agreement acceptable to the Corporation to indemnify the Corporation from any loss incurred by it in connection with such certificate), issue and deliver to such holder (or such other Person specified pursuant to Subsection 7.1) certificate(s) representing the shares of Class A Common Stock into which such holder's shares of Class B Common Stock were converted as a result of such Conversion Event (if such shares are certificated) or, if such shares are uncertificated, register such shares in book-entry form. Each share of Class B Common Stock that is converted pursuant to Subsection 7.1 or 7.2 shall thereupon automatically be retired and shall not be available for reissuance.

------

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;7.4. <u>Policies and Procedures</u>. The Corporation may, from time to time, establish such policies and procedures, not in violation of applicable law or the other provisions of this Certificate of Incorporation or Bylaws of the Corporation, relating to the conversion of the Class B Common Stock into Class A Common Stock, as it may deem necessary or advisable in connection therewith. If the Corporation has reason to believe that a Transfer or other Conversion Event giving rise to a conversion of shares of Class B Common Stock into Class A Common Stock has occurred but has not theretofore been reflected on the books of the Corporation (or in book-entry as maintained by the transfer agent of the Corporation), the Corporation may request that the holder of such shares furnish affidavits or other evidence to the Corporation as the Corporation deems necessary to determine whether a conversion of shares of Class B Common Stock to Class A Common Stock has occurred, and if such holder does not within ten (10) days after the date of such request furnish sufficient evidence to the Corporation (in the manner provided in the request) to enable the Corporation to determine that no such conversion has occurred, any such shares of Class B Common Stock, to the extent not previously converted, shall be automatically converted into shares of Class A Common Stock and the same shall thereupon be registered on the books and records of the Corporation (or in book-entry as maintained by the transfer agent of the Corporation). In connection with any action of stockholders taken at a meeting, the stock ledger of the Corporation (or in book-entry as maintained by the transfer agent of the Corporation) shall be presumptive evidence as to who are the stockholders entitled to vote in person or by proxy at any meeting of stockholders and the class or classes or series of shares held by each such stockholder and the number of shares of each class or classes or series held by such stockholder. The Corporation shall have the authority to determine whether a Transfer or other event giving rise to a conversion has occurred that results in a conversion to Class A Common Stock, and such determination shall be conclusive and binding.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;8. <u>Reservation of Stock</u>. The Corporation shall at all times reserve and keep available out of its authorized but unissued shares of Class A Common Stock, solely for the purpose of effecting the conversion of the shares of Class B Common Stock, such number of shares of Class A Common Stock as shall from time to time be sufficient to effect the conversion of all outstanding shares of Class B Common Stock into shares of Class A Common Stock.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;9. <u>Definitions</u>.

"<u>Affiliate</u>" means a person that directly, or indirectly through one or more intermediaries, controls, or is controlled by, or is under common control with, another person.

"<u>Convertible Security</u>" shall mean any evidences of indebtedness, shares of Preferred Stock or other securities (other than shares of Class B Common Stock) convertible into or exchangeable for shares of Class A Common Stock or Class B Common Stock, either directly or indirectly.

"<u>Disability</u>" shall mean permanent and total disability such that John Paulson is unable to engage in any substantial gainful activity by reason of any medically determinable mental impairment which would reasonably be expected to result in death or which has lasted or would reasonably be expected to last for a continuous period of not less than twelve (12) months as determined by a licensed medical practitioner jointly selected by a majority of the Independent Directors and John Paulson. If John Paulson is incapable of selecting a licensed physician, then

------

"<u>Independent Directors</u>" shall mean the members of the Board of Directors designated as independent directors in accordance with (i) the requirements of any national stock exchange under which the Corporation's equity securities are listed for trading that are generally applicable to companies with common equity securities listed thereon or (ii) if the Corporation's equity securities are not listed for trading on a national stock exchange, the requirements of the New York Stock Exchange generally applicable to companies with equity securities listed thereon.

"<u>IPO Date</u>" means [ ⚫ ], 2023.

"<u>Option</u>" shall mean rights, options, restricted stock units or warrants to subscribe for, purchase or otherwise acquire shares of Class A Common Stock, Class B Common Stock or Convertible Securities (as defined above).

"<u>Paulson Stockholders</u>" means John Paulson, Paulson Advantage Master Ltd., Paulson Advantage Plus Master Ltd. and any Permitted Trust, general partnership, limited partnership, limited liability company, corporation or other entity over which John Paulson exercises beneficial ownership in accordance with Rule 13d-3 under the Securities Exchange Act of 1934, as amended (the "<u>Exchange Act</u>"); *provided* that "Paulson Stockholders" shall not include any portfolio company of a Paulson Stockholder.

"<u>Permitted Transfer</u>" shall mean, and be restricted to, any Transfer of a share of Class B Common Stock by any Paulson Stockholder to any other Paulson Stockholder.

"<u>Permitted Transferee</u>" shall mean a transferee of shares of Class B Common Stock received in a Permitted Transfer.

"<u>Permitted Trust</u>" shall mean a bona fide trust where each trustee is a Paulson Stockholder.

"<u>Transfer</u>" of a share of Class B Common Stock shall mean any sale, assignment, transfer, conveyance, hypothecation or other transfer or disposition of such share or any legal or beneficial interest in such share, whether or not for value and whether voluntary or involuntary or by operation of law, including, without limitation, a transfer of a share of Class B Common Stock to a broker or other nominee (regardless of whether there is a corresponding change in beneficial ownership), or the transfer of, or entering into a binding agreement with respect to, Voting Control over such share by proxy or otherwise; *provided, however*, that the following shall not be considered a "Transfer" within the meaning of this Section 9 of Article V:

------

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(i) the granting of a revocable proxy to officers or directors of the Corporation at the request of the Board of Directors in connection with actions to be taken at an annual or special meeting of stockholders;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(ii) entering into a voting trust, agreement or arrangement (with or without granting a proxy) solely with stockholders who are holders of Class B Common Stock, which voting trust, agreement or arrangement does not involve any payment of cash, securities or other property to the holder of the shares subject thereto other than the mutual promise to vote shares in a designated manner; for the avoidance of doubt, any voting trust, agreement or arrangement entered into prior to the IPO Date shall not constitute a Transfer;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(iii) entering into a voting trust, agreement or arrangement (with or without granting a proxy) pursuant to a written agreement to which the Corporation is a party;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(iv) the pledge of shares of Class B Common Stock by a stockholder that creates a mere security interest in such shares pursuant to a bona fide loan or indebtedness transaction for so long as such stockholder continues to exercise Voting Control over such pledged shares; *provided, however*, that a foreclosure on such shares or other similar action by the pledgee shall constitute a Transfer unless such foreclosure or similar action otherwise qualifies as a Permitted Transfer;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(v) the fact that, as of the IPO Date or at any time after the IPO Date, the spouse of any holder of Class B Common Stock possesses or obtains an interest in such holder's shares of Class B Common Stock arising solely by reason of the application of the community property laws of any jurisdiction, so long as no other event or circumstance shall exist or have occurred that constitutes a Transfer of such shares of Class B Common Stock; provided that any transfer of shares by any holder of shares of Class B Common Stock to such holder's spouse, including a transfer in connection with a divorce proceeding, domestic relations order or similar legal requirement, shall constitute a "Transfer" of such shares of Class B Common Stock unless otherwise exempt from the definition of Transfer;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(vi) entering into a trading plan pursuant to Rule 10b5-1 under the Exchange Act, with a broker or other nominee; *provided, however*, that a sale of such shares of Class B Common Stock pursuant to such plan shall constitute a "Transfer" at the time of such sale; and

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(vii) in connection with a merger or consolidation of the Corporation with or into any other entity, or any other transaction or proposal that is approved by the Board of Directors, the entering into a support, voting, tender or similar agreement or arrangement (in each case, with or without the grant of a proxy) that has also been approved by the Board of Directors or the consummation of the actions or transactions contemplated therein (including, without limitation, tendering shares of Class B Common Stock or any legal or beneficial interest therein).

"<u>Voting Control</u>" means, with respect to a share of Class B Common Stock, the power (whether exclusive or shared) to vote or direct the voting of such share by proxy, voting agreement or otherwise.

------

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;B. <u>Preferred Stock</u>.

Shares of Preferred Stock may be issued from time to time in one or more series, each of such series to have such terms as stated or expressed herein and in the resolution or resolutions providing for the creation and issuance of such series adopted by the Board of Directors as hereinafter provided. Any shares of Preferred Stock which may be redeemed, purchased or acquired by the Corporation may be reissued except as otherwise provided by law.

Authority is hereby expressly granted to the Board of Directors from time to time to issue the Preferred Stock in one or more series, and in connection with the creation of any such series, by adopting a resolution or resolutions providing for the issuance of the shares thereof and by filing a certificate of designation relating thereto in accordance with the DGCL (a "<u>Certificate of Designation</u>"), to determine and fix the number of shares of such series and such voting powers, full or limited, or no voting powers, and such designations, preferences and relative participating, optional or other special rights, and qualifications, limitations or restrictions thereof, including without limitation thereof, dividend rights, conversion rights, redemption privileges and liquidation preferences, all to the fullest extent now or hereafter permitted by the DGCL. Without limiting the generality of the foregoing, the resolution or resolutions providing for the creation and issuance of any series of Preferred Stock may provide that such series shall be superior or rank equally or be junior to any other series of Preferred Stock to the extent permitted by law and this Certificate of Incorporation (including any Certificate of Designation).

**ARTICLE VI** 

For the management of the business and for the conduct of the affairs of the Corporation it is further provided that:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;A. <u>General Powers</u>. Except as otherwise expressly provided by the DGCL or this Certificate of Incorporation, the business and affairs of the Corporation shall be managed by or under the direction of the Board of Directors.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;B. <u>Number of Directors; Election of Directors</u>. Subject to the rights of the holders of any series of Preferred Stock to elect directors and subject to the terms of the Voting Agreement, dated on or about the IPO Date, by and among the Corporation and certain of the Paulson Stockholders (as the same may be amended, restated, supplemented and/or otherwise modified from time to time in accordance with its terms, the "<u>Voting Agreement</u>"), the number of directors which shall constitute the whole Board of Directors shall be fixed exclusively by one or more resolutions adopted from time to time by the Board of Directors.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;C. <u>Classes of Directors</u>. Subject to the rights of the holders of any series of Preferred Stock to elect directors, the directors of the Corporation are hereby classified with respect to the time for which they severally hold office into three classes, designated as Class I, Class II and Class III. Each class shall consist, as nearly as possible, of one-third of the total number of such directors. The initial Class I directors shall serve for a term expiring at the first annual meeting of the stockholders following the time at which the initial classification of the Board of Directors becomes effective; the initial Class II directors shall serve for a term expiring at the second annual meeting of the stockholders following the time at which the initial classification of the Board of Directors becomes effective; and the initial Class III directors shall serve for a term expiring at the third annual meeting following the time at which the initial classification of the Board of Directors

------

becomes effective. At each annual meeting of stockholders of the Corporation following the time at which the initial classification of the Board of Directors becomes effective, the successors of the class of directors whose term expires at that meeting shall be elected to hold office for a term expiring at the annual meeting of stockholders held in the third year following the year of their election. The Board of Directors is authorized to assign members of the Board of Directors already in office to a class at the time the initial classification of the Board of Directors becomes effective.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;D. <u>Term and Removal</u>. Subject to the rights of the holders of any series of Preferred Stock to elect directors and the nomination rights granted to the Paulson Stockholders pursuant to the Voting Agreement, each director shall hold office until the annual meeting at which such director's term expires and until his or her successor is duly elected and qualified, or until his or her earlier death, resignation, disqualification or removal. No decrease in the number of directors shall shorten the term of any incumbent director. Subject to the rights of the holders of any series of Preferred Stock to elect directors, the Board of Directors or any individual director may be removed from office at any time either with or without cause by the affirmative vote of the holders of capital stock representing a majority of the voting power of all of the then outstanding shares of capital stock of the Corporation entitled to vote thereon, voting together as a single class; *provided, however*, that at any time when the holders of Class B Common Stock beneficially own, in the aggregate, less than the majority of the voting power of all of the then outstanding shares of capital stock of the Corporation entitled to vote generally in the election of directors (a "<u>Trigger Event</u>"), the Board of Directors or any individual director may be removed from office only for cause and only by the affirmative vote of the holders of capital stock representing a majority of the voting power of all of the then outstanding shares of capital stock of the Corporation entitled to vote thereon, voting together as a single class.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;E. <u>Vacancies and Newly Created Directorships</u>. Subject to (i) the rights of the holders of any series of Preferred Stock to elect directors and (ii) the rights granted to the Paulson Stockholders pursuant to the Voting Agreement, any newly created directorship that results from an increase in the number of directors or any vacancy on the Board of Directors that results from the death, disability, resignation, disqualification or removal of any director (including pursuant to the Voting Agreement) or from any other cause shall be filled solely by the affirmative vote of a majority of the total number of directors then in office, even if less than a quorum, or by a sole remaining director, and shall not be filled by the stockholders unless the Board of Directors determines by resolution that any such vacancy or newly created directorship shall be filled by the stockholders. Any director elected to fill a newly created directorship or vacancy in accordance with the preceding sentence shall hold office until the next annual meeting of stockholders held to elect the class of directors to which such director is elected and until his or her successor is duly elected and qualified or until his or her earlier death, resignation, retirement, disqualification, or removal.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;F. <u>Preferred Stock Directors</u>. Whenever the holders of any series of Preferred Stock issued by the Corporation shall have the right as provided for herein (including any Certificate of Designation), voting separately as a series or separately as a class with one or more such other series, to elect directors, the election, term of office, removal and other features of such directorships shall be governed by the terms of this Certificate of Incorporation (including any Certificate of Designation). Notwithstanding anything to the contrary in this Article VI, during the period when the holders of any series of Preferred Stock issued by the Corporation shall have the

------

right to elect additional directors, the number of directors to be elected by the holders of any such series of Preferred Stock shall be in addition to the number fixed pursuant to paragraph B of this Article VI, and the total number of directors constituting the whole Board of Directors shall be automatically increased by such number of directors to be elected by the holders of any such series of Preferred Stock and each such additional director shall serve until such director's successor shall have been duly elected and qualified, or until such director's right to hold such office terminates pursuant to said provisions, whichever occurs earlier, subject to his earlier death, disqualification, resignation or removal. Except as otherwise provided in the Certificate of Designation(s) in respect of any series of Preferred Stock, whenever the holders of any series of Preferred Stock having such right to elect additional directors are divested of such right pursuant to the provisions of this Certificate of Incorporation (including any Certificate of Designation), the terms of office of all such additional directors elected by the holders of such series of Preferred Stock, or elected to fill any vacancies resulting from the death, resignation, disqualification or removal of such additional directors, shall forthwith terminate (in which case each such director thereupon shall cease to be qualified as, and shall cease to be, a director) and the total authorized number of directors of the Corporation shall automatically be reduced accordingly.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;G. <u>Vote by Ballot</u>. The directors of the Corporation need not be elected by written ballot unless the Bylaws so provide.

**ARTICLE VII** 

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;A. <u>Consent of Stockholders In Lieu of Meeting</u>. Subject to the rights of the holders of any series of Preferred Stock, at any time prior to the occurrence of the Trigger Event, any action required or permitted to be taken by the stockholders of the Corporation may be taken without a meeting, without prior notice and without a vote, if a consent or consents, setting forth the action so taken, are (i) signed by the holders of outstanding shares of the relevant class(es) or series of stock of the Corporation representing not less than the minimum number of votes that would be necessary to authorize or take such action at a meeting at which all shares of stock of the Corporation then issued and outstanding (other than treasury stock) entitled to vote thereon were present and voted, and (ii) delivered to the Corporation in accordance with applicable law. Subject to the rights of the holders of any series of Preferred Stock, at any time after the occurrence of the Trigger Event, any action required or permitted to be taken by the stockholders of the Corporation must be effected at an annual or special meeting of the stockholders of the Corporation, and shall not be taken by consent in lieu of a meeting.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;B. <u>Special Meetings of Stockholders</u>. Special meetings of the stockholders of the Corporation may be called, for any purpose or purposes, at any time only by or at the direction of (i) the Chairperson of the Board of Directors (if any), (ii) the Chief Executive Officer or (iii) the Board of Directors pursuant to a resolution adopted by a majority of the members of the Board of Directors then in office, and shall not be called by stockholders or any other person or persons. Notwithstanding the immediately preceding sentence, prior to the occurrence of the Trigger Event, special meetings of stockholders of the Corporation may be called by the Secretary of the Corporation at the request of the holders of at least a majority of the voting power of the then outstanding shares of capital stock of the Corporation.

------

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;C. <u>Stockholder Nominations and Introduction of Business, Etc</u>. Advance notice of stockholder nominations for election of directors and other business to be brought by stockholders before a meeting of stockholders shall be given in the manner provided by the Bylaws of the Corporation.

**ARTICLE VIII** 

No director or officer of the Corporation shall have any personal liability to the Corporation or its stockholders for monetary damages for any breach of fiduciary duty as a director or officer, except to the extent such exemption from liability or limitation thereof is not permitted under the DGCL as the same exists or hereafter may be amended. Any amendment, repeal, modification or elimination of this Article VIII, or the adoption of any provision of the Certificate of Incorporation inconsistent with this Article VIII, shall not adversely affect any right or protection of a director or officer of the Corporation with respect to any act or omission occurring prior to such amendment, repeal, modification, elimination or adoption. If the DGCL is amended after approval by the stockholders of this Article VIII to authorize corporate action further eliminating or limiting the personal liability of directors or officers, then the liability of a director or officer of the Corporation shall be eliminated or limited to the fullest extent permitted by the DGCL as so amended.

**ARTICLE IX** 

The Corporation shall have the power to provide rights to indemnification and advancement of expenses to its current and former officers, directors, employees and agents and to any person who is or was serving at the request of the Corporation as a director, officer, employee or agent of another corporation, partnership, joint venture, trust or other enterprise.

**ARTICLE X** 

Unless the Corporation consents in writing to the selection of an alternative forum, (a) (i) any derivative action or proceeding brought on behalf of the Corporation, (ii) any action asserting a claim of breach of a fiduciary duty owed by any current or former director, officer, other employee or stockholder of the Corporation to the Corporation or the Corporation's stockholders, (iii) any action asserting a claim arising pursuant to any provision of the DGCL, this Certificate of Incorporation, the Bylaws or as to which the DGCL confers exclusive jurisdiction on the Court of Chancery of the State of Delaware (the "<u>Court of Chancery</u>"), or (iv) any action asserting a claim governed by the internal affairs doctrine, except for, as to each of (i) through (iv) above, any action or proceeding as to which the Court of Chancery or other applicable court determines that there is an indispensable party not subject to the jurisdiction of such court (and the indispensable party does not consent to the personal jurisdiction of such court within 10 days following such determination), which is vested in the exclusive jurisdiction of a court or forum other than such court or for which such court does not have subject matter jurisdiction, shall be exclusively brought in the Court of Chancery of the State of Delaware or, if such court does not have subject matter jurisdiction thereof, the federal district court of the State of Delaware; and (b) the federal district courts of the United States shall be the exclusive forum for the resolution of any complaint asserting a cause of action arising under the Securities Act of 1933, as amended. To the fullest extent permitted by law, any underwriters and agents of the Corporation shall be express third

------

**ARTICLE XI** 

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;A. To the fullest extent permitted by law and in accordance with Section 122(17) of the DGCL, (i) the Corporation hereby renounces all interest and expectancy that it otherwise would be entitled to have in, and all rights to be offered an opportunity to participate in, any business opportunity that from time to time may be presented to the Paulson Stockholders, or their respective affiliates (other than the Corporation and its subsidiaries), and any of their respective principals, members, directors, partners, stockholders, officers, employees or other representatives (other than any such person who is also an employee of the Corporation or its subsidiaries), or any director or stockholder who is not employed by the Corporation or its subsidiaries (each such person, an "<u>Exempt Person</u>"); (ii) no Exempt Person will have any duty to refrain from (1) engaging in a corporate opportunity in the same or similar lines of business in which the Corporation or its subsidiaries from time to time is engaged or proposes to engage or (2) otherwise competing, directly or indirectly, with the Corporation or any of its subsidiaries; and (iii) if any Exempt Person acquires knowledge of a potential transaction or other business opportunity which may be a corporate opportunity both for such Exempt Person or any of his or her respective affiliates, on the one hand, and for the Corporation or its subsidiaries, on the other hand, such Exempt Person shall have no duty to communicate or offer such transaction or business opportunity to the Corporation or its subsidiaries and such Exempt Person may take any and all such transactions or opportunities for itself or offer such transactions or opportunities to any other Person, in each case unless the transaction or opportunity was presented to the Exempt Person solely in his or her capacity as a director of the Corporation.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;B. To the fullest extent permitted by law, no potential transaction or business opportunity may be deemed to be a corporate opportunity of the Corporation or its subsidiaries unless (i) the Corporation or its subsidiaries would be permitted to undertake such transaction or opportunity in accordance with this Certificate of Incorporation, (ii) the Corporation or its subsidiaries at such time have sufficient financial resources to undertake such transaction or opportunity, (iii) the Corporation or its subsidiaries have an interest or expectancy in such transaction or opportunity and (iv) such transaction or opportunity would be in the same or similar line of business in which the Corporation or its subsidiaries are then engaged or a line of business that is reasonably related to, or a reasonable extension of, such line of business.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;C. To the fullest extent permitted by law, no stockholder and no director will be liable to the Corporation or its subsidiaries or stockholders for breach of any duty solely by reason of any activities or omissions of the types referred to in this Article XI, except to the extent such actions or omissions are in breach of this Article XI.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;D. Any amendment, repeal or modification of this Article XI, or the adoption of any provision of the Certificate of Incorporation inconsistent with this Article XI, shall not adversely affect any right or protection of a director of the Corporation with respect to any act or omission occurring prior to such amendment, repeal, modification or adoption.

------

**ARTICLE XII** 

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;A. <u>Section 203 of the DGCL</u>. The Corporation expressly elects not to be governed by Section 203 of the DGCL and the restrictions and limitations set forth therein.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;B. <u>Interested Stockholder Transactions</u>. Notwithstanding anything to the contrary set forth in this Certificate of Incorporation, at any point in time at which the Common Stock is registered under Section 12(b) or 12(g) of the Exchange Act, the Corporation shall not engage in any Business Combination (as defined below) with any Interested Stockholder (as defined below) for a period of three (3) years following the time that such stockholder became an Interested Stockholder, unless:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;a. prior to such time that such stockholder became an Interested Stockholder, the Board of Directors approved
either the Business Combination or the transaction which resulted in such stockholder becoming an Interested Stockholder; or

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;b. upon consummation of the transaction which resulted in the stockholder becoming an Interested Stockholder, the
Interested Stockholder owned at least 85% of the voting stock (as defined below) of the Corporation outstanding at the time the transaction commenced, excluding for purposes of determining the voting stock outstanding (but not the outstanding voting
stock owned by the Interested Stockholder) those shares owned by (i) persons who are directors and also officers of the Corporation and (ii) employee stock plans of the Corporation in which employee participants do not have the right to
determine confidentially whether shares held subject to the plan will be tendered in a tender or exchange offer; or

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;c. at or subsequent to such time that such stockholder became an Interested Stockholder, the Business Combination
is approved by the Board of Directors and authorized at an annual or special meeting of stockholders by the affirmative vote of the holders of at least 66 2/3% of the voting power of all of the then-outstanding shares of capital stock of the
Corporation which is not owned by such Interested Stockholder.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;C. The restrictions contained in the foregoing Section B of Article XII shall not apply if:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;a. a stockholder becomes an Interested Stockholder inadvertently and (i) as soon as practicable divests
itself of ownership of sufficient shares so that the stockholder ceases to be an Interested Stockholder and (ii) would not, at any time, within the three-year period immediately prior to the Business Combination between the Corporation and such
stockholder, have been an Interested Stockholder but for the inadvertent acquisition of ownership, or

------

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;b. the Business Combination is proposed prior to the consummation or abandonment of and subsequent to the earlier
of the public announcement or the notice required hereunder of a proposed transaction which (i) constitutes one of the transactions described in the second sentence of this Section C(b) of Article XII, (ii) is with or by a Person who
either was not an Interested Stockholder during the previous three years or who became an Interested Stockholder with the approval of the Board of Directors and (iii) is approved or not opposed by a majority of the directors then in office (but
not less than one) who were directors prior to any Person becoming an Interested Stockholder during the previous three years or were recommended for election or elected to succeed such directors by a majority of such directors. The proposed
transactions referred to in the preceding sentence are limited to (x) a merger or consolidation of the Corporation (except for a merger in respect of which, pursuant to Section 251(f) of the DGCL, no vote of the stockholders of the
Corporation is required), (y) a sale, lease, exchange, mortgage, pledge, transfer or other disposition (in one transaction or a series of transactions) whether as part of a dissolution or otherwise, of assets of the Corporation or of any direct or
indirect majority-owned subsidiary of the Corporation (other than to any direct or indirect wholly owned subsidiary or to the Corporation) having an aggregate market value equal to fifty percent or more of either that aggregate market value of all
the assets of the Corporation determined on a consolidated basis or the aggregate market value of all the outstanding stock of the Corporation or (z) a proposed tender or exchange offer for fifty percent (50%) or more of the outstanding voting
stock of the Corporation. The Corporation shall give not less than 20 days' notice to all Interested Stockholders prior to the consummation of any of the transactions described in clause (x) or (y) of the second sentence of this Section
C(b) of Article XII.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;D. For purposes of this Article XII, references to:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;a. " <u>Affiliate</u> " means a person that directly, or indirectly through one or more intermediaries,
controls, or is controlled by, or is under common control with, another person.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;b. " <u>associate</u> ", when used to indicate a relationship with any person, means: (i) any
corporation, partnership, unincorporated association or other entity of which such person is a director, officer or partner or is, directly or indirectly, the owner of 20% or more of any class of shares of voting stock of the Corporation;
(ii) any trust or other estate in which such person has at least a 20% beneficial interest or as to which such person serves as trustee or in a similar fiduciary capacity; and (iii) any relative or spouse of such person, or any relative of
such spouse, who has the same residence as such person.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;c. " <u>Business Combination</u>," when used in reference to the Corporation and any Interested
Stockholder of the Corporation, means (i) any merger or consolidation of the Corporation or any direct or indirect majority-owned subsidiary of the Corporation (a) with the Interested Stockholder, or (b) with any other corporation,
partnership, unincorporated association or other entity if the merger or consolidation is caused by the Interested Stockholder and as a

------

result of such merger or consolidation Part B of this Article XII is not applicable to the surviving entity; (ii) any sale, lease, exchange, mortgage, pledge, transfer or other disposition (in one (1) transaction or a series of transactions), except proportionately as a stockholder of the Corporation, to or with the Interested Stockholder, whether as part of a dissolution or otherwise, of assets of the Corporation or of any direct or indirect majority-owned subsidiary of the Corporation which assets have an aggregate market value equal to 10% or more of either the aggregate market value of all the assets of the Corporation determined on a consolidated basis or the aggregate market value of all the outstanding shares of capital stock of the Corporation; (iii) any transaction which results in the issuance or transfer by the Corporation or by any direct or indirect majority-owned subsidiary of the Corporation of any stock of the Corporation or of such subsidiary to the Interested Stockholder, except: (a) pursuant to the exercise, exchange or conversion of securities exercisable for, exchangeable for or convertible into stock of the Corporation or any such subsidiary which securities were outstanding prior to the time that the Interested Stockholder became such; (b) pursuant to a merger under Section 251(g) of the DGCL; (c) pursuant to a dividend or distribution paid or made, or the exercise, exchange or conversion of securities exercisable for, exchangeable for or convertible into stock of the Corporation or any such subsidiary which security is distributed, pro rata to all holders of a class or series of stock of the Corporation subsequent to the time the Interested Stockholder became such; (d) pursuant to an exchange offer by the Corporation to purchase stock made on the same terms to all holders of said stock; or (e) any issuance or transfer of stock by the Corporation; *provided, however*, that in no case under items (c) through (e) of this subsection (iii) shall there be an increase in the Interested Stockholder's proportionate share of the stock of any class or series of the Corporation or of the voting stock of the Corporation (except as a result of immaterial changes due to fractional share adjustments); (iv) any transaction involving the Corporation or any direct or indirect majority-owned subsidiary of the Corporation which has the effect, directly or indirectly, of increasing the proportionate share of the stock of any class or series, or securities convertible into the stock of any class or series, of the Corporation or of any such subsidiary which is owned by the Interested Stockholder, except as a result of immaterial changes due to fractional share adjustments or as a result of any purchase or redemption of any shares of stock not caused, directly or indirectly, by the Interested Stockholder; or (v) any receipt by the Interested Stockholder of the benefit, directly or indirectly (except proportionately as a stockholder of the Corporation), of any loans, advances, guarantees, pledges, or other financial benefits (other than those expressly permitted in subsections (i) through (iv) above) provided by or through the Corporation or any direct or indirect majority-owned subsidiary.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;d. " <u>Control</u>," including the terms " <u>controlling</u>," " <u>controlled by</u> " and " <u>under common control with</u>," means the possession, directly or indirectly, of the power to direct or cause the direction of the management and policies of a Person, whether through the ownership of voting stock, by
contract or

------

otherwise. A Person who is the owner of 20% or more of the outstanding voting stock of any corporation, partnership, unincorporated association or other entity shall be presumed to have control of such entity, in the absence of proof by a preponderance of the evidence to the contrary. Notwithstanding the foregoing, a presumption of control shall not apply where such Person holds voting stock, in good faith and not for the purpose of circumventing this section, as an agent, bank, broker, nominee, custodian or trustee for one or more owners who do not individually or as a group have control of such 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;&nbsp;&nbsp;&nbsp;&nbsp;e. "<u>Interested Stockholder</u>" means any Person (other than the Corporation and any direct or indirect majority-owned subsidiary of the Corporation) that (i) is the owner of 15% or more of the capital stock of the Corporation that are entitled to vote, or (ii) is an Affiliate or associate of the Corporation and was the owner of fifteen percent (15%) or more of the capital stock of the Corporation that are entitled to vote at any time within the three-year period immediately prior to the date on which it is sought to be determined whether such Person is an Interested Stockholder, and the Affiliates and associates of such Person. Notwithstanding anything in this Article XII to the contrary, the term "Interested Stockholder" shall not include: (1) the Paulson Stockholders, or any of their respective Permitted Transferees, Affiliates or associates, including any investment funds managed by such Persons (collectively, the "<u>Investors</u>"), or any other Person with whom any of the foregoing are acting as a group or in concert for the purpose of acquiring, holding, voting or disposing of shares of capital stock of the Corporation, (2) any other Person who acquires voting stock of the Corporation directly from an Investor with prior approval of the Board of Directors, (3) any Person who acquires voting stock of the Corporation through a broker's transaction executed on any securities exchange or other over-the-counter market or pursuant to an underwritten public offering or (4) any Person whose ownership of shares in excess of the 15% limitation set forth herein is the result of any action taken solely by the Corporation; provided, further, that in the case of clause (4) such Person shall be an Interested Stockholder if thereafter such Person acquires additional shares of voting stock of the Corporation, except as a result of further corporate action not caused, directly or indirectly, by such Person.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;f. " <u>owner</u>," including the terms " <u>own</u> " and " <u>owned</u>," when used
with respect to any stock, means a Person that individually or with or through any of its Affiliates or associates:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;i. beneficially owns such stock, directly or indirectly; or

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;ii. has (a) the right to acquire such stock (whether such right is exercisable immediately or only after the
passage of time) pursuant to any agreement, arrangement or understanding, or upon the exercise of conversion rights, exchange rights, warrants or options, or otherwise; provided, however, that a Person shall not be deemed the owner of
stock tendered pursuant to a tender or exchange offer made by

------

such person or any of such Person's Affiliates or associates until such tendered stock is accepted for purchase or exchange; or (b) the right to vote such stock pursuant to any agreement, arrangement or understanding; *provided, however*, that a Person shall not be deemed the owner of any stock because of such Person's right to vote such stock if the agreement, arrangement or understanding to vote such stock arises solely from a revocable proxy or consent given in response to a proxy or consent solicitation made to ten or more Persons; or

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;iii. has any agreement, arrangement or understanding for the purpose of acquiring, holding, voting (except voting
pursuant to a revocable proxy or consent as described in item (b) of subsection ii. above), or disposing of such stock with any other Person that beneficially owns, or whose Affiliates or associates beneficially own, directly or indirectly,
such stock.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;g. " <u>Person</u> " means any individual, corporation, partnership, unincorporated association or other
entity.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;h. " <u>stock</u> " means, with respect to any corporation, capital stock and, with respect to any other
entity, any equity interest.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;i. " <u>voting stock</u> " means, with respect to any corporation, stock of any class or series entitled
to vote generally in the election of directors and, with respect to any entity that is not a corporation, any equity interest entitled to vote generally in the election of the governing body of such entity. Every reference to a percentage of voting
stock shall refer to such percentages of the votes of such voting stock.

**ARTICLE XIII** 

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;A. <u>Amendment of the Certificate of Incorporation</u>. The Corporation reserves the right to amend, alter, change, adopt or repeal any provision contained in this Certificate of Incorporation, in the manner now or hereafter prescribed by statute, and all rights conferred upon stockholders herein are granted subject to this reservation; *provided, however*, that, notwithstanding any other provision of this Certificate of Incorporation or any provision of law that might otherwise permit a lesser vote or no vote, but in addition to any vote of the holders of shares of any class or series of capital stock of the Corporation required by law or by this Certificate of Incorporation and subject to the terms of the Voting Agreement, at any time when the holders of the Corporation's Class B Common Stock no longer beneficially own, in the aggregate, at least the majority of the voting power of its outstanding capital stock, the affirmative vote of the holders of at least 66 2/3% of the voting power of all of the then-outstanding shares of capital stock of the Corporation entitled to vote generally in the election of directors, voting together as a single class, shall be required to amend or repeal, or adopt any provision of this Certificate of Incorporation inconsistent with Articles V, VI, VII, VIII, XI, XII and XIII; *provided, however,* for so long as any shares of Class B Common Stock remain outstanding, the Corporation shall not, without the prior affirmative vote of the holders of at least a majority of the voting power of the outstanding shares of Class B Common Stock, voting as a separate class, in addition to any other vote required by law or this Certificate of Incorporation and subject to the terms of the Voting Agreement, directly or indirectly, amend, alter, change, repeal or adopt any provision inconsistent with Part A of Article V, Article XI or this proviso of this Part A of Article XIII.

------

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;B. <u>Amendment of Bylaws</u>. In furtherance and not in limitation of the powers conferred upon it by the DGCL, the Board of Directors shall have the power to adopt, amend, alter or repeal the Bylaws of the Corporation. The stockholders may not adopt, amend, alter or repeal the Bylaws of the Corporation unless such action is approved, in addition to any other vote required by this Certificate of Incorporation, by the affirmative vote of the holders of at least 66 2/3% of the voting power of all of the then-outstanding shares of capital stock of the Corporation entitled to vote generally in the election of directors, voting together as a single class. Notwithstanding the immediately preceding sentence, prior to the occurrence of the Trigger Event, the Bylaws may be amended or repealed by affirmative vote of the holders of at least a majority of the voting power of the then-outstanding shares of capital stock.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;C. <u>Severability</u>. If any provision or provisions of this Certificate of Incorporation shall be held to be invalid, illegal or unenforceable as applied to any circumstance for any reason whatsoever: (i) the validity, legality and enforceability of such provisions in any other circumstance and of the remaining provisions of this Certificate of Incorporation (including, without limitation, each portion of any paragraph of this Certificate of Incorporation containing any such provision held to be invalid, illegal or unenforceable that is not itself held to be invalid, illegal or unenforceable) shall not, to the fullest extent permitted by applicable law, in any way be affected or impaired thereby and (ii) to the fullest extent permitted by applicable law, the provisions of this Certificate of Incorporation (including, without limitation, each such portion of any paragraph of this Certificate of Incorporation containing any such provision held to be invalid, illegal or unenforceable) shall be construed so as to permit the Corporation to protect its directors, officers, employees and agents from personal liability in respect of their good faith service to or for the benefit of the Corporation to the fullest extent permitted by law.

## Exhibit 3.4

**Exhibit 3.4** 

**Amended and Restated Bylaws of** 

**Steinway Musical Instruments Holdings, Inc.** 

**(a Delaware corporation)** 

------

**Table of Contents** 

---

| | | |
|:---|:---|:---|
|  |  | **Page** |
|  Article I—Corporate Offices | Article I—Corporate Offices | 1 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;1.1 | Registered Office | 1 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;1.2 | Other Offices | 1 |
|  Article II—Meetings of Stockholders | Article II—Meetings of Stockholders | 1 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;2.1 | Place of Meetings | 1 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;2.2 | Annual Meeting | 1 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;2.3 | Special Meeting | 1 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;2.4 | Notice of Business to be Brought before a Meeting | 2 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;2.5 | Notice of Nominations for Election to the Board of Directors | 5 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;2.6 | Additional Requirements for Valid Nomination of Candidates to Serve as Director and, if Elected, to be Seated as Directors | 7 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;2.7 | Notice of Stockholders' Meetings | 9 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;2.8 | Quorum | 9 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;2.9 | Adjourned Meeting; Notice | 9 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;2.10 | Conduct of Business | 9 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;2.11 | Voting | 10 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;2.12 | Record Date for Stockholder Meetings and Other Purposes | 10 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;2.13 | Proxies | 11 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;2.14 | List of Stockholders Entitled to Vote | 11 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;2.15 | Inspectors of Election | 12 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;2.16 | Delivery to the Corporation | 12 |
|  Article III—Directors | Article III—Directors | 12 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;3.1 | Powers | 12 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;3.2 | Number; Term; Qualifications | 13 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;3.3 | Resignation; Removal; Vacancies | 13 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;3.4 | Place of Meetings; Meetings by Telephone | 13 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;3.5 | Regular Meetings | 13 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;3.6 | Special Meetings; Notice | 13 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;3.7 | Quorum | 14 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;3.8 | Board Action without a Meeting | 14 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;3.9 | Fees and Compensation of Directors | 14 |
|  Article IV—Committees | Article IV—Committees | 15 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;4.1 | Committees of Directors | 15 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;4.2 | Committee Minutes | 15 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;4.3 | Meetings and Actions of Committees | 15 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;4.4 | Subcommittees | 16 |
|  Article V—Officers | Article V—Officers | 16 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;5.1 | Officers | 16 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;5.2 | Appointment of Officers | 16 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;5.3 | Subordinate Officers | 16 |

---

i

------

**TABLE OF CONTENTS** 

**(continued)** 

---

| | | |
|:---|:---|:---|
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;5.4 | Removal and Resignation of Officers | 16 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;5.5 | Vacancies in Offices | 17 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;5.6 | Representation of Shares of Other Corporations | 17 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;5.7 | Authority and Duties of Officers | 17 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;5.8 | Compensation | 17 |
|  Article VI—Records | Article VI—Records | 17 |
|  Article VII—General Matters | Article VII—General Matters | 18 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;7.1 | Execution of Corporate Contracts and Instruments | 18 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;7.2 | Stock Certificates | 18 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;7.3 | Special Designation of Certificates | 18 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;7.4 | Lost Certificates | 19 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;7.5 | Shares Without Certificates | 19 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;7.6 | Construction; Definitions | 19 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;7.7 | Dividends | 19 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;7.8 | Fiscal Year | 19 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;7.9 | Seal | 19 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;7.10 | Transfer of Stock | 20 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;7.11 | Stock Transfer Agreements | 20 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;7.12 | Registered Stockholders | 20 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;7.13 | Waiver of Notice | 20 |
|  Article VIII—Notice | Article VIII—Notice | 20 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;8.1 | Delivery of Notice; Notice by Electronic Transmission | 20 |
|  Article IX—Indemnification | Article IX—Indemnification | 21 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;9.1 | Indemnification of Directors and Officers | 21 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;9.2 | Indemnification of Others | 22 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;9.3 | Prepayment of Expenses | 22 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;9.4 | Determination; Claim | 22 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;9.5 | Non-Exclusivity of Rights | 22 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;9.6 | Insurance | 22 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;9.7 | Other Indemnification | 23 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;9.8 | Continuation of Indemnification | 23 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;9.9 | Amendment or Repeal; Interpretation | 23 |
|  Article X—Amendments | Article X—Amendments | 24 |
|  Article XI—Definitions | Article XI—Definitions | 24 |

---

ii

------

**Amended and Restated Bylaws of** 

**Steinway Musical Instruments Holdings, Inc.** 

**Article I—Corporate Offices** 

1.1 <u>Registered Office</u>.

The address of the registered office of Steinway Musical Instruments Holdings, Inc. (the "<u>Corporation</u>") in the State of Delaware, and the name of its registered agent at such address, shall be as set forth in the Corporation's certificate of incorporation, as the same may be amended and/or restated from time to time (the "<u>Certificate of Incorporation</u>").

1.2 <u>Other Offices</u>.

The Corporation may have additional offices at any place or places, within or outside the State of Delaware, as the Corporation's board of directors (the "<u>Board</u>") may from time to time establish or as the business of the Corporation may require.

**Article II—Meetings of Stockholders** 

2.1 <u>Place of Meetings</u>.

Meetings of stockholders shall be held at any place within or outside the State of Delaware, designated by the Board. The Board may, in its sole discretion, determine that a meeting of stockholders shall not be held at any place, but may instead be held solely by means of remote communication as authorized by Section 211(a)(2) of the General Corporation Law of the State of Delaware (the "<u>DGCL</u>"). In the absence of any such designation or determination, stockholders' meetings shall be held at the Corporation's principal executive office.

2.2 <u>Annual Meeting</u>.

The Board shall designate the date and time of the annual meeting. At the annual meeting, directors shall be elected and other proper business properly brought before the meeting in accordance with Section 2.4 of these Bylaws may be transacted. The Board may postpone, reschedule or cancel any previously scheduled annual meeting of stockholders.

2.3 <u>Special Meeting</u>.

Special meetings of the stockholders may be called only by such persons and only in such manner as set forth in the Certificate of Incorporation.

No business may be transacted at any special meeting of stockholders other than the business specified in the notice of such meeting. The Board may postpone, reschedule or cancel any previously scheduled special meeting of stockholders.

------

2.4 <u>Notice of Business to be Brought before a Meeting</u>. This Section 2.4 shall apply to any business that may be brought before an annual meeting of stockholders other than nominations for election to the Board at such meeting, which shall be governed by Section 2.5 and Section 2.6. Stockholders seeking to nominate persons for election to the Board must comply with Section 2.5 and Section 2.6 and this Section 2.4 shall not be applicable to nominations except as expressly provided in Section 2.5 and Section 2.6.

(a) At an annual meeting of the stockholders, only such business shall be conducted as shall have been properly brought before the meeting. To be properly brought before an annual meeting, business must be (i) specified in a notice of meeting given by or at the direction of the Board, (ii) if not specified in a notice of meeting, otherwise brought before the meeting by the Board or the Chairperson of the Board, if any, or (iii) otherwise properly brought before the meeting by a stockholder present in person who (A) (1) was a record owner of shares of the Corporation both at the time of giving the notice provided for in this Section 2.4 and at the time of the meeting, (2) is entitled to vote at the meeting, and (3) has complied with this Section 2.4 in all applicable respects or (B) properly made such proposal in accordance with Rule 14a-8 under the Securities Exchange Act of 1934, as amended, and the rules and regulations thereunder (as so amended and inclusive of such rules and regulations, the "<u>Exchange Act</u>"). The foregoing clause (iii) shall be the exclusive means for a stockholder to propose business to be brought before an annual meeting of the stockholders. The only matters that may be brought before a special meeting are the matters specified in the notice of meeting given by or at the direction of the person calling the meeting pursuant to Section 2.3, and, following any time when the holders of Class B Common Stock beneficially own, in the aggregate, less than the majority of the voting power of all of the then outstanding shares of capital stock of the Corporation entitled to vote generally in the election of directors (a "<u>Trigger Event</u>"), stockholders shall not be permitted to propose business to be brought before a special meeting of the stockholders. For purposes of this Section 2.4 and Section 2.5, "<u>present in person</u>" shall mean that the stockholder proposing that the business be brought before the annual meeting of the Corporation, or a qualified representative of such proposing stockholder, appear at such annual meeting, and a "<u>qualified representative</u>" of such proposing stockholder shall be a duly authorized officer, manager or partner of such stockholder or any other person authorized by a writing executed by such stockholder or an electronic transmission delivered by such stockholder to act for such stockholder as proxy at the meeting of stockholders and such person must produce such writing or electronic transmission, or a reliable reproduction of the writing or electronic transmission, at the meeting of stockholders.

(b) Without qualification, for business to be properly brought before an annual meeting by a stockholder pursuant to clause (iii)(A) of Section 2.4(a), the stockholder must (i) provide Timely Notice (as defined below) thereof in writing and in proper form to the Secretary of the Corporation and (ii) provide any updates or supplements to such notice at the times and in the forms required by this Section 2.4. To be timely, a stockholder's notice must be delivered to, or mailed and received at, the principal executive offices of the Corporation not less than ninety (90) days nor more than one hundred twenty (120) days prior to the one-year anniversary of the preceding year's annual meeting; *provided, however*, that if the date of the annual meeting is more than thirty (30) days before or more than sixty (60) days after such anniversary date, notice by the stockholder to be timely must be so delivered, or mailed and received, not later than the ninetieth (90th) day prior to such annual meeting or, if later, the tenth (10th) day following the day on which public disclosure of the date of such annual meeting was first made by the Corporation (such notice within such time periods, "<u>Timely Notice</u>"); *provided*, *further*, that for the purposes of calculating Timely Notice for the first annual meeting held after the Corporation's initial public offering of its Class A Common Stock pursuant to a registration statement on Form S-1, the date of the preceding year's annual meeting shall be deemed to be June 3, 2023. In no event shall any adjournment or postponement of an annual meeting or the announcement thereof commence a new time period (or extend any time period) for the giving of Timely Notice as described above.

------

(c) To be in proper form for purposes of this Section 2.4, a stockholder's notice to the Secretary shall set forth:

(i) As to each Proposing Person (as defined below), (A) the name and address of such Proposing Person (including, if applicable, the name and address that appear on the Corporation's books and records); and (B) the class or series and number of shares of the Corporation that are, directly or indirectly, owned of record or beneficially owned (within the meaning of Rule 13d-3 under the Exchange Act) by such Proposing Person, except that such Proposing Person shall in all events be deemed to beneficially own any shares of any class or series of the Corporation as to which such Proposing Person has a right to acquire beneficial ownership at any time in the future (the disclosures to be made pursuant to the foregoing clauses (A) and (B) are referred to as "<u>Stockholder Information</u>");

(ii) As to each Proposing Person, (A) the full notional amount of any securities that, directly or indirectly, underlie any "derivative security" (as such term is defined in Rule 16a-1(c) under the Exchange Act) that constitutes a "call equivalent position" (as such term is defined in Rule 16a-1(b) under the Exchange Act) ("<u>Synthetic Equity Position</u>") and that is, directly or indirectly, held or maintained by such Proposing Person with respect to any shares of any class or series of shares of the Corporation; *provided that*, for the purposes of the definition of "Synthetic Equity Position," the term "derivative security" shall also include any security or instrument that would not otherwise constitute a "derivative security" as a result of any feature that would make any conversion, exercise or similar right or privilege of such security or instrument becoming determinable only at some future date or upon the happening of a future occurrence, in which case the determination of the amount of securities into which such security or instrument would be convertible or exercisable shall be made assuming that such security or instrument is immediately convertible or exercisable at the time of such determination; and, *provided, further*, that any Proposing Person satisfying the requirements of Rule 13d-1(b)(1) under the Exchange Act (other than a Proposing Person that so satisfies Rule 13d-1(b)(1) under the Exchange Act solely by reason of Rule 13d-1(b)(1)(ii)(E)) shall not be deemed to hold or maintain the notional amount of any securities that underlie a Synthetic Equity Position held by such Proposing Person as a hedge with respect to a bona fide derivatives trade or position of such Proposing Person arising in the ordinary course of such Proposing Person's business as a derivatives dealer, (B) any rights to dividends on the shares of any class or series of shares of the Corporation owned beneficially by such Proposing Person that are separated or separable from the underlying shares of the Corporation, (C) any material pending or threatened legal proceeding in which such Proposing Person is a party or material participant involving the Corporation or any of its officers or directors, or any affiliate of the Corporation, (D) any other material relationship between such Proposing Person, on the one hand, and the Corporation, any affiliate of the Corporation, on the other hand, (E) any direct or indirect material interest in any material contract or agreement of such Proposing Person with the Corporation or any affiliate of the Corporation (including, in any such case, any employment agreement, collective bargaining agreement or consulting agreement), (F) a representation that such Proposing Person intends or is part of a group which intends to deliver a proxy statement or form of proxy to holders of at least the percentage of the Corporation's outstanding capital stock required to approve or adopt the proposal or otherwise solicit proxies from stockholders in support of such proposal and (G) any other information relating to such Proposing Person that would be required to be disclosed in a proxy statement or other filing required to be made in connection with solicitations of proxies or consents by such Proposing Person in support of the business proposed to be brought before the meeting pursuant to Section 14(a) of the Exchange Act (the disclosures to be made pursuant to the foregoing clauses (A) through (G) are referred to as "<u>Disclosable Interests</u>"); *provided, however*, that Disclosable Interests shall not include any such disclosures with respect to the ordinary course business activities of any broker, dealer, commercial bank, trust company or other nominee who is a Proposing Person solely as a result of being the stockholder directed to prepare and submit the notice required by these Bylaws on behalf of a beneficial owner; and

------

(iii) As to each item of business that the stockholder proposes to bring before the annual meeting, (A) a brief description of the business desired to be brought before the annual meeting, the reasons for conducting such business at the annual meeting and any material interest in such business of each Proposing Person, (B) the text of the proposal or business (including the text of any resolutions proposed for consideration and in the event that such business includes a proposal to amend the Bylaws, the language of the proposed amendment), (C) a reasonably detailed description of all agreements, arrangements and understandings (x) between or among any of the Proposing Persons or (y) between or among any Proposing Person and any other person or entity (including their names) in connection with the proposal of such business by such stockholder; and (D) any other information relating to such item of business that would be required to be disclosed in a proxy statement or other filing required to be made in connection with solicitations of proxies in support of the business proposed to be brought before the meeting pursuant to Section 14(a) of the Exchange Act; *provided, however*, that the disclosures required by this paragraph (iii) shall not include any disclosures with respect to any broker, dealer, commercial bank, trust company or other nominee who is a Proposing Person solely as a result of being the stockholder directed to prepare and submit the notice required by these Bylaws on behalf of a beneficial owner.

(d) For purposes of this Section 2.4, the term "<u>Proposing Person</u>" shall mean (i) the stockholder providing the notice of business proposed to be brought before an annual meeting, (ii) the beneficial owner or beneficial owners, if different, on whose behalf the notice of the business proposed to be brought before the annual meeting is made, and (iii) any participant (as defined in paragraphs (a)(ii)-(vi) of Instruction 3 to Item 4 of Schedule 14A) with such stockholder in such solicitation.

(e) A Proposing Person shall update and supplement its notice to the Corporation of its intent to propose business at an annual meeting, if necessary, so that the information provided or required to be provided in such notice pursuant to this Section 2.4 shall be true and correct as of the record date for stockholders entitled to vote at the meeting and as of the date that is ten (10) business days prior to the meeting or any adjournment or postponement thereof, and such update and supplement shall be delivered to, or mailed and received by, the Secretary at the principal executive offices of the Corporation not later than five (5) business days after the record date for stockholders entitled to vote at the meeting (in the case of the update and supplement required to be made as of such record date), and not later than eight (8) business days prior to the date for the meeting or, if practicable, any adjournment or postponement thereof (and, if not practicable, on the first practicable date prior to the date to which the meeting has been adjourned or postponed) (in the case of the update and supplement required to be made as of ten (10) business days prior to the meeting or any adjournment or postponement thereof). For the avoidance of doubt, the obligation to update and supplement as set forth in this paragraph or any other Section of these Bylaws shall not limit the Corporation's rights with respect to any deficiencies in any notice provided by a stockholder, extend any applicable deadlines hereunder or enable or be deemed to permit a stockholder who has previously submitted notice hereunder to amend or update any proposal or to submit any new proposal, including by changing or adding matters, business or resolutions proposed to be brought before a meeting of the stockholders.

(f) Notwithstanding anything in these Bylaws to the contrary, no business shall be conducted at an annual meeting that is not properly brought before the meeting in accordance with this Section 2.4. The presiding officer of the meeting shall, if the facts warrant, determine that the business was not properly brought before the meeting in accordance with this Section 2.4, and if he or she should so determine, he or she shall so declare to the meeting and any such business not properly brought before the meeting shall not be transacted.

------

(g) This Section 2.4 is expressly intended to apply to any business proposed to be brought before an annual meeting of stockholders other than any proposal made in accordance with Rule 14a-8 under the Exchange Act and included in the Corporation's proxy statement. In addition to the requirements of this Section 2.4 with respect to any business proposed to be brought before an annual meeting, each Proposing Person shall comply with all applicable requirements of the Exchange Act with respect to any such business. Nothing in this Section 2.4 shall be deemed to affect the rights of stockholders to request inclusion of proposals in the Corporation's proxy statement pursuant to Rule 14a-8 under the Exchange Act.

(h) For purposes of these Bylaws, "<u>public disclosure</u>" shall mean disclosure in a press release reported by a national news service or in a document publicly filed by the Corporation with the Securities and Exchange Commission pursuant to Sections 13, 14 or 15(d) of the Exchange Act.

2.5 <u>Notice of Nominations for Election to the Board</u>.

(a) Nominations of any person for election to the Board at an annual meeting or at a special meeting (but only if the election of directors is a matter specified in the notice of meeting given by or at the direction of the person calling such special meeting) may be made at such meeting only (i) as provided in the Voting Agreement (as defined below), (ii) by or at the direction of the Board, including by any committee or persons authorized to do so by the Board or these Bylaws, or (iii) by a stockholder present in person (A) who was a record owner of shares of the Corporation both at the time of giving the notice provided for in this Section 2.5 and at the time of the meeting, (B) is entitled to vote at the meeting, and (C) has complied with this Section 2.5 and Section 2.6 as to such notice and nomination. Other than nominations made by a stockholder in accordance with the Voting Agreement, the foregoing clause (iii) shall be the exclusive means for a stockholder to make any nomination of a person or persons for election to the Board at an annual meeting or special meeting.

(b) (i) Without qualification, for a stockholder to make any nomination of a person or persons for election to the Board at an annual meeting pursuant to clause (iii) of Section 2.5(a), the stockholder must (1) provide Timely Notice (as defined in Section 2.4) thereof in writing and in proper form to the Secretary of the Corporation, (2) provide the information, agreements and questionnaires with respect to such stockholder and its candidate for nomination as required to be set forth by this Section 2.5 and Section 2.6 and (3) provide any updates or supplements to such notice at the times and in the forms required by this Section 2.5 and Section 2.6.

(ii) Without qualification, if the election of directors is a matter specified in the notice of meeting given by or at the direction of the person calling a special meeting, then for a stockholder to make any nomination of a person or persons for election to the Board at a special meeting, the stockholder must (A) provide timely notice thereof in writing and in proper form to the Secretary of the Corporation at the principal executive offices of the Corporation, (B) provide the information with respect to such stockholder and its candidate for nomination as required by this Section 2.5 and Section 2.6 and (C) provide any updates or supplements to such notice at the times and in the forms required by this Section 2.5. To be timely, a stockholder's notice for nominations to be made at a special meeting must be delivered to, or mailed and received at, the principal executive offices of the Corporation not earlier than the one hundred twentieth (120th) day prior to such special meeting and not later than the ninetieth (90th) day prior to such special meeting or, if later, the tenth (10th) day following the day on which public disclosure (as defined in Section 2.4) of the date of such special meeting was first made.

------

(iii) In no event shall any adjournment or postponement of an annual meeting or special meeting or the announcement thereof commence a new time period (or extend any time period) for the giving of a stockholder's notice as described above.

(iv) In no event may a Nominating Person (as defined below) provide Timely Notice with respect to a greater number of director candidates than are subject to election by stockholders at the applicable meeting. If the Corporation shall, subsequent to such notice, increase the number of directors subject to election at the meeting, such notice as to any additional nominees shall be due on the later of (A)(1) the conclusion of the time period for Timely Notice for an annual meeting or (2) the date set forth in Section 2.5(b)(ii) for a special meeting, and (B) the tenth day following the date of public disclosure (as defined in Section 2.4) of such increase.

(c) To be in proper form for purposes of this Section 2.5, a stockholder's notice to the Secretary shall set forth:

(i) As to each Nominating Person (as defined below), the Stockholder Information (as defined in Section 2.4(c)(i), except that for purposes of this Section 2.5 the term "Nominating Person" shall be substituted for the term "Proposing Person" in all places it appears in Section 2.4(c)(i));

(ii) As to each Nominating Person, any Disclosable Interests (as defined in Section 2.4(c)(ii), except that for purposes of this Section 2.5 the term "Nominating Person" shall be substituted for the term "Proposing Person" in all places it appears in Section 2.4(c)(ii) and the disclosure with respect to the business to be brought before the meeting in Section 2.4(c)(ii) shall be made with respect to the nomination of persons for election to the Board at the meeting); and

(iii) As to each candidate whom a Nominating Person proposes to nominate for election as a director, (A) all information with respect to such candidate for nomination that would be required to be set forth in a stockholder's notice pursuant to this Section 2.5 and Section 2.6 if such candidate for nomination were a Nominating Person, (B) all information relating to such candidate for nomination that is required to be disclosed in a proxy statement or other filings required to be made in connection with solicitations of proxies for election of directors in a contested election pursuant to Section 14(a) under the Exchange Act (including such candidate's written consent to being named in the Corporation's proxy statement as a nominee and to serving as a director if elected), (C) a description of any direct or indirect material interest in any material contract or agreement between or among any Nominating Person, on the one hand, and each candidate for nomination or his or her respective associates or any other participants in such solicitation, on the other hand, including, without limitation, all information that would be required to be disclosed pursuant to Item 404 under Regulation S-K if such Nominating Person were the "registrant" for purposes of such rule and the candidate for nomination were a director or executive officer of such registrant (the disclosures to be made pursuant to the foregoing clauses (A) through (C) are referred to as "<u>Nominee Information</u>"), and (D) a completed and signed questionnaire, representation and agreement as provided in Section 2.6(a).

(d) For purposes of this Section 2.5, the term "<u>Nominating Person</u>" shall mean (i) the stockholder providing the notice of the nomination proposed to be made at the meeting, (ii) the beneficial owner or beneficial owners, if different, on whose behalf the notice of the nomination proposed to be made at the meeting is made, and (iii) any other participant in such solicitation.

------

(e) A stockholder providing notice of any nomination proposed to be made at a meeting shall further update and supplement such notice, if necessary, so that the information provided or required to be provided in such notice pursuant to this Section 2.5 shall be true and correct as of the record date for stockholders entitled to vote at the meeting and as of the date that is ten (10) business days prior to the meeting or any adjournment or postponement thereof, and such update and supplement shall be delivered to, or mailed and received by, the Secretary at the principal executive offices of the Corporation not later than five (5) business days after the record date for stockholders entitled to vote at the meeting (in the case of the update and supplement required to be made as of such record date), and not later than eight (8) business days prior to the date for the meeting or, if practicable, any adjournment or postponement thereof (and, if not practicable, on the first practicable date prior to the date to which the meeting has been adjourned or postponed) (in the case of the update and supplement required to be made as of ten (10) business days prior to the meeting or any adjournment or postponement thereof). For the avoidance of doubt, the obligation to update and supplement as set forth in this paragraph or any other Section of these Bylaws shall not limit the Corporation's rights with respect to any deficiencies in any notice provided by a stockholder, extend any applicable deadlines hereunder or enable or be deemed to permit a stockholder who has previously submitted notice hereunder to amend or update any nomination or to submit any new nomination.

(f) In addition to the requirements of this Section 2.5 with respect to any nomination proposed to be made at a meeting, each Nominating Person shall comply with all applicable requirements of the Exchange Act with respect to any such nominations.

2.6 <u>Additional Requirements for Valid Nomination of Candidates to Serve as Director and, if Elected, to be Seated as Directors</u>.

(a) To be eligible to be a candidate for election as a director of the Corporation at an annual or special meeting, a candidate must be nominated in the manner prescribed in Section 2.5 and the candidate for nomination, whether nominated by the Board or by a stockholder of record, must have previously delivered (with respect to nominations by stockholders pursuant to Section 2.5, within the time period for delivery of the stockholder's notice pursuant to Section 2.5), to the Secretary at the principal executive offices of the Corporation, (i) a completed written questionnaire (in a form provided by the Corporation upon request) with respect to the background, qualifications, stock ownership and independence of such proposed nominee and (ii) a written representation and agreement (in form provided by the Corporation upon request) that such candidate for nomination (A) is not and, if elected as a director during his or her term of office, will not become a party to (1) any agreement, arrangement or understanding with, and has not given and will not give any commitment or assurance to, any person or entity as to how such proposed nominee, if elected as a director of the Corporation, will act or vote on any issue or question (a "<u>Voting Commitment</u>") that has not been disclosed to the Corporation or (2) any Voting Commitment that could limit or interfere with such proposed nominee's ability to comply, if elected as a director of the Corporation, with such proposed nominee's fiduciary duties under applicable law, (B) is not, and will not become a party to, any agreement, arrangement or understanding with any person or entity other than the Corporation with respect to any direct or indirect compensation or reimbursement for service as a director that has not been disclosed therein or otherwise to the Corporation and (C) if elected as a director of the Corporation, will comply with all applicable corporate governance, conflict of interest, confidentiality, stock ownership and trading and other policies and guidelines of the Corporation applicable to directors and in effect during such person's term in office as a director (and, if requested by any candidate for nomination, the Secretary of the Corporation shall provide to such candidate for nomination all such policies and guidelines then in effect).

------

(b) The Board may also require any proposed candidate for nomination as a Director to furnish such other information as may reasonably be requested by the Board in writing prior to the meeting of stockholders at which such candidate's nomination is to be acted upon in order for the Board to determine the eligibility of such candidate for nomination to be an independent director of the Corporation, including, without limitation, eligibility in accordance with the Corporation's Corporate Governance Guidelines.

(c) A candidate for nomination as a director shall further update and supplement the materials delivered pursuant to this Section 2.6, if necessary, so that the information provided or required to be provided pursuant to this Section 2.6 shall be true and correct as of the record date for stockholders entitled to vote at the meeting and as of the date that is ten (10) business days prior to the meeting or any adjournment or postponement thereof, and such update and supplement shall be delivered to, or mailed and received by, the Secretary at the principal executive offices of the Corporation (or any other office specified by the Corporation in any public announcement) not later than five (5) business days after the record date for stockholders entitled to vote at the meeting (in the case of the update and supplement required to be made as of such record date), and not later than eight (8) business days prior to the date for the meeting or, if practicable, any adjournment or postponement thereof (and, if not practicable, on the first practicable date prior to the date to which the meeting has been adjourned or postponed) (in the case of the update and supplement required to be made as of ten (10) business days prior to the meeting or any adjournment or postponement thereof). For the avoidance of doubt, the obligation to update and supplement as set forth in this paragraph or any other Section of these Bylaws shall not limit the Corporation's rights with respect to any deficiencies in any notice provided by a stockholder, extend any applicable deadlines hereunder or enable or be deemed to permit a stockholder who has previously submitted notice hereunder to amend or update any proposal or to submit any new proposal, including by changing or adding nominees, matters, business or resolutions proposed to be brought before a meeting of the stockholders.

(d) No candidate shall be eligible for nomination as a director of the Corporation unless such candidate for nomination and the Nominating Person seeking to place such candidate's name in nomination have complied with Section 2.5 and this Section 2.6, as applicable. The presiding officer at the meeting shall, if the facts warrant, determine that a nomination was not properly made in accordance with Section 2.5 and this Section 2.6, and if he or she should so determine, he or she shall so declare such determination to the meeting, the defective nomination shall be disregarded and any ballots cast for the candidate in question (but in the case of any form of ballot listing other qualified nominees, only the ballots cast for the nominee in question) shall be void and of no force or effect.

(e) Subject to Section 2.6(f) of these Bylaws, no candidate for nomination at an annual or special meeting shall be eligible to be seated as a director of the Corporation unless nominated in accordance with Section 2.5 and this Section 2.6.

(f) Notwithstanding anything in these Bylaws to the contrary, for so long as any party to that certain voting agreement, dated as of [ • ], 2023, by and among the Corporation and Paulson (as defined therein) (as the same may be amended, restated, supplemented and/or otherwise modified from time to time in accordance with its terms, the "<u>Voting Agreement</u>"), is entitled to nominate a Director or Directors pursuant to the Voting Agreement, such party (and any candidate nominated by such party) shall not be subject to Section 2.5 or this Section 2.6 with respect to a nomination made pursuant to the Voting Agreement.

------

2.7 <u>Notice of Stockholders' Meetings.</u>

Unless otherwise provided by law, the Certificate of Incorporation or these Bylaws, the notice of any meeting of stockholders shall be sent or otherwise given in accordance with Section 8.1 of these Bylaws not less than ten (10) nor more than sixty (60) days before the date of the meeting to each stockholder entitled to vote at such meeting. The notice shall specify the place, if any, date and time of the meeting, the means of remote communication, if any, by which stockholders and proxy holders may be deemed to be present in person and vote at such meeting, and, in the case of a special meeting, the purpose or purposes for which the meeting is called.

2.8 <u>Quorum.</u>

Unless otherwise provided by law, the Certificate of Incorporation or these Bylaws, the holders of a majority in voting power of the stock issued and outstanding and entitled to vote, present in person if applicable, or represented by proxy, shall constitute a quorum for the transaction of business at all meetings of the stockholders. A quorum, once established at a meeting, shall not be broken by the withdrawal of enough votes to leave less than a quorum. If, however, a quorum is not present or represented at any meeting of the stockholders, then either (i) the person presiding over the meeting or (ii) a majority in voting power of the stockholders entitled to vote at the meeting, present in person, or by remote communication, if applicable, or represented by proxy, shall have power to adjourn the meeting from time to time in the manner provided in Section 2.9 of these Bylaws until a quorum is present or represented. At any adjourned meeting at which a quorum is present or represented, any business may be transacted that might have been transacted at the meeting as originally noticed.

2.9 <u>Adjourned Meeting; Notice.</u>

Unless these Bylaws otherwise require, when a meeting is adjourned to another time or place (including an adjournment taken to address a technical failure to convene or continue a meeting using remote communication), notice need not be given of the adjourned meeting if the time, place, if any, thereof, and the means of remote communications, if any, by which stockholders and proxy holders may be deemed to be present in person and vote at such adjourned meeting are (i) announced at the meeting at which the adjournment is taken, (ii) displayed, during the time scheduled for the meeting, on the same electronic network used to enable stockholders and proxy holders to participate in the meeting by means of remote communication or (iii) set forth in the notice of meeting given in accordance with Section 222(a) of the DGCL. At any adjourned meeting, the Corporation may transact any business which might have been transacted at the original meeting. If the adjournment is for more than thirty (30) days, a notice of the adjourned meeting shall be given to each stockholder of record entitled to vote at the meeting. If after the adjournment a new record date for determination of stockholders entitled to vote is fixed for the adjourned meeting, the Board shall fix as the record date for determining stockholders entitled to notice of such adjourned meeting the same or an earlier date as that fixed for determination of stockholders entitled to vote at the adjourned meeting, and shall give notice of the adjourned meeting to each stockholder of record entitled to vote at such meeting as of the record date so fixed for notice of such adjourned meeting.

2.10 <u>Conduct of Business</u>.

The date and time of the opening and the closing of the polls for each matter upon which the stockholders will vote at a meeting shall be announced at the meeting by the person presiding over the meeting. The Board may adopt by resolution such rules and regulations for the conduct of the meeting of stockholders as it shall deem appropriate. Except to the extent inconsistent with such rules and regulations as adopted by the Board, the person presiding over any meeting of stockholders shall have the right and authority to convene and (for any or no reason) to recess and/or adjourn the meeting, to prescribe such rules, regulations and procedures (which need not be in writing) and to do all such acts as, in the judgment of such presiding person, are appropriate for the proper conduct of the meeting. Such rules, regulations or procedures, whether adopted by

------

the Board or prescribed by the person presiding over the meeting, may include, without limitation, the following: (i) the establishment of an agenda or order of business for the meeting; (ii) rules and procedures for maintaining order at the meeting and the safety of those present (including, without limitation, rules and procedures for removal of disruptive persons from the meeting); (iii) limitations on attendance at or participation in the meeting to stockholders entitled to vote at the meeting, their duly authorized and constituted proxies or such other persons as the person presiding over the meeting shall determine; (iv) restrictions on entry to the meeting after the time fixed for the commencement thereof; and (v) limitations on the time allotted to questions or comments by participants. The presiding person at any meeting of stockholders, in addition to making any other determinations that may be appropriate to the conduct of the meeting (including, without limitation, determinations with respect to the administration and/or interpretation of any of the rules, regulations or procedures of the meeting, whether adopted by the Board or prescribed by the person presiding over the meeting), shall, if the facts warrant, determine and declare to the meeting that a matter of business was not properly brought before the meeting and if such presiding person should so determine, such presiding person shall so declare to the meeting and any such matter or business not properly brought before the meeting shall not be transacted or considered. Unless and to the extent determined by the Board or the person presiding over the meeting, meetings of stockholders shall not be required to be held in accordance with the rules of parliamentary procedure.

2.11 <u>Voting.</u>

Except as may be otherwise provided in the Certificate of Incorporation, each stockholder shall be entitled to one (1) vote for each share of capital stock held by such stockholder.

Except as otherwise provided by the Certificate of Incorporation, at all duly called or convened meetings of stockholders at which a quorum is present, for the election of directors, a plurality of the votes cast shall be sufficient to elect a director. Except as otherwise provided by the Certificate of Incorporation, these Bylaws, the rules or regulations of any stock exchange applicable to the Corporation, or applicable law or pursuant to any regulation applicable to the Corporation or its securities, each other matter presented to the stockholders at a duly called or convened meeting at which a quorum is present shall be decided by the affirmative vote of the holders of a majority in voting power of the votes cast (excluding abstentions and broker non-votes) on such matter.

2.12 <u>Record Date for Stockholder Meetings and Other Purposes</u>.

In order that the Corporation may determine the stockholders entitled to notice of or to vote at any meeting of stockholders or any adjournment thereof, the Board may fix a record date, which record date shall not precede the date upon which the resolution fixing the record date is adopted by the Board, and which record date shall, unless otherwise required by law, not be more than sixty (60) days nor less than ten (10) days before the date of such meeting. If the Board so fixes a date, such date shall also be the record date for determining the stockholders entitled to vote at such meeting unless the Board determines, at the time it fixes such record date, that a later date on or before the date of the meeting shall be the date for making such determination. If no record date is fixed by the Board, the record date for determining stockholders entitled to notice of or to vote at a meeting of stockholders shall be the close of business on the next day preceding the day on which notice is first given, or, if notice is waived, at the close of business on the day next preceding the day on which the meeting is held. A determination of stockholders of record entitled to notice of or to vote at a meeting of stockholders shall apply to any adjournment of the meeting; provided, however, that the Board may fix a new record date for determination of stockholders entitled to vote at the adjourned meeting; and in such case shall also fix as the record date for stockholders entitled to notice of such adjourned meeting the same or an earlier date as that fixed for determination of stockholders entitled to vote in accordance herewith at the adjourned meeting.

------

In order that the Corporation may determine the stockholders entitled to consent to corporate action without a meeting, the Board may fix a record date, which record date shall not precede the date upon which the resolution fixing the record date is adopted by the Board, and which date shall not be more than ten (10) days after the date upon which the resolution fixing the record date is adopted by the Board. If no record date has been fixed by the Board, the record date for determining stockholders entitled to consent to corporate action without a meeting, when no prior action by the Board is required by law, shall be the first date on which a signed consent setting forth the action taken or proposed to be taken is delivered to the Corporation. If no record date has been fixed by the Board and prior action by the Board is required by law, the record date for determining stockholders entitled to consent to corporate action in writing without a meeting shall be at the close of business on the day on which the Board adopts the resolution taking such prior action.

In order that the Corporation may determine the stockholders entitled to receive payment of any dividend or other distribution or allotment or any rights or the stockholders entitled to exercise any rights in respect of any change, conversion or exchange of capital stock, or for the purposes of any other lawful action, the Board may fix a record date, which record date shall not precede the date upon which the resolution fixing the record date is adopted, and which record date shall be not more than sixty (60) days prior to such action. If no record date is fixed, the record date for determining stockholders for any such purpose shall be at the close of business on the day on which the Board adopts the resolution relating thereto.

2.13 <u>Proxies.</u>

Each stockholder entitled to vote at a meeting of stockholders, or such stockholder's authorized officer, director, employee or agent, may authorize another person or persons to act for such stockholder by proxy authorized by a document or by a transmission permitted by law filed in accordance with the procedure established for the meeting, but no such proxy shall be voted or acted upon after three (3) years from its date, unless the proxy provides for a longer period. The revocability of a proxy that states on its face that it is irrevocable shall be governed by the provisions of Section 212 of the DGCL. A proxy may be in the form of an electronic transmission which sets forth or is submitted with information from which it can be determined that the transmission was authorized by the stockholder.

2.14 <u>List of Stockholders Entitled to Vote</u>.

The Corporation shall prepare, no later than the tenth day before each meeting of stockholders, a complete list of the stockholders entitled to vote at the meeting (provided, however, that if the record date for determining the stockholders entitled to vote is less than ten (10) days before the date of the meeting, the list shall reflect the stockholders entitled to vote as of the tenth day before the meeting date), arranged in alphabetical order, and showing the address of each stockholder and the number of shares registered in the name of each stockholder. The Corporation shall not be required to include electronic mail addresses or other electronic contact information on such list. Such list shall be open to the examination of any stockholder, for any purpose germane to the meeting for a period of ten (10) days ending on the day before the meeting date: (i) on a reasonably accessible electronic network, provided that the information required to gain access to such list is provided with the notice of the meeting, or (ii) during ordinary business hours, at the Corporation's principal place of business. In the event that the Corporation determines to make the list available on an electronic network, the Corporation may take reasonable steps to ensure that such information is available only to stockholders of the Corporation.

------

Such list shall presumptively determine the identity of the stockholders entitled to vote at the meeting and the number of shares held by each of them. Except as otherwise provided by law, the stock ledger shall be the only evidence as to who are the stockholders entitled to examine the list of stockholders required by this Section 2.14 or to vote in person or by proxy at any meeting of stockholders.

2.15 <u>Inspectors of Election</u>.

Before any meeting of stockholders, the Corporation shall appoint an inspector or inspectors of election to act at the meeting or its adjournment and make a written report thereof. The Corporation may designate one or more persons as alternate inspectors to replace any inspector who fails to act. If any person appointed as inspector or any alternate fails to appear or fails or refuses to act, then the person presiding over the meeting shall appoint a person to fill that vacancy.

Such inspectors shall take the actions contemplated in Section 231(b) of the DGCL.

Each inspector, before entering upon the discharge of the duties of inspector, shall take and sign an oath faithfully to execute the duties of inspection with strict impartiality and according to the best of such inspector's ability. Any report or certificate made by the inspectors of election is prima facie evidence of the facts stated therein. The inspectors of election may appoint such persons to assist them in performing their duties as they determine.

2.16 <u>Delivery to the Corporation.</u>

Whenever Section 2.4, Section 2.5 or Section 2.6 of this Article II requires one or more persons (including a record or beneficial owner of stock) to deliver a document or information to the Corporation or any officer, employee or agent thereof (including any notice, request, questionnaire, revocation, representation or other document or agreement), such document or information shall be in writing exclusively (and not in an electronic transmission) and shall be delivered exclusively by hand (including, without limitation, overnight courier service) or by certified or registered mail, return receipt requested, and the Corporation shall not be required to accept delivery of any document not in such written form or so delivered. For the avoidance of doubt, pursuant to Section 116(b) of the DGCL, this Section 2.16 expressly prohibits the use of an electronic transmission and the delivery of an electronic transmission to an information processing system with respect to the delivery of information and documents to the Corporation required by Section 2.4, Section 2.5 or Section 2.6 of this Article II.

**Article III—Directors** 

3.1 <u>Powers</u>.

Except as otherwise provided by the Certificate of Incorporation or the DGCL, the business and affairs of the Corporation shall be managed by or under the direction of the Board.

------

3.2 <u>Number; Term; Qualifications</u>.

The total number of directors constituting the Board shall be determined from time to time as provided in the Certificate of Incorporation, subject to the rights granted pursuant to the Voting Agreement. The Board shall be classified in the manner provided in the Certificate of Incorporation. Each director shall hold office until such time as provided in the Certificate of Incorporation. No reduction of the authorized number of directors shall have the effect of removing any director before that director's term of office expires. Directors need not be stockholders to be qualified for election or service as a director of the Corporation. The Certificate of Incorporation or these Bylaws may prescribe qualifications for directors.

3.3 <u>Resignation; Removal; Vacancies</u>.

Any director may resign at any time upon written or electronic transmission to the Secretary of the Corporation. Such resignation shall be effective upon delivery unless otherwise specified. Directors of the Corporation may be removed only as expressly provided in the Certificate of Incorporation. Newly created directorships resulting from any increase in the authorized number of directors or any vacancies on the Board resulting from the death, resignation, disqualification, removal from office or other cause shall be filled as set forth in the Certificate of Incorporation and subject to the rights granted pursuant to the Voting Agreement.

3.4 <u>Place of Meetings; Meetings by Telephone</u>.<u> </u>

The Board may hold meetings, both regular and special, either within or outside the State of Delaware.

Unless otherwise restricted by the Certificate of Incorporation or these Bylaws, members of the Board, or any committee designated by the Board, may participate in a meeting of the Board, or any committee, by means of conference telephone or other communications equipment by means of which all persons participating in the meeting can hear each other, and such participation in a meeting pursuant to this bylaw shall constitute presence in person at the meeting.

3.5 <u>Regular Meetings</u>.

Regular meetings of the Board may be held within or outside the State of Delaware and at such time and at such place as which has been designated by the Board and publicized among all directors, either orally or in writing, by telephone, including a voice-messaging system or other system designed to record and communicate messages, or by electronic mail or other means of electronic transmission. No further notice shall be required for regular meetings of the Board.

3.6 <u>Special Meetings; Notice</u>.

Special meetings of the Board for any purpose or purposes may be called at any time by the Chairperson of the Board, if any, the Chief Executive Officer or a majority of the total number of directors constituting the Board; *provided*, that at any time that the total number of directors constituting the Board is eight (8) or more, special meetings of the Board may also be called at any time by a group of no less than four (4) directors.

Notice of the time and place of special meetings shall be:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(i) delivered personally by hand, by courier or by telephone;

------

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(ii) sent by United States first-class mail, postage prepaid;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(iii) sent by electronic mail; or

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(iv) sent by other means of electronic transmission,

directed to each director at that director's address, telephone number, electronic mail address, or other address for electronic transmission, as the case may be, as shown on the Corporation's records.

If the notice is (i) delivered personally by hand, by courier or by telephone, (ii) sent by electronic mail, or (iii) sent by other means of electronic transmission, it shall be delivered or sent at least twenty-four (24) hours before the time of the holding of the meeting. If the notice is sent by U.S. mail, it shall be deposited in the U.S. mail at least four (4) days before the time of the holding of the meeting. The notice need not specify the place of the meeting (if the meeting is to be held at the Corporation's principal executive office) nor the purpose of the meeting.

3.7 <u>Quorum</u>.

At all meetings of the Board, unless otherwise provided by the Certificate of Incorporation, a majority of the total number of directors shall constitute a quorum for the transaction of business; *provided* that, solely for the purposes of filling vacancies pursuant to Section 3.3 of these Bylaws, a meeting of the Board may be held if a majority of the directors then in office participate in such meeting. The vote of a majority of the directors present at any meeting at which a quorum is present shall be the act of the Board, except as may be otherwise specifically provided by statute, the Certificate of Incorporation or these Bylaws. If a quorum is not present at any meeting of the Board, then the directors present thereat may adjourn the meeting from time to time, without notice other than announcement at the meeting, until a quorum is present.

3.8 <u>Board Action without a Meeting</u>.

Unless otherwise restricted by the Certificate of Incorporation or these Bylaws, any action required or permitted to be taken at any meeting of the Board, or of any committee thereof, may be taken without a meeting if all members of the Board or committee, as the case may be, consent thereto in writing or by electronic transmission. After an action is taken, the consent or consents relating thereto shall be filed with the minutes of the proceedings of the Board, or the committee thereof, in the same paper or electronic form as the minutes are maintained. Such action by written consent or consent by electronic transmission shall have the same force and effect as a unanimous vote of the Board.

3.9 <u>Fees and Compensation of Directors</u>.

Unless otherwise restricted by the Certificate of Incorporation, these Bylaws or the Voting Agreement, the Board shall have the authority to fix the compensation, including fees and reimbursement of expenses, of directors for services to the Corporation in any capacity. Any director of the Corporation may decline any or all such compensation payable to such director in his or her discretion.

------

**Article IV—Committees** 

4.1 <u>Committees of Directors</u>.

The Board may designate one (1) or more committees, each committee to consist of one (1) or more of the directors of the Corporation. The Board may designate one (1) or more directors as alternate members of any committee, who may replace any absent or disqualified member at any meeting of the committee. In the absence or disqualification of a member of a committee, the member or members thereof present at any meeting and not disqualified from voting, whether or not such member or members constitute a quorum, may unanimously appoint another member of the Board to act at the meeting in the place of any such absent or disqualified member. Any such committee, to the extent permitted by applicable law or provided in the resolution of the Board or in these Bylaws, shall have and may exercise all the powers and authority of the Board in the management of the business and affairs of the Corporation, and may authorize the seal of the Corporation to be affixed to all papers that may require it; but no such committee shall have the power or authority to (i) approve or adopt, or recommend to the stockholders, any action or matter expressly required by the DGCL to be submitted to stockholders for approval (other than the election or removal of directors), or (ii) adopt, amend or repeal any bylaw of the Corporation.

4.2 <u>Committee Minutes</u>.

Each committee shall keep regular minutes of its meetings.

4.3 <u>Meetings and Actions of Committees</u>.

Meetings and actions of committees shall be governed by, and held and taken in accordance with, the provisions of:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(i) Section 3.4 (place of meetings; meetings by telephone);

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(ii) Section 3.5 (regular meetings);

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(iii) Section 3.6 (special meetings; notice);

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(iv) Section 3.8 (board action without a meeting); and

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(v) Section 7.13 (waiver of notice),

with such changes in the context of those Bylaws provisions as are necessary to substitute the committee and its members for the Board and its members. *However*:

(i) the time of regular meetings of committees may be determined either by resolution of the Board or by resolution of the committee;

(ii) special meetings of committees may also be called by resolution of the Board or the chairperson of the applicable committee; and

------

(iii) the Board may adopt rules for the governance of any committee to override the provisions that would otherwise apply to the committee pursuant to this Section 4.3, provided that such rules do not violate applicable law.

4.4 <u>Subcommittees.</u>

Unless otherwise provided in the Certificate of Incorporation, these Bylaws or the resolutions of the Board designating the committee, a committee may create one (1) or more subcommittees, each subcommittee to consist of one (1) or more members of the committee, and delegate to a subcommittee any or all of the powers and authority of the committee.

**Article V—Officers** 

5.1 <u>Officers</u>.

The officers of the Corporation shall include a Chief Executive Officer, a President and a Secretary. The Corporation may also have, at the discretion of the Board, a Chairperson of the Board, a Vice Chairperson of the Board, a Chief Financial Officer, a Chief Accounting Officer, a Treasurer, one (1) or more Vice Presidents, one (1) or more Assistant Secretaries, and any such other officers as may be appointed in accordance with the provisions of these Bylaws. Any number of offices may be held by the same person. No officer need be a stockholder or director of the Corporation.

5.2 <u>Appointment of Officers</u>.

The Board shall appoint the officers of the Corporation, except such officers as may be appointed in accordance with the provisions of Section 5.3 of these Bylaws.

5.3 <u>Subordinate Officers</u>.

The Board may appoint, or empower the Chief Executive Officer or President or, in the absence of a Chief Executive Officer or President, the Chief Financial Officer, to appoint, such other officers and agents as the business of the Corporation may require. Each of such officers and agents shall hold office for such period, have such authority, and perform such duties as are provided in these Bylaws or as the Board may from time to time determine.

5.4 <u>Removal and Resignation of Officers</u>.

Subject to the rights, if any, of an officer under any contract of employment, any officer may be removed, either with or without cause, by the Board or, except in the case of an officer chosen by the Board, by any officer upon whom such power of removal may be conferred by the Board. Any officer may resign at any time by giving notice in writing or by electronic transmission to the Corporation. Any resignation shall take effect at the date of the receipt of that notice or at any later time specified in that notice. Unless otherwise specified in the notice of resignation, the acceptance of the resignation shall not be necessary to make it effective. If a resignation is made effective at a later date and the Corporation accepts the future effective date, the Board may fill the pending vacancy before the effective date if the Board provides that the successor shall not take office until the effective date. Any resignation is without prejudice to the rights, if any, of the Corporation under any contract to which the officer is a party.

------

5.5 <u>Vacancies in Offices</u>.

Any vacancy occurring in any office of the Corporation shall be filled by the Board or as provided in Section 5.3.

5.6 <u>Representation of Shares of Other Corporations</u>.

The Chairperson of the Board, if any, the Chief Executive Officer or the President, or any other person authorized by the Board, the Chief Executive Officer or the President, is authorized to vote, represent and exercise on behalf of this Corporation all rights incident to any and all shares or voting securities of any other corporation or other entity standing in the name of this Corporation, including the power to act by written consent. The authority granted herein may be exercised either by such person directly or by any other person authorized to do so by proxy or power of attorney duly executed by such person having the authority.

5.7 <u>Authority and Duties of Officers</u>.

All officers of the Corporation shall respectively have such authority and perform such duties in the management of the business of the Corporation as may be provided herein or designated from time to time by the Board and, to the extent not so provided, as generally pertain to their respective offices, subject to the oversight of the Board.

5.8 <u>Compensation.</u>

The compensation of the officers of the Corporation for their services as such shall be fixed from time to time by or at the direction of the Board. An officer of the Corporation shall not be prevented from receiving compensation by reason of the fact that he or she is also a director of the Corporation.

**Article VI—Records** 

A stock ledger consisting of one or more records in which the names of all of the Corporation's stockholders of record, the address and number of shares registered in the name of each such stockholder, and all issuances and transfers of stock of the Corporation are recorded in accordance with Section 224 of the DGCL shall be administered by or on behalf of the Corporation. Any records administered by or on behalf of the Corporation in the regular course of its business, including its stock ledger, books of account, and minute books, may be kept on, or by means of, or be in the form of, any information storage device, or method, or one or more electronic networks or databases (including one or more distributed electronic networks or databases), provided that the records so kept can be converted into clearly legible paper form within a reasonable time and, with respect to the stock ledger, that the records so kept (i) can be used to prepare the list of stockholders specified in Sections 219 and 220 of the DGCL, (ii) record the information specified in Sections 156, 159, 217(a) and 218 of the DGCL, and (iii) record transfers of stock as governed by Article 8 of the Uniform Commercial Code as adopted in the State of Delaware.

------

**Article VII—General Matters** 

7.1 <u>Execution of Corporate Contracts and Instruments</u>.

The Board, except as otherwise provided in these Bylaws, may authorize any officer or officers, or agent or agents, to enter into any contract or execute any instrument in the name of and on behalf of the Corporation; such authority may be general or confined to specific instances.

7.2 <u>Stock Certificates</u>.

The shares of the Corporation shall be represented by certificates, provided that the Board by resolution may provide that some or all of the shares of any class or series of stock of the Corporation shall be uncertificated. Certificates for the shares of stock, if any, shall be in such form as is consistent with the Certificate of Incorporation and applicable law. Every holder of stock represented by a certificate shall be entitled to have a certificate signed by, or in the name of the Corporation by, any two officers authorized to sign stock certificates representing the number of shares registered in certificate form. The Chairperson or Vice Chairperson of the Board, if any, Chief Executive Officer, the President, Vice President, the Treasurer, if any, any Assistant Treasurer, the Secretary or any Assistant Secretary of the Corporation are hereby specifically authorized to sign stock certificates. Any or all of the signatures on the certificate may be a facsimile. In case any officer, transfer agent or registrar who has signed or whose facsimile signature has been placed upon a certificate has ceased to be such officer, transfer agent or registrar before such certificate is issued, it may be issued by the Corporation with the same effect as if he or she were such officer, transfer agent or registrar at the date of issue.

The Corporation may issue the whole or any part of its shares as partly paid and subject to call for the remainder of the consideration to be paid therefor. Upon the face or back of each stock certificate issued to represent any such partly paid shares, or upon the books and records of the Corporation in the case of uncertificated partly paid shares, the total amount of the consideration to be paid therefor and the amount paid thereon shall be stated. Upon the declaration of any dividend on fully paid shares, the Corporation shall declare a dividend upon partly paid shares of the same class, but only upon the basis of the percentage of the consideration actually paid thereon.

7.3 <u>Special Designation of Certificates.</u>

If the Corporation is authorized to issue more than one class of stock or more than one series of any class, then the powers, the designations, the preferences and the relative, participating, optional or other special rights of each class of stock or series thereof and the qualifications, limitations or restrictions of such preferences and/or rights shall be set forth in full or summarized on the face or on the back of the certificate that the Corporation shall issue to represent such class or series of stock (or, in the case of uncertificated shares, set forth in a notice provided pursuant to Section 151 of the DGCL); provided, however, that except as otherwise provided in Section 202 of the DGCL, in lieu of the foregoing requirements, there may be set forth on the face of back of the certificate that the Corporation shall issue to represent such class or series of stock (or, in the case of any uncertificated shares, included in the aforementioned notice) a statement that the Corporation will furnish without charge to each stockholder who so requests the powers, the designations, the preferences and the relative, participating, optional or other special rights of each class of stock or series thereof and the qualifications, limitations or restrictions of such preferences and/or rights.

------

7.4 <u>Lost Certificates</u>.

Except as provided in this Section 7.4, no new certificates for shares shall be issued to replace a previously issued certificate unless the latter is surrendered to the Corporation and cancelled at the same time. The Corporation may issue a new certificate of stock or uncertificated shares in the place of any certificate theretofore issued by it, alleged to have been lost, stolen or destroyed, and the Corporation may require the owner of the lost, stolen or destroyed certificate, or such owner's legal representative, to give the Corporation a bond sufficient to indemnify it against any claim that may be made against it on account of the alleged loss, theft or destruction of any such certificate or the issuance of such new certificate or uncertificated shares.

7.5 <u>Shares Without Certificates</u>

The Corporation may adopt a system of issuance, recordation and transfer of its shares of stock by electronic or other means not involving the issuance of certificates, provided the use of such system by the Corporation is permitted in accordance with applicable law.

7.6 <u>Construction; Definitions</u>.

Unless the context requires otherwise, the general provisions, rules of construction and definitions in the DGCL shall govern the construction of these Bylaws. Without limiting the generality of this provision, the singular number includes the plural and the plural number includes the singular.

7.7 <u>Dividends</u>.

The Board, subject to any restrictions contained in either (i) the DGCL or (ii) the Certificate of Incorporation, may declare and pay dividends upon the shares of its capital stock. Dividends may be paid in cash, in property or in shares of the Corporation's capital stock.

The Board may set apart out of any of the funds of the Corporation available for dividends a reserve or reserves for any proper purpose and may abolish any such reserve. Such purposes shall include but not be limited to equalizing dividends, repairing or maintaining any property of the Corporation, and meeting contingencies.

7.8 <u>Fiscal Year</u>.

The fiscal year of the Corporation shall be fixed by resolution of the Board and may be changed by the Board.

7.9 <u>Seal</u>.

The Corporation may adopt a corporate seal, which shall be adopted and which may be altered by the Board. The Corporation may use the corporate seal by causing it or a facsimile thereof to be impressed or affixed or in any other manner reproduced.

------

7.10 <u>Transfer of Stock</u>.

Shares of the Corporation shall be transferable in the manner prescribed by law and in these Bylaws. Shares of stock of the Corporation shall be transferred on the books of the Corporation only by the holder of record thereof or by such holder's attorney duly authorized in writing, upon surrender to the Corporation of the certificate or certificates representing such shares endorsed by the appropriate person or persons (or by delivery of duly executed instructions with respect to uncertificated shares), with such evidence of the authenticity of such endorsement or execution, transfer, authorization and other matters as the Corporation may reasonably require, and accompanied by all necessary stock transfer stamps. No transfer of stock shall be valid as against the Corporation for any purpose until it shall have been entered in the stock records of the Corporation by an entry showing the names of the persons from and to whom it was transferred.

7.11 <u>Stock Transfer Agreements</u>.

The Corporation shall have power to enter into and perform any agreement with any number of stockholders of any one or more classes or series of stock of the Corporation to restrict the transfer of shares of stock of the Corporation of any one or more classes owned by such stockholders in any manner not prohibited by the DGCL.

7.12 <u>Registered Stockholders</u>.

The Corporation:

(i) shall be entitled to recognize the exclusive right of a person registered on its books as the owner of shares to receive dividends and to vote as such owner; and

(ii) shall not be bound to recognize any equitable or other claim to or interest in such share or shares on the part of another person, whether or not it shall have express or other notice thereof, except as otherwise provided by the laws of the State of Delaware.

7.13 <u>Waiver of Notice</u>.

Whenever notice is required to be given under any provision of the DGCL, the Certificate of Incorporation or these Bylaws, a written waiver, signed by the person entitled to notice, or a waiver by electronic transmission by the person entitled to notice, whether before or after the time of the event for which notice is to be given, shall be deemed equivalent to notice. Attendance of a person at a meeting shall constitute a waiver of notice of such meeting, except when the person attends a meeting for the express purpose of objecting at the beginning of the meeting, to the transaction of any business because the meeting is not lawfully called or convened. Neither the business to be transacted at, nor the purpose of, any regular or special meeting of the stockholders need be specified in any written waiver of notice or any waiver by electronic transmission unless so required by the Certificate of Incorporation or these Bylaws.

**Article VIII—Notice** 

8.1 <u>Delivery of Notice; Notice by Electronic Transmission</u>.

Without limiting the manner by which notice otherwise may be given effectively to stockholders, any notice to stockholders given by the Corporation under any provisions of the DGCL, the Certificate of Incorporation, or these Bylaws may be given in writing directed to the stockholder's mailing address (or by electronic transmission directed to the stockholder's electronic mail address, as applicable) as it appears on the records of the Corporation and shall be given (1) if mailed, when the notice is deposited in the U.S. mail, postage

------

prepaid, (2) if delivered by courier service, the earlier of when the notice is received or left at such stockholder's address or (3) if given by electronic mail, when directed to such stockholder's electronic mail address unless the stockholder has notified the Corporation in writing or by electronic transmission of an objection to receiving notice by electronic mail. A notice by electronic mail must include a prominent legend that the communication is an important notice regarding the Corporation.

Without limiting the manner by which notice otherwise may be given effectively to stockholders, any notice to stockholders given by the Corporation under any provision of the DGCL, the Certificate of Incorporation or these Bylaws shall be effective if given by a form of electronic transmission consented to by the stockholder to whom the notice is given. Any such consent shall be revocable by the stockholder by written notice or electronic transmission to the Corporation. Notwithstanding the provisions of this paragraph, the Corporation may give a notice by electronic mail in accordance with the first paragraph of this section without obtaining the consent required by this paragraph.

Any notice given pursuant to the preceding paragraph shall be deemed given:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(i) if by facsimile telecommunication, when directed to a number at which the stockholder has consented to receive
notice;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(ii) if by a posting on an electronic network together with separate notice to the stockholder of such specific
posting, upon the later of (A) such posting and (B) the giving of such separate notice; and

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(iii) if by any other form of electronic transmission, when directed to the stockholder.

Notwithstanding the foregoing, a notice may not be given by an electronic transmission from and after the time that (1) the Corporation is unable to deliver by such electronic transmission two (2) consecutive notices given by the Corporation and (2) such inability becomes known to the Secretary or an Assistant Secretary of the Corporation or to the transfer agent, or other person responsible for the giving of notice, provided, however, the inadvertent failure to discover such inability shall not invalidate any meeting or other action.

An affidavit of the Secretary or an Assistant Secretary or of the transfer agent or other agent of the Corporation that the notice has been given shall, in the absence of fraud, be prima facie evidence of the facts stated therein.

**Article IX—Indemnification** 

9.1 <u>Indemnification of Directors and Officers</u>.

The Corporation shall indemnify and hold harmless, to the fullest extent permitted by the DGCL as it presently exists or may hereafter be amended, any director or officer of the Corporation (a "<u>covered person</u>") who was or is made or is threatened to be made a party to or is otherwise involved in any action, suit or proceeding, whether civil, criminal, administrative or investigative (a "<u>Proceeding</u>") by reason of the fact that he or she, or a person for whom he or she is the legal representative, is or was a director or officer of the Corporation or, while serving as a director or officer of the Corporation, is or was serving at the request of the Corporation as a director, officer, employee or agent of another corporation or of a partnership, joint venture, trust, enterprise or non-profit entity, including service with respect to employee benefit plans, against all liability

------

and loss suffered and expenses (including, without limitation, attorneys' fees, judgments, fines, ERISA excise taxes or penalties and amounts paid in settlement) actually and reasonably incurred by such person in connection with any such Proceeding. Notwithstanding the preceding sentence, except as otherwise provided in Section 9.4, the Corporation shall be required to indemnify a person in connection with a Proceeding (or part thereof) initiated by such person only if the Proceeding (or part thereof) was authorized in the specific case by the Board.

9.2 <u>Indemnification of Others</u>.

The Corporation shall have the power to indemnify and hold harmless, to the fullest extent permitted by applicable law as it presently exists or may hereafter be amended, any employee or agent of the Corporation who was or is made or is threatened to be made a party or is otherwise involved in any Proceeding by reason of the fact that he or she, or a person for whom he or she is the legal representative, is or was an employee or agent of the Corporation or is or was serving at the request of the Corporation as a director, officer, employee or agent of another corporation or of a partnership, joint venture, trust, enterprise or non-profit entity, including service with respect to employee benefit plans, against all liability and loss suffered and expenses reasonably incurred by such person in connection with any such Proceeding.

9.3 <u>Prepayment of Expenses</u>.

The Corporation shall to the fullest extent not prohibited by applicable law pay the expenses (including attorneys' fees) incurred by any covered person, and may pay the expenses incurred by any employee or agent of the Corporation, in defending any Proceeding in advance of its final disposition; *provided, however*, that such payment of expenses in advance of the final disposition of the Proceeding shall be made only upon receipt of an undertaking by the person to repay all amounts advanced if it should be ultimately determined that the person is not entitled to be indemnified under this Article IX or otherwise.

9.4 <u>Determination; Claim</u>.

If a claim for indemnification (following the final disposition of such Proceeding) under this Article IX is not paid in full within sixty (60) days, or a claim for advancement of expenses under this Article IX is not paid in full within thirty (30) days, after a written claim therefor has been received by the Corporation the claimant may thereafter (but not before) file suit to recover the unpaid amount of such claim and, if successful in whole or in part, shall be entitled to be paid the expense of prosecuting such claim to the fullest extent permitted by law. In any such action the Corporation shall have the burden of proving that the claimant was not entitled to the requested indemnification or payment of expenses under applicable law.

9.5 <u>Non-Exclusivity of Rights</u>.

The rights conferred on any person by this Article IX shall not be exclusive of any other rights which such person may have or hereafter acquire under any statute, provision of the Certificate of Incorporation, these Bylaws, agreement, vote of stockholders or disinterested directors or otherwise.

9.6 <u>Insurance</u>.

The Corporation may purchase and maintain insurance on behalf of any person who is or was a director, officer, employee or agent of the Corporation, or is or was serving at the request of the Corporation as a director, officer, employee or agent of another corporation, partnership, joint venture, trust enterprise or non-profit entity against any liability asserted against him or her and incurred by him or her in any such capacity, or arising out of his or her status as such, whether or not the Corporation would have the power to indemnify him or her against such liability under the provisions of the DGCL.

------

9.7 <u>Continuation of Indemnification</u>.

The rights to indemnification and to prepayment of expenses provided by, or granted pursuant to, this Article IX shall continue notwithstanding that the person has ceased to be a director or officer of the Corporation and shall inure to the benefit of the estate, heirs, executors, administrators, legatees and distributees of such person.

9.8 <u>Amendment or Repeal; Interpretation</u>.

The provisions of this Article IX shall constitute a contract between the Corporation, on the one hand, and, on the other hand, each individual who serves or has served as a director or officer of the Corporation (whether before or after the adoption of these Bylaws), in consideration of such person's performance of such services, and pursuant to this Article IX the Corporation intends to be legally bound to each such current or former director or officer of the Corporation. With respect to current and former directors and officers of the Corporation, the rights conferred under this Article IX are present contractual rights and such rights are fully vested, and shall be deemed to have vested fully, immediately upon adoption of theses Bylaws. With respect to any directors or officers of the Corporation who commence service following adoption of these Bylaws, the rights conferred under this provision shall be present contractual rights and such rights shall fully vest, and be deemed to have vested fully, immediately upon such director or officer commencing service as a director or officer of the Corporation. Any repeal or modification of the foregoing provisions of this Article IX shall not adversely affect any right or protection (i) hereunder of any person in respect of any act or omission occurring prior to the time of such repeal or modification or (ii) under any agreement providing for indemnification or advancement of expenses to an officer or director of the Corporation in effect prior to the time of such repeal or modification.

Any reference to an officer of the Corporation in this Article IX shall be deemed to refer exclusively to the Chief Executive Officer, President, and Secretary, or other officer of the Corporation appointed by (x) the Board pursuant to Article V of these Bylaws or (y) an officer to whom the Board has delegated the power to appoint officers pursuant to Article V of these Bylaws, and any reference to an officer of any other corporation, partnership, joint venture, trust, employee benefit plan or other enterprise shall be deemed to refer exclusively to an officer appointed by the Board (or equivalent governing body) of such other entity pursuant to the certificate of incorporation and Bylaws (or equivalent organizational documents) of such other corporation, partnership, joint venture, trust, employee benefit plan or other enterprise. The fact that any person who is or was an employee of the Corporation or an employee of any other corporation, partnership, joint venture, trust, employee benefit plan or other enterprise has been given or has used the title of "Vice President" or any other title that could be construed to suggest or imply that such person is or may be an officer of the Corporation or of such other corporation, partnership, joint venture, trust, employee benefit plan or other enterprise shall not result in such person being constituted as, or being deemed to be, an officer of the Corporation or of such other corporation, partnership, joint venture, trust, employee benefit plan or other enterprise for purposes of this Article IX.

------

**Article X—Amendments** 

The Board is expressly empowered to adopt, amend or repeal the Bylaws. The stockholders also shall have power to adopt, amend or repeal the Bylaws; *provided, however*, that such action by stockholders shall require, in addition to any other vote required by the Certificate of Incorporation or applicable law, the affirmative vote of the holders of at least 66 2/3% of the voting power of all the then-outstanding shares of capital stock of the Corporation entitled to vote generally in the election of directors, voting together as a single class, except as otherwise provided in the Certificate of Incorporation. Notwithstanding the immediately preceding sentence, prior to the occurrence of a Trigger Event, the Bylaws may be adopted, amended or repealed by the affirmative vote of the holders of at least a majority of the voting power of the then-outstanding shares of capital stock.

**Article XI—Definitions** 

As used in these Bylaws, unless the context otherwise requires, the following terms shall have the following meanings:

An "<u>electronic transmission</u>" means any form of communication, not directly involving the physical transmission of paper, including the use of, or participation in, one or more electronic networks or databases (including one or more distributed electronic networks or databases), that creates a record that may be retained, retrieved and reviewed by a recipient thereof, and that may be directly reproduced in paper form by such a recipient through an automated process.

An "<u>electronic mail</u>" means an electronic transmission directed to a unique electronic mail address (which electronic mail shall be deemed to include any files attached thereto and any information hyperlinked to a website if such electronic mail includes the contact information of an officer or agent of the Corporation who is available to assist with accessing such files and information).

An "<u>electronic mail address</u>" means a destination, commonly expressed as a string of characters, consisting of a unique user name or mailbox (commonly referred to as the "local part" of the address) and a reference to an internet domain (commonly referred to as the "domain part" of the address), whether or not displayed, to which electronic mail can be sent or delivered.

The term "<u>person</u>" means any individual, general partnership, limited partnership, limited liability company, corporation, trust, business trust, joint stock company, joint venture, unincorporated association, cooperative or association or any other legal entity or organization of whatever nature, and shall include any successor (by merger or otherwise) of such entity.

------

**Steinway Musical Instruments Holdings, Inc.** 

**Certificate of Amendment and Restatement of Bylaws** 

The undersigned hereby certifies that she is the duly elected, qualified, and acting Chief Legal Officer of Steinway Musical Instruments Holdings, Inc., a Delaware corporation (the "<u>Corporation</u>"), and that the foregoing Bylaws were adopted by the Board of Directors of the Corporation on [ • ], 2023 to be effective as of [ • ], 2023.

---

| |
|:---|
| Jennifer Wang |
| Chief Legal Officer |

---

## Exhibit 10.2

**Exhibit 10.2** 

**STEINWAY MUSICAL INSTRUMENTS HOLDINGS, INC.** 

**2023 INCENTIVE AWARD PLAN** 

**ARTICLE I.** 

**PURPOSE** 

The Plan's purpose is to enhance the Company's ability to attract, retain and motivate persons who make (or are expected to make) important contributions to the Company by providing these individuals with equity ownership opportunities and/or equity-linked compensatory opportunities. Capitalized terms used in the Plan are defined in Article XI.

**ARTICLE II.** 

**ELIGIBILITY** 

Service Providers are eligible to be granted Awards under the Plan, subject to the limitations described herein. No Service Provider will automatically be granted any Award under this Plan.

**ARTICLE III.** 

**ADMINISTRATION AND DELEGATION** 

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;3.1 <u>Administration</u>. The Plan is administered by the Administrator. The Administrator has authority to determine which (if any) Service Providers receive Awards, to grant Awards and to set Award types, amounts, limitations, terms and conditions, subject to the conditions and limitations in the Plan and to Applicable Laws. The Administrator also has the authority, to the extent Applicable Laws permit, to take all actions and make all determinations under the Plan, to interpret the Plan and Award Agreements and to adopt, amend and repeal Plan administrative rules, guidelines and practices as it deems advisable. The Administrator may correct defects and ambiguities, supply omissions and reconcile inconsistencies in the Plan or any Award Agreement as it deems necessary or appropriate to administer the Plan and any Awards. The Administrator's determinations under the Plan are in its sole discretion and will be final and binding on all persons having or claiming any interest in the Plan or any Award.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;3.2 <u>Appointment of Committees</u>. To the extent Applicable Laws permit, the Board or the Administrator may delegate any or all of its powers under the Plan to one or more Committees or one or more committees of directors or officers of the Company or any of its Subsidiaries; <u>provided</u>, <u>however</u>, that in no event shall an officer of the Company be delegated the authority to grant Awards to, or amend Awards held by, the following individuals: (a) individuals who are subject to Section 16 of the Exchange Act, or (b) officers of the Company (or Directors) to whom authority to grant or amend Awards has been delegated hereunder. The Board or the Administrator, as applicable, may rescind any such delegation, abolish any such Committee or committee and/or re-vest in itself any previously delegated authority at any time.

**ARTICLE IV.** 

**STOCK AVAILABLE FOR AWARDS** 

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;4.1 <u>Number of Shares</u>. Subject to adjustment under Article VIII and the terms of this Article IV, the maximum number of Shares that may be issued pursuant to Awards under the Plan shall be equal to the Overall Share Limit. Shares issued under the Plan may consist of authorized but unissued Shares, Shares purchased on the open market or treasury Shares.

------

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;4.2 <u>Share Recycling</u>. If all or any part of an Award expires, lapses or is terminated, exchanged for or settled in cash, surrendered, repurchased, canceled without having been fully exercised or forfeited, in any case, in a manner that results in the Company acquiring Shares covered by the Award at a price not greater than the price (as adjusted to reflect any Equity Restructuring) paid by the Participant for such Shares or not issuing any Shares covered by the Award, the unused Shares covered by the Award will, as applicable, become or again be available for Award grants under the Plan. In addition, Shares delivered (either by actual delivery or attestation) to the Company by a Participant to satisfy the applicable exercise or purchase price of an Award and/or to satisfy any applicable tax withholding obligation with respect to an Award (including Shares retained by the Company from the Award being exercised or purchased and/or creating the tax obligation) will, as applicable, become or again be available for Award grants under the Plan. The payment of Dividend Equivalents in cash in conjunction with any outstanding Awards shall not count against the Overall Share Limit. Notwithstanding anything to the contrary contained herein, the following Shares shall not be added to the Shares authorized for grant under Section 4.1 and shall not be available for future grants of Awards: (i) Shares subject to a Stock Appreciation Right that are not issued in connection with the stock settlement of the Stock Appreciation Right on exercise thereof; and (ii) Shares purchased on the open market by the Company with the cash proceeds from the exercise of Options.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;4.3 <u>Incentive Stock Option Limitations</u>. Notwithstanding anything to the contrary herein, no more than 40,000,000 Shares may be issued pursuant to the exercise of Incentive Stock Options.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;4.4 <u>Substitute Awards</u>. In connection with an entity's merger or consolidation with the Company or the Company's acquisition of an entity's property or stock, the Administrator may grant Substitute Awards for any options or other stock or stock-based awards granted before such merger or consolidation by such entity or its affiliate in accordance with Applicable Laws. Substitute Awards may be granted on such terms as the Administrator deems appropriate, notwithstanding limitations on Awards in the Plan. Substitute Awards will not count against the Overall Share Limit (nor shall Shares subject to a Substitute Award be added back to the Shares available for Awards under the Plan as provided in Section 4.2 above), except that Shares acquired by exercise of substitute Incentive Stock Options will count against the maximum number of Shares that may be issued pursuant to the exercise of Incentive Stock Options under the Plan. Additionally, in the event that a company acquired by the Company or any Subsidiary or with which the Company or any Subsidiary combines has shares available under a pre-existing plan approved by stockholders and not adopted in contemplation of such acquisition or combination, the shares available for grant pursuant to the terms of such pre-existing plan (as adjusted, to the extent appropriate, using the exchange ratio or other adjustment or valuation ratio or formula used in such acquisition or combination to determine the consideration payable to the holders of common stock of the entities party to such acquisition or combination) may be used for Awards under the Plan and shall not count against the Overall Share Limit (and Shares subject to such Awards shall not be added to the Shares available for Awards under the Plan as provided in Section 4.2 above); provided that Awards using such available shares shall not be made after the date awards or grants could have been made under the terms of the pre-existing plan, absent the acquisition or combination, and may only be made to individuals who were not Service Providers prior to such acquisition or combination.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;4.5 <u>Non-Employee Director Compensation</u>. Notwithstanding any provision to the contrary in the Plan, the Administrator may, pursuant to the exercise of its business judgment, taking into account such factors, circumstances and considerations as it deems relevant from time to time, establish compensation for non-employee Directors from time to time, subject to the limitations in the Plan and/or pursuant to a written nondiscretionary formula established by the Administrator (the "<u>Non-Employee Director Equity Compensation Policy</u>"). The sum of any cash compensation, or other compensation, and the value (determined as of the grant date in accordance with Financial Accounting Standards Board Accounting Standards Codification Topic 718, or any successor thereto) of Awards granted to a non-employee Director as compensation for services as a non-employee Director during any fiscal year of the Company may not

------

exceed $750,000, increased to $1,000,000 in the fiscal year of a non-employee Director's initial service as a non-employee Director (the "***Director Limits***"). The Administrator may make exceptions to the Director Limits in extraordinary circumstances, as the Administrator may determine in its discretion, provided that the non-employee Director receiving such additional compensation may not participate in the decision to award such compensation or in other contemporaneous compensation decisions involving non-employee Directors.

**ARTICLE V.** 

**STOCK OPTIONS AND STOCK APPRECIATION RIGHTS** 

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;5.1 <u>General</u>. The Administrator may grant Options or Stock Appreciation Rights to Service Providers subject to the limitations in the Plan, including any limitations in the Plan that apply to Incentive Stock Options. A Stock Appreciation Right will entitle the Participant (or other person entitled to exercise the Stock Appreciation Right) to receive from the Company upon exercise of the exercisable portion of the Stock Appreciation Right an amount determined by multiplying the excess, if any, of the Fair Market Value on the date of exercise over the exercise price per Share of the Stock Appreciation Right by the number of Shares with respect to which the Stock Appreciation Right is exercised, subject to any limitations of the Plan or that the Administrator may impose and payable in cash, Shares valued at Fair Market Value or a combination of the two as the Administrator may determine or provide in the Award Agreement.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;5.2 <u>Exercise Price</u>. The Administrator will establish, and specify in the Award Agreement, each Option's and Stock Appreciation Right's exercise price and conditions, if any, that must be satisfied before all or part of the Option or Stock Appreciation Right may be exercised. The exercise price will not be less than 100% of the Fair Market Value on the grant date of the Option (subject to Section 5.6) or Stock Appreciation Right. Notwithstanding the foregoing, in the case of an Option or a Stock Appreciation Right that is a Substitute Award, the exercise price per share of the Shares subject to such Option or Stock Appreciation Right, as applicable, may be less than the Fair Market Value per share on the date of grant; <u>provided</u> that the exercise price of any Substitute Award shall be determined in accordance with the applicable requirements of Sections 424 and 409A of the Code.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;5.3 <u>Duration</u>. Each Option or Stock Appreciation Right will be exercisable at such times and as specified in the Award Agreement, provided that, subject to Section 5.6, the term of an Option or Stock Appreciation Right will not exceed ten years. Notwithstanding the foregoing and unless determined otherwise by the Company, in the event that on the last business day of the term of an Option or Stock Appreciation Right (other than an Incentive Stock Option) (a) the exercise of the Option or Stock Appreciation Right is prohibited by Applicable Laws, as determined by the Company, or (b) Shares may not be purchased or sold by the applicable Participant due to any Company insider trading policy (including blackout periods) or a "lock-up" agreement undertaken in connection with an issuance of securities by the Company, the term of the Option or Stock Appreciation Right shall be extended until the date that is 30 days after the end of the legal prohibition, black-out period or lock-up agreement, as determined by the Company; <u>provided</u>, <u>however</u>, in no event shall the extension last beyond the ten year term of the applicable Option or Stock Appreciation Right. Unless otherwise determined by the Administrator in the Award Agreement or by action of the Administrator following the grant of the Option or Stock Appreciation Right, (i) no portion of an Option or Stock Appreciation Right which is unexercisable at a Participant's Termination of Service shall thereafter become exercisable and (ii) the portion of an Option or Stock Appreciation Right that is unexercisable at a Participant's Termination of Service shall automatically expire thirty (30) days following such Termination of Service. Notwithstanding the foregoing, to the extent permitted under Applicable Laws, if the Participant, prior to the end of the term of an Option or Stock Appreciation Right, violates the non-competition, non-solicitation, confidentiality or other similar restrictive covenant provisions of any employment contract, confidentiality and nondisclosure agreement or other agreement between the Participant and the Company or any Subsidiary, the right of the Participant and the Participant's transferees to exercise any Option or Stock Appreciation Right issued to the Participant shall terminate immediately upon such violation, unless the Company otherwise determines.

------

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;5.4 <u>Exercise</u>. Subject to any conditions specified in the applicable Award Agreement and to Applicable Laws, Options and Stock Appreciation Rights may be exercised by delivering to the Company (a) a written notice of exercise, in a form the Administrator approves (which may be electronic), signed by the person authorized to exercise the Option or Stock Appreciation Right, and (b) such representations and documents as the Administrator, in its sole discretion, deems necessary or advisable to effect compliance with all applicable provisions of the Securities Act and any other federal, state or foreign securities laws or regulations, together with, as applicable, payment in full (i) as specified in Section 5.5 for the number of Shares for which the Award is exercised and (ii) as specified in Section 9.5 for any applicable taxes. Unless the Administrator otherwise determines, an Option or Stock Appreciation Right may not be exercised for a fraction of a Share.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;5.5 <u>Payment Upon Exercise</u>. Subject to Section 10.8, any Company insider trading policy (including blackout periods) and Applicable Laws, the exercise price of an Option must be paid by:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a) cash, wire transfer of immediately available funds or by check payable to the order of the Company, provided that the Company may limit the use of one of the foregoing payment forms if one or more of the payment forms below is permitted;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b) if there is a public market for Shares at the time of exercise, unless the Company otherwise determines, (i) delivery (including electronically or telephonically to the extent permitted by the Company) of an irrevocable and unconditional undertaking by a broker acceptable to the Company to deliver promptly to the Company sufficient funds to pay the exercise price, or (ii) the Participant's delivery to the Company of a copy of irrevocable and unconditional instructions to a broker acceptable to the Company to deliver promptly to the Company cash or a check sufficient to pay the exercise price; provided that such amount is paid to the Company at such time as may be required by the Administrator;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c) to the extent permitted by the Administrator, delivery (either by actual delivery or attestation) of Shares owned by the Participant valued at their Fair Market Value;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(d) to the extent permitted by the Administrator, surrendering Shares then issuable upon the Option's exercise valued at their Fair Market Value on the exercise date;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(e) to the extent permitted by the Administrator, delivery of a promissory note or any other property that the Administrator determines is good and valuable consideration; or

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(f) to the extent permitted by the Company, any combination of the above payment forms approved by the Administrator.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;5.6 <u>Additional Terms of Incentive Stock Options</u>. The Administrator may grant Incentive Stock Options only to employees of the Company, any of its present or future parent or subsidiary corporations, as defined in Sections 424(e) or (f) of the Code, respectively, and any other entities the employees of which are eligible to receive Incentive Stock Options under the Code. If an Incentive Stock Option is granted to a Greater Than 10% Stockholder, the exercise price will not be less than 110% of the Fair Market Value on the Option's grant date, and the term of the Option will not exceed five years. All Incentive Stock Options will be subject to and construed consistently with Section 422 of the Code. By accepting an Incentive Stock Option, the Participant agrees to give prompt notice to the Company of dispositions or other transfers (other than in connection with a Change in Control) of Shares acquired under the Option made within (a) two years from the grant date of the Option or (b) one year after the transfer of

------

such Shares to the Participant, specifying the date of the disposition or other transfer and the amount the Participant realized, in cash, other property, assumption of indebtedness or other consideration, in such disposition or other transfer. Neither the Company nor the Administrator will be liable to a Participant, or any other party, if an Incentive Stock Option fails or ceases to qualify as an "incentive stock option" under Section 422 of the Code. Any Incentive Stock Option or portion thereof that fails to qualify as an "incentive stock option" under Section 422 of the Code for any reason, including becoming exercisable with respect to Shares having a fair market value exceeding the $100,000 limitation under Treasury Regulation Section 1.422-4, will be a Non-Qualified Stock Option.

**ARTICLE VI.** 

**RESTRICTED STOCK; RESTRICTED STOCK UNITS** 

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;6.1 <u>General</u>. The Administrator may grant Restricted Stock, or the right to purchase Restricted Stock, to any Service Provider, subject to the Company's right to repurchase all or part of such Shares at their issue price or other stated or formula price from the Participant (or to require forfeiture of such Shares) if conditions the Administrator specifies in the Award Agreement are not satisfied before the end of the applicable restriction period or periods that the Administrator establishes for such Award. In addition, the Administrator may grant to Service Providers Restricted Stock Units, which may be subject to vesting and forfeiture conditions (including but not limited to <u>fulfillment of tax and other obligations by the Participants under the Applicable Laws)</u> during the applicable restriction period or periods, as set forth in an Award Agreement.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;6.2 <u>Restricted Stock</u>.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a) <u>Rights as Stockholders</u>. Subject to the Company's right of repurchase as described above, upon issuance of Restricted Stock, the Participant shall have, unless otherwise provided by the Administrator, all of the rights of a stockholder with respect to said Shares, subject to the restrictions in the Plan and Applicable Laws.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b) <u>Dividends</u>. Participants holding Shares of Restricted Stock will be entitled to all ordinary cash dividends paid with respect to such Shares, unless the Administrator provides otherwise in the Award Agreement. In addition, unless the Administrator provides otherwise, if any dividends or distributions are paid in Shares, or consist of a dividend or distribution to holders of Common Stock of property other than an ordinary cash dividend, the Shares or other property will be subject to the same restrictions on transferability and forfeitability as the Shares of Restricted Stock with respect to which they were paid. Notwithstanding anything to the contrary herein, with respect to any award of Restricted Stock, dividends which are paid to holders of Common Stock prior to vesting shall only be paid out to the Participant holding such Restricted Stock to the extent that the vesting conditions are subsequently satisfied. All such dividend payments will be made no later than March 15 of the calendar year following the calendar year in which the right to the dividend payment becomes nonforfeitable.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c) <u>Stock Certificates</u>. The Company may require that the Participant deposit in escrow with the Company (or its designee) any stock certificates issued in respect of Shares of Restricted Stock, together with a stock power endorsed in blank.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;6.3 <u>Restricted Stock Units.</u>

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a) <u>Settlement</u>. The Administrator may provide that settlement of Restricted Stock Units will occur upon or as soon as reasonably practicable after the Restricted Stock Units vest or will instead be deferred, on a mandatory basis or at the Participant's election, in a manner intended to comply with Section 409A.

------

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b) <u>Stockholder Rights</u>. A Participant will have no rights of a stockholder with respect to Shares subject to any Restricted Stock Unit unless and until the Shares are delivered in settlement of the Restricted Stock Unit.

**ARTICLE VII.** 

**OTHER STOCK OR CASH BASED AWARDS; DIVIDEND EQUIVALENTS** 

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;7.1 <u>Other Stock or Cash Based Awards</u>. Other Stock or Cash Based Awards may be granted to Participants, including Awards entitling Participants to receive Shares to be delivered in the future and including annual or other periodic or long-term cash bonus awards (whether based on specified Performance Criteria or otherwise), in each case subject to any conditions and limitations in the Plan. Such Other Stock or Cash Based Awards will also be available as a payment form in the settlement of other Awards, as standalone payments and as payment in lieu of compensation to which a Participant is otherwise entitled. Other Stock or Cash Based Awards may be paid in Shares, cash or other property, as the Administrator determines.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;7.2 <u>Dividend Equivalents</u>. A grant of Restricted Stock Units or Other Stock or Cash Based Award may provide a Participant with the right to receive Dividend Equivalents, and no Dividend Equivalents shall be payable with respect to Options or Stock Appreciation Rights. Dividend Equivalents may be paid currently or credited to an account for the Participant, settled in cash or Shares and subject to the same restrictions on transferability and forfeitability as the Award with respect to which the Dividend Equivalents are paid and subject to other terms and conditions as set forth in the Award Agreement. Notwithstanding anything to the contrary herein, Dividend Equivalents with respect to an Award shall only be paid out to the Participant to the extent that the vesting conditions applicable to the underlying Award are satisfied. All such Dividend Equivalent payments will be made no later than March 15 of the calendar year following the calendar year in which the right to the Dividend Equivalent payment becomes nonforfeitable in accordance with the foregoing, unless otherwise determined by the Administrator.

**ARTICLE VIII.** 

**ADJUSTMENTS FOR CHANGES IN COMMON STOCK** 

**AND CERTAIN OTHER EVENTS** 

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;8.1 <u>Equity Restructuring</u><u>(a)</u><u> </u>. In connection with any Equity Restructuring, notwithstanding anything to the contrary in this Article VIII, the Administrator will equitably adjust each outstanding Award as it deems appropriate to reflect the Equity Restructuring, which may include adjusting the number and type of securities subject to each outstanding Award and/or the Award's exercise price or grant price (if applicable), granting new Awards to Participants, and making cash payments to Participants. The adjustments provided under this Section 8.1 will be nondiscretionary and final and binding on the affected Participant and the Company; provided that the Administrator will determine whether an adjustment is equitable.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;8.2 <u>Corporate Transactions</u>. In the event of any dividend or other distribution (whether in the form of cash, Common Stock, other securities, or other property), reorganization, merger, consolidation, combination, amalgamation, repurchase, recapitalization, liquidation, dissolution, or sale, transfer, exchange or other disposition of all or substantially all of the assets of the Company, or sale or exchange of Common Stock or other securities of the Company, Change in Control, issuance of warrants or other rights to purchase Common Stock or other securities of the Company, other similar corporate transaction or event, other unusual or nonrecurring transaction or event affecting the Company or its financial statements or any change in any Applicable Laws or accounting principles, the Administrator, on such terms and conditions as it deems appropriate, either by the terms of the Award or by action taken prior to the occurrence of such transaction or event (except that action to give effect to a change in Applicable Laws or

------

accounting principles may be made within a reasonable period of time after such change) and either automatically or upon the Participant's request, is hereby authorized to take any one or more of the following actions whenever the Administrator determines that such action is appropriate in order to (x) prevent dilution or enlargement of the benefits or potential benefits intended by the Company to be made available under the Plan or with respect to any Award granted or issued under the Plan, (y) facilitate such transaction or event or (z) give effect to such changes in Applicable Laws or accounting principles:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a) To provide for the cancellation of any such Award in exchange for either an amount of cash or other property with a value equal to the amount that could have been obtained upon the exercise or settlement of the vested portion of such Award or realization of the Participant's rights under the vested portion of such Award, as applicable; provided that, if the amount that could have been obtained upon the exercise or settlement of the vested portion of such Award or realization of the Participant's rights, in any case, is equal to or less than zero, then the Award may be terminated without payment;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b) To provide that such Award shall vest and, to the extent applicable, be exercisable as to all Shares covered thereby, notwithstanding anything to the contrary in the Plan or the provisions of such Award;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c) To provide that such Award be assumed by the successor or survivor corporation, or a parent or subsidiary thereof, or shall be substituted for by 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/or applicable exercise or purchase price, in all cases, as determined by the Administrator;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(d) To make adjustments in the number and type of Shares (or other securities or property) subject to outstanding Awards and/or with respect to which Awards may be granted under the Plan (including, but not limited to, adjustments of the limitations in Article IV on the maximum number and kind of shares which may be issued, including pursuant to any Non-Employee Director Compensation Policy) and/or in the terms and conditions of (including the grant or exercise price or applicable performance goals), and the criteria included in, outstanding Awards;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(e) To replace such Award with other rights or property selected by the Administrator; and/or

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(f) To provide that the Award will terminate and cannot vest, be exercised or become payable after the applicable event.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;8.3 <u>Effect of Non-Assumption in a Change in Control</u>.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a) Notwithstanding the provisions of Section 8.2, if a Change in Control occurs and a Participant's Award is not continued, converted, assumed or replaced with a substantially similar award by (i) the Company, or (ii) a successor entity or its parent or subsidiary (an "***Assumption***"), and provided that the Participant has not had a Termination of Service, then, immediately prior to the Change in Control, such Award shall become fully vested, exercisable and/or payable, as applicable, and all forfeiture, repurchase and other restrictions on such Award shall lapse, in which case, such Award shall be canceled upon the consummation of the Change in Control in exchange for the right to receive the Change in Control consideration payable to other holders of Common Stock (A) which may be on such terms and conditions as apply generally to holders of Common Stock under the Change in Control documents (including, without limitation, any escrow, earn-out or other deferred consideration provisions) or such other terms and conditions as the Administrator may provide, and (B) determined by reference to the number of Shares subject to such Award and net of any applicable exercise price; provided that to the extent that any Award

------

constitutes "nonqualified deferred compensation" that may not be paid upon the Change in Control under Section 409A without the imposition of taxes thereon under Section 409A (including payments as a result of any termination of "nonqualified deferred compensation" Awards permitted under Section 409A in connection with a Change in Control), the timing of such payments shall be governed by the applicable Award Agreement (subject to any deferred consideration provisions applicable under the Change in Control documents); and provided, further, that if the amount to which the Participant would be entitled upon the settlement or exercise of such Award at the time of the Change in Control is equal to or less than zero, then such Award may be terminated without payment. The Administrator shall determine whether an Assumption of an Award has occurred in connection with a Change in Control.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b) If a Change in Control occurs and a Participant's Awards are assumed pursuant to Section 8.3(a), and, on or within 12 months following such Change in Control, the Company or its successor entity or a parent or subsidiary thereof terminates such Participant's employment or service with such entity for any reason (other than for Cause and other than as a result of such Participant's death or Disability), then (i) such Participant's remaining unvested Awards (including any Substitute Awards) shall become fully vested, exercisable and/or payable, as applicable, and all forfeiture, repurchase and other restrictions on such Awards (including any Substitute Awards) shall lapse, on the date of such Termination of Service, and (ii) with respect to Options then held by such Participant, the Participant shall have a period of 6 months following the date of such Termination of Service (or such longer period as may be set forth in the applicable Award Agreement(s)) to exercise such Options, to the extent that he or she was otherwise entitled to exercise such Options on the date of such Termination of Service (but in no event shall any Option remain exercisable beyond the maximum term set forth in Section 5.3).

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;8.4 <u>Administrative Stand Still</u>. In the event of any pending stock dividend, stock split, combination or exchange of shares, merger, consolidation or other distribution (other than normal cash dividends) of Company assets to stockholders, or any other extraordinary transaction or change affecting the Shares or the Share price, including any Equity Restructuring or any securities offering or other similar transaction, for administrative convenience, the Administrator may refuse to permit the exercise of any Award for up to 60 days before or after such transaction.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;8.5 <u>General</u>. Except as expressly provided in the Plan or the Administrator's action under the Plan, no Participant will have any rights due to any subdivision or consolidation of Shares of any class, dividend payment, increase or decrease in the number of Shares of any class or dissolution, liquidation, merger, or consolidation of the Company or other corporation. Except as expressly provided with respect to an Equity Restructuring under Section 8.1 or the Administrator's action under the Plan, no issuance by the Company of Shares of any class, or securities convertible into Shares of any class, will affect, and no adjustment will be made regarding, the number of Shares subject to an Award or the Award's grant price or exercise price (if applicable). The existence of the Plan, any Award Agreements and the Awards granted hereunder will not affect or restrict in any way the Company's right or power to make or authorize (a) any adjustment, recapitalization, reorganization or other change in the Company's capital structure or its business, (b) any merger, consolidation dissolution or liquidation of the Company or sale of Company assets or (c) any sale or issuance of securities, including securities with rights superior to those of the Shares or securities convertible into or exchangeable for Shares. The Administrator may treat Participants and Awards (or portions thereof) differently under this Article VIII.

------

**ARTICLE IX.** 

**GENERAL PROVISIONS APPLICABLE TO AWARDS** 

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;9.1 <u>Transferability</u>(a) . Except as the Administrator may determine or provide in an Award Agreement or otherwise for Awards other than Incentive Stock Options, Awards may not be sold, assigned, transferred, pledged or otherwise encumbered, either voluntarily or by operation of law, except for certain beneficiary designations, by will or the laws of descent and distribution, or, subject to the Administrator's consent, pursuant to a domestic relations order, and, during the life of the Participant, will be exercisable only by the Participant. Any permitted transfer of an Award hereunder shall be without consideration, except as required by Applicable Laws, and such Award transferred to a permitted transferee shall continue to be subject to all the terms and conditions of the Award as applicable to the original Participant and the Participant or transferor and the receiving permitted transferee shall execute any and all documents requested by the Administrator. References to a Participant, to the extent relevant in the context, will include references to a Participant's authorized transferee that the Administrator specifically approves.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;9.2 <u>Documentation</u>. Each Award will be evidenced in an Award Agreement, which may be written or electronic, as the Administrator determines. The Award Agreement will contain the terms and conditions applicable to an Award. Each Award may contain terms and conditions in addition to those set forth in the Plan.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;9.3 <u>Discretion</u>. Except as the Plan otherwise provides, each Award may be made alone or in addition or in relation to any other Award. The terms of each Award to a Participant need not be identical, and the Administrator need not treat Participants or Awards (or portions thereof) uniformly.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;9.4 <u>Change in Status</u>. The Administrator will determine how the disability, death, retirement, an authorized leave of absence or any other change or purported change in a Participant's Service Provider status affects an Award and the extent to which, and the period during which, the Participant, the Participant's legal representative, conservator, guardian or Designated Beneficiary may exercise rights under the Award, if applicable.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;9.5 <u>Withholding</u>. Each Participant must pay the Company, or make provision satisfactory to the Administrator for payment of, any taxes required by Applicable Laws to be withheld in connection with such Participant's Awards by the date of the event creating the tax liability. The Company may deduct an amount sufficient to satisfy such tax obligations based on the applicable statutory withholding rates (or such other rate as may be determined by the Company after considering any accounting consequences or costs, to the extent permitted by Applicable Laws) from any payment of any kind otherwise due to a Participant. In the absence of a contrary determination by the Company (or, with respect to withholding pursuant to clause (b) below with respect to Awards held by individuals subject to Section 16 of the Exchange Act, a contrary determination by the Administrator), all tax withholding obligations will be calculated based on the maximum applicable statutory withholding rates. Subject to Section 10.8 and any Company insider trading policy (including blackout periods), Participants may satisfy such tax obligations (a) in cash, by wire transfer of immediately available funds, by check made payable to the order of the Company, provided that the Company may limit the use of the foregoing payment forms if one or more of the payment forms below is permitted, (b) to the extent permitted by the Administrator and Applicable Laws, in whole or in part by delivery of Shares, including Shares delivered by attestation and Shares retained from the Award creating the tax obligation, valued at their Fair Market Value on the date of delivery, (c) if there is a public market for Shares at the time the tax obligations are satisfied, unless the Company otherwise determines in accordance with Applicable Laws, (i) delivery (including electronically or telephonically to the extent permitted by the Company) of an irrevocable and unconditional undertaking by a broker acceptable to the Company to deliver promptly to the Company sufficient funds to satisfy the tax obligations, or (ii) delivery by the Participant to the Company of a copy of irrevocable and unconditional instructions to a broker acceptable to the Company to deliver promptly to the Company cash or a check sufficient to satisfy the tax withholding; provided that such amount is paid to the Company at such time as may be required by the Administrator, or (d) to the extent permitted by the Company, any combination of the foregoing payment forms approved by the Administrator. Notwithstanding any other provision of the Plan, the number of Shares which may be so delivered or retained pursuant to clause (b) of the immediately preceding sentence shall be limited to the number of Shares which have a Fair Market Value on the date of delivery or retention

------

no greater than the aggregate amount of such liabilities based on the maximum individual statutory tax rate in the applicable jurisdiction at the time of such withholding (or such other rate as may be required to avoid the liability classification of the applicable Award under generally accepted accounting principles in the United States of America); provided, however, to the extent such Shares were acquired by Participant from the Company as compensation, the Shares must have been held for the minimum period required by applicable accounting rules to avoid a charge to the Company's earnings for financial reporting purposes; provided, further, that, any such Shares delivered or retained shall be rounded up to the nearest whole Share to the extent rounding up to the nearest whole Share does not result in the liability classification of the applicable Award under generally accepted accounting principles in the United States of America. If any tax withholding obligation will be satisfied under clause (b) above by the Company's retention of Shares from the Award creating the tax obligation and there is a public market for Shares at the time the tax obligation is satisfied, the Company may elect to instruct any brokerage firm determined acceptable to the Company for such purpose to sell on the applicable Participant's behalf some or all of the Shares retained and to remit the proceeds of the sale to the Company or its designee, and each Participant's acceptance of an Award under the Plan will constitute the Participant's authorization to the Company and instruction and authorization to such brokerage firm to complete the transactions described in this sentence.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;9.6 <u>Amendment of Award</u>. The Administrator may amend, modify or terminate any outstanding Award, including by substituting another Award of the same or a different type, changing the exercise or settlement date, and converting an Incentive Stock Option to a Non-Qualified Stock Option. The Participant's consent to such action will be required unless (a) the action, taking into account any related action, does not materially and adversely affect the Participant's rights under the Award, or (b) the change is permitted under Article VIII or pursuant to Section 10.6.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;9.7 <u>Conditions on Delivery of Stock</u>. The Company will not be obligated to deliver any Shares under the Plan or remove restrictions from Shares previously delivered under the Plan until (a) all Award conditions have been met or removed to the Company's satisfaction, (b) as determined by the Company, all other legal matters regarding the issuance and delivery of such Shares have been satisfied, including, but not limited to, any applicable securities laws and stock exchange or stock market rules and regulations, and (c) the Participant has executed and delivered to the Company such representations or agreements as the Administrator deems necessary or appropriate to satisfy any Applicable Laws. The Company's inability to carry out filings with or obtain authority from any regulatory body having jurisdiction, which the Administrator determines is necessary to the lawful issuance and sale of any securities, will relieve the Company of any liability for failing to issue or sell such Shares as to which such requisite filings have not been carried out or authority has not been obtained.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;9.8 <u>Acceleration</u>. The Administrator may, to the extent Applicable Laws permit, at any time provide that any Award will become immediately vested and fully or partially exercisable, free of some or all restrictions or conditions, or otherwise fully or partially realizable.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;9.9 <u>Cash Settlement</u>. Without limiting the generality of any other provision of the Plan, the Administrator may provide, in an Award Agreement or subsequent to the grant of an Award, in its discretion, that any Award may be settled in cash, Shares or a combination thereof.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;9.10 <u>Broker-Assisted Sales</u>. In the event of a broker-assisted sale of Shares in connection with the payment of amounts owed by a Participant under or with respect to the Plan or Awards, including amounts to be paid under the final sentence of Section 9.5: (a) any Shares to be sold through the broker-assisted sale will be sold on the day the payment first becomes due, or as soon thereafter as practicable; (b) such Shares may be sold as part of a block trade with other Participants in the Plan in which all Participants receive an average price; (c) the applicable Participant will be responsible for all broker's fees and other costs of sale, and by accepting an Award, each Participant agrees to indemnify and hold the Company

------

harmless from any losses, costs, damages, or expenses relating to any such sale; (d) to the extent the Company or its designee receives proceeds of such sale that exceed the amount owed, the Company will pay such excess in cash to the applicable Participant as soon as reasonably practicable; (e) the Company and its designees are under no obligation to arrange for such sale at any particular price; and (f) in the event the proceeds of such sale are insufficient to satisfy the Participant's applicable obligation, the Participant may be required to pay immediately upon demand to the Company or its designee an amount in cash sufficient to satisfy any remaining portion of the Participant's obligation.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;9.11 <u>Currency</u>. Unless otherwise required by Applicable Laws, or as determined by the Administrator, all Awards shall be designated in U.S. dollars. A Participant may be required to provide evidence that any currency used to pay the exercise price of any Award was acquired and taken out of the jurisdiction in which the Participant resides in accordance with Applicable Laws, including foreign exchange control laws and regulations. In the event the exercise price for an Award is paid in another currency, as permitted by the Administrator, the amount payable will be determined by conversion from U.S. dollars at the exchange rate as selected by the Administrator on the date of exercise.

**ARTICLE X.** 

**MISCELLANEOUS** 

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;10.1 <u>No Right to Employment or Other Status</u>. No person will have any claim or right to be granted an Award, and the grant of an Award will not be construed as giving a Participant the right to continued employment or any other relationship with the Company or any Subsidiary. The Company and its Subsidiaries expressly reserve the right at any time to dismiss or otherwise terminate its relationship with a Participant free from any liability or claim under the Plan or any Award, except as expressly provided in an Award Agreement or in the Plan.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;10.2 <u>No Rights as Stockholder; Certificates</u>. Subject to the Award Agreement, no Participant or Designated Beneficiary will have any rights as a stockholder with respect to any Shares to be distributed under an Award until becoming the record holder of such Shares. Notwithstanding any other provision of the Plan, unless the Administrator otherwise determines or Applicable Laws require, the Company will not be required to deliver to any Participant certificates evidencing Shares issued in connection with any Award and instead such Shares may be recorded in the books of the Company (or, as applicable, its transfer agent or stock plan administrator). The Company may place legends on stock certificates issued under the Plan that the Administrator deems necessary or appropriate to comply with Applicable Laws.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;10.3 <u>Effective Date and Term of Plan</u>. Unless earlier terminated by the Board, the Plan will become effective on the day prior to the Public Trading Date (the "Effective Date") and will remain in effect until the tenth anniversary of the earlier of (a) the date the Board adopted the Plan or (b) the date the Company's stockholders approved the Plan, but Awards previously granted may extend beyond that date in accordance with the Plan. Notwithstanding anything to the contrary in the Plan, an Incentive Stock Option may not be granted under the Plan after 10 years from the earlier of (i) the date the Board adopted the Plan or (ii) the date the Company's stockholders approved the Plan, but Awards previously granted may extend beyond that date in accordance with the Plan. If the Plan is not approved by the Company's stockholders, the Plan will not become effective and no Awards will be granted under the Plan.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;10.4 <u>Amendment and Termination of Plan</u>. The Board may amend, suspend or terminate the Plan at any time; provided that no amendment, other than an increase to the Overall Share Limit, may materially and adversely affect any Award outstanding at the time of such amendment without the affected Participant's consent. No Awards may be granted under the Plan during any suspension period or after the Plan's termination. Awards outstanding at the time of any Plan suspension or termination will continue to be governed by the Plan and the Award Agreement, as in effect before such suspension or termination. The Board will obtain stockholder approval of any Plan amendment to the extent necessary to comply with Applicable Laws.

------

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;10.5 <u>Provisions for Foreign Participants</u>. The Administrator may modify Awards granted to Participants who are foreign nationals or employed outside the United States or establish subplans or procedures under the Plan to address differences in laws, rules, regulations or customs of such foreign jurisdictions with respect to tax, securities, currency, employee benefit or other matters; <u>provided</u>, <u>however</u>, that no such subplans and/or modifications shall increase the Overall Share Limit or the Director Limit.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;10.6 <u>Section</u> <u>409A</u>.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a) <u>General</u>. The Company intends that all Awards be structured to comply with, or be exempt from, Section 409A, such that no adverse tax consequences, interest, or penalties under Section 409A apply. Notwithstanding anything in the Plan or any Award Agreement to the contrary, the Administrator may, without a Participant's consent, amend this Plan or Awards, adopt policies and procedures, or take any other actions (including amendments, policies, procedures and retroactive actions) as are necessary or appropriate to preserve the intended tax treatment of Awards, including any such actions intended to (i) exempt this Plan or any Award from Section 409A, or (ii) comply with Section 409A, including regulations, guidance, compliance programs and other interpretative authority that may be issued after an Award's grant date. The Company makes no representations or warranties as to an Award's tax treatment under Section 409A or otherwise. The Company will have no obligation under this Section 10.6 or otherwise to avoid the taxes, penalties or interest under Section 409A with respect to any Award and will have no liability to any Participant or any other person if any Award, compensation or other benefits under the Plan are determined to constitute noncompliant "nonqualified deferred compensation" subject to taxes, penalties or interest under Section 409A.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b) <u>Separation from Service</u>. If an Award constitutes "nonqualified deferred compensation" under Section 409A, any payment or settlement of such Award upon a termination of a Participant's Service Provider relationship will, to the extent necessary to avoid taxes under Section 409A, be made only upon the Participant's "separation from service" (within the meaning of Section 409A), whether such "separation from service" occurs upon or after the termination of the Participant's Service Provider relationship. For purposes of this Plan or any Award Agreement relating to any such payments or benefits, references to a "termination," "termination of employment" or like terms means a "separation from service."

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c) <u>Payments to Specified Employees</u>. Notwithstanding any contrary provision in the Plan or any Award Agreement, any payment(s) of "nonqualified deferred compensation" required to be made under an Award to a "specified employee" (as defined under Section 409A and as the Administrator determines) due to his or her "separation from service" will, to the extent necessary to avoid taxes under Section 409A(a)(2)(B)(i) of the Code, be delayed for the six-month period immediately following such "separation from service" (or, if earlier, until the specified employee's death) and will instead be paid (as set forth in the Award Agreement) on the day immediately following such six-month period or as soon as administratively practicable thereafter (without interest). Any payments of "nonqualified deferred compensation" under such Award payable more than six months following the Participant's "separation from service" will be paid at the time or times the payments are otherwise scheduled to be made.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;10.7 <u>Limitations on Liability</u>. Notwithstanding any other provisions of the Plan, no individual acting as a director, officer, other employee or agent of the Company or any Subsidiary will be liable to any Participant, former Participant, spouse, beneficiary, or any other person for any claim, loss, liability, or expense incurred in connection with the Plan or any Award, and such individual will not be personally liable with respect to the Plan because of any contract or other instrument executed in his or her capacity

------

as an Administrator, director, officer, other employee or agent of the Company or any Subsidiary. To the extent permitted by Applicable Laws, the Company will indemnify and hold harmless each director, officer, other employee and agent of the Company or any Subsidiary that has been or will be granted or delegated any duty or power relating to the Plan's administration or interpretation, against any cost or expense (including attorneys' fees) or liability (including any sum paid in settlement of a claim with the Administrator's approval) arising from any act or omission concerning this Plan unless arising from such person's own fraud or bad faith.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;10.8 <u>Lock-Up Period</u>. The Company may, at the request of any underwriter representative or otherwise, in connection with registering the offering of any Company securities under the Securities Act, prohibit Participants from, directly or indirectly, selling or otherwise transferring any Shares or other Company securities during a period of up to 180 days following the effective date of a Company registration statement filed under the Securities Act, or such longer period as determined by the underwriter.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;10.9 <u>Data Privacy</u>. As a condition for receiving any Award, each Participant explicitly and unambiguously consents to the collection, use and transfer, in electronic or other form, of personal data as described in this section by and among the Company and any Subsidiary and any of their respective affiliates exclusively for implementing, administering and managing the Participant's participation in the Plan. Country-specific regulations as set out in the Exhibit to the Plan may provide for further or deviating requirements with regard to consent and its withdrawal. The Company and the Subsidiaries and their respective affiliates may hold certain personal information about a Participant, including the Participant's name, address and telephone number; birthdate; social security, insurance number or other identification number; salary; nationality; job title(s); any Shares held in the Company or any Subsidiaries or any of their respective affiliates; and Award details, to implement, manage and administer the Plan and Awards (the "***Data***"). The Company and the Subsidiaries and their respective affiliates may transfer the Data amongst themselves as necessary to implement, administer and manage a Participant's participation in the Plan, and the Company and the Subsidiaries and their respective affiliates may transfer the Data to third parties assisting the Company with Plan implementation, administration and management. These recipients may be located in the Participant's country, or elsewhere, and the Participant's country may have different data privacy laws and protections than the recipients' country. If not otherwise regulated by country-specific provisions as set out in the Exhibit to this Plan, through accepting an Award, each Participant authorizes such recipients to receive, possess, use, retain and transfer the Data, in electronic or other form, to implement, administer and manage the Participant's participation in the Plan, including any required Data transfer to a broker or other third party with whom the Company, any Subsidiary or the Participant may elect to deposit any Shares. The Data related to a Participant will be held only as long as necessary to implement, administer, and manage the Participant's participation in the Plan. A Participant may, at any time, view the Data that the Company and any Subsidiary hold regarding such Participant, request additional information about the storage and processing of the Data regarding such Participant, recommend any necessary corrections to the Data regarding the Participant or refuse or withdraw the consents in this Section 10.9 in writing, without cost, by contacting the local human resources representative. If the Participant refuses or withdraws the consents in this Section 10.9, the Company may cancel Participant's ability to participate in the Plan and, in the Administrator's discretion, the Participant may forfeit any outstanding Awards. For more information on the consequences of refusing or withdrawing consent, Participants may contact their local human resources representative.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;10.10 <u>Severability</u>. If any portion of the Plan or any action taken under it is held illegal or invalid for any reason, the illegality or invalidity will not affect the remaining parts of the Plan, and the Plan will be construed and enforced as if the illegal or invalid provisions had been excluded, and the illegal or invalid action will be null and void.

------

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;10.11 <u>Governing Documents</u>. If any contradiction occurs between the Plan and any Award Agreement or other written agreement between a Participant and the Company (or any Subsidiary) that the Administrator has approved, the Plan will govern, unless it is expressly specified in such Award Agreement or other written document that a specific provision of the Plan will not apply.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;10.12 <u>Governing Law</u>. The Plan and all Awards will be governed by and interpreted in accordance with the laws of the State of Delaware, disregarding any state's choice-of-law principles requiring the application of a jurisdiction's laws other than the State of Delaware.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;10.13 <u>Claw-back Provisions</u>. All Awards (including, without limitation, any proceeds, gains or other economic benefit actually or constructively received by Participant upon any receipt or exercise of any Award or upon the receipt or resale of any Shares underlying the Award) shall be subject to the provisions of any claw-back policy implemented by the Company, including, without limitation, any claw-back policy adopted to comply with Applicable Laws (including the Dodd-Frank Wall Street Reform and Consumer Protection Act and any rules or regulations promulgated thereunder) as and to the extent set forth in such claw-back policy or the Award Agreement.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;10.14 <u>Titles and Headings</u>. The titles and headings in the Plan are for convenience of reference only and, if any conflict, the Plan's text, rather than such titles or headings, will control.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;10.15 <u>Conformity to Laws</u>. Notwithstanding anything herein to the contrary, the Plan, the granting and vesting of Awards under the Plan, and the issuance and delivery of Shares and the payment of money under the Plan or under Awards granted or awarded hereunder are intended to conform, and will be subject to compliance, with Applicable Laws and approvals by any listing, regulatory or governmental authority as may, in the opinion of counsel for the Company, be necessary or advisable in connection therewith, and to the extent Applicable Laws permit, the Plan and all Award Agreements will be deemed amended as necessary accordingly and the Administrator may take any action, before or after an Award is made, that it deems advisable to comply with any Applicable Laws or obtain any approval. Any securities delivered under this Plan shall be subject to such restrictions, and the person acquiring such securities shall, if requested by the Company, provide such assurances and representations to the Company as the Company may deem necessary or desirable to assure compliance with all applicable legal requirements.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;10.16 <u>Relationship to Other Benefits</u>. No payment under the Plan will be taken into account in determining any benefits under any pension, retirement, savings, profit sharing, group insurance, welfare or other benefit plan of the Company or any Subsidiary except as expressly provided in writing in such other plan or an agreement thereunder.

**ARTICLE XI.** 

**DEFINITIONS** 

As used in the Plan, the following words and phrases will have the following meanings:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;11.1 "***Administrator***" means the Board or a Committee to the extent that the Board's powers or authority under the Plan have been delegated to such Committee. Notwithstanding the foregoing, the full Board, acting by a majority of its members in office, shall conduct the general administration of the Plan with respect to Awards granted to Directors and, with respect to such Awards, the term "Administrator" as used in the Plan shall be deemed to refer to the Board.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;11.2 "***Applicable Laws***" means the requirements relating to the administration of equity incentive plans under U.S. federal and state securities, tax and other applicable laws, rules and regulations, the applicable rules of any stock exchange or quotation system on which the Common Stock is listed, quoted or traded and the applicable laws, regulations, rules and government orders of any foreign country or other jurisdiction where Awards are granted.

------

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;11.3 "***Award***" means, individually or collectively, a grant under the Plan of Options, Stock Appreciation Rights, Restricted Stock, Restricted Stock Units, Dividend Equivalents, or Other Stock or Cash Based Awards.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;11.4 "***Award Agreement***" means a written agreement evidencing an Award, which may be electronic, that contains such terms and conditions as the Administrator determines, consistent with and subject to the terms and conditions of the Plan.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;11.5 "***Board***" means the Board of Directors of the Company.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;11.6 "***Cause***" with respect to a Participant, shall mean "Cause" (or any term of similar effect) as defined in such Participant's employment or service agreement with the Company or an affiliate thereof if such an agreement exists and contains a definition of Cause (or term of similar effect), or, if no such agreement exists or such agreement does not contain a definition of Cause (or term of similar effect), then "Cause" shall mean one or more of the following: (a) willful violation of any Company policies and/or repeated and gross failure to perform Participant's material duties, after written notice of such violation or nonperformance has been given to Participant with 30 days to cure such violation or nonperformance; (b) use of illegal drugs by Participant; (c) commission of a felony, a crime of moral turpitude or a misdemeanor involving fraud or dishonesty; (d) the perpetration of any act of fraud or material dishonesty against or affecting the Company, any of its affiliates, or any customer, agent or employee thereof; (e) material breach of fiduciary duty or material breach of this Agreement, after written notice of such breach has been given to Participant and, to the extent such breach is curable, after providing 30 days to cure such breach; (f) repeated insolent or abusive conduct in the workplace, including but not limited to, harassment of others of a racial or sexual nature after notice of such behavior; (g) taking any action which is intended to harm or disparage the Company or its affiliates, or their reputations, or which would reasonably be expected to lead to unwanted or unfavorable publicity to the Company or its affiliates; or (h) engaging in any act of material self-dealing without prior notice to and consent by the Board.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;11.7 "***Change in Control***" means and includes each of the following:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a) A transaction or series of transactions (other than an offering of Common Stock to the general public through a registration statement filed with the Securities and Exchange Commission or a transaction or series of transactions that meets the requirements of clauses (i) and (ii) of subsection (c) below) whereby any "person" or related "group" of "persons" (as such terms are used in Sections 13(d) and 14(d)(2) of the Exchange Act) (other than the Company, any of the Subsidiaries, an employee benefit plan maintained by the Company or any of the Subsidiaries or a "person" that, prior to such transaction, directly or indirectly controls, is controlled by, or is under common control with, the Company) directly or indirectly acquires beneficial ownership (within the meaning of Rule 13d-3 under the Exchange Act) of securities of the Company possessing more than 50% of the total combined voting power of the Company's securities outstanding immediately after such acquisition; or

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b) During any period of 24 consecutive months, individuals who, at the beginning of such period, constitute the Board together with any new Director(s) (other than a Director designated by a person who shall have entered into an agreement with the Company to effect a transaction described in subsections (a) or (c)) whose election by the Board or nomination for election by the Company's stockholders was approved by a vote of at least two-thirds of the Directors then still in office who either were Directors at the beginning of the 24-month period or whose election or nomination for election was previously so approved, cease for any reason to constitute a majority thereof; or

------

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c) The consummation by the Company (whether directly involving the Company or indirectly involving the Company through one or more intermediaries) of (x) a merger, consolidation, reorganization, or business combination or (y) a sale or other disposition of all or substantially all of the Company's assets in any single transaction or series of related transactions or (z) the acquisition of assets or stock of another entity, in each case other than a transaction:

&nbsp;&nbsp;&nbsp;&nbsp;&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) which results in the Company's voting securities outstanding immediately before the transaction continuing to represent (either by remaining outstanding or by being converted into voting securities of the Company or the person that, as a result of the transaction, controls, directly or indirectly, the Company or owns, directly or indirectly, all or substantially all of the Company's assets or otherwise succeeds to the business of the Company (the Company or such person, the "***Successor Entity***")) directly or indirectly, at least a majority of the combined voting power of the Successor Entity's outstanding voting securities immediately after the transaction, 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;(ii) after which no person or group beneficially owns voting securities representing 50% or more of the combined voting power of the Successor Entity; <u>provided</u>, <u>however</u>, that no person or group shall be treated for purposes of this clause (ii) as beneficially owning 50% or more of the combined voting power of the Successor Entity solely as a result of the voting power held in the Company prior to the consummation of the transaction.

Notwithstanding the foregoing, if a Change in Control constitutes a payment event with respect to any Award (or portion of any Award) that provides for the deferral of compensation that is subject to Section 409A, to the extent required to avoid the imposition of additional taxes under Section 409A, the transaction or event described in subsection (a), (b) or (c) with respect to such Award (or portion thereof) shall only constitute a Change in Control for purposes of the payment timing of such Award if such transaction also constitutes a "change in control event," as defined in Treasury Regulation Section 1.409A-3(i)(5).

The Administrator shall have full and final authority, which shall be exercised in its discretion, to determine conclusively whether a Change in Control has occurred pursuant to the above definition, the date of the occurrence of such Change in Control and any incidental matters relating thereto; provided that any exercise of authority in conjunction with a determination of whether a Change in Control is a "change in control event" as defined in Treasury Regulation Section 1.409A-3(i)(5) shall be consistent with such regulation.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;11.8 "***Class A Common Stock***" means the Class A common stock of the Company, par value of $0.0001 per share.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;11.9 "***Class B Common Stock***" means the Class B common stock of the Company, par value of $0.0001 per share.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;11.10 "***Code***" means the Internal Revenue Code of 1986, as amended, and the regulations issued thereunder.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;11.11 "***Committee***" means one or more committees or subcommittees of the Board, which may include one or more directors or executive officers of the Company, to the extent Applicable Laws permit. To the extent required to comply with the provisions of Rule 16b-3, it is intended that each member of the Committee will be, at the time the Committee takes any action with respect to an Award that is subject to Rule 16b-3, a "non-employee director" within the meaning of Rule 16b-3; however, a Committee member's failure to qualify as a "non-employee director" within the meaning of Rule 16b-3 will not invalidate any Award granted by the Committee that is otherwise validly granted under the Plan.

------

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;11.12 "***Common Stock***" means the Class A Common Stock or the Class B Common Stock.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;11.13 "***Company***" means Steinway Musical Instruments Holdings, Inc., a Delaware corporation, or any successor.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;11.14 "***Consultant***" means any person, including any adviser, engaged by the Company or any Subsidiary to render services to such entity if the consultant or adviser: (a) renders bona fide services to the Company or the Subsidiary; (b) renders services not in connection with the offer or sale of securities in a capital-raising transaction and does not directly or indirectly promote or maintain a market for the Company's securities; and (c) is a natural person.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;11.15 "***Designated Beneficiary***" means the beneficiary or beneficiaries the Participant designates, in a manner the Administrator determines, to receive amounts due or exercise the Participant's rights if the Participant dies or becomes incapacitated. Without a Participant's effective designation, "Designated Beneficiary" will mean the Participant's estate determined in accordance with Applicable Laws.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;11.16 "***Director***" means a Board member.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;11.17 "***Disability***" means that the Participant is unable to engage in any substantial gainful activity by reason of any medically determinable physical or mental impairment that can be expected to result in death or can be expected to last for a continuous period of not less than 12 months.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;11.18 "***Dividend Equivalents***" means a right granted to a Participant under the Plan to receive the equivalent value (in cash or Shares) of dividends paid on Shares.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;11.19 "***Employee***" means any employee of the Company or its Subsidiaries.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;11.20 "***Equity Restructuring***" means, as determined by the Administrator, a non-reciprocal transaction between the Company and its stockholders, such as a stock dividend, stock split, spin-off or recapitalization through a large, nonrecurring cash dividend, or other large, nonrecurring cash dividend, that affects the Shares (or other securities of the Company) or the share price of Common Stock (or other securities of the Company) and causes a change in the per share value of the Common Stock underlying outstanding Awards.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;11.21 "***Exchange Act***" means the Securities Exchange Act of 1934, as amended.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;11.22 "***Fair Market Value***" means, as of any date, the value of a share of Common Stock determined as follows: (a) if the Common Stock is listed on any established stock exchange, its Fair Market Value will be the closing sales price for such Common Stock as quoted on such exchange for such date, or if no sale occurred on such date, the last day preceding such date during which a sale occurred, as reported in *The Wall Street Journal* or another source the Administrator deems reliable; (b) if the Common Stock is not traded on a stock exchange but is quoted on a national market or other quotation system, the closing sales price on such date, or if no sales occurred on such date, then on the last date preceding such date during which a sale occurred, as reported in *The Wall Street Journal* or another source the Administrator deems reliable; or (c) without an established market for the Common Stock, the Administrator will determine the Fair Market Value in its discretion.

Notwithstanding the foregoing, with respect to any Award granted on the pricing date of the Company's initial public offering, the Fair Market Value shall mean the initial public offering price of a Share as set forth in the Company's final prospectus relating to its initial public offering filed with the Securities and Exchange Commission.

------

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;11.23 "***Greater Than 10% Stockholder***" means an individual then owning (within the meaning of Section 424(d) of the Code) more than 10% of the total combined voting power of all classes of stock of the Company or its parent or subsidiary corporation, as defined in Section 424(e) and (f) of the Code, respectively.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;11.24 "***Incentive Stock Option***" means an Option intended to qualify as an "incentive stock option" as defined in Section 422 of the Code.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;11.25 "***Non-Qualified Stock Option***" means an Option, or portion thereof, not intended or not qualifying as an Incentive Stock Option.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;11.26 "***Option***" means an option to purchase Shares, which will either be an Incentive Stock Option or a Non-Qualified Stock Option.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;11.27 "***Other Stock or Cash Based Awards***" means cash awards, awards of Shares, and other awards valued wholly or partially by referring to, or are otherwise based on, Shares or other property awarded to a Participant under Article VII.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;11.28 "***Overall Share Limit***" means the sum of (a) 6,000,000 Shares; and (b) an annual increase on the first day of each calendar year beginning January 1, 2023 and ending on and including January 1, 2032, equal to the lesser of (i) five percent (5%) of the aggregate number of shares of Common Stock outstanding on the final day of the immediately preceding calendar year and (ii) such smaller number of Shares as is determined by the Board.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;11.29 "***Participant***" means a Service Provider who has been granted an Award.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;11.30 "***Performance Criteria***" mean the criteria (and adjustments) that the Administrator may select for an Award to establish performance goals for a performance period, which may include (but are not limited to) the following: net earnings or losses (either before or after one or more of interest, taxes, depreciation, amortization, and non-cash equity-based compensation expense); gross or net sales or revenue or sales or revenue growth; net income (either before or after taxes) or adjusted net income; profits (including but not limited to gross profits, net profits, profit growth, net operation profit or economic profit), profit return ratios or operating margin; budget or operating earnings (either before or after taxes or before or after allocation of corporate overhead and bonus); cash flow (including operating cash flow and free cash flow or cash flow return on capital); return on assets; return on capital or invested capital; cost of capital; return on stockholders' equity; total stockholder return; return on sales; costs, reductions in costs and cost control measures; expenses; working capital; earnings or loss per share; adjusted earnings or loss per share; price per share or dividends per share (or appreciation in or maintenance of such price or dividends); regulatory achievements or compliance; implementation, completion or attainment of objectives relating to research, development, regulatory, commercial, or strategic milestones or developments; market share; economic value or economic value added models; division, group or corporate financial goals; customer satisfaction/growth; customer service; employee satisfaction; recruitment and maintenance of personnel; human resources management; environmental, social and governance measures; supervision of litigation and other legal matters; strategic partnerships and transactions; financial ratios (including those measuring liquidity, activity, profitability or leverage); debt levels or reductions; sales-related goals; financing and other capital raising transactions; cash on hand; acquisition activity; investment sourcing activity; and marketing initiatives, any of which may be measured in absolute terms or as compared to any incremental increase or decrease. Such performance goals also may be based solely by reference to the Company's performance or the performance of a Subsidiary, division, business segment or business unit of the Company or a Subsidiary, or based upon performance relative to performance of other companies or upon comparisons of any of the indicators of performance relative to performance of other companies.

------

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;11.31 "***Plan***" means this 2023 Incentive Award Plan.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;11.32 "***Public Trading Date***" means the first date upon which the Common Stock is listed (or approved for listing) upon notice of issuance on any securities exchange or designated (or approved for designation) upon notice of issuance as a national market security on an interdealer quotation system.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;11.33 "***Restricted Stock***" means Shares awarded to a Participant under Article VI subject to certain vesting conditions and other restrictions.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;11.34 "***Restricted Stock Unit***" means an unfunded, unsecured right to receive, on the applicable settlement date, one Share or an amount in cash or other consideration determined by the Administrator to be of equal value as of such settlement date awarded to a Participant under Article VI subject to certain vesting conditions and other restrictions.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;11.35 "***Rule 16b-3***" means Rule 16b-3 promulgated under the Exchange Act.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;11.36 "***Section 409A***" means Section 409A of the Code and all regulations, guidance, compliance programs and other interpretative authority thereunder.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;11.37 "***Securities Act***" means the Securities Act of 1933, as amended.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;11.38 "***Service Provider***" means an Employee, Consultant or Director.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;11.39 "***Shares***" means shares of Class A Common Stock.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;11.40 "***Stock Appreciation Right***" means a stock appreciation right granted under Article V.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;11.41 "***Subsidiary***" means any entity (other than the Company), whether domestic or foreign, in an unbroken chain of entities beginning with the Company if each of the entities other than the last entity in the unbroken chain beneficially owns, at the time of the determination, securities or interests representing at least 50% of the total combined voting power of all classes of securities or interests in one of the other entities in such chain.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;11.42 "***Substitute Awards***" mean Awards granted or Shares issued by the Company in assumption of, or in substitution or exchange for, awards previously granted, or the right or obligation to make future awards, in each case by a company acquired by the Company or any Subsidiary or with which the Company or any Subsidiary combines.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;11.43 "***Termination of Service***" means the date the Participant ceases to be a Service Provider.

**\* \* \* \* \*** 

------

<u>Exhibit: Special Local Law Provisions</u> 

This <u>Exhibit</u> includes special terms and conditions applicable to Awards issued in the country or countries below. These terms and conditions are in addition to those set forth in the Plan and to the extent there are any inconsistencies between these terms and conditions and those set forth in the Plan, these terms and conditions shall prevail. Any capitalized term used in this <u>Exhibit</u> without definition shall have the meaning ascribed to such term in the Plan.

The information is based on the exchange control, securities and other laws in effect in the respective countries as of March 2023. Such laws are often complex and change frequently. As a result, the Company strongly recommends that the Participant does not rely on the information herein as the only source of information relating to the consequences of the receipt of Awards because such information may be out of date at the time of vesting or payment of Awards.

In addition, the information is general in nature and may not apply to each particular situation, and the Company is not in a position to assure the Participant of any particular result. Accordingly, the Participant is advised to seek appropriate professional advice as to how the relevant laws in the respective country may apply. Finally, if the Participant is a citizen or resident of a country other than the one in which the Participant currently works, the information contained herein may not be applicable.

**Germany** 

***<u>Terms and Conditions</u>***

The Participant is aware of and consents to the fact that the Plan is not part of the employment contract. In particular, neither any Award nor any other financial benefit conferred upon the Participant in connection with the Plan are part of the Participant's entitlement to remuneration or benefits in terms of his/her employment with the Employer (as defined below).

***<u>Notifications</u>***

Exchange Control Information. Cross-border payments in excess of €12,500 must be reported monthly to the German Federal Bank. If the Participant receives cross-border payments made upon the Plan in excess of €12,500, the Participant must report by the fifth day of the month following the month in which the payment was received. The report must be filed electronically. The form of report can be accessed via the German Federal Bank's website at www.bundesbank.de and is available in both German and English.

***<u>German Tax Obligations</u>***

All Tax Liabilities, duties or other expenses, incurring from or in connection with the execution of the Plan shall be borne by the respective Participant. "**Tax Liabilities**" shall be any liabilities for income tax, wage tax, solidarity surcharge, VAT or social security contributions arising as a result of the Plan.

The Participant shall be obliged to notify the Company or any of its Subsidiaries being the Participant's employing entity (including their branches), if different, (the "**Employer**") of its participation in the Plan and any exercise, grant or payment of an Award under the Plan. The Employer shall have the authority and the right to deduct or withhold, or require the Participant to remit to the Employer, an amount sufficient to satisfy all Tax Liabilities required by law to be withheld and/or paid including, without limitation, the authority to deduct such amounts from other compensation payable to the Participant by the Employer.

------

The Participant understands that they may suffer adverse tax consequences as a result of their participation in the Plan. Neither the Company nor the Employer or any Subsidiary makes any representation or undertaking regarding the treatment of any tax withholding in connection with the entering into the Plan or any grant or payment under the Plan. The Company, the Employer and the Subsidiaries do not commit and are under no obligation to structure the Plan to reduce or eliminate Participant's tax burden. The Participant represents that they have had the opportunity to consult with any tax consultants they deem advisable in connection with the Plan and that they are not relying on the Company, the Employer or any Subsidiary for any tax advice. The Participant is relying solely on such advisors and not on any statements or representations of the Company, the Employer or any of the Subsidiaries or their agents.

Payments pursuant to Section 9.5 may only be made directly to the company obliged to pay the Tax Liabilities and deductions may only be made by the company obliged to pay the Tax Liabilities. The option under Section 9.5 to satisfy the tax obligations of the Participants by delivering Shares is not available for German Participants.

***<u>Data Privacy</u>***

In addition to and in amendment of Section 10.9, Participants located in Germany may only participate in the Plan if they have signed the Consent Form attached to this Exhibit as **Appendix 1**. Participant may revoke their consent at any time. In this case, however, they may longer participate in the Plan with effect for the future.

## Exhibit 10.3

**Exhibit 10.3** 

**STEINWAY MUSICAL INSTRUMENTS HOLDINGS, INC.** 

**2023 EMPLOYEE STOCK PURCHASE PLAN** 

**ARTICLE I.** 

**PURPOSE** 

The purpose of this Plan is to assist Eligible Employees of the Company and its Designated Subsidiaries in acquiring a stock ownership interest in the Company.

The Plan consists of two components: (i) the Section 423 Component and (ii) the Non-Section 423 Component. The Section 423 Component is intended to qualify as an "employee stock purchase plan" under Section 423 of the Code and shall be administered, interpreted and construed in a manner consistent with the requirements of Section 423 of the Code. The Non-Section 423 Component authorizes the grant of rights which need not qualify as rights granted pursuant to an "employee stock purchase plan" under Section 423 of the Code. Rights granted under the Non-Section 423 Component shall be granted pursuant to separate Offerings containing such sub-plans, appendices, rules or procedures as may be adopted by the Administrator and designed to achieve tax, securities laws or other objectives for Eligible Employees and Designated Subsidiaries but shall not be intended to qualify as an "employee stock purchase plan" under Section 423 of the Code. Except as otherwise determined by the Administrator or provided herein, the Non-Section 423 Component will operate and be administered in the same manner as the Section 423 Component. Offerings intended to be made under the Non-Section 423 Component will be designated as such by the Administrator at or prior to the time of such Offering.

For purposes of this Plan, the Administrator may designate separate Offerings under the Plan in which Eligible Employees will participate. The terms of these Offerings need not be identical, even if the dates of the applicable Offering Period(s) in each such Offering are identical, provided that the terms of participation are the same within each separate Offering under the Section 423 Component (as determined under Section 423 of the Code). Solely by way of example and without limiting the foregoing, the Company could, but shall not be required to, provide for simultaneous Offerings under the Section 423 Component and the Non-Section 423 Component of the Plan.

**ARTICLE II.** 

**DEFINITIONS AND CONSTRUCTION** 

Wherever the following terms are used in the Plan they shall have the meanings specified below, unless the context clearly indicates otherwise.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;2.1 "***Administrator***" means the entity that conducts the general administration of the Plan as provided in Article XI. The term "Administrator" shall refer to the Committee unless the Board has assumed the authority for administration of the Plan as provided in Article XI.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;2.2 *"****Agent***" means the brokerage firm, bank or other financial institution, entity or person(s), if any, engaged, retained, appointed or authorized to act as the agent of the Company or an Employee with regard to the Plan.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;2.3 *"****Applicable Law***" means the requirements relating to the administration of equity incentive plans under U.S. federal and state securities, tax and other applicable laws, rules and regulations, the applicable rules of any stock exchange or quotation system on which Shares are listed or quoted and the applicable laws and rules of any foreign country or other jurisdiction where rights under this Plan are granted.

------

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;2.4 "***Board***" means the Board of Directors of the Company.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;2.5 "***Class A Common Stock***" means the Class A common stock of the Company, par value of $0.0001 per share.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;2.6 "***Class B Common Stock***" means the Class B common stock of the Company, par value of $0.0001 per share.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;2.7 "***Code***" means the U.S. Internal Revenue Code of 1986, as amended, and the regulations issued thereunder.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;2.8 "***Common Stock***" means Class A Common Stock and Class B Common Stock of the Company and such other securities of the Company that may be substituted therefore.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;2.9 "***Company***" means Steinway Musical Instruments Holdings, Inc., a Delaware corporation, or any successor.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;2.10 "***Compensation***" of an Eligible Employee means, unless otherwise determined by the Administrator, the gross base compensation received by such Eligible Employee as compensation for services to the Company or any Designated Subsidiary, including commissions, but excluding vacation pay, holiday pay, jury duty pay, funeral leave pay, military leave pay, incentive compensation, one-time bonuses (e.g., retention or sign on bonuses), education or tuition reimbursements, travel expenses, business and moving reimbursements, income received in connection with any stock options, stock appreciation rights, restricted stock, restricted stock units or other compensatory equity awards, fringe benefits, other special payments and all contributions made by the Company or any Designated Subsidiary for the Employee's benefit under any employee benefit plan now or hereafter established.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;2.11 "***Designated Subsidiary***" means any Subsidiary designated by the Administrator in accordance with Section 11.2(b), such designation to specify whether such participation is in the Section 423 Component or Non-Section 423 Component. A Designated Subsidiary may participate in either the Section 423 Component or Non-Section 423 Component, but not both; provided that a Subsidiary that, for U.S. tax purposes, is disregarded from the Company or any Subsidiary that participates in the Section 423 Component shall automatically constitute a Designated Subsidiary that participates in the Section 423 Component.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;2.12 "***Effectiv***e ***Date***" means the day prior to the Public Trading Date.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;2.13 "***Eligible Employee***" means:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a) an Employee who does not, immediately after any rights under this Plan are granted, own (directly or through attribution) stock possessing 5% or more of the total combined voting power or value of all classes of Common Stock and other securities of the Company, a Parent or a Subsidiary (as determined under Section 423(b)(3) of the Code). For purposes of the foregoing, the rules of Section 424(d) of the Code with regard to the attribution of stock ownership shall apply in determining the stock ownership of an individual, and stock that an Employee may purchase under outstanding options shall be treated as stock owned by the Employee.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b) Notwithstanding the foregoing, the Administrator may provide in an Offering Document that an Employee shall not be eligible to participate in an Offering Period under the Section 423 Component if: (i) such Employee is a highly compensated employee within the meaning of Section 423(b)(4)(D) of the Code; (ii) such Employee has not met a service requirement designated by the

------

Administrator pursuant to Section 423(b)(4)(A) of the Code (which service requirement may not exceed two years); (iii) such Employee's customary employment is for twenty hours per week or less; (iv) such Employee's customary employment is for less than five months in any calendar year; and/or (v) such Employee is a citizen or resident of a foreign jurisdiction and the grant of a right to purchase Shares under the Plan to such Employee would be prohibited under the laws of such foreign jurisdiction or the grant of a right to purchase Shares under the Plan to such Employee in compliance with the laws of such foreign jurisdiction would cause the Plan to violate the requirements of Section 423 of the Code, as determined by the Administrator in its sole discretion; <u>provided</u>, <u>further</u>, that any exclusion in clauses (i), (ii), (iii), (iv) or (v) shall be applied in an identical manner under each Offering Period to all Employees, in accordance with Treasury Regulation Section 1.423-2(e).

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c) Further notwithstanding the foregoing, with respect to the Non-Section 423 Component, the first sentence in this definition shall apply in determining who is an "Eligible Employee," except (i) the Administrator may limit eligibility further within the Company or a Designated Subsidiary so as to only designate some Employees of the Company or a Designated Subsidiary as Eligible Employees, and (ii) to the extent the restrictions in the first sentence in this definition are not consistent with applicable local laws, the applicable local laws shall control.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;2.14 "***Employee***" means any individual who renders services to the Company or any Designated Subsidiary in the status of an employee, and, with respect to the Section 423 Component, a person who is an employee within the meaning of Section 3401(c) of the Code. For purposes of an individual's participation in, or other rights under the Plan, all determinations by the Company shall be final, binding and conclusive, notwithstanding that any court of law or governmental agency subsequently makes a contrary determination. For purposes of the Plan, the employment relationship shall be treated as continuing intact while the individual is on sick leave or other leave of absence approved by the Company or Designated Subsidiary and meeting the requirements of Treasury Regulation Section 1.421-1(h)(2). Where the period of leave exceeds three (3) months and the individual's right to reemployment is not guaranteed either by statute or by contract, the employment relationship shall be deemed to have terminated on the first day immediately following such three (3)-month period.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;2.15 "***Enrollment Date***" means the first Trading Day of each Offering Period.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;2.16 "***Fair Market Value***" means, as of any date, the value of Shares determined as follows: (i) if the Shares are listed on any established stock exchange, its Fair Market Value will be the closing sales price for such Shares as quoted on such exchange for such date, or if no sale occurred on such date, the last day preceding such date during which a sale occurred, as reported in The Wall Street Journal or another source the Administrator deems reliable; (ii) if the Shares are not traded on a stock exchange but are quoted on a national market or other quotation system, the closing sales price on such date, or if no sales occurred on such date, then on the last date preceding such date during which a sale occurred, as reported in The Wall Street Journal or another source the Administrator deems reliable; or (iii) without an established market for the Shares, the Administrator will determine the Fair Market Value in its discretion.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;2.17 "***Non-Section 423 Component***" means those Offerings under the Plan, together with the sub-plans, appendices, rules or procedures, if any, adopted by the Administrator as a part of this Plan, in each case, pursuant to which rights to purchase Shares during an Offering Period may be granted to Eligible Employees that need not satisfy the requirements for rights to purchase Shares granted pursuant to an "employee stock purchase plan" that are set forth under Section 423 of the Code.

------

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;2.18 "***Offering***" means an offer under the Plan of a right to purchase Shares that may be exercised during an Offering Period as further described in Article IV hereof. Unless otherwise specified by the Administrator, each Offering to the Eligible Employees of the Company or a Designated Subsidiary shall be deemed a separate Offering, even if the dates and other terms of the applicable Offering Periods of each such Offering are identical, and the provisions of the Plan will separately apply to each Offering. To the extent permitted by Treas. Reg. § 1.423-2(a)(1), the terms of each separate Offering under the Section 423 Component need not be identical, provided that the terms of the Section 423 Component and an Offering thereunder together satisfy Treas. Reg. § 1.423-2(a)(2) and (a)(3).

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;2.19 "***Offering Document***" has the meaning given to such term in Section 4.1.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;2.20 "***Offering Period***" has the meaning given to such term in Section 4.1.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;2.21 "***Parent***" means any corporation, other than the Company, in an unbroken chain of corporations ending with the Company if, at the time of the determination, each of the corporations other than the Company owns stock possessing 50% or more of the total combined voting power of all classes of stock in one of the other corporations in such chain.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;2.22 "***Participant***" means any Eligible Employee who has executed a subscription agreement and been granted rights to purchase Shares pursuant to the Plan.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;2.23 "***Payday***" means the regular and recurring established day for payment of Compensation to an Employee of the Company or any Designated Subsidiary.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;2.24 *"****Plan***" means this 2023 Employee Stock Purchase Plan, including both the Section 423 Component and Non-Section 423 Component and any other sub-plans or appendices hereto, as amended from time to time.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;2.25 "***Public Trading Date***" means the first date upon which the Common Stock is listed (or approved for listing) upon notice of issuance on any securities exchange or designated (or approved for designation) upon notice of issuance as a national market security on an interdealer quotation system.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;2.26 "***Purchase Date***" means the last Trading Day of each Purchase Period or such other date as determined by the Administrator and set forth in the Offering Document.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;2.27 "***Purchase Period***" means one or more periods within an Offering Period, as designated in the applicable Offering Document; <u>provided</u>, <u>however</u>, that, in the event no Purchase Period is designated by the Administrator in the applicable Offering Document, the Purchase Period for each Offering Period covered by such Offering Document shall be the same as the applicable Offering Period.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;2.28 "***Purchase Price***" means the purchase price designated by the Administrator in the applicable Offering Document (which purchase price, for purposes of the Section 423 Component, shall not be less than 85% of the Fair Market Value of a Share on the Enrollment Date or on the Purchase Date, whichever is lower); <u>provided</u>, <u>however</u>, that, in the event no purchase price is designated by the Administrator in the applicable Offering Document, the purchase price for the Offering Periods covered by such Offering Document shall be 85% of the Fair Market Value of a Share on the Enrollment Date or on the Purchase Date, whichever is lower; <u>provided</u>, <u>further</u>, that the Purchase Price may be adjusted by the Administrator pursuant to Article VIII and shall not be less than the par value of a Share.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;2.29 "***Section 423 Component***" means those Offerings under the Plan, together with the sub-plans, appendices, rules or procedures, if any, adopted by the Administrator as a part of this Plan, in each case, pursuant to which rights to purchase Shares during an Offering Period may be granted to Eligible Employees that are intended to satisfy the requirements for rights to purchase Shares granted pursuant to an "employee stock purchase plan" that are set forth under Section 423 of the Code.

------

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;2.30 "***Securities Act***" means the U.S. Securities Act of 1933, as amended.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;2.31 "***Share***" means a share of Class A Common Stock.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;2.32 "***Subsidiary***" means any corporation, other than the Company, in an unbroken chain of corporations beginning with the Company if, at the time of the determination, each of the corporations other than the last corporation in an unbroken chain owns stock possessing 50% or more of the total combined voting power of all classes of stock in one of the other corporations in such chain; <u>provided</u>, however, that a limited liability company or partnership may be treated as a Subsidiary to the extent either (a) such entity is treated as a disregarded entity under Treasury Regulation Section 301.7701-3(a) by reason of the Company or any other Subsidiary that is a corporation being the sole owner of such entity, or (b) such entity elects to be classified as a corporation under Treasury Regulation Section 301.7701-3(a) and such entity would otherwise qualify as a Subsidiary. In addition, with respect to the Non-Section 423 Component, Subsidiary shall include any corporate or non-corporate entity in which the Company has a direct or indirect equity interest or significant business relationship.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;2.33 "***Trading Day***" means a day on which national stock exchanges in the United States are open for trading.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;2.34 "***Treas. Reg.***" means U.S. Department of the Treasury regulations.

**ARTICLE III.** 

**SHARES SUBJECT TO THE PLAN** 

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;3.1 <u>Number of Shares</u>. Subject to Article VIII, the aggregate number of Shares that may be issued pursuant to rights granted under the Plan shall be 900,000 Shares. In addition to the foregoing, subject to Article VIII, on the first day of each calendar year beginning on January 1, 2023 and ending on and including January 1, 2032, the number of Shares available for issuance under the Plan shall be increased by that number of Shares equal to the lesser of (a) one percent (1.0%) of the aggregate number of shares of Common Stock of the Company outstanding on the final day of the immediately preceding calendar year and (b) such smaller number of Shares as determined by the Board. If any right granted under the Plan shall for any reason terminate without having been exercised, the Shares not purchased under such right shall again become available for issuance under the Plan. Notwithstanding anything in this Section 3.1 to the contrary, the number of Shares that may be issued or transferred pursuant to the rights granted under the Section 423 Component of the Plan shall not exceed an aggregate of 10,000,000 Shares, subject to Article VIII.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;3.2 <u>Shares Distributed</u>. Any Shares distributed pursuant to the Plan may consist, in whole or in part, of authorized and unissued Shares, treasury shares or Shares purchased on the open market.

**ARTICLE IV.** 

**OFFERING PERIODS; OFFERING DOCUMENTS; PURCHASE DATES** 

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;4.1 <u>Offering Periods</u>. The Administrator may from time to time grant or provide for the grant of rights to purchase Shares under the Plan to Eligible Employees during one or more periods (each, an "***Offering Period***") selected by the Administrator. The terms and conditions applicable to each Offering Period shall be set forth in an "***Offering Document***" adopted by the Administrator, which Offering Document shall be in such form and shall contain such terms and conditions as the Administrator shall deem appropriate and shall be incorporated by reference into and made part of the Plan and shall be attached hereto as part of the Plan. The Administrator shall establish in each Offering Document one or more Purchase Periods during such Offering Period during which rights granted under the Plan shall be exercised and purchases of Shares carried out during such Offering Period in accordance with such Offering Document and the Plan. The provisions of separate Offering Periods under the Plan need not be identical..

------

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;4.2 <u>Offering Documents</u>. Each Offering Document with respect to an Offering Period shall specify (through incorporation of the provisions of this Plan by reference or otherwise):

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a) the length of the Offering Period, which period shall not exceed twenty-seven months;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b) the length of the Purchase Period(s) within the Offering Period;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c) in connection with each Offering Period that contains only one Purchase Period the maximum number of Shares that may be purchased by any Eligible Employee during such Offering Period, which, in the absence of a contrary designation by the Administrator, shall be 5,000 Shares;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(d) in connection with each Offering Period that contains more than one Purchase Period, the maximum aggregate number of Shares which may be purchased by any Eligible Employee during each Purchase Period, which, in the absence of a contrary designation by the Administrator, shall be 5,000 Shares; and

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(e) such other provisions as the Administrator determines are appropriate, subject to the Plan.

**ARTICLE V.** 

**ELIGIBILITY AND PARTICIPATION** 

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;5.1 <u>Eligibility</u>. Any Eligible Employee who shall be employed by the Company or a Designated Subsidiary on a given Enrollment Date for an Offering Period shall be eligible to participate in the Plan during such Offering Period, subject to the requirements of this Article V and, for the Section 423 Component, the limitations imposed by Section 423(b) of the Code.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;5.2 <u>Enrollment in Plan</u>.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a) Except as otherwise set forth in an Offering Document or determined by the Administrator, an Eligible Employee may become a Participant in the Plan for an Offering Period by delivering a subscription agreement to the Company by such time prior to the Enrollment Date for such Offering Period (or such other date specified in the Offering Document) designated by the Administrator and in such form as the Company provides.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b) Each subscription agreement shall designate a whole percentage of such Eligible Employee's Compensation to be withheld by the Company or the Designated Subsidiary employing such Eligible Employee on each Payday during the Offering Period as payroll deductions under the Plan. The percentage of Compensation designated by an Eligible Employee may not be less than 1% and may not be more than the maximum percentage specified by the Administrator in the applicable Offering Document (which percentage shall be 40% in the absence of any such designation) as payroll deductions. The payroll deductions made for each Participant shall be credited to an account for such Participant under the Plan and shall be deposited with the general funds of the Company.

------

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c) A Participant may increase or decrease the percentage of Compensation designated in his or her subscription agreement, subject to the limits of this Section 5.2, or may suspend his or her payroll deductions, at any time during an Offering Period; <u>provided</u>, <u>however</u>, that the Administrator may limit the number of changes a Participant may make to his or her payroll deduction elections during each Offering Period in the applicable Offering Document (and in the absence of any specific designation by the Administrator, a Participant shall be allowed to decrease and/or suspend (but not increase) his or her payroll deduction elections one time during each Offering Period). Any such change or suspension of payroll deductions shall be effective with the first full payroll period following five business days after the Company's receipt of the new subscription agreement (or such shorter or longer period as may be specified by the Administrator in the applicable Offering Document). In the event a Participant suspends his or her payroll deductions, such Participant's cumulative payroll deductions prior to the suspension shall remain in his or her account and shall be applied to the purchase of Shares on the next occurring Purchase Date and shall not be paid to such Participant unless he or she withdraws from participation in the Plan pursuant to Article VII.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(d) Except as otherwise set forth in an Offering Document or determined by the Administrator, a Participant may participate in the Plan only by means of payroll deduction and may not make contributions by lump sum payment for any Offering Period.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;5.3 <u>Payroll Deductions</u>. Except as otherwise provided in the applicable Offering Document, payroll deductions for a Participant shall commence on the first Payday following the Enrollment Date and shall end on the last Payday in the Offering Period to which the Participant's authorization is applicable, unless sooner terminated by the Participant as provided in Article VII or suspended by the Participant or the Administrator as provided in Section 5.2 and Section 5.6, respectively. Notwithstanding any other provisions of the Plan to the contrary, in non-U.S. jurisdictions where participation in the Plan through payroll deductions is prohibited, the Administrator may provide that an Eligible Employee may elect to participate through contributions to the Participant's account under the Plan in a form acceptable to the Administrator in lieu of or in addition to payroll deductions; provided, however, that, for any Offering under the Section 423 Component, the Administrator shall take into consideration any limitations under Section 423 of the Code when applying an alternative method of contribution.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;5.4 <u>Effect of Enrollment</u>. A Participant's completion of a subscription agreement will enroll such Participant in the Plan for each subsequent Offering Period on the terms contained therein until the Participant either submits a new subscription agreement, withdraws from participation under the Plan as provided in Article VII or otherwise becomes ineligible to participate in the Plan.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;5.5 <u>Limitation on Purchase of</u> <u>Shares</u>. An Eligible Employee may be granted rights under the Section 423 Component only if such rights, together with any other rights granted to such Eligible Employee under "employee stock purchase plans" of the Company, any Parent or any Subsidiary, as specified by Section 423(b)(8) of the Code, do not permit such employee's rights to purchase stock of the Company or any Parent or Subsidiary to accrue at a rate that exceeds $25,000 of the fair market value of such stock (determined as of the first day of the Offering Period during which such rights are granted) for each calendar year in which such rights are outstanding at any time. This limitation shall be applied in accordance with Section 423(b)(8) of the Code.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;5.6 <u>Suspension of Payroll Deductions</u>. Notwithstanding the foregoing, to the extent necessary to comply with Section 423(b)(8) of the Code and Section 5.5 (with respect to the Section 423 Component) or the other limitations set forth in this Plan, a Participant's payroll deductions may be suspended by the Administrator at any time during an Offering Period. The balance of the amount credited to the account of each Participant that has not been applied to the purchase of Shares by reason of Section 423(b)(8) of the Code, Section 5.5 or the other limitations set forth in this Plan shall be paid to such Participant in one lump sum in cash as soon as reasonably practicable after the Purchase Date.

------

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;5.7 <u>Foreign Employees</u>. In order to facilitate participation in the Plan, the Administrator may provide for such special terms applicable to Participants who are citizens or residents of a foreign jurisdiction, or who are employed by a Designated Subsidiary outside of the United States, as the Administrator may consider necessary or appropriate to accommodate differences in local law, tax policy or custom. Except as permitted by Section 423 of the Code, with respect to the Section 423 Component, such special terms may not be more favorable than the terms of rights granted under the Section 423 Component to Eligible Employees who are residents of the United States. Such special terms may be set forth in an addendum to the Plan in the form of an appendix or sub-plan (which appendix or sub-plan may be designed to govern Offerings under the Section 423 Component or the Non-Section 423 Component, as determined by the Administrator). To the extent that the terms and conditions set forth in an appendix or sub-plan conflict with any provisions of the Plan, the provisions of the appendix or sub-plan shall govern. The adoption of any such appendix or sub-plan shall be pursuant to Section 11.2(g). Without limiting the foregoing, the Administrator is specifically authorized to adopt rules and procedures, with respect to Participants who are foreign nationals or employed in non-U.S. jurisdictions, regarding the exclusion of particular Subsidiaries from participation in the Plan, eligibility to participate, the definition of Compensation, handling of payroll deductions or other contributions by Participants, payment of interest, conversion of local currency, data privacy security, payroll tax, withholding procedures, establishment of bank or trust accounts to hold payroll deductions or contributions.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;5.8 <u>Leave of Absence</u>. During leaves of absence approved by the Company meeting the requirements of Treasury Regulation Section 1.421-1(h)(2) under the Code, a Participant may continue participation in the Plan by making cash payments to the Company on his or her normal Payday equal to the Participant's authorized payroll deduction.

**ARTICLE VI.** 

**GRANT AND EXERCISE OF RIGHTS** 

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;6.1 <u>Grant of Rights</u>. On the Enrollment Date of each Offering Period, each Eligible Employee participating in such Offering Period shall be granted a right to purchase the maximum number of Shares specified under Section 4.2, subject to the limits in Section 5.5, and shall have the right to buy, on each Purchase Date during such Offering Period (at the applicable Purchase Price), such number of whole Shares as is determined by dividing (a) such Participant's payroll deductions accumulated prior to such Purchase Date and retained in the Participant's account as of the Purchase Date, by (b) the applicable Purchase Price (rounded down to the nearest Share). The right shall expire on the earliest of: (x) the last Purchase Date of the Offering Period, (y) the last day of the Offering Period, and (z) the date on which the Participant withdraws in accordance with Section 7.1 or Section 7.3.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;6.2 <u>Exercise of Rights</u>. On each Purchase Date, each Participant's accumulated payroll deductions and any other additional payments specifically provided for in the applicable Offering Document will be applied to the purchase of whole Shares, up to the maximum number of Shares permitted pursuant to the terms of the Plan and the applicable Offering Document, at the Purchase Price. No fractional Shares shall be issued upon the exercise of rights granted under the Plan, unless the Offering Document specifically provides otherwise. Any cash in lieu of fractional Shares remaining after the purchase of whole Shares upon exercise of a purchase right will be credited to a Participant's account and carried forward and applied toward the purchase of whole Shares for the next following Offering Period. Shares issued pursuant to the Plan may be evidenced in such manner as the Administrator may determine and may be issued in certificated form or issued pursuant to book-entry procedures.

------

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;6.3 <u>Pro Rata Allocation of Shares</u>. If the Administrator determines that, on a given Purchase Date, the number of Shares with respect to which rights are to be exercised may exceed (a) the number of Shares that were available for issuance under the Plan on the Enrollment Date of the applicable Offering Period, or (b) the number of Shares available for issuance under the Plan on such Purchase Date, the Administrator may in its sole discretion provide that the Company shall make a pro rata allocation of the Shares available for purchase on such Enrollment Date or Purchase Date, as applicable, in as uniform a manner as shall be practicable and as it shall determine in its sole discretion to be equitable among all Participants for whom rights to purchase Shares are to be exercised pursuant to this Article VI on such Purchase Date, and shall either (i) continue all Offering Periods then in effect, or (ii) terminate any or all Offering Periods then in effect pursuant to Article IX. The Company may make pro rata allocation of the Shares available on the Enrollment Date of any applicable Offering Period pursuant to the preceding sentence, notwithstanding any authorization of additional Shares for issuance under the Plan by the Company's stockholders subsequent to such Enrollment Date. The balance of the amount credited to the account of each Participant that has not been applied to the purchase of Shares shall be paid to such Participant in one lump sum in cash as soon as reasonably practicable after the Purchase Date or such earlier date as determined by the Administrator.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;6.4 <u>Withholding</u>. At the time a Participant's rights under the Plan are exercised, in whole or in part, or at the time some or all of the Shares issued under the Plan is disposed of, the Participant must make adequate provision for the Company's federal, state, or other tax withholding obligations, if any, that arise upon the exercise of the right or the disposition of the Shares. At any time, the Company may, but shall not be obligated to, withhold from the Participant's compensation or Shares received pursuant to the Plan the amount necessary for the Company to meet applicable withholding obligations, including any withholding required to make available to the Company any tax deductions or benefits attributable to sale or early disposition of Shares by the Participant.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;6.5 <u>Conditions to Issuance of</u> 6.6 <u>Shares</u>. The Company shall not be required to issue or deliver any certificate or certificates for, or make any book entries evidencing, Shares purchased upon the exercise of rights under the Plan prior to fulfillment of all of the following conditions: (a) the admission of such Shares to listing on all stock exchanges, if any, on which the Shares are then listed; (b) the completion of any registration or other qualification of such Shares under any state or federal law or under the rulings or regulations of the Securities and Exchange Commission or any other governmental regulatory body, that the Administrator shall, in its absolute discretion, deem necessary or advisable; (c) the obtaining of any approval or other clearance from any state or federal governmental agency that the Administrator shall, in its absolute discretion, determine to be necessary or advisable; (d) the payment to the Company of all amounts that it is required to withhold under federal, state or local law upon exercise of the rights, if any; and (e) the lapse of such reasonable period of time following the exercise of the rights as the Administrator may from time to time establish for reasons of administrative convenience.

**ARTICLE VII.** 

**WITHDRAWAL; CESSATION OF ELIGIBILITY** 

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;7.1 <u>Withdrawal</u>. A Participant may withdraw all but not less than all of the payroll deductions credited to his or her account and not yet used to exercise his or her rights under the Plan at any time by giving written notice to the Company in a form acceptable to the Company no later than one week prior to the end of the Offering Period or, if earlier, the end of the Purchase Period (or such shorter or longer period as may be specified by the Administrator in the applicable Offering Document). All of the Participant's payroll deductions credited to his or her account during an Offering Period shall be paid to such Participant as soon as reasonably practicable after receipt of notice of withdrawal without any interest thereon (except as may be required by applicable local laws) and such Participant's rights for the Offering Period shall be automatically terminated, and no further payroll deductions for the purchase of Shares shall be made for such Offering Period. If a Participant withdraws from an Offering Period, payroll deductions shall not resume at the beginning of the next Offering Period unless the Participant timely delivers to the Company a new subscription agreement.

------

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;7.2 <u>Future Participation</u>. A Participant's withdrawal from an Offering Period shall not have any effect upon his or her eligibility to participate in any similar plan that may hereafter be adopted by the Company or a Designated Subsidiary or in subsequent Offering Periods that commence after the termination of the Offering Period from which the Participant withdraws.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;7.3 <u>Cessation of Eligibility</u>. Upon a Participant's ceasing to be an Eligible Employee for any reason, he or she shall be deemed to have elected to withdraw from the Plan pursuant to this Article VII and the payroll deductions credited to such Participant's account during the Offering Period shall be paid to such Participant or, in the case of his or her death, to the person or persons entitled thereto under Section 12.4, as soon as reasonably practicable without any interest thereon (except as may be required by applicable local laws), and such Participant's rights for the Offering Period shall be automatically terminated. If a Participant transfers employment from the Company or any Designated Subsidiary participating in the Section 423 Component to any Designated Subsidiary participating in the Non-Section 423 Component, such transfer shall not be treated as a termination of employment, but the Participant shall immediately cease to participate in the Section 423 Component; however, any contributions made for the Offering Period in which such transfer occurs shall be transferred to the Non-Section 423 Component, and such Participant shall immediately join the then-current Offering under the Non-Section 423 Component upon the same terms and conditions in effect for the Participant's participation in the Section 423 Component, except for such modifications otherwise applicable for Participants in such Offering. A Participant who transfers employment from any Designated Subsidiary participating in the Non-Section 423 Component to the Company or any Designated Subsidiary participating in the Section 423 Component shall not be treated as terminating the Participant's employment and shall remain a Participant in the Non-Section 423 Component until the earlier of (i) the end of the current Offering Period under the Non-Section 423 Component or (ii) the Enrollment Date of the first Offering Period in which the Participant is eligible to participate following such transfer. Notwithstanding the foregoing, the Administrator may establish different rules to govern transfers of employment between entities participating in the Section 423 Component and the Non-Section 423 Component, consistent with the applicable requirements of Section 423 of the Code.

**ARTICLE VIII.** 

**ADJUSTMENTS UPON CHANGES IN SHARES** 

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;8.1 <u>Changes in Capitalization</u>. Subject to Section 8.3, in the event that the Administrator determines that any dividend or other distribution (whether in the form of cash, Shares, other securities, or other property), change in control, reorganization, merger, amalgamation, consolidation, combination, repurchase, redemption, recapitalization, liquidation, dissolution, or sale, transfer, exchange or other disposition of all or substantially all of the assets of the Company, or sale or exchange of Shares or other securities of the Company, issuance of warrants or other rights to purchase Shares or other securities of the Company, or other similar corporate transaction or event, as determined by the Administrator, affects the Shares such that an adjustment is determined by the Administrator to be appropriate in order to prevent dilution or enlargement of the benefits or potential benefits intended by the Company to be made available under the Plan or with respect to any outstanding purchase rights under the Plan, the Administrator shall make equitable adjustments, if any, to reflect such change with respect to (a) the aggregate number and type of Shares (or other securities or property) that may be issued under the Plan (including, but not limited to, adjustments of the limitations in Section 3.1 and the limitations established in each Offering Document pursuant to Section 4.2 on the maximum number of Shares that may be purchased); (b) the class(es) and number of Shares and price per Share subject to outstanding rights; and (c) the Purchase Price with respect to any outstanding rights.

------

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;8.2 <u>Other Adjustments</u>. Subject to Section 8.3, in the event of any transaction or event described in Section 8.1 or any unusual or nonrecurring transactions or events affecting the Company, any affiliate of the Company, or the financial statements of the Company or any affiliate, or of changes in Applicable Law or accounting principles, the Administrator, in its discretion, and on such terms and conditions as it deems appropriate, is hereby authorized to take any one or more of the following actions whenever the Administrator determines that such action is appropriate in order to prevent the dilution or enlargement of the benefits or potential benefits intended to be made available under the Plan or with respect to any right under the Plan, to facilitate such transactions or events or to give effect to such changes in laws, regulations or principles:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a) To provide for either (i) termination of any outstanding right in exchange for an amount of cash, if any, equal to the amount that would have been obtained upon the exercise of such right had such right been currently exercisable or (ii) the replacement of such outstanding right with other rights or property selected by the Administrator in its sole discretion;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b) To provide that the outstanding rights under the Plan shall be assumed by the successor or survivor corporation, or a parent or subsidiary thereof, or shall be substituted for by similar rights 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;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c) To make adjustments in the number and type of Shares (or other securities or property) subject to outstanding rights under the Plan and/or in the terms and conditions of outstanding rights and rights that may be granted in the future;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(d) To provide that Participants' accumulated payroll deductions may be used to purchase Shares prior to the next occurring Purchase Date on such date as the Administrator determines in its sole discretion and the Participants' rights under the ongoing Offering Period(s) shall be terminated; and

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(e) To provide that all outstanding rights shall terminate without being exercised.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;8.3 <u>No Adjustment Under Certain Circumstances</u>. Unless determined otherwise by the Administrator, no adjustment or action described in this Article VIII or in any other provision of the Plan shall be authorized to the extent that such adjustment or action would cause the Section 423 Component of the Plan to fail to satisfy the requirements of Section 423 of the Code.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;8.4 <u>No Other Rights</u>. Except as expressly provided in the Plan, no Participant shall have any rights by reason of any subdivision or consolidation of shares of stock of any class, the payment of any dividend, any increase or decrease in the number of shares of stock of any class or any dissolution, liquidation, merger, or consolidation of the Company or any other corporation. Except as expressly provided in the Plan or pursuant to action of the Administrator under the Plan, no issuance by the Company of shares of stock of any class, or securities convertible into shares of stock of any class, shall affect, and no adjustment by reason thereof shall be made with respect to, the number of Shares subject to outstanding rights under the Plan or the Purchase Price with respect to any outstanding rights.

**ARTICLE IX.** 

**AMENDMENT, MODIFICATION AND TERMINATION** 

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;9.1 <u>Amendment, Modification and Termination</u>. The Administrator may amend, suspend or terminate the Plan at any time and from time to time; <u>provided</u>*,* <u>however</u>, that approval of the Company's stockholders shall be required to amend the Plan to: (a) increase the aggregate number, or change the type, of shares that may be sold pursuant to rights under the Plan under Section 3.1 (other than an adjustment as provided by Article VIII) or (b) change the corporations or classes of corporations whose employees may be granted rights under the Plan.

------

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;9.2 <u>Certain Changes to Plan</u>. Without stockholder consent and without regard to whether any Participant rights may be considered to have been adversely affected (and, with respect to the Section 423 Component of the Plan, after taking into account Section 423 of the Code), the Administrator shall be entitled to change or terminate the Offering Periods, limit the frequency and/or number of changes in the amount withheld from Compensation during an Offering Period, establish the exchange ratio applicable to amounts withheld in a currency other than U.S. dollars, permit payroll withholding in excess of the amount designated by a Participant in order to adjust for delays or mistakes in the Company's processing of payroll withholding elections, establish reasonable waiting and adjustment periods and/or accounting and crediting procedures to ensure that amounts applied toward the purchase of Shares for each Participant properly correspond with amounts withheld from the Participant's Compensation, and establish such other limitations or procedures as the Administrator determines in its sole discretion to be advisable that are consistent with the Plan.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;9.3 <u>Actions In the Event of Unfavorable Financial Accounting Consequences</u>. In the event the Administrator determines that the ongoing operation of the Plan may result in unfavorable financial accounting consequences, the Administrator may, in its discretion and, to the extent necessary or desirable, modify or amend the Plan to reduce or eliminate such accounting consequence including, but not limited to:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a) altering the Purchase Price for any Offering Period including an Offering Period underway at the time of the change in Purchase Price;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b) shortening any Offering Period so that the Offering Period ends on a new Purchase Date, including an Offering Period underway at the time of the Administrator action; and

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c) allocating Shares.

Such modifications or amendments shall not require stockholder approval or the consent of any Participant.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;9.4 <u>Payments Upon Termination of Plan</u>. Upon termination of the Plan, the balance in each Participant's Plan account shall be refunded as soon as practicable after such termination, without any interest thereon, or the Offering Period may be shortened so that the purchase of Shares occurs prior to the termination of the Plan.

**ARTICLE X.** 

**TERM OF PLAN** 

The Plan shall become effective on the Effective Date. The effectiveness of the Section 423 Component of the Plan shall be subject to approval of the Plan by the Company's stockholders within twelve months following the date the Plan is first approved by the Board. No right may be granted under the Section 423 Component of the Plan prior to such stockholder approval. The Plan shall remain in effect until terminated under Section 9.1. No rights may be granted under the Plan during any period of suspension of the Plan or after termination of the Plan.

**ARTICLE XI.** 

**ADMINISTRATION** 

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;11.1 <u>Administrator</u>. Unless otherwise determined by the Board, the Administrator of the Plan shall be the Compensation Committee of the Board (or another committee or a subcommittee of the Board to which the Board delegates administration of the Plan). The Board may at any time vest in the Board any authority or duties for administration of the Plan. The Administrator may delegate administrative tasks under the Plan to the services of an Agent or Employees to assist in the administration of the Plan, including establishing and maintaining an individual securities account under the Plan for each Participant.

------

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;11.2 <u>Authority of Administrator</u>. The Administrator shall have the power, subject to, and within the limitations of, the express provisions of the Plan:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a) To determine when and how rights to purchase Shares shall be granted and the provisions of each offering of such rights (which need not be identical).

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b) To designate from time to time which Subsidiaries of the Company shall be Designated Subsidiaries, which designation may be made without the approval of the stockholders of the Company.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c) To impose a mandatory holding period pursuant to which Employees may not dispose of or transfer Shares purchased under the Plan for a period of time determined by the Administrator in its discretion.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(d) To construe and interpret the Plan and rights granted under it, and to establish, amend and revoke rules and regulations for its administration. The Administrator, in the exercise of this power, may correct any defect, omission or inconsistency in the Plan, in a manner and to the extent it shall deem necessary or expedient to make the Plan fully effective.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(e) To amend, suspend or terminate the Plan as provided in Article IX.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(f) Generally, to exercise such powers and to perform such acts as the Administrator deems necessary or expedient to promote the best interests of the Company and its Subsidiaries and to carry out the intent that the Plan be treated as an "employee stock purchase plan" within the meaning of Section 423 of the Code for the Section 423 Component.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(g) The Administrator may adopt sub-plans applicable to particular Designated Subsidiaries or locations, which sub-plans may be designed to be outside the scope of Section 423 of the Code. The rules of such sub-plans may take precedence over other provisions of this Plan, with the exception of Section 3.1 hereof, but unless otherwise superseded by the terms of such sub-plan, the provisions of this Plan shall govern the operation of such sub-plan.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;11.3 <u>Decisions Binding</u>. The Administrator's interpretation of the Plan, any rights granted pursuant to the Plan, any subscription agreement and all decisions and determinations by the Administrator with respect to the Plan are final, binding, and conclusive on all parties.

**ARTICLE XII.** 

**MISCELLANEOUS** 

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;12.1 <u>Restriction upon Assignment</u>. A right granted under the Plan shall not be transferable other than by will or the applicable laws of descent and distribution, and is exercisable during the Participant's lifetime only by the Participant. Except as provided in Section 12.4 hereof, a right under the Plan may not be exercised to any extent except by the Participant. The Company shall not recognize and shall be under no duty to recognize any assignment or alienation of the Participant's interest in the Plan, the Participant's rights under the Plan or any rights thereunder.

------

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;12.2 <u>Rights as a Stockholder</u>. With respect to Shares subject to a right granted under the Plan, a Participant shall not be deemed to be a stockholder of the Company, and the Participant shall not have any of the rights or privileges of a stockholder, until such Shares have been issued to the Participant or his or her nominee following exercise of the Participant's rights under the Plan. No adjustments shall be made for dividends (ordinary or extraordinary, whether in cash securities, or other property) or distribution or other rights for which the record date occurs prior to the date of such issuance, except as otherwise expressly provided herein or as determined by the Administrator.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;12.3 <u>Interest</u>. No interest shall accrue on the payroll deductions or contributions of a Participant under the Plan.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;12.4 <u>Designation of Beneficiary</u>.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a) A Participant may, in the manner determined by the Administrator, file a written designation of a beneficiary who is to receive any Shares and/or cash, if any, from the Participant's account under the Plan in the event of such Participant's death subsequent to a Purchase Date on which the Participant's rights are exercised but prior to delivery to such Participant of such Shares and cash. In addition, a Participant may file a written designation of a beneficiary who is to receive any cash from the Participant's account under the Plan in the event of such Participant's death prior to exercise of the Participant's rights under the Plan. If the Participant is married and resides in a community property state, a designation of a person other than the Participant's spouse as his or her beneficiary shall not be effective without the prior written consent of the Participant's spouse.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b) Such designation of beneficiary may be changed by the Participant at any time by written notice to the Company. In the event of the death of a Participant and in the absence of a beneficiary validly designated under the Plan who is living at the time of such Participant's death, the Company shall deliver such Shares and/or cash to the executor or administrator of the estate of the Participant, or if no such executor or administrator has been appointed (to the knowledge of the Company), the Company, in its discretion, may deliver such Shares and/or cash to the spouse or to any one or more dependents or relatives of the Participant, or if no spouse, dependent or relative is known to the Company, then to such other person as the Company may designate.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;12.5 <u>Notices</u>. All notices or other communications by a Participant to the Company under or in connection with the Plan shall be deemed to have been duly given when received in the form specified by the Company at the location, or by the person, designated by the Company for the receipt thereof.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;12.6 <u>Equal Rights and Privileges</u>. Subject to Section 5.7, all Eligible Employees will have equal rights and privileges under the Section 423 Component so that the Section 423 Component of this Plan qualifies as an "employee stock purchase plan" within the meaning of Section 423 of the Code. Subject to Section 5.7, any provision of the Section 423 Component that is inconsistent with Section 423 of the Code will, without further act or amendment by the Company, the Board or the Administrator, be reformed to comply with the equal rights and privileges requirement of Section 423 of the Code. Eligible Employees participating in the Non-Section 423 Component need not have the same rights and privileges as other Eligible Employees participating in the Non-Section 423 Component or as Eligible Employees participating in the Section 423 Component.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;12.7 <u>Use of Funds</u>. All payroll deductions received or held by the Company under the Plan may be used by the Company for any corporate purpose, and the Company shall not be obligated to segregate such payroll deductions.

------

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;12.8 <u>Reports</u>. Statements of account shall be given to Participants at least annually, which statements shall set forth the amounts of payroll deductions, the Purchase Price, the number of Shares purchased and the remaining cash balance, if any.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;12.9 <u>No Employment Rights</u>. Nothing in the Plan shall be construed to give any person (including any Eligible Employee or Participant) the right to remain in the employ of the Company or any Parent or Subsidiary or affect the right of the Company or any Parent or Subsidiary to terminate the employment of any person (including any Eligible Employee or Participant) at any time, with or without cause.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;12.10 <u>Notice of Disposition of Shares</u>. Each Participant shall give prompt notice to the Company of any disposition or other transfer of any Shares purchased upon exercise of a right under the Section 423 Component of the Plan if such disposition or transfer is made: (a) within two years from the Enrollment Date of the Offering Period in which the Shares were purchased or (b) within one year after the Purchase Date on which such Shares were purchased. Such notice shall specify the date of such disposition or other transfer and the amount realized, in cash, other property, assumption of indebtedness or other consideration, by the Participant in such disposition or other transfer.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;12.11 <u>Governing Law</u>. The Plan and any agreements hereunder shall be administered, interpreted and enforced in accordance with the laws of the State of Delaware, disregarding any state's choice of law principles requiring the application of a jurisdiction's laws other than the State of Delaware.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;12.12 <u>Electronic Forms</u>. To the extent permitted by Applicable Law and in the discretion of the Administrator, an Eligible Employee may submit any form or notice as set forth herein by means of an electronic form approved by the Administrator. Before the commencement of an Offering Period, the Administrator shall prescribe the time limits within which any such electronic form shall be submitted to the Administrator with respect to such Offering Period in order to be a valid election.

**\* \* \* \* \***

## Exhibit 10.4

**Exhibit 10.4** 

**STEINWAY MUSICAL INSTRUMENTS HOLDINGS, INC.** 

**NON-EMPLOYEE DIRECTOR COMPENSATION POLICY** 

Non-employee members of the board of directors (the "***Board***") of Steinway Musical Instruments Holdings, Inc. (the "***Company***") shall be eligible to receive cash and equity compensation as set forth in this Non-Employee Director Compensation Policy (this "***Policy***"). The cash and equity compensation described in this Policy shall be paid or be made, as applicable, automatically and without further action of the Board, to each member of the Board who is (i) not an employee or equityholder of Paulson & Co., Inc. and (ii) not an employee of the Company or any parent or subsidiary of the Company (each, a "***Non-Employee Director***") who may be eligible to receive such cash or equity compensation, unless such Non-Employee Director declines the receipt of such cash or equity compensation by written notice to the Company. This Policy shall become effective after the effectiveness of the Company's initial public offering (the "***IPO***") and shall remain in effect until it is revised or rescinded by further action of the Board. This Policy may be amended, modified or terminated by the Board at any time in its sole discretion. The terms and conditions of this Policy shall supersede any prior cash and/or equity compensation arrangements for service as a member of the Board between the Company and any of its Non-Employee Directors and between any subsidiary of the Company and any of its non-employee directors.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;1. <u>Cash Compensation</u>.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a) <u>Annual Retainers</u>. Each Non-Employee Director shall receive an annual retainer of $65,000 for service on the Board.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b) <u>Additional Annual Retainers</u>. In addition, a Non-Employee Director shall receive the following annual retainers:

&nbsp;&nbsp;&nbsp;&nbsp;&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) <u>Chairperson of the Board</u>. A Non-Employee Director serving as Chairperson of the Board shall receive an additional annual retainer of $40,000 for such service.

&nbsp;&nbsp;&nbsp;&nbsp;&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) <u>Audit Committee</u>. A Non-Employee Director serving as Chairperson of the Audit Committee shall receive an additional annual retainer of $20,000 for such service. A Non-Employee Director serving as a member of the Audit Committee (other than the Chairperson) shall receive an additional annual retainer of $10,000 for such service.

&nbsp;&nbsp;&nbsp;&nbsp;&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) <u>Compensation Committee</u>. A Non-Employee Director serving as Chairperson of the Compensation Committee shall receive an additional annual retainer of $15,000 for such service. A Non-Employee Director serving as a member of the Compensation Committee (other than the Chairperson) shall receive an additional annual retainer of $5,000 for such service.

&nbsp;&nbsp;&nbsp;&nbsp;&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) <u>Nominating and Corporate Governance Committee</u>. A Non-Employee Director serving as Chairperson of the Nominating and Corporate Governance Committee shall receive an additional annual retainer of $10,000 for such service. A Non-Employee Director serving as a member of the Nominating and Corporate Governance Committee (other than the Chairperson) shall receive an additional annual retainer of $7,500 for such service.

------

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c) <u>Payment of Retainers</u>. The annual retainers described in Sections 1(a) and 1(b) shall be earned on a quarterly basis based on a calendar quarter and shall be paid by the Company in arrears not later than the fifteenth day following the end of each calendar quarter. In the event a Non-Employee Director does not serve as a Non-Employee Director, or in the applicable positions described in Section 1(b), for an entire calendar quarter, such Non-Employee Director shall receive a prorated portion of the retainer(s) otherwise payable to such Non-Employee Director for such calendar quarter pursuant to Sections 1(a) and 1(b), with such prorated portion determined by multiplying such otherwise payable retainer(s) by a fraction, the numerator of which is the number of days during which the Non-Employee Director serves as a Non-Employee Director or in the applicable positions described in Section 1(b) during the applicable calendar quarter and the denominator of which is the number of days in the applicable calendar quarter.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;2. <u>Equity Compensation</u>. Non-Employee Directors shall be granted the equity awards described below. The awards described below shall be granted under and shall be subject to the terms and provisions of the Company's 2023 Incentive Award Plan or any other applicable Company equity incentive plan then-maintained by the Company (such plan, as may be amended from time to time, the "***Equity Plan***") and shall be granted subject to the execution and delivery of award agreements, including attached exhibits, in substantially the forms previously approved by the Board. All applicable terms of the Equity Plan apply to this Policy as if fully set forth herein, and all equity grants hereunder are subject in all respects to the terms of the Equity Plan.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a) <u>Annual Awards</u>. Each Non-Employee Director who (i) serves on the Board as of the date of any annual meeting of the Company's stockholders (an "***Annual Meeting***") after the IPO and (ii) will continue to serve as a Non-Employee Director immediately following such Annual Meeting, shall be automatically granted, on the date of such Annual Meeting, an award of restricted stock units that have an aggregate fair value on the date of such Annual Meeting of $110,000 or, in the case of the Chairperson of the Board, $150,000 (in each case as determined in accordance with FASB Accounting Codification Topic 718 and with the number of shares of common stock underlying such award subject to adjustment as provided in the Equity Plan). The awards described in this Section 2(a) shall be referred to as the "***Annual Awards***."

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b) <u>Termination of Employment of Employee Directors</u>. Members of the Board who are employees of the Company or any parent or subsidiary of the Company who subsequently terminate their employment with the Company and any parent or subsidiary of the Company and remain on the Board will, to the extent that they are otherwise eligible, be eligible to receive, after termination from employment with the Company and any parent or subsidiary of the Company, Annual Awards as described in Section 2(a) above.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c) <u>Vesting of Awards Granted to Non-Employee Directors</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;&nbsp;&nbsp;&nbsp;&nbsp;(i) Each Annual Award shall vest and become exercisable on the earlier of (i) the day immediately preceding the date of the first Annual Meeting following the date of grant and (ii) the first anniversary of the date of grant, in each case subject to the Non-Employee Director continuing in service on the Board through the applicable vesting 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;(ii) No portion of an Annual Award that is unvested or unexercisable at the time of a Non-Employee Director's termination of service on the Board shall become vested and exercisable thereafter. All of a Non-Employee Director's Annual Awards shall vest in full immediately prior to the occurrence of a Change in Control (as defined in the Equity Plan), to the extent outstanding at such time.

\* \* \* \* \*

## Exhibit 10.5

**Exhibit 10.5** 

**STEINWAY MUSICAL INSTRUMENTS HOLDINGS, INC.** 

**2023 INCENTIVE AWARD PLAN** 

**STOCK OPTION GRANT NOTICE** 

Capitalized terms not specifically defined in this Stock Option Grant Notice (the "<u>Grant Notice</u>") have the meanings given to them in the 2023 Incentive Award Plan (as amended from time to time, the "<u>Plan</u>") of Steinway Musical Instruments Holdings, Inc. (the "<u>Company</u>"). The Company hereby grants to the participant listed below ("<u>Participant</u>") the stock option described in this Grant Notice (the "<u>Option</u>"), subject to the terms and conditions of the Plan and the Stock Option Agreement attached hereto as <u>Exhibit A</u> (the "<u>Agreement</u>"), both of which are incorporated into this Grant Notice by reference.

---

| | |
|:---|:---|
| **Participant:** |  |
| **Grant Date:** |  |
| **Exercise Price per Share:** |  |
| **Shares Subject to the Option:** |  |
| **Final Expiration Date:** |  |
| **Vesting Commencement Date:** |  |
| **Vesting Schedule:** | [To be specified in individual agreements] |
| **Type of Option** | ☐ Incentive Stock Option ☐ Non-Qualified Stock Option |

---

By Participant's signature below or electronic acceptance or authentication in a form authorized by the Company, Participant agrees to be bound by the terms of this Grant Notice, the Plan and the Agreement. Participant has reviewed the Plan, this Grant Notice and the Agreement in their entirety, has had an opportunity to obtain the advice of counsel prior to executing this Grant Notice and fully understands all provisions of the Plan, this Grant Notice and the Agreement. Participant hereby agrees to accept as binding, conclusive and final all decisions or interpretations of the Administrator upon any questions arising under the Plan or relating to the Option.

---

| |
|:---|
| **STEINWAY MUSICAL INSTRUMENTS PARTICIPANT HOLDINGS, INC.**  |
| By: |
| Print Name: |
| Title: |

---

------

**EXHIBIT A** 

**STOCK OPTION AGREEMENT** 

**ARTICLE I.** 

**GENERAL** 

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;1.1 <u>Incorporation of Terms of Plan</u>. The Option is subject to the terms and conditions set forth in this Agreement and the Plan, which is incorporated herein by reference. In the event of any inconsistency between the Plan and this Agreement, the terms of the Plan will control.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;1.2 <u>Defined Terms</u>. Capitalized terms not specifically defined herein shall have the meanings specified in the Plan or the Grant Notice. For purposes of this Agreement,

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a) "<u>CIC Qualifying Termination</u>" shall mean a Termination of Service of Participant by any Participating Company without Cause or by Participant for Good Reason during the twenty-four (24) month period immediately following a Change in Control.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b) "<u>Good Reason</u>" shall mean a Participant having "Good Reason" to terminate the Participant's employment as defined in any employment or severance agreement between the Participant and a Participating Company; provided that, in the absence of an agreement containing such a definition, a Participant shall have "Good Reason" to terminate the Participant's employment upon or after a Change in Control, (i) any material adverse change by the Participating Companies in Participant's job title, duties, responsibility or authority; (ii) failure by the Participating Companies to pay Participant any amount of Participant's annual base salary or bonus when due; (iii) any material diminution of Participant's annual base salary (other than such a material diminution that is applied on a substantially comparable basis to similarly-situated employees of the Participating Companies); (iv) the termination or denial of Participant's right to participate in material employment-related benefits that are offered to similarly-situated employees of the Participating Companies; (v) the movement of Participant's principal location of work to a new location that is in excess of 30 miles from Participant's principal location of work as of the date hereof without Participant's consent; or (vi) failure by the Company to require any successor to assume and agree to perform the Company's obligations under this Agreement or any employment or severance agreement with the Participant; provided that none of the events described in this definition of Good Reason shall constitute Good Reason unless Participant notifies the Company in writing of the event that is purported to constitute Good Reason (which notice is provided not later than the 30th day following the occurrence of the event purported to constitute Good Reason) and then only if the Company fails to cure such event within 30 days after the Company's receipt of such written notice.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c) "<u>Participating Company</u>" shall mean the Company or any of its parents or Subsidiaries.

**ARTICLE II.** 

**GRANT OF OPTION** 

<u>Section</u> <u>2.1</u> <u>Grant of Option</u>. In consideration of Participant's past and/or continued employment with or service to a Participating Company and for other good and valuable consideration, effective as of the grant date set forth in the Grant Notice (the "<u>Grant Date</u>"), the Company has granted to the Participant the Option to purchase any part or all of an aggregate number of Shares set forth in the Grant Notice, upon the terms and conditions set forth in the Grant Notice, the Plan and this Agreement, subject to adjustment as provided in Article VIII of the Plan.

------

<u>Section</u> <u>2.2</u> <u>Exercise Price</u>. The exercise price per Share of the Shares subject to the Option (the "<u>Exercise Price</u>") shall be as set forth in the Grant Notice.

<u>Section</u> <u>2.3</u> <u>Consideration to the Company</u>. In consideration of the grant of the Option by the Company, Participant agrees to render faithful and efficient services to any Participating Company.

**ARTICLE III.** 

**PERIOD OF EXERCISABILITY** 

<u>Section</u> <u>3.1</u> <u>Commencement of Exercisability</u>.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a) Subject to Participant's continued employment with or service to a Participating Company on each applicable vesting date and subject to <u>Sections 3.1(b)</u>, <u>3.2</u>, <u>3.3</u>, <u>6.9</u> and <u>6.14</u> hereof, the Option shall become vested and exercisable in such amounts and at such times as are set forth in the Grant Notice.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b) Notwithstanding the Grant Notice or the provisions of <u>Section</u> <u>3.1(a)</u> and <u>(c)</u>, in the event of a CIC Qualifying Termination, the Option shall become vested and exercisable in full on the date of such CIC Qualifying Termination.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c) Subject to <u>Section</u> <u>3.1(b)</u>, except as provided in <u>Section</u> <u>5.3(ii)</u> of the Plan, and unless otherwise determined by the Administrator or as set forth in a written agreement between Participant and the Company, any portion of the Option that has not become vested and exercisable on or prior to the Termination of Service (including, without limitation, pursuant to any employment or similar agreement by and between Participant and the Company) shall be forfeited on the Termination of Service and shall not thereafter become vested or exercisable.

<u>Section</u> <u>3.2</u> <u>Duration of Exercisability</u>. The installments provided for in the vesting schedule set forth in the Grant Notice are cumulative. Each such installment that becomes vested and exercisable pursuant to the vesting schedule set forth in the Grant Notice shall remain vested and exercisable until it becomes unexercisable under <u>Section</u> <u>3.3</u> hereof. Once the Option becomes unexercisable, it shall be forfeited immediately.

<u>Section</u> <u>3.3</u> <u>Expiration of Option</u>. The Option may not be exercised to any extent by anyone after the first to occur of the following events:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a) The expiration date set forth in the Grant Notice; *provided* that such expiration date shall not be later than the tenth (10th) anniversary of the Grant Date;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b) Except as the Administrator may otherwise approve, the ninetieth (90th) day following the Termination of Service by reason of Participant's termination for any reason other than due to death, Disability or by a Participating Company for Cause;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c) Except as the Administrator may otherwise approve, immediately upon the Termination of Service by reason of Participant's termination by a Participating Company for Cause; and

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(d) The expiration of twelve (12) months from the Termination of Service by reason of Participant's termination due to death or Disability.

<u>Section</u> <u>3.4</u> <u>Tax Withholding</u>. Notwithstanding any other provision of this Agreement:

------

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a) The Participating Companies have the authority to deduct or withhold, or require Participant to remit to the applicable Participating Company, an amount sufficient to satisfy any applicable federal, state, local and foreign taxes (including the employee portion of any FICA obligation) required by Applicable Law to be withheld with respect to any taxable event arising pursuant to this Agreement. The Participating Companies may withhold or Participant may make such payment in one or more of the forms specified below:

&nbsp;&nbsp;&nbsp;&nbsp;&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) [by cash or check made payable to the Participating Company with respect to which the withholding obligation arises;

&nbsp;&nbsp;&nbsp;&nbsp;&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) by the deduction of such amount from other compensation payable to Participant;]<sup>1</sup>

&nbsp;&nbsp;&nbsp;&nbsp;&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) with respect to any withholding taxes arising in connection with the exercise of the Option, with the consent of the Administrator, by requesting that the Participating Companies withhold a net number of vested Shares otherwise issuable upon the exercise of the Option having a then current Fair Market Value not exceeding the amount necessary to satisfy the withholding obligation of the Participating Companies based on the maximum statutory withholding rates in Participant's applicable jurisdictions for federal, state, local and foreign income tax and payroll tax purposes that are applicable to such taxable income;

&nbsp;&nbsp;&nbsp;&nbsp;&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) [with respect to any withholding taxes arising in connection with the exercise of the Option, with the consent of the Administrator, by tendering to the Company vested Shares held for such period of time as may be required by the Administrator in order to avoid adverse accounting consequences and having a then current Fair Market Value not exceeding the amount necessary to satisfy the withholding obligation of the Participating Companies based on the maximum statutory withholding rates in Participant's applicable jurisdictions for federal, state, local and foreign income tax and payroll tax purposes that are applicable to such taxable income;

&nbsp;&nbsp;&nbsp;&nbsp;&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) with respect to any withholding taxes arising in connection with the exercise of the Option, through the delivery of a notice that Participant has placed a market sell order with a broker acceptable to the Company with respect to Shares then issuable to Participant pursuant to the Option, and that the broker has been directed to pay a sufficient portion of the net proceeds of the sale to the Participating Company with respect to which the withholding obligation arises in satisfaction of such withholding taxes; provided that payment of such proceeds is then made to the applicable Participating Company at such time as may be required by the Administrator, but in any event not later than the settlement of such sale; 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;(vi) in any combination of the foregoing]<sup>2</sup>.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b) With respect to any withholding taxes arising in connection with the Option, in the event Participant fails to provide timely payment of all sums required pursuant to <u>Section</u> <u>3.4(a)</u>, the Company shall have the right and option, but not the obligation, to treat such failure as an election by Participant to satisfy all or any portion of Participant's required payment obligation pursuant to <u>Section</u> <u>3.4(a)(ii)</u> or <u>Section</u> <u>3.4(a)(iii)</u> above, or any combination of the foregoing as the Company may determine to be appropriate. The Company shall not be obligated to deliver any certificate representing Shares issuable with respect to the exercise of the Option to, or to cause any such Shares to be held in book-entry form by,

------

<sup>1</sup> NTD: Remove if only net withholding will be permitted.

<sup>2</sup> NTD: Remove if only net withholding will be permitted.

------

Participant or his or her legal representative unless and until Participant or his or her legal representative shall have paid or otherwise satisfied in full the amount of all federal, state, local and foreign taxes applicable with respect to the taxable income of Participant resulting from the exercise of the Option or any other taxable event related to the Option.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c) In the event any tax withholding obligation arising in connection with the Option will be satisfied under <u>Section</u> <u>3.4(a)(iii)</u>, then the Company may elect to instruct any brokerage firm determined acceptable to the Company for such purpose to sell on Participant's behalf a whole number of Shares from those Shares then issuable upon the exercise of the Option as the Company determines to be appropriate to generate cash proceeds sufficient to satisfy the tax withholding obligation and to remit the proceeds of such sale to the Participating Company with respect to which the withholding obligation arises. Participant's acceptance of this Option constitutes Participant's instruction and authorization to the Company and such brokerage firm to complete the transactions described in this <u>Section</u> <u>3.4(c)</u>, including the transactions described in the previous sentence, as applicable. The Company may refuse to issue any Shares to Participant until the foregoing tax withholding obligations are satisfied, provided that no payment shall be delayed under this <u>Section</u> <u>3.4(c)</u> if such delay will result in a violation of Section 409A.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(d) Participant is ultimately liable and responsible for all taxes owed in connection with the Option, regardless of any action any Participating Company takes with respect to any tax withholding obligations that arise in connection with the Option. No Participating Company makes any representation or undertaking regarding the treatment of any tax withholding in connection with the awarding, vesting or exercise of the Option or the subsequent sale of Shares. The Participating Companies do not commit and are under no obligation to structure the Option to reduce or eliminate Participant's tax liability.

**ARTICLE IV.** 

**EXERCISE OF OPTION** 

<u>Section</u> <u>4.1</u> <u>Person Eligible to Exercise</u>. During the lifetime of Participant, only Participant may exercise the Option or any portion thereof. After the death of Participant, any exercisable portion of the Option may, prior to the time when the Option becomes unexercisable under <u>Section</u> <u>3.3</u> hereof, be exercised by Participant's personal representative or by any Person empowered to do so under the deceased Participant's will or under the then Applicable Laws of descent and distribution.

<u>Section</u> <u>4.2</u> <u>Partial Exercise</u>. Subject to <u>Section</u> <u>6.2</u>, any exercisable portion of the Option or the entire Option, if then wholly exercisable, may be exercised in whole or in part at any time prior to the time when the Option or portion thereof becomes unexercisable under <u>Section</u> <u>3.3</u> hereof.

<u>Section</u> <u>4.3</u> <u>Manner of Exercise</u>. The Option, or any exercisable portion thereof, may be exercised solely by delivery to the Secretary of the Company (or any third party administrator or other Person designated by the Company), during regular business hours, of all of the following prior to the time when the Option or such portion thereof becomes unexercisable under <u>Section</u> <u>3.3</u> hereof.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a) An exercise notice in a form specified by the Administrator, stating that the Option or portion thereof is thereby exercised, such notice complying with all applicable rules established by the Administrator;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b) The receipt by the Company of full payment for the Shares with respect to which the Option or portion thereof is exercised, in such form of consideration permitted under <u>Section</u> <u>4.4</u> that is acceptable to the Administrator;

------

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c) The payment of any applicable withholding tax in accordance with <u>Section</u> <u>3.4</u>;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(d) Any other written representations, documents or filings as may be required in the Administrator's sole discretion to effect compliance with Applicable Law; and

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(e) In the event the Option or portion thereof shall be exercised pursuant to <u>Section</u> <u>4.1</u> by any Person or Persons other than Participant, appropriate proof of the right of such Person or Persons to exercise the Option.

Notwithstanding any of the foregoing, the Administrator shall have the right to specify all conditions of the manner of exercise, which conditions may vary by country and which may be subject to change from time to time.

<u>Section</u> <u>4.4</u> <u>Method of Payment</u>. Payment of the Exercise Price shall be by any of the following, or a combination thereof, at the election of Participant:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a) Cash or check;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b) With the consent of the Administrator, surrender of vested Shares (including, without limitation, Shares otherwise issuable upon exercise of the Option) held for such period of time as may be required by the Administrator in order to avoid adverse accounting consequences and having a Fair Market Value on the date of delivery equal to the aggregate Exercise Price of the Option or exercised portion thereof;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c) Through the delivery of a notice that Participant has placed a market sell order with a broker acceptable to the Company with respect to Shares then issuable upon exercise of the Option, and that the broker has been directed to pay a sufficient portion of the net proceeds of the sale to the Company in satisfaction of the Exercise Price; *provided* that payment of such proceeds is then made to the Company at such time as may be required by the Administrator, but in any event not later than the settlement of such sale; or

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(d) Any other form of legal consideration acceptable to the Administrator.

<u>Section</u> <u>4.5</u> <u>Conditions to Issuance of Shares</u>. The Company shall not be required to issue or deliver any certificate or certificates for any Shares or to cause any Shares to be held in book-entry form prior to the fulfillment of all of the following conditions: (a) the admission of the Shares to listing on all stock exchanges on which such Shares are then listed, (b) the completion of any registration or other qualification of the Shares under any state or federal law or under rulings or regulations of the Securities and Exchange Commission or other governmental regulatory body, which the Administrator shall, in its absolute discretion, deem necessary or advisable, (c) the obtaining of any approval or other clearance from any state, federal or applicable foreign governmental agency that the Administrator shall, in its absolute discretion, determine to be necessary or advisable, (d) the receipt by the Company of full payment for such Shares, which may be in one or more of the forms of consideration permitted under <u>Section</u> <u>4.4</u>, and (e) the receipt of full payment of any applicable withholding tax in accordance with <u>Section</u> <u>3.4</u> by the Participating Company with respect to which the applicable withholding obligation arises.

<u>Section</u> <u>4.6</u> <u>Rights as Stockholder</u>. Neither Participant nor any Person claiming under or through Participant will have any of the rights or privileges of a stockholder of the Company in respect of any Shares purchasable upon the exercise of any part of the Option unless and until certificates representing such Shares (which may be in book-entry form) will have been issued and recorded on the records of the Company or its transfer agents or registrars and delivered to Participant (including through electronic

------

delivery to a brokerage account). No adjustment will be made for a dividend or other right for which the record date is prior to the date of such issuance, recordation and delivery, except as provided in Article VIII of the Plan. Except as otherwise provided herein, after such issuance, recordation and delivery, Participant will have all the rights of a stockholder of the Company with respect to such Shares, including, without limitation, the right to receipt of dividends and distributions on such Shares.

**ARTICLE V.** 

**RESTRICTIVE COVENANTS** 

<u>Section</u> <u>5.1</u> <u>Restrictive Covenants</u>. In consideration of the benefits being provided to Participant pursuant to this Agreement, Participant agrees to be bound by the restrictive covenants contained in this Article V.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a) <u>Obligation to Maintain Confidentiality</u>. Participant agrees not to divulge to third parties, or use in a manner not authorized by the Company, any confidential or Participating Company proprietary information gathered or learned by Participant during his or her employment with the Participating Companies or their respective affiliates. "<u>Confidential Information</u>" includes, but is not limited to, information in oral, written or recorded form regarding business plans, trade or business secrets, Participating Company financial records, supplier contracts or relationships, or any other information that the Participating Companies do not regularly disclose to the public. To the extent that Participant has any doubt as to whether information constitutes Confidential Information, Participant agrees to obtain advice from the Company's General Counsel prior to divulging or using such information. Participant understands and agrees that divulging such information to third parties, or using such information in an unauthorized manner, would cause serious competitive harm to the Company. Confidential Information shall exclude: (a) information that is generally known by or available for use by the public, (b) information that was known by Participant prior to his or her employment with the Participating Companies (including their respective predecessors in interest, affiliates and Subsidiaries) and was obtained, to the best of Participant's knowledge, without violation of any obligation of confidentiality to the Participating Companies, or (c) information that is required to be disclosed pursuant to applicable law or a court order. If information is required to be disclosed because of a court order, Participant must notify the Company's General Counsel immediately. Nothing in this <u>Section</u> <u>5.1(a)</u> shall be interpreted to preclude Participant from communicating to a governmental agency about terms or conditions of employment or legal compliance issues, or from cooperating with an investigation being conducted by a governmental agency.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b) <u>Ownership of Property</u>. Participant acknowledges that all discoveries, concepts, ideas, inventions, innovations, improvements, developments, methods, processes, programs, designs, analyses, drawings, reports, patent applications, copyrightable work, and mask work (whether or not including any Confidential Information) and all registrations or applications related thereto, all other proprietary information, and all similar or related information (whether or not patentable) that relate to the Participating Companies' or affiliates' actual or anticipated business, research and development, or existing or future products or services, and that were or are conceived, developed, contributed to, made or reduced to practice by Participant (either solely or jointly with others) while employed by or in the service of the Participating Companies or their respective affiliates (including, without limitation, prior to the date of this Agreement) (including any of the foregoing that constitutes any proprietary information or records) ("<u>Work Product</u>") belong to the Participating Companies or their respective affiliates, and Participant hereby assigns, and agrees to assign, all of the above Work Product to a Participating Company or affiliate thereof. Any copyrightable work prepared in whole or in part by Participant in the course of Participant's work for any of the foregoing entities shall be deemed a "work made for hire" under the copyright laws, and the Participating Company or affiliate thereof shall own all rights therein. To the extent that any such copyrightable work is not a "work made for hire", Participant hereby assigns and agrees to assign to the

------

Participating Company or affiliate thereof all right, title, and interest, including without limitation, copyright in and to such copyrightable work. Participant shall as promptly as practicable under the circumstances disclose such Work Product and copyrightable work to the Company and perform all actions reasonably requested by the Company (whether during or after Participant's employment with or service to the Participating Companies and their respective affiliates) to establish and confirm the Participating Company's or such affiliate's ownership (including, without limitation, assignments, consents, powers of attorney, and other instruments). Participant is hereby provided notice of immunity under the federal Defend Trade Secrets Act of 2016, which states: (i) an individual shall not be held criminally or civilly liable under any federal or state trade secret law for the disclosure of a trade secret that (A) is made (1) in confidence to a federal, state, or local government official, either directly or indirectly, or to an attorney and (2) solely for the purpose of reporting or investigating a suspected violation of law, or (B) is made in a complaint or other document filed in a lawsuit or other proceeding, if such filing is made under seal; and (ii) an individual who files a lawsuit for retaliation by an employer for reporting a suspected violation of law may disclose the trade secret to the attorney of the individual and use the trade secret information in the court proceeding, if the individual (A) files any document containing the trade secret under seal and (B) does not disclose the trade secret, except pursuant to court order.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c) <u>Third Party Information</u>. Participant understands that the Participating Companies and their respective affiliates will receive from third parties confidential or proprietary information ("<u>Third Party Information</u>") subject to a duty on the Participating Companies or their respective affiliates part to maintain the confidentiality of such information and to use it only for certain limited purposes. During the period of Participant's employment with or service to the Company or its Subsidiaries or affiliates and thereafter, and without in any way limiting the provisions of <u>Section</u> <u>5.1(a)</u> above, Participant will hold Third Party Information in the strictest confidence and will not disclose to any one (other than personnel and consultants of the Participating Companies and their respective affiliates who need to know such information in connection with their work for the Participating Companies and their respective affiliates) or use, except in connection with Participant's work for the Participating Companies or their respective affiliates, Third Party Information unless expressly authorized by the Company in writing or unless and to the extent that the Third Party Information (a) becomes generally known to and available for use by the public other than as a result of Participant's acts or omissions to act, (b) was known to Participant prior to Participant's employment with or service to the Participating Companies or their respective affiliates and was obtained, to the best of Participant's knowledge, without violation of any obligation of confidentiality to the Company, or (c) is required to be disclosed pursuant to any applicable law or court order.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(d) <u>Nonsolicitation</u>. Participant acknowledges that, in the course of Participant's employment, Participant will become familiar with the Participating Companies' and their respective affiliates' trade secrets and with other Confidential Information concerning the Participating Companies and their respective affiliates and that Participant's services will be of special, unique and extraordinary value to the Participating Companies and their respective affiliates. Participant agrees that, while employed by any Participating Company or its affiliates, and continuing until the twelve (12) month anniversary of the date of any termination of Participant's employment or service, Participant shall not directly or indirectly through another entity (i) induce or attempt to induce any employee of the Participating Companies or their respective affiliates to leave the employ of the Participating Companies or their respective affiliates, or in any way interfere with the relationship between the Participating Companies or their respective affiliates and any employee thereof, (ii) hire any person who was an employee of the Participating Companies or their respective affiliates within 180 days prior to the time such employee was hired by Participant, (iii) induce or attempt to induce any customer, supplier, licensee or other business relation of the Participating Companies or their respective affiliates to cease doing business with the Participating Companies or their respective affiliates or in any way interfere with the relationship between any such customer, licensee or business relation and the Participating Companies or their respective affiliates, or (iv) directly or indirectly acquire or attempt to acquire an interest in any business relating to

------

the business of the Company or its Subsidiaries or affiliates and with which any of the Participating Companies or their respective affiliates have entered into substantive negotiations or has requested and received confidential information relating to the acquisition of such business by the Participating Companies or their respective affiliates in the two-year period immediately preceding Participant's termination of employment with any Participating Company.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(e) <u>Non-disparagement</u>. Participant agrees that at no time during his or her employment by any Participating Company or thereafter shall he or she make, or cause or assist any other person to make, any statement or other communication to any third party which impugns or attacks, or is otherwise critical of, in any material respect, the reputation, business or character of the Participating Companies or their respective affiliates or any of their respective directors, officers or employees; provided that Participant shall not be required to make any untruthful statement or to violate any law.

<u>Section</u> <u>5.2</u> <u>Enforcement</u>. If, at the time of enforcement of Article V of this Agreement, a court holds that the restrictions stated therein are unreasonable under circumstances then existing, the parties hereto agree that the maximum duration, scope or geographical area reasonable under such circumstances shall be substituted for the stated period, scope or area and that the court shall be allowed to revise the restrictions contained herein to cover the maximum duration, scope and area permitted by law. Participant agrees that because his or her services are unique and Participant has access to confidential information, money damages would be an inadequate remedy for any breach of this Article V and its subsections. Participant agrees that the Participating Companies and their respective affiliates, in the event of a breach or threatened breach of this Article V or any of its subsections, may seek injunctive or other equitable relief in addition to any other remedy available to them in a court of competent jurisdiction without posting bond or other security.

<u>Section</u> <u>5.3</u> <u>Acknowledgments</u>. Participant acknowledges that the provisions of this Article V and its subsections are (a) in addition to, and not in limitation of, any obligation of Participant under the terms of any other agreement with the Participating Companies or their respective affiliates (including, without limitation, the restrictive covenants in any employment or severance agreement between the Participant and any Participating Company, which Participant acknowledges remain in full force and effect in accordance with their terms), and (b) in consideration of (i) employment with the Participating Companies, and (ii) additional good and valuable consideration as set forth in this Agreement. In addition, Participant agrees and acknowledges that the restrictions contained in this Article V and its subsections do not preclude Participant from earning a livelihood, nor do they unreasonably impose limitations on Participant's ability to earn a living. Participant agrees and acknowledges that the potential harm to the Participating Companies or their respective affiliates of the non-enforcement of this Article V and its subsections outweighs any potential harm to Participant of its enforcement by injunction or otherwise. Participant acknowledges that he or she has carefully read this Agreement and has given careful consideration to the restraints imposed upon Participant by this Agreement, and is in full accord as to their necessity for the reasonable and proper protection of confidential and proprietary information of the Participating Companies and their respective affiliates now existing or to be developed in the future. Participant expressly acknowledges and agrees that each and every restraint imposed by this Agreement is reasonable with respect to subject matter, time period and geographical area.

**ARTICLE VI.** 

**OTHER PROVISIONS** 

<u>Section</u> <u>6.1</u> <u>Administration</u>. The Administrator shall have the power to interpret the Plan, the Grant Notice and this Agreement and to adopt such rules for the administration, interpretation and application of the Plan, the Grant Notice and this Agreement as are consistent therewith and to interpret, amend or revoke any such rules. All actions taken and all interpretations and determinations made by the Administrator will be final and binding upon Participant, the Company and all other interested Persons. To the extent allowable pursuant to Applicable Law, no member of the Committee or the Board will be personally liable for any action, determination or interpretation made with respect to the Plan, the Grant Notice or this Agreement.

------

<u>Section</u> <u>6.2</u> <u>Whole Shares</u>. The Option may only be exercised for whole Shares.

<u>Section</u> <u>6.3</u> <u>Option Not Transferable</u>. Subject to <u>Section</u> <u>4.1</u> hereof, the Option may not be sold, pledged, assigned or transferred in any manner other than by will or the laws of descent and distribution, unless and until the Shares underlying the Option have been issued, and all restrictions applicable to such Shares have lapsed. Neither the Option nor any interest or right therein or part thereof shall be liable for the debts, contracts or engagements of Participant or his or her successors in interest or shall be subject to disposition by transfer, alienation, anticipation, pledge, encumbrance, assignment or any other means whether such disposition be voluntary or involuntary or by operation of law by judgment, levy, attachment, garnishment or any other legal or equitable proceedings (including bankruptcy), and any attempted disposition thereof shall be null and void and of no effect, except to the extent that such disposition is permitted by the preceding sentence. Notwithstanding the foregoing, with the consent of the Administrator, if the Option is a Non-Qualified Stock Option, it may be transferred to Permitted Transferees pursuant to any conditions and procedures the Administrator may require.

<u>Section</u> <u>6.4</u> <u>Adjustments</u>. The Administrator may accelerate the vesting of all or a portion of the Option in such circumstances as it, in its sole discretion, may determine. Participant acknowledges that the Option is subject to adjustment, modification and termination in certain events as provided in this Agreement and the Plan, including <u>Section</u> <u>8.2</u> of the Plan.

<u>Section</u> <u>6.5</u> <u>Notices</u>. Any notice to be given under the terms of this Agreement to the Company shall be addressed to the Company in care of the Secretary of the Company at the Company's principal office, and any notice to be given to Participant shall be addressed to Participant at Participant's last address reflected on the Company's records. By a notice given pursuant to this <u>Section</u> <u>6.5</u>, either party may hereafter designate a different address for notices to be given to that party. Any notice shall be deemed duly given when sent via email or when sent by certified mail (return receipt requested) and deposited (with postage prepaid) in a post office or branch post office regularly maintained by the United States Postal Service.

<u>Section</u> <u>6.6</u> <u>Titles</u>. Titles are provided herein for convenience only and are not to serve as a basis for interpretation or construction of this Agreement.

<u>Section</u> <u>6.7</u> <u>Governing Law</u>. The laws of the State of Delaware shall govern the interpretation, validity, administration, enforcement and performance of the terms of this Agreement regardless of the law that might be applied under principles of conflicts of laws.

<u>Section</u> <u>6.8</u> <u>Conformity to Securities Laws</u>. Participant acknowledges that the Plan, the Grant Notice and this Agreement are intended to conform to the extent necessary with all Applicable Laws, including, without limitation, the provisions of the Securities Act and the Exchange Act, and any and all regulations and rules promulgated thereunder by the Securities and Exchange Commission and state securities laws and regulations. Notwithstanding anything herein to the contrary, the Plan shall be administered, and the Option is granted and may be exercised, only in such a manner as to conform to Applicable Law. To the extent permitted by Applicable Law, the Plan, the Grant Notice and this Agreement shall be deemed amended to the extent necessary to conform to Applicable Law.

------

<u>Section</u> <u>6.9</u> <u>Amendment, Suspension and Termination</u>. To the extent permitted by the Plan, this Agreement may be wholly or partially amended or otherwise modified, suspended or terminated at any time or from time to time by the Administrator or the Board*, provided* that, except as may otherwise be provided by the Plan, no amendment, modification, suspension or termination of this Agreement shall adversely affect the Option in any material way without the prior written consent of Participant.

<u>Section</u> <u>6.10</u> <u>Successors and Assigns</u>. The Company may assign any of its rights under this Agreement to single or multiple assignees, and this Agreement shall inure to the benefit of the successors and assigns of the Company. Subject to the restrictions on transfer set forth in <u>Section</u> <u>6.3</u> and the Plan, this Agreement shall be binding upon and inure to the benefit of the heirs, legatees, legal representatives, successors and assigns of the parties hereto.

<u>Section</u> <u>6.11</u> <u>Limitations Applicable to Section</u> <u>16 Persons</u>. Notwithstanding any other provision of the Plan or this Agreement, if Participant is subject to Section 16 of the Exchange Act, the Plan, the Option, the Grant Notice and this Agreement shall be subject to any additional limitations set forth in any applicable exemptive rule under Section 16 of the Exchange Act (including any amendment to Rule 16b-3 of the Exchange Act) that are requirements for the application of such exemptive rule. To the extent permitted by Applicable Law, this Agreement shall be deemed amended to the extent necessary to conform to such applicable exemptive rule.

<u>Section</u> <u>6.12</u> <u>Not a Contract of Employment</u>. Nothing in this Agreement or in the Plan shall confer upon Participant any right to continue to serve as an employee or other service provider of any Participating Company or shall interfere with or restrict in any way the rights of any Participating Company, which rights are hereby expressly reserved, to discharge or terminate the services of Participant at any time for any reason whatsoever, with or without cause, except to the extent (i) expressly provided otherwise in a written agreement between a Participating Company and Participant or (ii) where such provisions are not consistent with applicable foreign or local laws, in which case such applicable foreign or local laws shall control.

<u>Section</u> <u>6.13</u> <u>Entire Agreement</u>. The Plan, the Grant Notice and this Agreement (including any exhibit hereto) constitute the entire agreement of the parties and supersede in their entirety all prior undertakings and agreements of the Company and Participant with respect to the subject matter hereof.

<u>Section</u> <u>6.14</u> <u>Section 409A</u>. This Option is not intended to constitute "nonqualified deferred compensation" within the meaning of Section 409A. However, notwithstanding any other provision of the Plan, the Grant Notice or this Agreement, if at any time the Administrator determines that this Option (or any portion thereof) may be subject to Section 409A, the Administrator shall have the right in its sole discretion (without any obligation to do so or to indemnify Participant or any other Person for failure to do so) to adopt such amendments to the Plan, the Grant Notice or this Agreement, or adopt other policies and procedures (including amendments, policies and procedures with retroactive effect), or take any other actions, as the Administrator determines are necessary or appropriate for this Option either to be exempt from the application of Section 409A or to comply with the requirements of Section 409A.

<u>Section</u> <u>6.15</u> <u>Agreement Severable</u>. In the event that any provision of the Grant Notice or this Agreement is held invalid or unenforceable, such provision will be severable from, and such invalidity or unenforceability will not be construed to have any effect on, the remaining provisions of the Grant Notice or this Agreement.

<u>Section</u> <u>6.16</u> <u>Limitation on Participant's Rights</u>. Participation in the Plan confers no rights or interests other than as herein provided. This Agreement creates only a contractual obligation on the part of the Company as to amounts payable and shall not be construed as creating a trust. Neither the Plan nor any underlying program, in and of itself, has any assets. Participant shall have only the right to receive Shares as a general unsecured creditor with respect to the Option, as and when exercised pursuant to the terms hereof.

------

<u>Section</u> <u>6.17</u> <u>Counterparts</u>. The Grant Notice may be executed in one or more counterparts, including by way of any electronic signature, subject to Applicable Law, each of which shall be deemed an original and all of which together shall constitute one instrument.

<u>Section</u> <u>6.18</u> <u>Broker-Assisted Sales</u>. In the event of any broker-assisted sale of Shares in connection with the payment of withholding taxes as provided in <u>Section</u> <u>3.4(a)(v)</u> or <u>Section</u> <u>3.4(c)</u> or the payment of the Exercise Price as provided in <u>Section</u> <u>4.4(c)</u>: (a) any Shares to be sold through a broker-assisted sale will be sold on the day the tax withholding obligation or exercise of the Option, as applicable, occurs or arises, or as soon thereafter as practicable; (b) such Shares may be sold as part of a block trade with other participants in the Plan in which all participants receive an average price; (c) Participant will be responsible for all broker's fees and other costs of sale, and Participant agrees to indemnify and hold the Company harmless from any losses, costs, damages, or expenses relating to any such sale; (d) to the extent the proceeds of such sale exceed the applicable tax withholding obligation or Exercise Price, the Company agrees to pay such excess in cash to Participant as soon as reasonably practicable; (e) Participant acknowledges that the Company or its designee is under no obligation to arrange for such sale at any particular price, and that the proceeds of any such sale may not be sufficient to satisfy the applicable tax withholding obligation or Exercise Price; and (f) in the event the proceeds of such sale are insufficient to satisfy the applicable tax withholding obligation, Participant agrees to pay immediately upon demand to the Participating Company with respect to which the withholding obligation arises an amount in cash sufficient to satisfy any remaining portion of the applicable Participating Company's withholding obligation.

<u>Section</u> <u>6.19</u> <u>Incentive Stock Options</u>. Participant acknowledges that to the extent the aggregate Fair Market Value of Shares (determined as of the time the option with respect to the Shares is granted) with respect to which Incentive Stock Options, including this Option (if applicable), are exercisable for the first time by Participant during any calendar year exceeds $100,000 or if for any other reason such Incentive Stock Options do not qualify or cease to qualify for treatment as "incentive stock options" under Section 422 of the Code, such Incentive Stock Options shall be treated as Non-Qualified Stock Options. Participant further acknowledges that the rule set forth in the preceding sentence shall be applied by taking the Option and other stock options into account in the order in which they were granted, as determined under Section 422(d) of the Code and the Treasury Regulations thereunder. Participant also acknowledges that an Incentive Stock Option exercised more than three (3) months after Participant's Termination of Service, other than by reason of death or disability, will be taxed as a Non-Qualified Stock Option.

<u>Section</u> <u>6.20</u> <u>Notification of Disposition</u>. If this Option is designated as an Incentive Stock Option, Participant shall give prompt written notice to the Company of any disposition or other transfer of any Shares acquired under this Agreement if such disposition or transfer is made (a) within two (2) years from the Grant Date or (b) within one (1) year after the transfer of such Shares to Participant. Such notice shall specify the date of such disposition or other transfer and the amount realized, in cash, other property, assumption of indebtedness or other consideration, by Participant in such disposition or other transfer.

**\* \* \* \* \***

## Exhibit 10.6

**Exhibit 10.6** 

**STEINWAY MUSICAL INSTRUMENTS HOLDINGS, INC.** 

**2023 INCENTIVE AWARD PLAN** 

**RESTRICTED STOCK UNIT GRANT NOTICE** 

Capitalized terms not specifically defined in this Restricted Stock Unit Grant Notice (the "<u>Grant Notice</u>") have the meanings given to them in the 2023 Incentive Award Plan (as amended from time to time, the "<u>Plan</u>") of Steinway Musical Instruments Holdings, Inc. (the "<u>Company</u>"). The Company hereby grants to the participant listed below ("<u>Participant</u>") the Restricted Stock Units described in this Grant Notice (the "<u>RSUs</u>"), subject to the terms and conditions of the Plan and the Restricted Stock Unit Agreement attached hereto as <u>Exhibit A</u> (the "<u>Agreement</u>"), both of which are incorporated into this Grant Notice by reference..

---

| |
|:---|
| **Participant:** |
| **Grant Date:** |
| **Number of Restricted Stock Units:** |
| **Vesting Commencement Date:** |
| **Vesting Schedule:** [To be specified in individual agreements]<sup>1</sup> |

---

By Participant's signature below or electronic acceptance or authentication in a form authorized by the Company, Participant agrees to be bound by the terms of this Grant Notice, the Plan and the Agreement. Participant has reviewed the Plan, this Grant Notice and the Agreement in their entirety, has had an opportunity to obtain the advice of counsel prior to executing this Grant Notice and fully understands all provisions of the Plan, this Grant Notice and the Agreement. Participant hereby agrees to accept as binding, conclusive and final all decisions or interpretations of the Administrator upon any questions arising under the Plan, the Grant Notice, the Agreement or relating to the RSUs.

---

| | |
|:---|:---|
| **STEINWAY MUSICAL INSTRUMENTS HOLDINGS, INC.** | **PARTICIPANT** |
| By: | By: |
| Print Name: | Print Name: |
| Title: |  |
|  | Address: |

---

------

<sup>1</sup> Sell-to-cover language as set forth on Annex A to be included as applicable.

------

**EXHIBIT A** 

**<u>TO RESTRICTED STOCK UNIT GRANT NOTICE</u>**

**RESTRICTED STOCK UNIT AGREEMENT** 

Pursuant to the Grant Notice to which this Agreement is attached, the Company has granted to Participant the number of RSUs set forth in the Grant Notice.

**ARTICLE I.** 

**GENERAL** 

<u>Section</u> <u>1.1</u> <u>Defined Terms</u>. Capitalized terms not specifically defined herein shall have the meanings specified in the Plan or the Grant Notice.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a) "<u>Cessation Date</u>" shall mean the date of Participant's Termination of Service (regardless of the reason for such termination).

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b) "<u>CIC Qualifying Termination</u>" shall mean Termination of Service of Participant by any Participating Company without Cause or by Participant for Good Reason during the twenty-four (24) month period immediately following a Change in Control.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c) "<u>Good Reason</u>" shall mean a Participant having "Good Reason" to terminate the Participant's employment as defined in any employment or severance agreement between the Participant and a Participating Company; *provided* that, in the absence of an agreement containing such a definition, a Participant shall have "Good Reason" to terminate the Participant's employment upon or after a Change in Control, (i) any material adverse change by the Participating Companies in Participant's job title, duties, responsibility or authority; (ii) failure by the Participating Companies to pay Participant any amount of Participant's annual base salary or bonus when due; (iii) any material diminution of Participant's annual base salary (other than such a material diminution that is applied on a substantially comparable basis to similarly-situated employees of the Participating Companies); (iv) the termination or denial of Participant's right to participate in material employment-related benefits that are offered to similarly-situated employees of the Participating Companies; (v) the movement of Participant's principal location of work to a new location that is in excess of 30 miles from Participant's principal location of work as of the date hereof without Participant's consent; or (vi) failure by the Company to require any successor to assume and agree to perform the Company's obligations under this Agreement or any employment or severance agreement with the Participant; provided that none of the events described in this definition of Good Reason shall constitute Good Reason unless Participant notifies the Company in writing of the event that is purported to constitute Good Reason (which notice is provided not later than the 30<sup>th</sup> day following the occurrence of the event purported to constitute Good Reason) and then only if the Company fails to cure such event within 30 days after the Company's receipt of such written notice.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(d) "<u>Participating Company</u>" shall mean the Company or any of its parents or Subsidiaries.

<u>Section</u> <u>1.2</u> <u>Incorporation of Terms of Plan</u>. The RSUs and the shares of Class A Common Stock ("<u>Stock</u>") to be issued to Participant hereunder ("<u>Shares</u>") are subject to the terms and conditions set forth in this Agreement and the Plan, which is incorporated herein by reference. In the event of any inconsistency between the Plan and this Agreement, the terms of the Plan shall control.

------

<u>Section</u> <u>1.3</u> <u>Consideration to the Company</u>. In consideration of the grant of the RSUs by the Company, Participant agrees to render faithful and efficient services to any Participating Company.

**ARTICLE II.** 

**AWARD OF RESTRICTED STOCK UNITS** 

<u>Section</u> <u>2.1</u> <u>Award of</u> <u>RSUs</u>. In consideration of Participant's past and/or continued employment with or service to any Participating Company and for other good and valuable consideration, effective as of the grant date set forth in the Grant Notice (the "<u>Grant Date</u>"), the Company has granted to Participant the number of RSUs set forth in the Grant Notice, upon the terms and conditions set forth in the Grant Notice, the Plan and this Agreement, subject to adjustments as provided in Article VIII of the Plan. Each RSU represents the right to receive one Share or, at the option of the Company, an amount of cash as set forth in <u>Section</u> <u>2.3(b)</u>, in either case, at the times and subject to the conditions set forth herein. However, unless and until the RSUs have vested, Participant will have no right to the payment of any Shares subject thereto. Prior to the actual delivery of any Shares, the RSUs will represent an unsecured obligation of the Company, payable only from the general assets of the Company.

<u>Section</u> <u>2.2</u> <u>Vesting of</u> <u>RSUs</u>.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a) Subject to Participant's continued employment with or service to the Participating Companies on each applicable vesting date and subject to the terms of this Agreement, the RSUs shall vest in such amounts and at such times as are set forth in the Grant Notice.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b) In the event Participant incurs a Termination of Service, except as may be otherwise provided by the Administrator or as set forth in a written agreement between Participant and the Company, Participant shall immediately forfeit any and all RSUs granted under this Agreement which have not vested or do not vest on or prior to the date on which such Termination of Service occurs, and Participant's rights in any such RSUs which are not so vested shall lapse and expire.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c) Notwithstanding the Grant Notice or the provisions of <u>Section</u> <u>2.2(a)</u> and <u>Section</u> <u>2.2(b)</u>, in the event of a CIC Qualifying Termination, the RSUs shall become vested in full on the date of such CIC Qualifying Termination.

<u>Section</u> <u>2.3</u> <u>Distribution or Payment of RSUs</u>.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a) Participant's RSUs shall be distributed in Shares (either in book-entry form or otherwise) or, at the option of the Company, paid in an amount of cash as set forth in <u>Section</u> <u>2.3(b)</u>, in either case, as soon as administratively practicable following the vesting of the applicable RSU pursuant to Section 2.2, and, in any event, no later than March 15<sup>th</sup> of the calendar year following the year in which such vesting occurred (for the avoidance of doubt, this deadline is intended to comply with the "short-term deferral" exemption from Section 409A). Notwithstanding the foregoing, the Company may delay a distribution or payment in settlement of RSUs if it reasonably determines that such payment or distribution will violate federal securities laws or any other Applicable Law, *provided* that such distribution or payment shall be made at the earliest date at which the Company reasonably determines that the making of such distribution or payment will not cause such violation, as required by Treasury Regulation Section 1.409A-2(b)(7)(ii), and provided further that no payment or distribution shall be delayed under this Section 2.3(a) if such delay will result in a violation of Section 409A.

------

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b) In the event that the Company elects to make payment of Participant's RSUs in cash, the amount of cash payable with respect to each RSU shall be equal to the Fair Market Value of a Share on the day immediately preceding the applicable distribution or payment date set forth in <u>Section</u> <u>2.3(a)</u>. All distributions made in Shares shall be made by the Company in the form of whole Shares unless otherwise determined by the Administrator. The Administrator shall determine whether cash shall be given in lieu of fractional Shares or whether such fractional Shares shall be eliminated by rounding down.

<u>Section</u> <u>2.4</u> <u>Conditions to Issuance of Certificates</u>. The Company shall not be required to issue or deliver any certificate or certificates for any Shares or to cause any Shares to be held in book-entry form prior to the fulfillment of all of the following conditions: (a) the admission of the Shares to listing on all stock exchanges on which such Shares are then listed, (b) the completion of any registration or other qualification of the Shares under any state or federal law or under rulings or regulations of the Securities and Exchange Commission or other governmental regulatory body, which the Administrator shall, in its absolute discretion, deem necessary or advisable, (c) the obtaining of any approval or other clearance from any state, federal or applicable foreign governmental agency that the Administrator shall, in its absolute discretion, determine to be necessary or advisable, and (d) the receipt of full payment of any applicable withholding tax in accordance with <u>Section</u> <u>2.5</u> by the Participating Company with respect to which the applicable withholding obligation arises.

<u>Section</u> <u>2.5</u> <u>Tax Withholding</u>. Notwithstanding any other provision of this Agreement:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a) As set forth in Section 9.5 of the Plan, the Participating Companies have the authority to deduct or withhold, or require Participant to remit to the applicable Participating Company, an amount sufficient to satisfy any applicable federal, state, local and foreign taxes (including the employee portion of any FICA obligation) required by Applicable Law to be withheld with respect to any taxable event arising in connection with the RSUs. [The Participating Companies may withhold or Participant may make such payment [in one or more of the forms specified below:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(i) by cash or check made payable to the Participating Company with respect to which the withholding obligation arises;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(ii) by the deduction of such amount from other compensation payable to Participant;]<sup>2</sup>

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(iii) with respect to any withholding taxes arising in connection with the distribution of the RSUs, with the consent of the Administrator, by requesting that the Company withhold a net number of vested shares of Stock otherwise issuable pursuant to the RSUs having a then current Fair Market Value not exceeding the amount necessary to satisfy the withholding obligation of the Participating Companies based on the maximum statutory withholding rates in Participant's applicable jurisdictions for federal, state, local and foreign income tax and payroll tax purposes that are applicable to such taxable income;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(iv) [with respect to any withholding taxes arising in connection with the distribution of the RSUs, with the consent of the Administrator, by tendering to the Company vested shares of Stock having a then current Fair Market Value not exceeding the amount necessary to satisfy the withholding obligation of the Participating Companies based on the maximum statutory withholding rates in Participant's applicable jurisdictions for federal, state, local and foreign income tax and payroll tax purposes that are applicable to such taxable income;

------

<sup>2</sup> NTD: Remove if only net withholding will be permitted.

------

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(v) with respect to any withholding taxes arising in connection with the distribution of the RSUs, with the consent of the Administrator, through the delivery of a notice that Participant has placed a market sell order with a broker acceptable to the Company with respect to shares of Stock then issuable to Participant pursuant to the RSUs, and that the broker has been directed to pay a sufficient portion of the net proceeds of the sale to the Participating Company with respect to which the withholding obligation arises in satisfaction of such withholding taxes; *provided* that payment of such proceeds is then made to the applicable Participating Company at such time as may be required by the Administrator, but in any event not later than the settlement of such sale; or

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(vi) in any combination of the foregoing]<sup>3</sup>.]<sup>4</sup>

[In satisfaction of such tax withholding obligations and in accordance with the Sell to Cover Election included in the Grant Notice, the Participant has irrevocably elected to sell the portion of the Shares to be delivered under the Restricted Stock Units necessary so as to satisfy the tax withholding obligations and shall execute any letter of instruction or agreement required by the Company's transfer agent (together with any other party the Company determines necessary to execute the Sell to Cover Election, the "<u>Agent</u>") to cause the Agent to irrevocably commit to forward the proceeds necessary to satisfy the tax withholding obligations directly to the Company and/or its affiliates. Notwithstanding any other provision of this Agreement, the Company shall not be obligated to deliver any new certificate representing Shares to the Participant or the Participant's legal representative or enter such Shares in book entry form unless and until the Participant or the Participant's legal representative shall have paid or otherwise satisfied in full the amount of all federal, state and local taxes applicable to the taxable income of the Participant resulting from the grant or vesting of the RSUs or the issuance of Shares. In accordance with Participant's Sell to Cover Election pursuant to the Grant Notice, the Participant hereby acknowledges and agrees:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(i) The Participant hereby appoints the Agent as the Participant's agent and authorizes the Agent to (1) sell on the open market at the then prevailing market price(s), on the Participant's behalf, as soon as practicable on or after the Shares are issued upon the vesting of the RSUs, that number (rounded up to the next whole number) of the Shares so issued necessary to generate proceeds to cover (x) any tax withholding obligations incurred with respect to such vesting or issuance and (y) all applicable fees and commissions due to, or required to be collected by, the Agent with respect thereto and (2) apply any remaining funds to the Participant's federal tax withholding.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(ii) The Participant hereby authorizes the Company and the Agent to cooperate and communicate with one another to determine the number of Shares that must be sold pursuant to subsection (i) above.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(iii) The Participant understands that the Agent may effect sales as provided in subsection (i) above in one or more sales and that the average price for executions resulting from bunched orders will be assigned to the Participant's account. In addition, the Participant acknowledges that it may not be possible to sell Shares as provided by subsection (i) above due to (1) a legal or contractual restriction applicable to the Participant or the Agent, (2) a market disruption, or (3) rules governing order execution priority on the national exchange where the Shares may be traded. The Participant further agrees and acknowledges that in the event the sale of Shares would result in material adverse harm to the Company, as determined by the Company in its sole discretion, the Company may instruct the Agent not to sell Shares as provided by subsection (i) above. In the event of the Agent's inability to sell Shares, the Participant will continue to be responsible for the timely payment to the Company and/or its affiliates of all federal, state, local and foreign taxes that are required by applicable laws and regulations to be withheld, including but not limited to those amounts specified in subsection (i) above.

------

<sup>3</sup> Remove if only net withholding will be permitted.

<sup>4</sup> Remove if sell-to-cover is included.

------

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(iv) The Participant acknowledges that regardless of any other term or condition of this <u>Section</u> <u>2.5(a)</u>, the Agent will not be liable to the Participant for (1) special, indirect, punitive, exemplary, or consequential damages, or incidental losses or damages of any kind, or (2) any failure to perform or for any delay in performance that results from a cause or circumstance that is beyond its reasonable control.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(v) The Participant hereby agrees to execute and deliver to the Agent any other agreements or documents as the Agent reasonably deems necessary or appropriate to carry out the purposes and intent of this <u>Section</u> <u>2.5(a)</u>. The Agent is a third-party beneficiary of this <u>Section</u> <u>2.5(a)</u>.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(vi) This <u>Section</u> <u>2.5(a)</u> shall terminate not later than the date on which all tax withholding obligations arising in connection with the vesting of the Award have been satisfied.]<sup>5</sup>

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b) [With respect to any withholding taxes arising in connection with the RSUs, in the event Participant fails to provide timely payment of all sums required pursuant to <u>Section</u> <u>2.5(a)</u>, the Company shall have the right and option, but not the obligation, to treat such failure as an election by Participant to satisfy all or any portion of Participant's required payment obligation pursuant to <u>Section</u> <u>2.5(a)(ii)</u> or <u>Section</u> <u>2.5(a)(iii)</u> above, or any combination of the foregoing as the Company may determine to be appropriate.]<sup>6</sup> The Company shall not be obligated to deliver any certificate representing shares of Stock issuable with respect to the RSUs to, or to cause any such Shares to be held in book-entry form by, Participant or his or her legal representative unless and until Participant or his or her legal representative shall have paid or otherwise satisfied in full the amount of all federal, state, local and foreign taxes applicable with respect to the taxable income of Participant resulting from the vesting or settlement of the RSUs or any other taxable event related to the RSUs.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c) [In the event any tax withholding obligation arising in connection with the RSUs will be satisfied under <u>Section</u> <u>2.5(a)(iii)</u>, then the Company may elect to instruct any brokerage firm determined acceptable to the Company for such purpose to sell on Participant's behalf a whole number of shares from those shares of Stock then issuable to Participant pursuant to the RSUs as the Company determines to be appropriate to generate cash proceeds sufficient to satisfy the tax withholding obligation and to remit the proceeds of such sale to the Participating Company with respect to which the withholding obligation arises. Participant's acceptance of this Award constitutes Participant's instruction and authorization to the Company and such brokerage firm to complete the transactions described in this <u>Section</u> <u>2.5(c)</u>, including the transactions described in the previous sentence, as applicable. The Company may refuse to issue any shares of Stock in settlement of the RSUs to Participant until the foregoing tax withholding obligations are satisfied, provided that no payment shall be delayed under this Section 2.5(c) if such delay will result in a violation of Section 409A of the Code.]<sup>7</sup>

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(d) Participant is ultimately liable and responsible for all taxes owed in connection with the RSUs, regardless of any action any Participating Company takes with respect to any tax withholding obligations that arise in connection with the RSUs. No Participating Company makes any representation or undertaking regarding the treatment of any tax withholding in connection with the awarding, vesting or payment of the RSUs or the subsequent sale of Shares. The Participating Companies do not commit and are under no obligation to structure the RSUs to reduce or eliminate Participant's tax liability.

------

<sup>5</sup> Keep if sell-to-cover is included.

<sup>6</sup> Remove if sell-to-cover is included.

<sup>7</sup> Remove if sell-to-cover is included.

------

<u>Section</u> <u>2.6</u> <u>Rights as Stockholder</u>. Neither Participant nor any Person claiming under or through Participant will have any of the rights or privileges of a stockholder of the Company in respect of any Shares deliverable hereunder unless and until certificates representing such Shares (which may be in book-entry form) will have been issued and recorded on the records of the Company or its transfer agents or registrars, and delivered to Participant (including through electronic delivery to a brokerage account). Except as otherwise provided herein, after such issuance, recordation and delivery, Participant will have all the rights of a stockholder of the Company with respect to such Shares, including, without limitation, the right to receipt of dividends and distributions on such Shares.

**ARTICLE III.** 

<u>Section</u> <u>3.1</u> <u>Restrictive Covenants</u>. In consideration of the benefits being provided to Participant pursuant to this Agreement, Participant agrees to be bound by the restrictive covenants contained in this Article III.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a) <u>Obligation to Maintain Confidentiality</u>. Participant agrees not to divulge to third parties, or use in a manner not authorized by the Company, any confidential or Participating Company proprietary information gathered or learned by Participant during his or her employment with the Participating Companies or their respective affiliates. "<u>Confidential Information</u>" includes, but is not limited to, information in oral, written or recorded form regarding business plans, trade or business secrets, Participating Company financial records, supplier contracts or relationships, or any other information that the Participating Companies do not regularly disclose to the public. To the extent that Participant has any doubt as to whether information constitutes Confidential Information, Participant agrees to obtain advice from the Company's General Counsel prior to divulging or using such information. Participant understands and agrees that divulging such information to third parties, or using such information in an unauthorized manner, would cause serious competitive harm to the Company. Confidential Information shall exclude: (a) information that is generally known by or available for use by the public, (b) information that was known by Participant prior to his or her employment with the Participating Companies (including their respective predecessors in interest, affiliates and Subsidiaries) and was obtained, to the best of Participant's knowledge, without violation of any obligation of confidentiality to the Participating Companies, or (c) information that is required to be disclosed pursuant to applicable law or a court order. If information is required to be disclosed because of a court order, Participant must notify the Company's General Counsel immediately. Nothing in this <u>Section</u> <u>3.1(a)</u> shall be interpreted to preclude Participant from communicating to a governmental agency about terms or conditions of employment or legal compliance issues, or from cooperating with an investigation being conducted by a governmental agency.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b) <u>Ownership of Property</u>. Participant acknowledges that all discoveries, concepts, ideas, inventions, innovations, improvements, developments, methods, processes, programs, designs, analyses, drawings, reports, patent applications, copyrightable work, and mask work (whether or not including any Confidential Information) and all registrations or applications related thereto, all other proprietary information, and all similar or related information (whether or not patentable) that relate to the Participating Companies' or affiliates' actual or anticipated business, research and development, or existing or future products or services, and that were or are conceived, developed, contributed to, made or reduced to practice by Participant (either solely or jointly with others) while employed by or in the service of the Participating Companies or their respective affiliates (including, without limitation, prior to the date of this Agreement) (including any of the foregoing that constitutes any proprietary information or records) ("<u>Work Product</u>") belong to the Participating Companies or their respective affiliates, and Participant hereby assigns, and agrees to assign, all of the above Work Product to a Participating Company or affiliate thereof.

------

Any copyrightable work prepared in whole or in part by Participant in the course of Participant's work for any of the foregoing entities shall be deemed a "work made for hire" under the copyright laws, and the Participating Company or affiliate thereof shall own all rights therein. To the extent that any such copyrightable work is not a "work made for hire", Participant hereby assigns and agrees to assign to the Participating Company or affiliate thereof all right, title, and interest, including without limitation, copyright in and to such copyrightable work. Participant shall as promptly as practicable under the circumstances disclose such Work Product and copyrightable work to the Company and perform all actions reasonably requested by the Company (whether during or after Participant's employment with or service to the Participating Companies and their respective affiliates) to establish and confirm the Participating Company's or such affiliate's ownership (including, without limitation, assignments, consents, powers of attorney, and other instruments). Participant is hereby provided notice of immunity under the federal Defend Trade Secrets Act of 2016, which states: (i) an individual shall not be held criminally or civilly liable under any federal or state trade secret law for the disclosure of a trade secret that (A) is made (1) in confidence to a federal, state, or local government official, either directly or indirectly, or to an attorney and (2) solely for the purpose of reporting or investigating a suspected violation of law, or (B) is made in a complaint or other document filed in a lawsuit or other proceeding, if such filing is made under seal; and (ii) an individual who files a lawsuit for retaliation by an employer for reporting a suspected violation of law may disclose the trade secret to the attorney of the individual and use the trade secret information in the court proceeding, if the individual (A) files any document containing the trade secret under seal and (B) does not disclose the trade secret, except pursuant to court order.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c) <u>Third Party Information</u>. Participant understands that the Participating Companies and their respective affiliates will receive from third parties confidential or proprietary information ("<u>Third Party Information</u>") subject to a duty on the Participating Companies or their respective affiliates part to maintain the confidentiality of such information and to use it only for certain limited purposes. During the period of Participant's employment with or service to the Company or its Subsidiaries or affiliates and thereafter, and without in any way limiting the provisions of <u>Section</u> <u>3.1(a)</u> above, Participant will hold Third Party Information in the strictest confidence and will not disclose to any one (other than personnel and consultants of the Participating Companies and their respective affiliates who need to know such information in connection with their work for the Participating Companies and their respective affiliates) or use, except in connection with Participant's work for the Participating Companies or their respective affiliates, Third Party Information unless expressly authorized by the Company in writing or unless and to the extent that the Third Party Information (a) becomes generally known to and available for use by the public other than as a result of Participant's acts or omissions to act, (b) was known to Participant prior to Participant's employment with or service to the Participating Companies or their respective affiliates and was obtained, to the best of Participant's knowledge, without violation of any obligation of confidentiality to the Company, or (c) is required to be disclosed pursuant to any applicable law or court order.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(d) <u>Nonsolicitation</u>. Participant acknowledges that, in the course of Participant's employment, Participant will become familiar with the Participating Companies' and their respective affiliates' trade secrets and with other Confidential Information concerning the Participating Companies and their respective affiliates and that Participant's services will be of special, unique and extraordinary value to the Participating Companies and their respective affiliates. Participant agrees that, while employed by any Participating Company or its affiliates, and continuing until the twelve (12) month anniversary of the date of any termination of Participant's employment or service, Participant shall not directly or indirectly through another entity (i) induce or attempt to induce any employee of the Participating Companies or their respective affiliates to leave the employ of the Participating Companies or their respective affiliates, or in any way interfere with the relationship between the Participating Companies or their respective affiliates and any employee thereof, (ii) hire any person who was an employee of the Participating Companies or their respective affiliates within 180 days prior to the time such employee was hired by Participant, (iii) induce or attempt to induce any customer, supplier, licensee or other business

------

relation of the Participating Companies or their respective affiliates to cease doing business with the Participating Companies or their respective affiliates or in any way interfere with the relationship between any such customer, licensee or business relation and the Participating Companies or their respective affiliates, or (iv) directly or indirectly acquire or attempt to acquire an interest in any business relating to the business of the Company or its Subsidiaries or affiliates and with which any of the Participating Companies or their respective affiliates have entered into substantive negotiations or has requested and received confidential information relating to the acquisition of such business by the Participating Companies or their respective affiliates in the two-year period immediately preceding Participant's termination of employment with any Participating Company.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(e) <u>Non-disparagement</u>. Participant agrees that at no time during his or her employment by any Participating Company or thereafter shall he or she make, or cause or assist any other person to make, any statement or other communication to any third party which impugns or attacks, or is otherwise critical of, in any material respect, the reputation, business or character of the Participating Companies or their respective affiliates or any of their respective directors, officers or employees; provided that Participant shall not be required to make any untruthful statement or to violate any law.

<u>Section</u> <u>3.2</u> <u>Enforcement</u>. If, at the time of enforcement of Article III of this Agreement, a court holds that the restrictions stated therein are unreasonable under circumstances then existing, the parties hereto agree that the maximum duration, scope or geographical area reasonable under such circumstances shall be substituted for the stated period, scope or area and that the court shall be allowed to revise the restrictions contained herein to cover the maximum duration, scope and area permitted by law. Participant agrees that because his or her services are unique and Participant has access to confidential information, money damages would be an inadequate remedy for any breach of this Article III and its subsections. Participant agrees that the Participating Companies and their respective affiliates, in the event of a breach or threatened breach of this Article III or any of its subsections, may seek injunctive or other equitable relief in addition to any other remedy available to them in a court of competent jurisdiction without posting bond or other security.

<u>Section</u> <u>3.3</u> <u>Acknowledgments</u>. Participant acknowledges that the provisions of this Article III and its subsections are (a) in addition to, and not in limitation of, any obligation of Participant under the terms of any other agreement with the Participating Companies or their respective affiliates (including, without limitation, the restrictive covenants in any employment or severance agreement between the Participant and any Participating Company, which Participant acknowledges remain in full force and effect in accordance with their terms), and (b) in consideration of (i) employment with the Participating Companies, and (ii) additional good and valuable consideration as set forth in this Agreement. In addition, Participant agrees and acknowledges that the restrictions contained in this Article III and its subsections do not preclude Participant from earning a livelihood, nor do they unreasonably impose limitations on Participant's ability to earn a living. Participant agrees and acknowledges that the potential harm to the Participating Companies or their respective affiliates of the non-enforcement of this Article III and its subsections outweighs any potential harm to Participant of its enforcement by injunction or otherwise. Participant acknowledges that he or she has carefully read this Agreement and has given careful consideration to the restraints imposed upon Participant by this Agreement, and is in full accord as to their necessity for the reasonable and proper protection of confidential and proprietary information of the Participating Companies and their respective affiliates now existing or to be developed in the future. Participant expressly acknowledges and agrees that each and every restraint imposed by this Agreement is reasonable with respect to subject matter, time period and geographical area.

------

**ARTICLE IV.** 

**OTHER PROVISIONS** 

<u>Section</u> <u>4.1</u> <u>Administration</u>. The Administrator shall have the power to interpret the Plan, the Grant Notice and this Agreement and to adopt such rules for the administration, interpretation and application of the Plan, the Grant Notice and this Agreement as are consistent therewith and to interpret, amend or revoke any such rules. All actions taken and all interpretations and determinations made by the Administrator will be final and binding upon Participant, the Company and all other interested Persons. To the extent allowable pursuant to Applicable Law, no member of the Committee or the Board will be personally liable for any action, determination or interpretation made with respect to the Plan, the Grant Notice or this Agreement.

<u>Section</u> <u>4.2</u> <u>RSUs</u> <u>Not Transferable</u>. The RSUs may not be sold, pledged, assigned or transferred in any manner other than by will or the laws of descent and distribution, unless and until the Shares underlying the RSUs have been issued, and all restrictions applicable to such Shares have lapsed. No RSUs or any interest or right therein or part thereof shall be liable for the debts, contracts or engagements of Participant or his or her successors in interest or shall be subject to disposition by transfer, alienation, anticipation, pledge, encumbrance, assignment or any other means whether such disposition be voluntary or involuntary or by operation of law by judgment, levy, attachment, garnishment or any other legal or equitable proceedings (including bankruptcy), and any attempted disposition thereof shall be null and void and of no effect, except to the extent that such disposition is permitted by the preceding sentence.

<u>Section</u> <u>4.3</u> <u>Adjustments</u> The Administrator may accelerate the vesting of all or a portion of the RSUs in such circumstances as it, in its sole discretion, may determine. Participant acknowledges that the RSUs and the Shares subject to the RSUs are subject to adjustment, modification and termination in certain events as provided in this Agreement and the Plan, including Section 8.2 of the Plan.

<u>Section</u> <u>4.4</u> <u>Notices</u>. Any notice to be given under the terms of this Agreement to the Company shall be addressed to the Company in care of the Secretary of the Company at the Company's principal office, and any notice to be given to Participant shall be addressed to Participant at Participant's last address reflected on the Company's records. By a notice given pursuant to this <u>Section</u> <u>4.4</u>, either party may hereafter designate a different address for notices to be given to that party. Any notice shall be deemed duly given when sent via email or when sent by certified mail (return receipt requested) and deposited (with postage prepaid) in a post office or branch post office regularly maintained by the United States Postal Service.

<u>Section</u> <u>4.5</u> <u>Titles</u>. Titles are provided herein for convenience only and are not to serve as a basis for interpretation or construction of this Agreement.

<u>Section</u> <u>4.6</u> <u>Governing Law</u>. The laws of the State of Delaware shall govern the interpretation, validity, administration, enforcement and performance of the terms of this Agreement regardless of the law that might be applied under principles of conflicts of laws.

<u>Section</u> <u>4.7</u> <u>Conformity to Securities Laws</u>. Participant acknowledges that the Plan, the Grant Notice and this Agreement are intended to conform to the extent necessary with all Applicable Laws, including, without limitation, the provisions of the Securities Act and the Exchange Act, and any and all regulations and rules promulgated thereunder by the Securities and Exchange Commission and state securities laws and regulations. Notwithstanding anything herein to the contrary, the Plan shall be administered, and the RSUs are granted, only in such a manner as to conform to Applicable Law. To the extent permitted by Applicable Law, the Plan, the Grant Notice and this Agreement shall be deemed amended to the extent necessary to conform to Applicable Law.

------

<u>Section</u> <u>4.8</u> <u>Amendment, Suspension and Termination</u>. To the extent permitted by the Plan, this Agreement may be wholly or partially amended or otherwise modified, suspended or terminated at any time or from time to time by the Administrator or the Board*, provided* that, except as may otherwise be provided by the Plan, no amendment, modification, suspension or termination of this Agreement shall adversely affect the RSUs in any material way without the prior written consent of Participant.

<u>Section</u> <u>4.9</u> <u>Successors and Assigns</u>. The Company may assign any of its rights under this Agreement to single or multiple assignees, and this Agreement shall inure to the benefit of the successors and assigns of the Company. Subject to the restrictions on transfer set forth in <u>Section</u> <u>4.2</u> and the Plan, this Agreement shall be binding upon and inure to the benefit of the heirs, legatees, legal representatives, successors and assigns of the parties hereto.

<u>Section</u> <u>4.10</u> <u>Limitations Applicable to Section</u> <u>16 Persons</u>. Notwithstanding any other provision of the Plan or this Agreement, if Participant is subject to Section 16 of the Exchange Act, the Plan, the RSUs, the Grant Notice and this Agreement shall be subject to any additional limitations set forth in any applicable exemptive rule under Section 16 of the Exchange Act (including any amendment to Rule 16b-3 of the Exchange Act) that are requirements for the application of such exemptive rule. To the extent permitted by Applicable Law, this Agreement shall be deemed amended to the extent necessary to conform to such applicable exemptive rule.

<u>Section</u> <u>4.11</u> <u>Not a Contract of Employment</u>. Nothing in this Agreement or in the Plan shall confer upon Participant any right to continue to serve as an employee or other service provider of any Participating Company or shall interfere with or restrict in any way the rights of any Participating Company, which rights are hereby expressly reserved, to discharge or terminate the services of Participant at any time for any reason whatsoever, with or without cause, except to the extent (i) expressly provided otherwise in a written agreement between a Participating Company and Participant or (ii) where such provisions are not consistent with applicable foreign or local laws, in which case such applicable foreign or local laws shall control.

<u>Section</u> <u>4.12</u> <u>Entire Agreement</u>. The Plan, the Grant Notice and this Agreement (including any exhibit hereto) constitute the entire agreement of the parties and supersede in their entirety all prior undertakings, notices, communications and agreements of the Company and Participant with respect to the subject matter hereof.

<u>Section</u> <u>4.13</u> <u>Section 409A</u>. This Award is not intended to constitute "nonqualified deferred compensation" within the meaning of Section 409A. However, notwithstanding any other provision of the Plan, the Grant Notice or this Agreement, if at any time the Administrator determines that this Award (or any portion thereof) may be subject to Section 409A, the Administrator shall have the right in its sole discretion (without any obligation to do so or to indemnify Participant or any other Person for failure to do so) to adopt such amendments to the Plan, the Grant Notice or this Agreement, or adopt other policies and procedures (including amendments, policies and procedures with retroactive effect), or take any other actions, as the Administrator determines are necessary or appropriate for this Award either to be exempt from the application of Section 409A or to comply with the requirements of Section 409A.

<u>Section</u> <u>4.14</u> <u>Agreement Severable</u>. In the event that any provision of the Grant Notice or this Agreement is held invalid or unenforceable, such provision will be severable from, and such invalidity or unenforceability will not be construed to have any effect on, the remaining provisions of the Grant Notice or this Agreement.

------

<u>Section</u> <u>4.15</u> <u>Limitation on Participant's Rights</u>. Participation in the Plan confers no rights or interests other than as herein provided. This Agreement creates only a contractual obligation on the part of the Company as to amounts payable and shall not be construed as creating a trust. Neither the Plan nor any underlying program, in and of itself, has any assets. Participant shall have only the rights of a general unsecured creditor of the Company with respect to amounts credited and benefits payable, if any, with respect to the RSUs.

<u>Section</u> <u>4.16</u> <u>Counterparts</u>. The Grant Notice may be executed in one or more counterparts, including by way of any electronic signature, subject to Applicable Law, each of which shall be deemed an original and all of which together shall constitute one instrument.

<u>Section</u> <u>4.17</u> <u>[Broker-Assisted Sales</u>. In the event of any broker-assisted sale of shares of Stock in connection with the payment of withholding taxes as provided in <u>Section</u> <u>2.5(a)(iii)</u> or <u>Section</u> <u>2.5(a)(v)</u>: (A) any shares of Stock to be sold through a broker-assisted sale will be sold on the day the tax withholding obligation arises or as soon thereafter as practicable; (B) such shares of Stock may be sold as part of a block trade with other participants in the Plan in which all participants receive an average price; (C) Participant will be responsible for all broker's fees and other costs of sale, and Participant agrees to indemnify and hold the Company harmless from any losses, costs, damages, or expenses relating to any such sale; (D) to the extent the proceeds of such sale exceed the applicable tax withholding obligation, the Company agrees to pay such excess in cash to Participant as soon as reasonably practicable; (E) Participant acknowledges that the Company or its designee is under no obligation to arrange for such sale at any particular price, and that the proceeds of any such sale may not be sufficient to satisfy the applicable tax withholding obligation; and (F) in the event the proceeds of such sale are insufficient to satisfy the applicable tax withholding obligation, Participant agrees to pay immediately upon demand to the Participating Company with respect to which the withholding obligation arises an amount in cash sufficient to satisfy any remaining portion of the applicable Participating Company's withholding obligation.]<sup>8</sup>

------

<sup>8</sup> Remove if sell-to-cover included.

------

**<u>ANNEX A</u>**

**Grant Notice Sell-to-Cover Language** 

**Withholding Tax Election**: By accepting this Award electronically through the Plan service provider's online grant acceptance policy, the Participant understands and agrees that as a condition of the grant of the RSUs hereunder, the Participant is required to, and hereby affirmatively elects to (the "Sell to Cover Election"), (1) sell that number of Shares determined in accordance with Section 2.5 of the Agreement as may be necessary to satisfy all applicable withholding obligations with respect to any taxable event arising in connection with the RSUs and similarly sell such number of Shares as may be necessary to satisfy all applicable withholding obligations with respect to any other awards of restricted stock units granted to the Participant under the Plan or any other equity incentive plans of the Company, and (2) to allow the Agent (as defined in the Agreement) to remit the cash proceeds of such sale(s) to the Company. Furthermore, the Participant directs the Company to make a cash payment equal to the required tax withholding from the cash proceeds of such sale(s) directly to the appropriate taxing authorities. **The Participant has carefully reviewed Section 2.5 of the Agreement and the Participant hereby represents and warrants that on the date hereof he or she is not aware of any material, nonpublic information with respect to the Company or any securities of the Company, is not subject to any legal, regulatory or contractual restriction that would prevent the Agent from conducting sales, does not have, and will not attempt to exercise, authority, influence or control over any sales of Shares effected by the Agent pursuant to the Agreement, and is entering into the Agreement and this election to "sell to cover" in good faith and not as part of a plan or scheme to evade the prohibitions of Rule 10b5-1 (regarding trading of the Company's securities on the basis of material nonpublic information) under the Securities Exchange Act of 1934, as amended (the "Exchange Act"). It is the Participant's intent that this election to "sell to cover" comply with the requirements of Rule 10b5-1(c)(1)(i)(B) under the Exchange Act and be interpreted to comply with the requirements of Rule 10b5-1(c) under the Exchange Act.**

## Exhibit 10.10

**Exhibit 10.10**

**$75,000,000 ABL CREDIT AGREEMENT** 

**dated as of September 19, 2013** 

**among** 

**PIANISSIMO ACQUISITION CORP. (to be merged with and into** 

**STEINWAY MUSICAL INSTRUMENTS, INC.),** 

**as Parent Borrower,** 

**STEINWAY, INC,** 

**CONN-SELMER, INC.,** 

**as Borrowers,** 

**PIANISSIMO HOLDINGS CORP.,** 

**THE LENDERS FROM TIME TO TIME PARTY HERETO,** 

**BANK OF AMERICA, N.A.,** 

**as Administrative Agent, Swing Line Lender and L/C Issuer,** 

**and** 

**DEUTSCHE BANK SECURITIES INC.,** 

**as Sole Syndication Agent** 

------

**BANK OF AMERICA, N.A.** 

**and** 

**DEUTSCHE BANK SECURITIES INC.,** 

**as Joint Lead Arrangers and Joint Book Managers** 

------

**TABLE OF CONTENTS** 

---

| | | |
|:---|:---|:---|
|  |  | **Page** |
| **ARTICLE I** | **ARTICLE I** | **ARTICLE I** |
| **DEFINITIONS AND ACCOUNTING TERMS** | **DEFINITIONS AND ACCOUNTING TERMS** | **DEFINITIONS AND ACCOUNTING TERMS** |
|  Section 1.01 | Defined Terms | 1 |
|  Section 1.02 | Other Interpretative Provisions | 50 |
|  Section 1.03 | Accounting Terms and Determinations | 51 |
|  Section 1.04 | Rounding | 52 |
|  Section 1.05 | Times of Day; Rates | 52 |
|  Section 1.06 | Currency Equivalents Generally | 52 |
|  Section 1.07 | Letter of Credit Amounts | 53 |
| **ARTICLE II** | **ARTICLE II** | **ARTICLE II** |
| **THE COMMITMENTS AND LOANS** | **THE COMMITMENTS AND LOANS** | **THE COMMITMENTS AND LOANS** |
|  Section 2.01 | Commitments | 53 |
|  Section 2.02 | Borrowings, Conversions and Continuations of Loans | 53 |
|  Section 2.03 | Letters of Credit | 56 |
|  Section 2.04 | Swing Line Loans | 63 |
|  Section 2.05 | Prepayments | 66 |
|  Section 2.06 | Scheduled Repayment of Loans | 68 |
|  Section 2.07 | Termination and Reduction of Revolving Facility Commitments | 68 |
|  Section 2.08 | Interest | 69 |
|  Section 2.09 | Fees | 69 |
|  Section 2.10 | Computation of Interest and Fees | 71 |
|  Section 2.11 | Evidence of Debt | 72 |
|  Section 2.12 | Payments Generally; Administrative Agent's Clawback | 72 |
|  Section 2.13 | Sharing of Payments by Lenders | 74 |
|  Section 2.14 | Incremental Loans | 75 |
|  Section 2.15 | Defaulting Lenders | 77 |
|  Section 2.16 | Cash Collateral | 80 |
|  Section 2.17 | Agent Advances; Overadvances | 81 |
|  Section 2.18 | Settlement | 82 |
| **ARTICLE III** | **ARTICLE III** | **ARTICLE III** |
| **TAXES, YIELD PROTECTION AND ILLEGALITY** | **TAXES, YIELD PROTECTION AND ILLEGALITY** | **TAXES, YIELD PROTECTION AND ILLEGALITY** |
|  Section 3.01 | Taxes | 84 |
|  Section 3.02 | Illegality | 88 |
|  Section 3.03 | Inability to Determine Rates | 88 |
|  Section 3.04 | Increased Costs | 89 |
|  Section 3.05 | Compensation for Losses | 91 |
|  Section 3.06 | Mitigation Obligations; Replacement of Lenders | 91 |
|  Section 3.07 | Survival | 92 |

---

i

------

---

| | | |
|:---|:---|:---|
| **ARTICLE IV** | **ARTICLE IV** | **ARTICLE IV** |
| **CONDITIONS PRECEDENT** | **CONDITIONS PRECEDENT** | **CONDITIONS PRECEDENT** |
|  Section 4.01 | Conditions to Closing Date Borrowing | 92 |
|  Section 4.02 | All Credit Events | 99 |
| **ARTICLE V** | **ARTICLE V** | **ARTICLE V** |
| **REPRESENTATIONS AND WARRANTIES** | **REPRESENTATIONS AND WARRANTIES** | **REPRESENTATIONS AND WARRANTIES** |
|  Section 5.01 | Corporate Existence and Power; Compliance with Laws | 99 |
|  Section 5.02 | Corporate Authorization; No Contravention | 100 |
|  Section 5.03 | Governmental Authorization | 100 |
|  Section 5.04 | Binding Effect | 100 |
|  Section 5.05 | Litigation | 101 |
|  Section 5.06 | No Default | 101 |
|  Section 5.07 | ERISA Compliance | 101 |
|  Section 5.08 | Use of Proceeds; Margin Regulations | 102 |
|  Section 5.09 | Ownership of Property; Liens | 102 |
|  Section 5.10 | Taxes | 102 |
|  Section 5.11 | Financial Condition | 103 |
|  Section 5.12 | Environmental Matters | 104 |
|  Section 5.13 | Regulated Entities | 104 |
|  Section 5.14 | Solvency | 104 |
|  Section 5.15 | Labor Relations | 105 |
|  Section 5.16 | Intellectual Property | 105 |
|  Section 5.17 | Brokers' Fees; Transaction Fees | 105 |
|  Section 5.18 | Insurance | 105 |
|  Section 5.19 | Ventures, Subsidiaries and Affiliates; Outstanding Stock | 106 |
|  Section 5.20 | Jurisdiction of Organization; Chief Executive Office | 106 |
|  Section 5.21 | Status of Steinway and Sons | 106 |
|  Section 5.22 | Full Disclosure | 106 |
|  Section 5.23 | Foreign Assets Control Regulations, Export Controls and Anti-Money Laundering | 107 |
|  Section 5.24 | Patriot Act | 107 |
|  Section 5.25 | No Restricted Payments | 107 |
|  Section 5.26 | Collateral Documents | 108 |
| **ARTICLE VI**<br> **AFFIRMATIVE COVENANTS** | **ARTICLE VI**<br> **AFFIRMATIVE COVENANTS** | **ARTICLE VI**<br> **AFFIRMATIVE COVENANTS** |
| **ARTICLE VI**<br> **AFFIRMATIVE COVENANTS** | **ARTICLE VI**<br> **AFFIRMATIVE COVENANTS** | **ARTICLE VI**<br> **AFFIRMATIVE COVENANTS** |
|  Section 6.01 | Financial Statements | 109 |
|  Section 6.02 | Certificates; Other Information | 110 |
|  Section 6.03 | Notices | 113 |
|  Section 6.04 | Preservation of Corporate Existence, Etc. | 114 |
|  Section 6.05 | Maintenance of Property | 115 |
|  Section 6.06 | Insurance | 115 |
|  Section 6.07 | Payment of Obligations | 116 |

---

ii

------

---

| | | |
|:---|:---|:---|
|  Section 6.08 | Compliance with Laws | 117 |
|  Section 6.09 | Inspection of Property and Books and Records; Quarterly Management Calls | 117 |
|  Section 6.10 | Use of Proceeds | 117 |
|  Section 6.11 | Collection of Accounts; Management of Collateral | 118 |
|  Section 6.12 | Landlord Agreements | 120 |
|  Section 6.13 | Further Assurances | 121 |
|  Section 6.14 | Environmental Matters | 122 |
|  Section 6.15 | Post-Closing Obligations | 123 |
|  Section 6.16 | Material Contracts | 123 |
|  Section 6.17 | Designation as Senior Debt | 123 |
|  Section 6.18 | Change in Collateral; Collateral Records; Account Documentation | 123 |
| **ARTICLE VII**<br> **NEGATIVE COVENANTS** | **ARTICLE VII**<br> **NEGATIVE COVENANTS** | **ARTICLE VII**<br> **NEGATIVE COVENANTS** |
| **ARTICLE VII**<br> **NEGATIVE COVENANTS** | **ARTICLE VII**<br> **NEGATIVE COVENANTS** | **ARTICLE VII**<br> **NEGATIVE COVENANTS** |
|  Section 7.01 | Limitation on Liens | 124 |
|  Section 7.02 | Disposition of Assets | 126 |
|  Section 7.03 | Consolidations and Mergers | 127 |
|  Section 7.04 | Acquisitions; Loans and Investments | 128 |
|  Section 7.05 | Limitation on Indebtedness | 129 |
|  Section 7.06 | Employee Loans and Transactions with Affiliates | 131 |
|  Section 7.07 | Management Fees and Compensation | 131 |
|  Section 7.08 | Use of Proceeds | 131 |
|  Section 7.09 | Contingent Obligations | 132 |
|  Section 7.10 | Reserved | 132 |
|  Section 7.11 | Restricted Payments | 133 |
|  Section 7.12 | Change in Business | 134 |
|  Section 7.13 | Reserved | 135 |
|  Section 7.14 | Changes in Accounting, Name or Jurisdiction of Organization | 135 |
|  Section 7.15 | Amendments to Related Agreements | 135 |
|  Section 7.16 | No Negative Pledges | 135 |
|  Section 7.17 | Sale-Leasebacks | 136 |
|  Section 7.18 | Amendment of Organization Documents | 136 |
|  Section 7.19 | Fixed Charge Coverage Ratio | 136 |
| **ARTICLE VIII**<br> **DEFAULTS** | **ARTICLE VIII**<br> **DEFAULTS** | **ARTICLE VIII**<br> **DEFAULTS** |
| **ARTICLE VIII**<br> **DEFAULTS** | **ARTICLE VIII**<br> **DEFAULTS** | **ARTICLE VIII**<br> **DEFAULTS** |
|  Section 8.01 | Events of Default | 136 |
|  Section 8.02 | Remedies upon Event of Default | 139 |
|  Section 8.03 | Application of Funds | 140 |
|  Section 8.04 | Equity Cure | 142 |

---

iii

------

---

| | | |
|:---|:---|:---|
| **ARTICLE IX**<br> **AGENCY PROVISIONS** | **ARTICLE IX**<br> **AGENCY PROVISIONS** | **ARTICLE IX**<br> **AGENCY PROVISIONS** |
| **ARTICLE IX**<br> **AGENCY PROVISIONS** | **ARTICLE IX**<br> **AGENCY PROVISIONS** | **ARTICLE IX**<br> **AGENCY PROVISIONS** |
|  Section 9.01 | Appointment and Authority | 142 |
|  Section 9.02 | Rights as a Lender | 143 |
|  Section 9.03 | Exculpatory Provisions | 143 |
|  Section 9.04 | Reliance by Administrative Agent | 144 |
|  Section 9.05 | Delegation of Duties | 145 |
|  Section 9.06 | Resignation of Administrative Agent | 145 |
|  Section 9.07 | Non-Reliance on Administrative Agent and Other Lenders | 146 |
|  Section 9.08 | No Other Duties, Etc. | 146 |
|  Section 9.09 | Administrative Agent May File Proofs of Claim | 146 |
|  Section 9.10 | Collateral and Guaranty Matters | 147 |
|  Section 9.11 | Secured Hedge Agreements and Seemed Cash Management Agreements | 148 |
| **ARTICLE X**<br> **MISCELLANEOUS** | **ARTICLE X**<br> **MISCELLANEOUS** | **ARTICLE X**<br> **MISCELLANEOUS** |
| **ARTICLE X**<br> **MISCELLANEOUS** | **ARTICLE X**<br> **MISCELLANEOUS** | **ARTICLE X**<br> **MISCELLANEOUS** |
|  Section 10.01 | Amendments, Etc. | 149 |
|  Section 10.02 | Notices; Effectiveness; Electronic Communication | 151 |
|  Section 10.03 | No Waiver; Cumulative Remedies; Enforcement | 154 |
|  Section 10.04 | Expenses; Indemnity; Damage Waiver | 155 |
|  Section 10.05 | Payments Set Aside | 157 |
|  Section 10.06 | Successors and Assigns | 157 |
|  Section 10.07 | Treatment of Certain Information; Confidentiality | 162 |
|  Section 10.08 | Right of Setoff | 163 |
|  Section 10.09 | Interest Rate Limitation | 164 |
|  Section 10.10 | Counterparts; Integration; Effectiveness | 164 |
|  Section 10.11 | Survival of Representations and Warranties | 164 |
|  Section 10.12 | Severability | 164 |
|  Section 10.13 | Replacement of Lenders | 165 |
|  Section 10.14 | Governing Law; Jurisdiction Etc. | 166 |
|  Section 10.15 | Waiver of Jury Trial | 167 |
|  Section 10.16 | No Advisory or Fiduciary Responsibility | 167 |
|  Section 10.17 | Electronic Execution of Assignments and Certain Other Documents | 168 |
|  Section 10.18 | Patriot Act Notice | 168 |
|  Section 10.19 | Intercreditor Agreements | 168 |
|  Section 10.20 | Judgment Currency | 169 |
|  Section 10.21 | Field Audit and Examination Reports; Disclaimer by Lenders | 169 |
|  Section 10.22 | Additional Borrowers | 170 |

---

iv

------

---

| | |
|:---|:---|
| **Schedules:** |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Schedule 2.01 | Commitments and Revolving Facility Percentage |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Schedule 2.03 | Existing Letters of Credit |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Schedule 5.05 | Litigation; Tax Matters |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Schedule 5.07 | ERISA |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Schedule 5.09 | Ownership of Property; Liens |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Schedule 5.10 | Taxes |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Schedule 5.11(a) | Historical Financial Statements |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Schedule 5.11(b) | Pro-Forma Financial Statements |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Schedule 5.11(e) | Projections |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Schedule 5.12 | Environmental |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Schedule 5.15 | Labor Relations |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Schedule 5.16 | Intellectual Property |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Schedule 5.17 | Brokers' and Transaction Fees |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Schedule 5.18 | Insurance |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Schedule 5.19 | Ventures, Subsidiaries and Affiliates; Outstanding Stock |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Schedule 5.20 | Jurisdiction of Organization; Chief Executive Office |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Schedule 5.26(c) | Mortgaged Properties |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Schedule 6.10 | Prior Indebtedness |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Schedule 6.13 | Guarantors |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Schedule 6.15 | Post-Closing Obligations |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Schedule 7.01 | Liens |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Schedule 7.04 | Investments |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Schedule 7.05 | Continuing Indebtedness |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Schedule 7.06 | Transactions with Affiliates |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Schedule 7.09 | Contingent Obligations |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Schedule 10.02 | Administrative Agent's Office; Certain Addresses for Notices |
| **Exhibits:** |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Exhibit A-1 | Form of Committed Loan Notice |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Exhibit A-2 | Form of Swing Line Loan Notice |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Exhibit A-3 | Form of Prepayment Notice |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Exhibit B | Form of Note |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Exhibit C-1 | Form of Assignment and Assumption |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Exhibit C-2 | Form of Administrative Questionnaire |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Exhibit D | Form of Compliance Certificate |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Exhibit E | Form of Guaranty |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Exhibit F-1 | Form of Pledge and Security Agreement |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Exhibit F-2 | Form of Perfection Certificate |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Exhibit G | Form of Solvency Certificate |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Exhibit H-1 | Form of ABL/Term Intercreditor Agreement |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Exhibit H-2 | Form of Term Intercreditor Agreement |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Exhibit I | Form of Borrowing Base Certificate |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Exhibit J | Form of Loan Party Accession Agreement |

---

v

------

**ABL CREDIT AGREEMENT** 

ABL CREDIT AGREEMENT (this "<u>Agreement</u>") dated as of September 19, 2013, by and among PIANISSIMO ACQUISITION CORP., a Delaware corporation ("<u>AcquisitionCo</u>" and initially the "<u>Initial Borrower</u>"), which upon consummation of the Closing Date Acquisition on the Closing Date will be merged with and into STEINWAY MUSICAL INSTRUMENTS, INC., a Delaware corporation (the "<u>Company</u>", with the Company being the survivor of such merger and the "<u>Parent Borrower</u>" hereunder), STEINWAY, INC., a Delaware corporation ("<u>Steinway</u>"), CONN-SELMER, INC., a Delaware corporation ("<u>Conn</u><u>-Selmer</u>" and, together with the Parent Borrower and Steinway, each a "<u>Borrower</u>" and, collectively and jointly and severally, the "<u>Borrowers</u>"), PIANISSIMO HOLDINGS CORP., a Delaware corporation ("<u>Holdings</u>"), the other Persons party hereto that are designated as "Loan Party", each lender from time to time party hereto (collectively, the "<u>Lenders</u>" and individually each a "<u>Lender</u>"), BANK OF AMERICA, N.A., as Administrative Agent, L/C Issuer and Swing Line Lender and DEUTSCHE BANK SECURITIES INC., as Syndication Agent.

Pursuant to or in connection with the Merger Agreement (such term and each other capitalized term used but not defined in this introductory statement having the meaning assigned thereto in <u>Article</u> <u>I</u>), Holdings will cause AcquisitionCo to merge (the "<u>Closing Date Acquisition</u>") with and into the Company, with (i) the Company surviving as a Wholly-Owned Subsidiary of Holdings and (ii) the Company assuming by operation of law all of the obligations of AcquisitionCo under this Agreement and the other Loan Documents.

As part of the financing contemplated by the Merger Agreement, Holdings and the Borrowers have requested the Lenders to provide an asset-based revolving credit facility to the Borrowers on a joint and several basis in the aggregate principal amount of $75,000,000 for the purposes described herein. The Lenders are willing to make the requested credit facility available on the terms and conditions set forth herein. Accordingly, in consideration of the mutual covenants and agreements herein contained, the parties hereto covenant and agree as follows:

**ARTICLE I** 

**DEFINITIONS AND ACCOUNTING TERMS** 

**Section 1.01 <u>Defined Terms</u>**. As used in this Agreement, the following terms have the meanings set forth below:

"<u>ABL Credit Obligations</u>" means, with respect to each Loan Party, without duplication:

&nbsp;&nbsp;&nbsp;&nbsp;&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) in the case of each Borrower, all principal of, premium, if any, and interest (including, without limitation, any interest which accrues after the commencement of any proceeding under any Debtor Relief Law with respect to such Borrower, whether or not allowed or allowable as a claim in any such proceeding) on, any Loan or L/C Obligation under, or any Note issued pursuant 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;&nbsp;&nbsp;&nbsp;&nbsp;(ii) Bank Product Debt;

------

&nbsp;&nbsp;&nbsp;&nbsp;&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) all fees, expenses, indemnification obligations and other amounts of whatever nature now or hereafter payable by such Loan Party (including, without limitation, any amounts which accrue after the commencement of any proceeding under any Debtor Relief Law with respect to such Loan Party, whether or not allowed or allowable as a claim in any such proceeding) pursuant 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;&nbsp;&nbsp;&nbsp;&nbsp;(iv) all expenses of the Agents as to which one or more of such Agents have a right to reimbursement by such Loan Party under <u>Section</u> <u>10.04(a)</u> of this Agreement or under any other similar provision of any other Loan Document, including, without limitation, any and all sums advanced by the Collateral Agent to preserve the Collateral or preserve its security interests in the Collateral to the extent permitted under any Loan Document or applicable Requirements of 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;&nbsp;&nbsp;&nbsp;&nbsp;(v) all amounts paid by any Indemnitee as to which such Indemnitee has the right to reimbursement by such Loan Party under <u>Section</u> <u>10.04(b)</u> of this Agreement or under any other similar provision of any other Loan Document; 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;(vi) in the case of Holdings and each Subsidiary Guarantor, all amounts now or hereafter payable by Holdings or such Subsidiary Guarantor and all other obligations or liabilities now existing or hereafter arising or incurred (including, without limitation, any amounts which accrue after the commencement of any proceeding under any Debtor Relief Law with respect to any Loan Party, whether or not allowed or allowable as a claim in any such proceeding) on the part of Holdings or such Subsidiary Guarantor pursuant to this Agreement, the Guaranties or any other Loan Document;

together in each case with all renewals, modifications, consolidations or extensions thereof.

"<u>ABL Credit Party</u>" means each Lender, each L/C Issuer, the Administrative Agent, each co-agent or sub-agent appointed by the Administrative Agent from time to time pursuant to this Agreement, the Collateral Agent and each Indemnitee, and "<u>ABL Credit Parties</u>" means any two or more of them, collectively.

"<u>ABL Priority Collateral</u>" has the meaning given to the term in the ABL/Term Intercreditor Agreement.

"<u>ABL/Term Intercreditor Agreement</u>" means the Intercreditor Agreement, substantially in the form of <u>Exhibit</u> <u>H</u><u>-1</u> hereto, dated as of the date hereof among the Agent, the Term Administrative Agent, the Second Lien Agent, Holdings, the Borrowers, the Term Borrower and the other Loan Parties and Term Loan Parties party thereto, as the same may be amended, modified or supplemented from time to time.

"<u>Accession Agreement</u>" means a Loan Party Accession Agreement, substantially in the form of <u>Exhibit</u> <u>J</u> hereto, executed and delivered by each Person that becomes a Subsidiary Guarantor after the Closing Date in accordance with <u>Section</u> <u>6.13</u>.

"<u>Accepting Lenders</u>" has the meaning specified in <u>Section</u> <u>10.01</u>.

------

"<u>Account</u>" means, as at any date of determination, all "accounts" (as such term is defined in the UCC) of the Loan Parties, including, without limitation, the unpaid portion of the obligation of a customer of a Loan Party in respect of Inventory purchased by and shipped to such customer and/or the rendition of services by a Loan Party, as stated on the respective invoice of a Loan Party, net of any credits, rebates or offsets owed to such customer.

"<u>Account Debtor</u>" means each debtor, customer or obligor in any way obligated on or in connection with any Account.

"<u>Acquired Business</u>" means the Company and its subsidiaries acquired pursuant to the terms of the Merger Agreement.

"<u>Acquisition</u>" means any transaction or series of related transactions for the purpose of or resulting, directly or indirectly, in (a) the acquisition of all or substantially all of the assets of a Person (other than the acquisition of inventory from any Steinway dealer), or of any business or division of a Person, (b) the acquisition of in excess of fifty percent (50%) of the Stock and Stock Equivalents of any Person or otherwise causing any Person to become a Subsidiary of the Parent Borrower, or (c) a merger or consolidation or any other combination with another Person.

"<u>AcquisitionCo</u>" means Pianissimo Acquisition Corp.

"<u>Adjusted Eurodollar Rate</u>" means, for any Interest Period with respect to a Eurodollar Rate Loan, the quotient obtained (expressed as a decimal, carried out to four decimal places) by dividing (i) the applicable Eurodollar Rate for such Interest Period by (ii) 1.00 minus the Eurodollar Reserve Percentage.

"<u>Administrative Agent</u>" means Bank of America, N.A. in its capacity as administrative agent under any of the Loan Documents, or any successor administrative agent.

"<u>Administrative Agent's Office</u>" means the Administrative Agent's address and, as appropriate, account as set forth on <u>Schedule</u> <u>10.02</u>, or such other address or account as the Administrative Agent may from time to time notify the Parent Borrower and the Lenders.

"<u>Administrative Questionnaire</u>" means an Administrative Questionnaire substantially in the form of <u>Exhibit</u> <u>C</u><u>-2</u> or in any other form approved by the Administrative Agent.

"<u>Affiliate</u>" means, as to any Person, any other Person which, directly or indirectly, is in control of, is controlled by, or is under common control with, such Person. A Person shall be deemed to control another Person if the controlling Person possesses, directly or indirectly, the power to direct or cause the direction of the management and policies of the other Person, whether through the ownership of voting securities, by contract or otherwise. Without limitation, any Affiliated Party of a Person shall for the purposes of this Agreement, be deemed to control the other Person. Notwithstanding the foregoing, neither Agent nor any Lender shall be deemed an "Affiliate" of any Loan Party or of any Subsidiary of any Loan Party.

------

"<u>Affiliated Party</u>" means, as to any Person, any director, executive officer, beneficial owner of five percent (5%) or more of the Stock (either directly or through ownership of Stock Equivalents), general partner, investment advisor or investment manager, of a Person.

"<u>Agent</u>" means the Administrative Agent or the Collateral Agent and any successors and assigns in such capacity, and "<u>Agents</u>" means any two or more of them.

"<u>Agent Party</u>" has the meaning specified in <u>Section</u> <u>10.02(c)</u>.

"<u>Agent Advances</u>" has the meaning assigned to such term in <u>Section</u> <u>2.17(a)</u>.

"<u>Aggregate Commitments</u>" means at any time the Revolving Facility Commitments of all the Lenders.

"<u>Agreement</u>" means this ABL Credit Agreement, as amended, amended and restated, supplemented or otherwise modified from time to time in accordance with the terms hereof.

"<u>Alternate Interest Period</u>" has the meaning specified in <u>Section</u> <u>2.02(a)</u>.

"<u>Anti</u><u>-Money Laundering Laws, Export Controls, and Economic Sanctions</u>" has the meaning specified in <u>Section</u> <u>5.23</u>.

"<u>Applicable Rate</u>" means:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a) with respect to Revolving Facility Loans, Agent Advances and Overadvances, (i) for the period ending on the date that the third monthly Borrowing Base Certificate is delivered to the Collateral Agent after the Closing Date, 1.75% per annum, in the case of Eurodollar Rate Loans, and 0.75% per annum, in the case of Base Rate Loans, and (ii) thereafter, as of any date of determination, a percentage per annum equal to the rate set forth below opposite the then-applicable Average Quarterly Availability for the Fiscal Quarter immediately preceding the Fiscal Quarter in which the date of determination falls:

---

| | | | |
|:---|:---|:---|:---|
| **Applicable Rate** | **Applicable Rate** | **Applicable Rate** | **Applicable Rate** |
| **Pricing Level** | **Average Quarterly**<br> **Availability** | **Eurodollar Rate<br>Loans** | **Base Rate Loans** |
| I | Greater than or equal to 66% | 1.50% | 0.50% |
| II | Less than 66% but greater than or equal to 33% | 1.75% | 0.75% |
| III | Less than 33% | 2.00% | 1.00% |

---

------

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b) With respect to Incremental Loans, as of and following the effective date of any Incremental Commitment, a percentage per annum as agreed upon among the Administrative Agent, the Parent Borrower and the applicable Incremental Lenders at the time such Incremental Commitments become effective.

For the avoidance of doubt, (a) Agent Advances and Overadvances shall bear interest as Base Rate Loans, and (b) changes in the Applicable Rate resulting from a change in the Average Quarterly Availability, as calculated in a Compliance Certificate delivered pursuant to <u>Section</u> <u>6.02(b)</u>, for any Fiscal Quarter shall become effective as to all applicable Revolving Facility Loans and Letter of Credit Fees on the first day of the next Fiscal Quarter following delivery of such Compliance Certificate; <u>provided</u>, <u>however</u>, that if a Compliance Certificate is not delivered when required to be delivered in accordance with such <u>Section</u> <u>6.02(b)</u>, then Pricing Level III shall apply from the first day of the next Fiscal Quarter following the date on which such Compliance Certificate was required to be delivered through the date on which such Compliance Certificate is delivered, after which the pricing level corresponding to the Average Quarterly Availability set forth in such Compliance Certificate shall apply. Notwithstanding the calculation of the Applicable Rate for any period as set forth above, if, as a result of any error in the calculation of the Average Quarterly Availability for any quarter or for any other reason, the Parent Borrower or the Required Lenders determine that (i) the Average Quarterly Availability as calculated for such quarter was inaccurate and (ii) a proper calculation of the Average Quarterly Availability for such quarter would have resulted in higher pricing for such period, each applicable Borrower shall immediately and retroactively be obligated to pay to the Administrative Agent for the account of the applicable Lenders or L/C Issuers, as the case may be, promptly on demand by the Administrative Agent (or, after the occurrence of an actual or deemed entry of an order for relief with respect to any Borrower under the Bankruptcy Code of the United States, automatically and without further action by the Administrative Agent, any Lender or any L/C Issuer), an amount equal to the excess of the amount of interest and fees that should have been paid for such period over the amount of interest and fees actually paid for such period. This paragraph shall not limit the rights of the Administrative Agent, any Lender or any L/C Issuer, as the case may be, under <u>Section</u> <u>2.08(a)</u>, <u>2.04(c)</u> or <u>2.03(h)</u> or under <u>Article</u> <u>VIII</u>.

"<u>Appraisal</u>" means an appraisal of the Borrowers' Inventory conducted by appraisers selected by the Collateral Agent, including any such appraisal conducted as part of the initial Field Survey and Audit obtained by the Collateral Agent prior to the Closing Date and any such appraisal obtained by the Agents pursuant to <u>Section</u> <u>6.09(a)</u>.

"<u>Approved Fund</u>" means any Fund that is administered or managed by (i) a Lender, (ii) an Affiliate of a Lender or (iii) an entity or an Affiliate of an entity that administers or manages a Lender.

"<u>Assignee Group</u>" means two or more Eligible Assignees that are Affiliates of one another or two or more Approved Funds managed by the same investment advisor.

"<u>Assignment and Assumption</u>" means an assignment and assumption entered into by a Lender and an Eligible Assignee (with the consent of any party whose consent is required by <u>Section</u> <u>10.06(b)</u>), and accepted by the Administrative Agent, in substantially in the form of <u>Exhibit</u> <u>C</u><u>-1</u> hereto or any other form approved by the Administrative Agent.

------

"<u>Audited Financial Statements</u>" means the audited consolidated balance sheets of the Company and its subsidiaries as of December 31, 2012, 2011 and 2010, and the related consolidated statements of operations and comprehensive income (loss), equity, and cash flows for the years ended December 31, 2012, 2011 and 2010, in each case, including the notes thereto, audited by KPMG LLP.

"<u>Availability</u>" means, at any time, (a) the Borrowing Base <u>minus</u> (b) the aggregate Outstanding Amounts under the Facility.

"<u>Availability Period</u>" shall mean the period from and including the Closing Date to but excluding the earlier of the Revolving Facility Maturity Date and the date of termination of the Revolving Facility Commitments.

"<u>Availability Reserve</u>" means the sum (without duplication) of (a) the Inventory Reserve; (b) the Rent and Charges Reserve; (c) the Bank Product Reserve; (d) all accrued Royalties, whether or not then due and payable by a Borrower or Subsidiary Guarantor; (e) the aggregate amount of liabilities secured by Liens upon Collateral that are senior to Agent's Liens (but imposition of any such reserve shall not waive an Event of Default arising therefrom); and (f) such additional reserves, in such amounts and with respect to such matters, as the Administrative Agent in its Credit Judgment may elect to impose from time to time.

"<u>Average Quarterly Availability</u>" means, for any Fiscal Quarter, an amount (expressed as a percentage) equal to the quotient of (A) the average daily Availability during such Fiscal Quarter <u>divided by</u> (B) the daily average Borrowing Base for such Fiscal Quarter.

"<u>Bank of America</u>" means Bank of America, N.A., and its successors.

"<u>Bank Product</u>" means any of the following products, services or facilities extended to any Borrower or Subsidiary by a Lender or any of its Affiliates: (a) services under any Cash Management Agreement; (b) products under Rate Contracts; (c) commercial credit card and merchant card services; and (d) leases and other banking products or services as may be requested by any Borrower or Subsidiary, other than Letters of Credit; <u>provided</u>, <u>however</u>, that for any of the foregoing to be included as a "Finance Obligation" for purposes of a distribution under <u>Section</u> <u>8.03</u>, the applicable Secured Party and Loan Party must have previously provided written notice to the Administrative Agent of (i) the existence of such Bank Product, (ii) the maximum dollar amount of obligations arising thereunder to be included as a Bank Product Reserve ("<u>Bank Product Amount</u>"), and (iii) the methodology to be used by such parties in determining the Bank Product Debt owing from time to time. The Bank Product Amount may be changed from time to time upon written notice to the Administrative Agent by the applicable Secured Party and Loan Party. No Bank Product Amount may be established or increased at any time that a Default or Event of Default exists, or if a reserve in such amount would cause an Overadvance.

"<u>Bank Product Amount</u>" is defined in the definition of Bank Product.

"<u>Bank Product Debt</u>" means Indebtedness and other obligations of a Loan Party relating to Bank Products.

------

"<u>Bank Product Reserve</u>" means the aggregate amount of reserves established by the Administrative Agent from time to time in its discretion in respect of Bank Product Debt, which shall be at least equal to the sum of all Bank Product Amounts.

"<u>Bankruptcy Code</u>" means the Federal Bankruptcy Reform Act of 1978.

"<u>Base Rate</u>" means, for any day, a rate per annum equal to the highest of (i) the Prime Rate for such day, (ii) the sum of 0.50% plus the Federal Funds Rate for such day and (iii) the Eurodollar Rate for a one-month Interest Period (determined by reference to <u>clause</u> <u>(ii)</u> of the definition thereof) plus 1.00%.

"<u>Base Rate Loan</u>" means a Loan that bears interest based on the Base Rate.

"<u>Benefit Plan</u>" means any employee benefit plan as defined in Section 3(3) of ERISA (whether governed by the laws of the United States or otherwise) to which any Loan Party incurs or otherwise has any obligation or liability, contingent or otherwise.

"<u>Borrower</u>" has the meaning specified in the introductory statement to this Agreement.

"<u>Borrower Materials</u>" has the meaning specified in <u>Section</u> <u>6.02</u>.

"<u>Borrowing</u>" means the borrowing consisting of simultaneous Loans of the same Type and, in the case of Eurodollar Rate Loans, having the same Interest Period made by each of the Lenders.

"<u>Borrowing Base</u>" means, on any date of determination, an amount equal to the lesser of (a) the Aggregate Commitments; or (b) the sum 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;(i) up to 80% of the then Eligible Accounts of the Borrowers and Subsidiary Guarantors, other than Accounts constituting Dealer Notes; plus

&nbsp;&nbsp;&nbsp;&nbsp;&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) up to the lesser of (A) 50% of the then Eligible Accounts of the Borrowers and Subsidiary Guarantors, constituting Dealer Notes and (B) $5,000,000; plus

&nbsp;&nbsp;&nbsp;&nbsp;&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) up to the sum of (A) in the case of Steinway grand pianos, the sum of (1) 85% of the Current Wholesale Value of all finished and near-finished pianos, (2) 75% of the Current Wholesale Value of Concert and Artist Bank Pianos, and (3) 70% of the Current Wholesale Value of all Factory Returns; (B) in the case of Steinway upright pianos, the sum of (1) 65% of the Current Wholesale Value of all finished and near-finished pianos, and (2) 50% of the Current Wholesale Value of all Factory Returns; (C) in the case of Boston and Essex grand pianos, the sum of (1) 65% of the Standard Cost Value of all finished pianos, and (2) 50% of the Standard Cost Value of all Factory Returns; and (D) in the case of Boston and Essex upright pianos, the sum of (1) 50% of the Standard Cost Value of all finished pianos, and (2) 40% of the Standard Cost Value of all Factory Returns; plus

------

&nbsp;&nbsp;&nbsp;&nbsp;&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) up to 50% of the cost of the Eligible Inventory of Steinway constituting raw materials; plus

&nbsp;&nbsp;&nbsp;&nbsp;&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) up to 65% of the cost of Eligible Inventory of the Borrowers and Subsidiary Guarantors (other than Steinway) constituting finished goods; plus

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(vi) up to 25% of the cost of Eligible Inventory of the Borrowers and Subsidiary Guarantors (other than Steinway) constituting raw materials; plus

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(vii) up to the lesser of (A) $7,500,000 and (B) 25% of the cost of Eligible Inventory of the Borrowers and Subsidiary Guarantors constituting work-in-process; minus

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(viii) $5,000,000; and minus

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(ix) the Availability Reserve.

The Borrowing Base in effect at any time shall be the Borrowing Base as shown on the Borrowing Base Certificate and the reconciliation reports delivered by the Parent Borrower pursuant to <u>Section</u> <u>6.2(j)</u> of this Agreement; <u>provided</u>, <u>however</u>, (i) that if Parent Borrower shall fail to deliver a Borrowing Base Certificate when required pursuant to <u>Section</u> <u>6.02(j)</u>, the amounts calculated with respect to the Eligible Accounts and the Eligible Inventory shall be zero until such Borrowing Base Certificate is delivered and (ii) notwithstanding the foregoing, for a 60-day period commencing on the Closing Date (or such shorter period ending on the date as the Parent Borrower may elect after delivery of a field examination which is satisfactory in form to the Administrative Agent), the Borrowing Base shall be equal to the greater of (a) $20,000,000 and (b) the amount shown on the most recent borrowing base certificate delivered under the Existing Credit Agreement prior to the Closing Date minus $5,000,000.

For the avoidance of doubt, none of the assets being acquired in an Acquisition nor the assets of the Person whose Equity Interests are being acquired in an Acquisition (other than with respect to the Transactions) shall be included in any calculation of the Borrowing Base (whether or not such assets meet the eligibility criteria hereunder) until such time as a Field Survey and Audit of the assets and/or Person(s) being acquired with results reasonably acceptable to the Administrative Agent has been completed; it being agreed that the Administrative Agent shall use commercially reasonable efforts to commence a Field Survey and Audit promptly following the Parent Borrower's request therefor which may be requested prior to consummation of such Acquisition.

"<u>Borrowing Base Certificate</u>" means a certificate signed by a Responsible Officer of the Parent Borrower and setting forth the calculation of the Borrowing Base in compliance with <u>Section</u> <u>6.02(j)</u>, substantially in the form of <u>Exhibit</u> <u>I</u>.

"<u>Boston Pianos</u>" means pianos designed by Steinway, manufactured by an OEM and marketed under the Boston piano line.

------

"<u>Business Day</u>" means any day other than a Saturday, Sunday or other day on which commercial banks are authorized to close under the Requirements of Law of, or are in fact closed in, the state where the Administrative Agent's Office is located, except that if such day relates to any Eurodollar Rate Loan, such day shall be a day that is also a London Banking Day.

"<u>Capital Lease</u>" means, with respect to any Person, any lease of, or other arrangement conveying the right to use, any Property by such Person as lessee that has been or should be accounted for as a capital lease on a balance sheet of such Person prepared in accordance with GAAP.

"<u>Capital Lease Obligations</u>" means, at any time, with respect to any Capital Lease, any lease entered into as part of any sale leaseback transaction of any Person or any synthetic lease, the amount of all obligations of such Person that is (or that would be, if such synthetic lease or other lease were accounted for as a Capital Lease) capitalized on a balance sheet of such Person prepared in accordance with GAAP.

"<u>Cash Collateralize</u>" or "<u>Cash Collateralization</u>" means to deliver to the Administrative Agent an amount (whether in cash or in the form of a backstop letter of credit in form and substance reasonably satisfactory to, and issued by a U.S. commercial bank reasonably acceptable to, the Administrative Agent in its commercially reasonable discretion) equal to 105.0% of the sum of (a) the Maximum Undrawn Amount plus the aggregate amount of all unreimbursed payments and disbursements under each Letter of Credit which have not been converted to Revolving Facility Loans plus (b) the amount of unpaid Letter of Credit Fees then accrued.

"<u>Cash Dominion Period</u>" has the meaning specified in <u>Section</u> <u>6.11(b)</u>.

"<u>Cash Equivalents</u>" means (a) any readily-marketable securities (i) issued by, or directly, unconditionally and fully guarantied or insured by the United States federal government or (ii) issued by any agency of the United States federal government the obligations of which are fully backed by the full faith and credit of the United States federal government, (b) any readily-marketable direct obligations issued by any other agency of the United States federal government, any state of the United States or any political subdivision of any such state or any public instrumentality thereof, in each case having a rating of at least "A-1" from S&P or at least "P-1" from Moody's, (c) any commercial paper rated at least "A-1" by S&P or "P-1" by Moody's and issued by any Person organized under the laws of any state of the United States, (d) any Dollar-denominated time deposit, insured certificate of deposit, overnight bank deposit or bankers' acceptance issued or accepted by (i) any Lender or (ii) any commercial bank that is (A) organized under the laws of the United States, any state thereof or the District of Columbia, (B) "adequately capitalized" (as defined in the regulations of its primary federal banking regulators) and (C) has Tier 1 capital (as defined in such regulations) in excess of $250,000,000 and (e) shares of any United States money market fund that (i) has substantially all of its assets invested continuously in the types of investments referred to in <u>clauses (a)</u>, <u>(b)</u>, <u>(c)</u> or <u>(d)</u> above with maturities as set forth in the proviso below, (ii) has net assets in excess of $500,000,000 and (iii) has obtained from either S&P or Moody's the highest rating obtainable for money market funds in the United States; <u>provided</u>, <u>however</u>, that the maturities of all obligations specified in any of <u>clauses (a)</u>, <u>(b)</u>, <u>(c)</u> or <u>(d)</u> above shall not exceed 365 days.

------

"<u>Cash Management Accounts</u>" means the bank deposit accounts or securities accounts of each Loan Party other than Excluded Accounts, which (i) shall be subject to one or more Cash Management Agreements and (ii) at the option of the applicable Loan Party, may be maintained at one or more Cash Management Banks.

"<u>Cash Management Agreement</u>" means any agreement to provide cash management services, including treasury, depository, overdraft, credit or debit card, electronic funds transfer and other cash management arrangements.

"<u>Cash Management Bank</u>" means any Person, that, at the time it enters into a Cash Management Agreement, is a Lender or an Affiliate of a Lender, in its capacity as a party to such Cash Management Agreement.

"<u>Cash Management Collections Accounts</u>" has the meaning specified in <u>Section</u> <u>6.11(a)</u>.

"<u>Cash Management Obligations</u>" means, as applied to any Cash Management Bank, any direct or indirect liability, contingent or otherwise, of such Person under or in respect of a Cash Management Agreement.

"<u>Cash Management Triggering Event</u>" has the meaning specified in <u>Section</u> <u>6.11(b)</u>.<u> </u>

"<u>Change in Law</u>" means the occurrence, after the date of this Agreement, of any of the following: (i) the adoption or taking effect of any law, rule, regulation or treaty; (ii) any change in any law, rule, regulation or treaty or in the administration, interpretation, implementation or application thereof by any Governmental Authority; or (iii) the making or issuance of any request, rule, guideline or directive (whether or not having the force of law) by any Governmental Authority; <u>provided</u> that notwithstanding anything herein to the contrary, (x) the Dodd-Frank Wall Street Reform and Consumer Protection Act (Pub. L. 111-203, H.R. 4173) and all requests, rules, guidelines or directives thereunder or issued in connection therewith and (y) all requests, rules, guidelines or directives promulgated by the Bank for International settlements, the Basel Committee on Banking Supervision (or any successor or similar authority) or the United States or foreign regulatory authorities, in each case pursuant to Basel III, shall in each case be deemed to be a "Change in Law", regardless of the date enacted, adopted or issued.

"<u>Change of Control</u>" means the occurrence of any of the following events:

&nbsp;&nbsp;&nbsp;&nbsp;&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) Permitted Holders at any time cease to own, on a fully diluted basis, at least fifty-one percent (51%) of the issued and outstanding Stock of Holdings owned by the Permitted Holders on the Effective Date (as the same may be adjusted for any combination, recapitalization or reclassification into a greater or smaller number of shares, interests or other unit of equity security) or, in any event, Stock representing voting control of Holdings;

&nbsp;&nbsp;&nbsp;&nbsp;&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) Holdings ceases to own, on a fully diluted basis, one hundred percent (100%) of the issued and outstanding Stock and Stock Equivalents of the Parent Borrower;

------

&nbsp;&nbsp;&nbsp;&nbsp;&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) the Parent Borrower ceases to have beneficial ownership (as defined in Rule 13d-3 under the Exchange Act), on a fully diluted basis, of one hundred percent (100%) of the Stock and Stock Equivalents of each other Borrower, in each instance in <u>clauses (i)</u>, <u>(ii)</u> and <u>(iii)</u>, free and clear of all Liens, rights, options, warrants or other similar agreements or understandings, other than Liens in favor of the Administrative Agent, for the benefit of the Secured Parties, Liens in favor of the Term Agent pursuant to the Term Finance Documents and Liens in favor of the Second Lien Agent pursuant to the Second Lien Loan Documents; 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;(iv) a "Change of Control" (as defined in any Term Loan Document or Second Lien Loan Document) shall occur.

"<u>Closing Date</u>" means the first date on or after the Effective Date when all the conditions precedent in <u>Section</u> <u>4.01</u> are satisfied or waived in accordance with <u>Section</u> <u>10.01</u>.

"<u>Closing Date Acquisition</u>" has the meaning specified in the introductory statement to this Agreement.

"<u>Code</u>" means the Internal Revenue Code of 1986.

"<u>Collateral</u>" means all of the "Collateral" referred to in the Collateral Documents and all of the other property and assets that are or are required under the terms hereof or of the Collateral Documents to be subject to Liens in favor of the Collateral Agent for the benefit of the Secured Parties.

"<u>Collateral Access Agreement</u>" means a landlord waiver, bailee letter or acknowledgment agreement of any lessor, warehouseman, processor, consignee, mortgagee or other Person (other than any Loan Party) in possession of, having a Lien upon, or having rights or interests in the equipment or inventory (or any books or records relating thereto) of any Loan Party, in each case in the form attached as an exhibit to the Pledge and Security Agreement or otherwise in form and substance reasonably satisfactory to the Collateral Agent.

"<u>Collateral Agent</u>" means Bank of America, in its capacity as collateral agent for the Secured Parties under the Collateral Documents, and its successor or successors in such capacity.

"<u>Collateral Documents</u>" means, collectively, the Pledge and Security Agreement, the Depositary Bank Agreements, each Mortgage, any additional pledges, security agreements, patent, trademark or copyright filings or mortgages that create or purport to create a Lien in favor of the Collateral Agent for the benefit of the Secured Parties and any instruments of assignment, control agreements, lockbox letters or other instruments or agreements executed pursuant to the foregoing.

"<u>Collections</u>" means all cash, checks, notes, instruments, and other items of payment (including insurance proceeds, proceeds of cash sales, rental proceeds, and tax refunds).

"<u>Commitment Fee</u>" has the meaning specified in <u>Section</u> <u>2.09(a)</u>.

------

"<u>Committed Loan Notice</u>" means a notice of (i) a Borrowing, (ii) a conversion of Loans from one Type to the other or (iii) a continuation of Eurodollar Rate Loans, pursuant to <u>Section</u> <u>2.02(a)</u>, which, if in writing, shall be substantially in the form of <u>Exhibit</u> <u>A-1</u>.

"<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>Company</u>" means Steinway Musical Instruments, Inc.

"<u>Compliance Certificate</u>" has the meaning specified in <u>Section</u> <u>6.02(b)</u>.

"<u>Computer Hardware</u>" means all computer and other electronic data processing hardware of a Loan Party, whether now or hereafter owned, licensed or leased by such Loan Party, including, without limitation, all integrated computer systems, central processing units, memory units, display terminals, printers, features, computer elements, card readers, tape drives, hard and soft disk drives, cables, electrical supply hardware, generators, power equalizers, accessories, peripheral devices and other related computer hardware, all documentation, flowcharts, logic diagrams, manuals, specifications, training materials, charts and pseudo codes associated with any of the foregoing and all options, warranties, services contracts, program services, test rights, maintenance rights, support rights, renewal rights and indemnifications relating to any of the foregoing.

"<u>Concert and Artist Bank Pianos</u>" means all pianos held by Steinway or a Steinway dealer, including without limitation, those located at a performance venue, which are available for use by performers.

"<u>Conn</u><u>-Selmer</u>" has the meaning specified in the introductory statement to this Agreement.

"<u>Conn</u><u>-Selmer Dealer Notes</u>" means notes made by Conn-Selmer dealers in favor of Conn-Selmer or any Subsidiary thereof, that evidence indebtedness owing by such dealers to Conn-Selmer or such Subsidiary for extensions of credit made by Conn-Selmer or such Subsidiary to dealers to acquire Conn-Selmer's musical instruments in an amount not to exceed $3,000,000 in the aggregate for all such note installments with a due date more than one year after the date of issuance.

"<u>Consolidated Capital Expenditures</u>" means, with respect to any Person, for any period, the aggregate amount incurred that would, in accordance with GAAP, be classified as capital expenditures on the consolidated balance sheet of such Person and its Subsidiaries for such period.

"<u>Consolidated Cash Interest Expense</u>" means, with respect to Holdings and its Subsidiaries, gross interest expense for such period paid or required to be paid in cash (including all commissions, discounts, fees and other charges in connection with letters of credit and similar instruments, but excluding (i) commitment fees and other upfront fees payable in connection with the Related Transactions, (ii) net of amounts paid or payable and/or received or receivable under permitted Rate Contracts in respect of interest rates, (iii) the amortized amount of debt discount and debt issuance costs, (iv) interest paid or payable by the issuance of payment-in-kind notes and (v) other non-cash interest) minus interest income for such period.

------

"<u>Consolidated EBITDA</u>" means the net income (or loss) for the applicable period of measurement of Holdings and its Subsidiaries on a consolidated basis determined in accordance with GAAP,

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(A) but excluding: (a) the income (or loss) of any Person in which any other Person (other than the Parent Borrower or any of its Wholly-Owned Subsidiaries) has an ownership interest, except to the extent that any such income has been actually received in cash by a Loan Party or a Subsidiary during such period; (b) the income (or loss) of any Person accrued prior to the date it becomes a Subsidiary of Holdings or is merged into or consolidated with Holdings or any of its Subsidiaries or that Person's assets are acquired by Holdings or any of its Subsidiaries; (c) the proceeds of any life insurance policy; (d) the impact of any foreign currency valuation or settlement adjustments; (e) non-cash gains or losses from the sale, exchange, transfer or other disposition of Property or assets not in the Ordinary Course of Business of Holdings and its Subsidiaries, and related tax effects in accordance with GAAP; (f) any other extraordinary, unusual or non-recurring gains or losses of Holdings or its Subsidiaries and related tax effects in accordance with GAAP; and (g) gains or losses (whether or not realized) with respect to obligations under Term Secured Hedge Agreements and Secured Hedge Agreements,

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(B) <u>plus</u>, without duplication and to the extent reflected as a charge in the statement of such net income for such period: (a) all amounts deducted in calculating net income (or loss) for depreciation or amortization for such period; (b) gross interest expense (less interest income) deducted in calculating net income (or loss) for such period; (c) all accrued taxes on or measured by income to the extent deducted in calculating net income (or loss) for such period; (d) all non-cash losses or expenses (or minus non-cash income or gain) included or deducted in calculating net income (or loss) for such period, including, without limitation, (i) non-cash compensation expense, (ii) non-cash charges arising from the conversion of last-in, first-out accounting to first-in, first-out accounting, (iii) write-offs and write-downs (other than in respect of Accounts or Inventory), (iv) gains or losses from early extinguishment of debt or other infrequent and unusual items and (v) non-cash pension expense; (e) fees and expenses incurred in connection with the closing of the Related Transactions incurred within the succeeding one year period following the Closing Date to the extent deducted in calculating net income (or loss) for such period; (f) all proceeds of business interruption insurance to the extent not already included in determining net income (or loss) for such period; (g) losses from retail locations incurred during the first 12 months following the acquisition or opening of such location in an aggregate amount not to exceed the greater of (x) $2,000,000 and (y) 5.0% of Consolidated EBITDA for such period; (h)(i) one-time costs associated with the development and opening of replacement locations for Steinway Hall New York in an aggregate amount not to exceed $8,000,000 and (ii) costs associated with the development and opening of other new retail locations; (i) any reduction in net income arising from any purchase accounting adjustments arising as a result of the Related Transaction or any Permitted Acquisition to the extent deducted in calculating net income (or loss) for such period; (j) upfront fees and expenses payable in connection with the issuance of any Stock or Stock Equivalents permitted hereunder, any Permitted Acquisition or the incurrence of debt permitted hereunder (in each case whether or not consummated) to the extent deducted in calculating net income (or loss) for such period; (k) consulting and director fees paid to directors, board

------

consultant's fees, salaries and bonuses payable to directors and reimbursement of actual out-of-pocket expenses incurred in connection with attending board of director meetings, in each case, to the extent permitted under <u>Section</u> <u>7.07</u>; (l) reimbursement of reasonable out-of-pocket costs and expenses to Sponsor to the extent permitted under <u>Section</u> <u>7.07</u>; (m) one-time expenses related to (i) any management changes and reductions in work force, including, without limitation, severance and related outplacement service fees, search fees, related hiring costs and relocation costs, (ii) cash expenses and charges relating to restructuring of the Loan Parties' operations, transition costs and corporate offsets, (iii) one-time cash expenses and charges arising from other restructuring activities and (iv) consulting fees paid to third party non-Affiliates in connection with marketing, sales and related initiatives, including, without limitation, any consulting fees associated with the assessment or implementation of such activities, in an aggregate amount for this <u>clause (m)</u> not to exceed 15% of Consolidated EBITDA for such period (before giving effect to such addback and the pro forma effect pursuant to <u>clause (e)</u> of the definition of "pro forma basis"); and (n) any expenses and charges of a type set forth in the Adjusted EBITDA Reconciliation contained in the Company's Lender Presentation dated September 4, 2013,

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(C) <u>plus</u>, with respect to Targets owned by the Holdings or any of its Subsidiaries for which the Administrative Agent has received financial statements pursuant to <u>Section</u> <u>6.01(b)</u> for less than twelve months, the Consolidated EBITDA calculated on a pro forma basis and allocated to each month prior to the acquisition thereof included in the trailing twelve month period for which Consolidated EBITDA is being calculated, and

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(D) <u>minus</u>, with respect to any Disposition by Holdings or any of its Subsidiaries consummated within the period in question, Consolidated EBITDA attributable to Holdings, the Subsidiary or profit center which is the subject of such Disposition from the beginning of such period until the date of consummation of such Disposition.

For purposes of calculating Consolidated EBITDA as of any date of measurement ending on or before June 30, 2014, Consolidated EBITDA for: (a) the calendar quarter ending December, 31, 2012 shall be deemed to equal $18,400,000, (b) the calendar quarter ending March, 31, 2013 shall be deemed to equal $9,600,000, (c) the calendar quarter ending June, 30, 2013 shall be deemed to equal $14,600,000 and (d) the calendar months ending July 31, 2013, August 31, 2013 and September 30, 2013 shall be calculated in a manner consistent with the calculation of Consolidated EBITDA for the preceding periods.

"<u>Consolidated Total Debt</u>" of Holdings and its Subsidiaries means, as of any date of determination, the aggregate principal amount of all Indebtedness of Holdings and its Subsidiaries (other than Indebtedness in respect of any undrawn acceptance, letter of credit or similar facilities, hedging obligations, surety bonds, permitted earn-outs or non-compete payments).

"<u>Consolidating</u>" means, with respect to balance sheets, statements of income, operations, shareholders' equity and cash flows, that such financial statements present consolidating information with regard to each of the piano and band business divisions and the consolidating financial statements of Holdings and its Subsidiaries.

------

"<u>Contingent Obligation</u>" means, as to any Person, any direct or indirect liability, contingent or otherwise, of that Person: (i) with respect to any Indebtedness, lease, dividend or other obligation of another Person if the primary purpose or intent of the Person incurring such liability, or the primary effect thereof, is to provide assurance to the obligee of such liability that such liability will be paid or discharged, or that any agreements relating thereto will be complied with, or that the holders of such liability will be protected (in whole or in part) against loss with respect thereto; (ii) with respect to any letter of credit issued for the account of that Person or as to which that Person is otherwise liable for reimbursement of drawings; (iii) under any Rate Contracts; (iv) to make take-or-pay or similar payments if required regardless of nonperformance by any other party or parties to an agreement; or (v) for the obligations of another Person through any agreement to purchase, repurchase or otherwise acquire such obligation or any Property constituting security therefor, to provide funds for the payment or discharge of such obligation or to maintain the solvency, financial condition or any balance sheet item or level of income of another Person. The amount of any Contingent Obligation shall be equal to the amount of the obligation so guaranteed or otherwise supported or, if not a fixed and determined amount, the maximum amount so guaranteed or supported.

"<u>Contractual Obligation</u>" means, as to any Person, any provision of any security (whether in the nature of Stock, Stock Equivalents or otherwise) issued by such Person or of any agreement, undertaking, contract, indenture, mortgage, deed of trust or other instrument, document or agreement (other than a Loan Document) to which such Person is a party or by which it or any of its Property is bound or to which any of its Property is subject.

"<u>Controlled Account</u>" means each Deposit Account that is subject to a Deposit Account Control Agreement in form and substance satisfactory to the Administrative Agent and the L/C Issuer.

"<u>Copyrights</u>" means all rights, title and interests (and all related IP Ancillary Rights) arising under any Requirement of Law in or relating to copyrights and all mask work, database and design rights, whether or not registered or published, all registrations and recordations thereof and all applications in connection therewith.

"<u>Covenant Triggering Event</u>" shall occur at any time that (i) an Event of Default has occurred and is continuing or (ii) Availability is less than 15.0% of the Revolving Facility Commitment.

"<u>Credit Event</u>" has the meaning specified in <u>Article</u> <u>IV</u>.

"<u>Credit Judgment</u>" means the Administrative Agent's credit judgment exercised in good faith, based upon its consideration of any factor that it believes (a) could adversely affect the quantity, quality, mix or value of Collateral (including any Requirement of Law that may inhibit collection of an Account), the enforceability or priority of Collateral Agent's Liens, or the amount that Agents and Lenders could receive in liquidation of any Collateral; (b) suggests that any collateral report or financial information delivered by any Loan Party is incomplete, inaccurate or misleading in any material respect; (c) materially increases the likelihood of any proceeding under Debtor Relief Law involving a Loan Party; or (d) creates or could result in a Default or Event of Default. In exercising such judgment with respect to (a) through (d) hereof, Administrative Agent may consider any factors that could increase the credit risk of lending to Borrowers on the security of the Collateral (other than such factors that are attributable to general economic conditions).

------

"<u>Current Wholesale Value</u>" means, for any piano at any time, the wholesale price of such piano as published in good faith by Holdings or its Subsidiaries at such time, or if such price is not so published, the wholesale price of such piano as reasonably determined by the Administrative Agent.

"<u>Dealer Notes</u>" means, collectively, the Conn-Selmer Dealer Notes and the Steinway Dealer Notes.

"<u>Debtor Relief Laws</u>" means the Bankruptcy Code and all other liquidation, conservatorship, bankruptcy, assignment for the benefit of creditors, moratorium, rearrangement, receivership, insolvency, reorganization, or similar debtor relief laws of the United States or other applicable jurisdictions from time to time in effect and affecting the rights of creditors generally.

"<u>Default</u>" means any event or condition that constitutes an Event of Default or that, with the giving of any notice, the passage of time, or both, would be an Event of Default.

"<u>Default Rate</u>" means an interest rate equal to (A) the Base Rate plus (B) the Applicable Rate, if any, applicable to Base Rate Loans plus (C) 2.00% per annum; <u>provided</u>, <u>however</u>, that with respect to a Eurodollar Rate Loan, the Default Rate shall be an interest rate equal to the interest rate (including any Applicable Rate) otherwise applicable to such Loan plus 2.00% per annum.

"<u>Defaulting Lender</u>" means, subject to <u>Section</u> <u>2.15(b)</u>, any Lender that, as determined by the Administrative Agent, (i) has failed to perform any of its funding obligations hereunder, including in respect of its Loans, L/C Obligations or Swing Line Loans, within three Business Days of the date required to be funded by it hereunder, (ii) has notified the Parent Borrower, the Administrative Agent, an L/C Issuer or the Swing Line Lender that it does not intend to comply with its funding obligations or has made a public statement to that effect with respect to its funding obligations hereunder or under other agreements generally in which it commits to extend credit, (iii) has failed, within three Business Days after request by the Administrative Agent or the Parent Borrower, to confirm in a manner satisfactory to the Administrative Agent or the Parent Borrower that it will comply with its funding obligations or (iv) has, or has a direct or indirect parent company that has, (A) become the subject of a proceeding under any Debtor Relief Law, (B) had a receiver, conservator, trustee, administrator, assignee for the benefit of creditors or similar Person charged with reorganization or liquidation of its business or a custodian appointed for it or (C) taken any action in furtherance of, or indicated its consent to, approval of or acquiescence in any such proceeding or appointment; <u>provided</u> that a Lender shall not be a Defaulting Lender solely by virtue of the ownership or acquisition of any equity interest in that Lender or any direct or indirect parent company thereof by a Governmental Authority.

"<u>Deposit Account</u>" means a "<u>deposit account</u>" (as defined in the UCC) and also means and includes all demand, time, savings, passbook or similar accounts maintained by a Loan Party with a bank or other financial institution, whether or not evidenced by an instrument, all cash and other funds held therein and all passbooks related thereto and all certificates and instruments, if any, from time to time representing, evidencing or deposited into such deposit accounts.

------

"<u>Depositary Bank Agreement</u>" means an agreement among a Loan Party, a bank or other depositary institution and the Collateral Agent, in form and substance reasonably satisfactory to the Collateral Agent.

"<u>Disposition</u>" means (i) the sale, lease, conveyance or other disposition of Property, other than sales or other dispositions expressly permitted under <u>Section</u> <u>7.02(a)</u>, <u>7.02(c)</u>, <u>7.02(d)</u> and <u>7.02(j)</u> and (ii) the sale or transfer by the Parent Borrower or any Subsidiary of the Parent Borrower of any Stock or Stock Equivalent issued by any Subsidiary of the Parent Borrower and held by such transfer Person.

"<u>Disqualified Stock</u>" means any Stock that, by its terms (or by the terms of any security into which it is convertible or for which it is exchangeable in each case, at the option of the holder of the Stock), or upon the happening of any event, matures or is mandatorily redeemable, pursuant to a sinking fund obligation or otherwise, or is redeemable at the option of the holder thereof, in whole or in part, in each case at any time on or prior to the date that is 91 days after the Revolving Facility Maturity Date. Notwithstanding the preceding sentence, any Stock that would constitute Disqualified Stock solely because the holders of the Stock have the right to require the issuer to repurchase such Stock upon the occurrence of a change of control or an asset sale will not constitute Disqualified Stock if the terms of such Stock provide that the issuer may not repurchase or redeem any such Stock pursuant to such provisions unless such repurchase or redemption complies with <u>Section</u> <u>7.11</u>. The amount of Disqualified Stock deemed to be outstanding at any time for purposes of this Agreement will be the maximum amount that Holdings and its Subsidiaries may become obligated to pay upon the maturity of, or pursuant to any mandatory redemption provisions of, such Disqualified Stock, exclusive of accrued dividends.

"<u>Dollars</u>", "<u>dollars</u>" and "<u>$</u>"means lawful money of the United States.

"<u>Domestic Subsidiary</u>" means, with respect to any Person, a Subsidiary of such Person that is incorporated or otherwise organized under the laws of the United States, any state thereof or the District of Columbia.

"<u>Drawing Date</u>" has the meaning specified in <u>Section</u> <u>2.03(d)(ii)</u>.

"<u>Effective Date</u>" means the date this Agreement becomes effective in accordance with <u>Section</u> <u>10.10</u>.

"<u>Electronic Transmission</u>" means each document, instruction, authorization, file, information and any other communication transmitted, posted or otherwise made or communicated by e-mail or E-Fax, or otherwise to or from a Platform or other equivalent service.

"<u>Eligible Accounts</u>" means all Accounts of a Borrower or Subsidiary Guarantor, arising in the ordinary course of business, evidencing the sale of goods and services by such Borrower or Subsidiary Guarantor and which the Administrative Agent, in its Credit Judgment, shall deem to be an Eligible Account, based upon such considerations as the Administrative Agent may from time to time deem appropriate. Without in any way limiting the foregoing, (i) in general,

------

unless otherwise determined by the Administrative Agent as aforesaid, an Account shall not constitute an Eligible Account unless it is subject to a perfected, first priority Lien in favor of the Administrative Agent for the ratable benefit of the Lenders, is free and clear of all Liens other than Permitted Liens and is evidenced by an invoice or other document satisfactory to the Administrative Agent, and (ii) no Account of an Account Debtor shall be an Eligible Account if:

&nbsp;&nbsp;&nbsp;&nbsp;&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) such Account arises out of a sale made by a Borrower or Subsidiary Guarantor to an Affiliate of such Borrower or Subsidiary Guarantor or to a Person controlled by an Affiliate of such Borrower or Subsidiary Guarantor or such Account Debtor is such Borrower's or Subsidiary Guarantor's creditor or supplier;

&nbsp;&nbsp;&nbsp;&nbsp;&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) more than 60 days have elapsed from the due date of such Account;

&nbsp;&nbsp;&nbsp;&nbsp;&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) (i) with respect to Accounts of a Borrower or Subsidiary Guarantor other than Conn-Selmer, more than ninety days have elapsed from the invoice date of each such Account, and (ii) solely with respect to Accounts of Conn-Selmer, more than three hundred and five days have elapsed from the invoice date of each such Account;

&nbsp;&nbsp;&nbsp;&nbsp;&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) 50% or more of the aggregate account balance of Accounts due from such Account Debtor is more than 60 days past 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;&nbsp;&nbsp;&nbsp;&nbsp;(v) any covenant, representation or warranty contained in this Agreement or any Loan Documents with respect to such Account has been breached in a material manner;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(vi) the Administrative Agent is not and continues not to be satisfied with the credit standing of such Account Debtor, or the Administrative Agent otherwise believes, in its Credit Judgment, that collection of such Account is insecure or that such Account may not be paid by reason of such Account Debtor's financial inability to pay (and in the absence of an Event of Default which is continuing, at Borrowers' request therefor, Agent agrees to advise Borrowers of the reasons for its making any such judgment);

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(vii) such Account Debtor has asserted any dispute, offset or counterclaim against the related Borrower or Subsidiary Guarantor, such Account or any other Account due from such Account Debtor to such Borrower or Subsidiary Guarantor, or such Account is or could reasonably be expected to become subject to any offset, deduction, defense, dispute, or counterclaim, or is contingent in any respect or for any reason, but only to the extent of the amount in dispute;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(viii) such Account Debtor resides outside the continental United States, Alaska, Hawaii, the U.S. Virgin Islands and/or Puerto Rico, unless the sale is covered by a letter of credit or credit insurance in form and substance acceptable to the Agent in its Credit Judgment, or unless such Account (in U.S. Dollars) is due from an entity located in Canada or a territory 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;&nbsp;&nbsp;&nbsp;&nbsp;(ix) the sale to such Account Debtor is on a bill-and-hold, guaranteed sale, sale-and-return, sale on approval, consignment or any other repurchase or return basis or is evidenced by chattel paper;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(x) such Account Debtor is the United States of America, any state or any department, agency or instrumentality of any of them, unless the related Borrower or Subsidiary Guarantor assigns its right to payment of such Account to the Agent for the ratable benefit of the Lenders pursuant to the Federal Assignment of Claims Act of 1940, as amended, or has otherwise complied with all other applicable statutes or ordinances;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(xi) any of the following events occur or conditions exist with respect to the goods giving rise to such Account: (i) if such goods have not been shipped to such Account Debtor, or (ii) if so shipped, have subsequently not been delivered to such Account Debtor, or (iii) if so delivered, have not been accepted by such Account Debtor, or (iv) if such Account otherwise does not represent a final sale, or (v) such goods have been repossessed:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(xii) the amount of all Accounts of such Account Debtor exceeds any credit limit determined by the Administrative Agent, in its Credit Judgment, to the extent that the amount of such Account exceeds such limit;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(xiii) such Account Debtor has commenced or has had commenced against it a case under any federal, state or other bankruptcy or insolvency laws, as now constituted or hereafter amended, or made an assignment for the benefit of creditors, or if a decree or order for relief has been entered by a court having jurisdiction in the premises in respect of such Account Debtor in an involuntary case under any state or federal bankruptcy laws, as now constituted or hereafter amended, or if any other petition or other application for relief under any state or federal bankruptcy law has been filed against such Account Debtor, or if such Account Debtor has failed, suspended business, ceased to be solvent, called a meeting of its creditors (in order to discuss financial insolvency or lack of liquidity), or consented to or suffered a receiver, trustee, liquidator or custodian to be appointed for it or for all or a significant portion of its assets or affairs;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(xiv) the related Borrower or Subsidiary Guarantor has made any agreement with such Account Debtor for any deduction therefrom, except for discounts or allowances made in the ordinary course of business for prompt payment, all of which discounts or allowances shall be reflected in the calculation of the face value of each respective invoice related thereto; 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;(xv) such Account is not payable to the related Borrower or Subsidiary Guarantor;

notwithstanding the foregoing, Eligible Accounts may include in addition to any Account of any Borrower or Subsidiary Guarantor constituting an Eligible Account hereunder, Dealer Notes pledged to the Administrative Agent, satisfactory to the Administrative Agent in its Credit Judgment, and otherwise qualifying as Eligible Accounts hereunder having an aggregate outstanding principal amount at any time of up to $20,000,000, that mature up to two years from

------

the execution thereof. Notwithstanding anything to the contrary herein, the Steinway Dealer Notes shall not constitute Eligible Accounts until such time that such notes are deemed Eligible Accounts by the Administrative Agent, in its Credit Judgment. The Administrative Agent shall require that the Steinway Dealer Notes, among other things, be subject to a field examination and audit (and such examination and audit be reasonably acceptable to the Required Lenders) in order to determine whether such notes shall be considered Eligible Accounts.

"<u>Eligible Assignee</u>" means any Person that meets the requirements to be an assignee under <u>Section</u> <u>10.06(b)(iii)</u> and <u>(v)</u> (subject to such consents, if any, as may be required under <u>Section</u> <u>10.06(b)(iii)</u>).

"<u>Eligible Inventory</u>" means all Inventory of a Borrower or Subsidiary Guarantor consisting of (i) Boston Pianos, Essex Pianos, Steinway Pianos, Factory Returns, Concert and Artist Bank Pianos, near-finished pianos, and raw materials of Steinway, and (ii) raw materials, work-in-process and finished goods of any Borrower or Subsidiary Guarantor, in each case which is in good and saleable condition and located at such Borrower's or Subsidiary Guarantor's places of business or at the Collateral locations described on <u>Schedule</u> <u>I</u> to the Pledge and Security Agreement (except when in transit to or from such locations) and which is not, in the Administrative Agent's Credit Judgment, obsolete, damaged, slow-moving or unmerchantable, and which the Administrative Agent, in its Credit Judgment, shall deem Eligible Inventory, based upon such considerations as the Administrative Agent may from time to time deem appropriate. In general, unless otherwise determined by the Administrative Agent as referenced above, Inventory shall not constitute Eligible Inventory if it is on consignment to any consignee and unless it is subject to a perfected, first priority Lien in favor of the Administrative Agent for the ratable benefit of the Lenders, is free and clear of all Liens other than Permitted Encumbrances and conforms to all standards imposed by any Governmental Authority, division or department thereof which has regulatory authority over such goods or the use or sale thereof.

"<u>Environmental Laws</u>" means all Requirements of Law and Permits imposing liability or standards of conduct for or relating to the regulation and protection of human health, safety, the workplace, the environment and natural resources, and including public notification requirements and environmental transfer of ownership, notification or approval statutes.

"<u>Environmental Liabilities</u>" means all Liabilities (including costs of Remedial Actions, natural resource damages and costs and expenses of investigation and feasibility studies, including the cost of environmental consultants and the cost of attorney's fees) that may be imposed on, incurred by or asserted against any Loan Party or any Subsidiary of any Loan Party as a result of, or related to, any claim, suit, action, investigation, proceeding or demand by any Person, whether based in contract, tort, implied or express warranty, strict liability, criminal or civil statute or common law or otherwise, arising under any Environmental Law or in connection with any environmental, health or safety condition or with any Release and resulting from the ownership, lease, sublease or other operation or occupation of property by any Loan Party or any Subsidiary of any Loan Party, whether on, prior or after the date hereof.

------

"<u>Equity Contribution</u>" has the meaning specified in <u>Section</u> <u>4.01(f)</u>.

"<u>Equity Issuance</u>" means (i) any sale or issuance by Holdings or any of its Subsidiaries to any Person other than Holdings or a Subsidiary of Holdings of any Stock or any Stock Equivalents (other than Disqualified Stock) and (ii) the receipt by Holdings or any of its Subsidiaries of any cash capital contributions, whether or not paid in connection with any issuance of Stock of Holdings or any of its Subsidiaries, from any Person other than Holdings or a Subsidiary of Holdings.

"<u>ERISA</u>" means the Employee Retirement Income Security Act of 1974.

"<u>ERISA Affiliate</u>" means, collectively, any Loan Party and any Person under common control or treated as a single employer with, any Loan Party, within the meaning of Section 414(b), (c), (m) or (o) of the Code.

"<u>ERISA Event</u>" means any of the following: (a) a reportable event described in Section 4043(c) of ERISA (or, unless the 30-day notice requirement has been duly waived under the applicable regulations, Section 4043(c) of ERISA) with respect to a Title IV Plan; (b) the withdrawal of any ERISA Affiliate from a Title IV Plan subject to Section 4063 of ERISA during a plan year in which it was a substantial employer, as defined in Section 4001(a)(2) of ERISA; (c) the complete or partial withdrawal of any ERISA Affiliate from any Multiemployer Plan; (d) with respect to any Multiemployer Plan, the filing of a notice of reorganization, insolvency or termination (or treatment of a plan amendment as termination) under Section 4041A of ERISA; (e) the filing of a notice of intent to terminate a Title IV Plan (or treatment of a plan amendment as termination) under Section 4041(c) of ERISA; (f) the institution of proceedings to terminate a Title IV Plan or Multiemployer Plan by the PBGC; (g) the failure to make any required contribution to any Title IV Plan or Multiemployer Plan when due; (h) the imposition of a Lien under Section 412 or 430(k) of the Code or Section 303 or 4068 of ERISA on any property (or rights to property, whether real or personal) of any ERISA Affiliate; (i) the failure of a Benefit Plan or any trust thereunder intended to qualify for tax exempt status under Section 401 or 501 of the Code or other Requirements of Law to qualify thereunder; (j) a Title IV plan is in "at risk" status within the meaning of Code Section 430(i) or Section 303 of ERISA; (k) a Multiemployer Plan is in "endangered status" or "critical status" within the meaning of Section 432(b) of the Code or Section 305 of ERISA; and (l) any other event or condition that would reasonably be expected to constitute grounds under Section 4042 of ERISA for the termination of, or the appointment of a trustee to administer, any Title IV Plan or Multiemployer Plan or for the imposition of any material liability upon any ERISA Affiliate under Title IV of ERISA other than for PBGC premiums due but not delinquent.

"<u>Essex Pianos</u>" means pianos designed by Steinway, manufactured by an OEM and marketed under the Essex piano line all of which are finished goods or Factory Returns.

"<u>Eurodollar Rate</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;&nbsp;&nbsp;&nbsp;&nbsp;(i) for any Interest Period with respect to a Eurodollar Rate Loan, the rate per annum equal to the London Interbank Offered Rate ("<u>LIBOR</u>"), or a comparable or successor rate, which rate is approved by the Administrative Agent, as published on the applicable Reuters screen page (or such other commercially available source providing such quotations as may be designated by the Administrative Agent from time to time), at approximately 11:00 a.m., London time, two Business Days prior to the commencement of such Interest Period, for Dollar deposits (for delivery on the first day of such Interest Period) with a term equivalent to such Interest Period; 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;(ii) for any interest calculation with respect to a Base Rate Loan on any date, the rate per annum equal to LIBOR, at approximately 11:00 a.m., London time determined two Business Days prior to such date for Dollar deposits with a term of one month commencing on the date of determination; <u>provided</u> that to the extent a comparable or successor rate is approved by the Administrative Agent in connection herewith, the approved rate shall be applied to the applicable Interest Period in a manner consistent with market practice; <u>provided</u>, <u>further</u> that to the extent such market practice is not administratively feasible for the Administrative Agent, such approved rate shall be applied to the applicable Interest Period as otherwise reasonably determined by the Administrative Agent.

"<u>Eurodollar Rate Loan</u>" means at any date a Loan which bears interest at a rate based on <u>clause (i)</u> of the definition of "Eurodollar Rate".

"<u>Eurodollar Reserve Percentage</u>" means for any day during any Interest Period, the reserve percentage (expressed as a decimal, carried out to four decimal places) in effect on such day, whether or not applicable to any Lender, under regulations issued from time to time by the Federal Reserve Board for determining the maximum reserve requirement (including any emergency, supplemental or other marginal reserve requirement) with respect to Eurocurrency funding (currently referred to "Eurocurrency liabilities"). The Adjusted Eurodollar Rate for each outstanding Eurodollar Rate Loan shall be adjusted automatically on and as of the effective date of any change in the Eurodollar Reserve Percentage.

"<u>Event of Default</u>" has the meaning specified in <u>Section</u> <u>8.01</u>.

"<u>Event of Loss</u>" means, with respect to any Property, any of the following: (i) any loss, destruction or damage of such Property; or (ii) any actual condemnation, seizure or taking, by exercise of the power of eminent domain or otherwise, of such Property, or confiscation of such Property or the requisition of the use of such Property.

"<u>Exchange Act</u>" means the Securities Exchange Act of 1934, as amended, and the rules and regulations promulgated thereunder.

"<u>Excluded Accounts</u>" means (i) Deposit Accounts used solely for funding payroll or segregating payroll taxes or segregating 401k contribution or contributions to an employee stock purchase plan and other health and benefit plans, (ii) Deposit Accounts or securities accounts, amounts on deposit or value of the securities held in which the seven-day average balance does not exceed $2,000,000 in the aggregate at any one time, (iii) zero balance disbursement accounts, (iv) deposit or securities accounts located outside the United States, (v) subject to the ABL/Term Intercreditor Agreement, the Term Priority Collateral Asset Disposition Account (as defined in the ABL/Term Intercreditor Agreement), and (vi) Deposit Accounts or securities accounts maintained in connection with pledges of cash or cash equivalents permitted under <u>Section</u> <u>7.01(e)</u>.

------

"<u>Excluded Domestic Holdco</u>" means a Domestic Subsidiary substantially all of the assets of which consist of Stock of one or more Excluded Domestic Holdcos or Foreign Subsidiaries.

"<u>Excluded Domestic Subsidiary</u>" means any Domestic Subsidiary that is (a) a Subsidiary of a Foreign Subsidiary, (b) an Excluded Domestic Holdco or (c) an indirect Domestic Subsidiary of an Excluded Domestic Holdco.

"<u>Excluded Subsidiary</u>" means any Subsidiary of Holdings (a) for which the joining in, or becoming a party to, a Guaranty (i) would be prohibited by applicable law or regulation existing as of the Closing Date or on the date that such Subsidiary was acquired by a Loan Party (so long as such prohibition is not incurred in contemplation of such acquisition), (ii) would require governmental (including regulatory) consent, approval, license or authorization or (iii) would result in material adverse tax consequences as reasonably determined by the Parent Borrower, (b) that is an Excluded Domestic Subsidiary, (c) that is a Non-Material Subsidiary, (d) to the extent the burden or cost of obtaining a Guaranty outweighs the benefit afforded to the Lenders thereby, as reasonably determined by the Administrative Agent and the Parent Borrower and (e) Steinway and Sons.

"<u>Excluded Swap Obligation</u>" means, with respect to any Loan Party, any Swap Obligation if, and to the extent that, all or a portion of the Guaranty of such Loan Party of, or the grant by such Loan Party of a security interest to secure, such Swap Obligation (or any Guaranty 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 Loan Party's failure for any reason to constitute an "eligible contract participant" as defined in the Commodity Exchange Act (determined after giving effect to Section 2.10 of the Guaranty and other "keepwell, support or other agreement" for the benefit of such Loan Party and any and all guarantees of such Loan Party's Swap Obligations by other Loan Parties) at the time the Guaranty of such Loan Party, or a grant by such Loan Party of a security interest, becomes effective with respect to such Swap Obligation. If a Swap Obligation arises under a master agreement governing more than one swap, such exclusion shall apply only to the portion of such Swap Obligation that is attributable to swaps for which such Guaranty or security interest is or becomes excluded in accordance with the first sentence of this definition.

"<u>Excluded Taxes</u>" means, with respect to the Administrative Agent, any Lender, any L/C Issuer or any other recipient of any payment to be made by or on account of any obligation of the Borrowers hereunder, (i) taxes imposed on or measured by its overall net income (however denominated), and franchise taxes imposed on it (in lieu of net income taxes), by the jurisdiction (or any political subdivision thereof) under the laws of which such recipient is organized or in which its principal office is located or, in the case of any Lender, in which its Lending Office is located, (ii) any branch profits taxes imposed by the United States or any similar tax imposed by any other jurisdiction in which any Borrower is located, (iii) any backup withholding tax that is required by the Code to be withheld from amounts payable to a Lender that has failed to comply with <u>clause (A)</u> of <u>Section</u> <u>3.01(e)(ii)</u>, (iv) in the case of a Foreign Lender (other than an assignee pursuant to a request by the Parent Borrower under <u>Section</u> <u>10.13</u>), any United States withholding tax that is (A) required to be imposed on amounts payable to such Foreign Lender pursuant to the Requirements of Law in force at the time such Foreign Lender becomes a party hereto (or

------

designates a new Lending Office) or (B) is attributable to such Foreign Lender's failure or inability (other than as a result of a Change in Law) to comply with <u>clause (B)</u> of <u>Section</u> <u>3.01(e)(ii)</u>, except to the extent that such Foreign Lender (or its assignor, if any) was entitled, at the time of designation of a new Lending Office (or assignment), to receive additional amounts from the Borrowers with respect to such withholding tax pursuant to <u>Section</u> <u>3.01(a)</u> and (v) any United States withholding tax that is imposed as a result of such recipient's failure to comply with the requirements to establish an exemption from such withholding tax pursuant to FATCA.

"<u>Existing Credit Agreement</u>" means the $100,000,000 Loan and Security Agreement, dated as of October 15, 2010 (as amended, modified or supplemented to the Closing Date) among Conn-Selmer, Steinway, the lenders party thereto, Bank of America, N.A., as administrative agent, and the other parties thereto.

"<u>Existing Letters of Credit</u>" means the letters of credit issued before the Closing Date and described by date of issuance, letter of credit number, undrawn amount, name of beneficiary and date of expiry on <u>Schedule</u> <u>2.03</u> hereto, and "<u>Existing Letter of Credit</u>" means any one of them.

"<u>E</u><u>-Fax</u>" means any system used to receive or transmit faxes electronically.

"<u>Facility</u>" means at any time, the aggregate amount of the Revolving Facility Commitments at such time, which as of the Closing Date is $75,000,000, and any Incremental Commitments or Incremental Loans.

"<u>Factory Returns</u>" means pianos bearing the Steinway, Steinway and Sons, Essex or Boston name brands that have been returned to Steinway and are in near-new, good and merchantable condition.

"<u>FASB ASC</u>" means the Accounting Standards Codification of the Financial Accounting Standards Board.

"<u>FATCA</u>" means Sections 1471 through 1474 of the Code as of the date of this Agreement (or any amended or successor provisions that are substantively similar and not materially more onerous to comply with), any regulations thereunder or official interpretations thereof and any agreements entered into pursuant to Section 1471(b)(1) of the Code.

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

------

"<u>Federal Reserve Board</u>" means the Board of Governors of the Federal Reserve System, or any entity succeeding to any of its principal functions.

"<u>Fee Letter</u>" means the Fee Letter dated as of August 14, 2013 among Holdings and Bank of America, N.A., Merrill Lynch, Pierce, Fenner & Smith Incorporated, Deutsche Bank AG New York Branch and Deutsche Bank Securities Inc.

"<u>FEMA</u>" means the Federal Emergency Management Agency, a component of the U.S. Department of Homeland Security that administers the National Flood Insurance Program.

"<u>Field Survey and Audit</u>" means a field survey and audit of the Loan Parties and an appraisal of the Collateral performed by auditors, examiners and/or appraisers selected by any Agent, at the sole cost and expense of the Borrowers.

"<u>Finance Document</u>" means (i) each Loan Document, (ii) each Secured Hedge Agreement and (iii) each Secured Cash Management Agreement, and "<u>Finance Documents</u>" means all of them, collectively.

"<u>Finance Obligations</u>" means, at any date, (i) all ABL Credit Obligations, (ii) all Cash Management Obligations then owing under any Secured Cash Management Agreement to a Cash Management Bank and (iii) all Swap Obligations (other than Excluded Swap Obligations) of a Loan Party permitted hereunder then owing under any Secured Hedge Agreement to any Hedge Bank and all costs and expenses incurred in connection with enforcement and collection of the obligations described in this <u>clause (ii)</u>, including the fees, charges and disbursement of counsel (it being understood, for avoidance of doubt, that obligations of a Loan Party of or owed to (i) Bank of America or its affiliates or (ii) a Person that is both a Term Finance Party and a Lender at the time such Rate Contract or Cash Management Agreement was entered into by such Loan Party shall be considered Finance Obligations); <u>provided</u> that the Finance Obligations shall exclude any Excluded Swap Obligation.

"<u>Fiscal Quarter</u>" means any of the quarterly accounting periods of the Loan Parties, ending on March 31, June 30, September 30 and December 31 of each year.

"<u>Fiscal Year</u>" means any of the annual accounting periods of the Loan Parties ending on December 31 of each year.

"<u>Fixed Charge Coverage Ratio</u>" means, with respect to any Person for any period, the ratio of (a) Consolidated EBITDA of such Person and its Subsidiaries for such period minus the sum of (i) Consolidated Capital Expenditures paid or payable in cash by such Person and its Subsidiaries during such period (except those financed with borrowed money other than under the Facility) plus (ii) income taxes paid or payable by such Person and its Subsidiaries in cash during such period, to (b) the sum of (i) all scheduled payments of principal of Funded Debt and Capital Lease Obligations paid or payable in cash during such period, plus (ii) Consolidated Cash Interest Expense of such Person and its Subsidiaries paid or payable in cash during such period, plus (iii) dividends or distributions paid or payable in cash by such Person or any of its Subsidiaries, in respect of the Equity Interests of such Person or any of its Subsidiaries (other than (A) dividends or distributions paid by a Loan Party to any other Loan Party and (B) dividends paid in connection with any recapitalization of the Parent Borrower or any of its Subsidiaries, but only to the extent not financed with proceeds of Loans) during such period.

------

Notwithstanding the foregoing, for purposes of determining the Fixed Charge Coverage Ratio as of or for the periods ended September 30, 2013, December 31, 2013 and March 31, 2014, the fixed charges will be deemed to be equal to, for the Fiscal Quarter ended (i) March 31, 2013, $5,467,075, (ii) June 30, 2013, $5,459,888, and (iii) September 30, 2013, $5,452,718, as each such amount may be adjusted by an amount described in <u>clause (b)(iii)</u> of this definition and paid during the period after the Closing Date and on or before September 30, 2013.

"<u>Flood Insurance</u>" means, for any Real Estate located in a Special Flood Hazard Area, federal Flood Insurance or private insurance reasonably satisfactory to the Administrative Agent, in either case, that (a) meets the requirements set forth by FEMA in its Mandatory Purchase of Flood Insurance Guidelines, (b) shall include a deductible not to exceed $50,000 and (c) shall have a coverage amount equal to the lesser of (i) the "replacement cost value" of the buildings and any personal property Collateral located on the Real Estate as determined under the National Flood Insurance Program or (ii) the maximum policy limits set under the National Flood Insurance Program.

"<u>Foreign Lender</u>" means any Lender or L/C Issuer which, for U.S. federal tax purposes (i) is regarded as a separate entity and is not a "United States person" within the meaning of Section 7701(a)(30) of the Code or (ii) is disregarded as separate from an entity that is not a "United States person" within the meaning of Section 7701(a)(30) of the Code.

"<u>Foreign Subsidiary</u>" means, with respect to any Person, a Subsidiary of such Person that is not a Domestic Subsidiary.

"<u>Fronting Exposure</u>" means, at any time there is a Defaulting Lender, (i) with respect to any L/C Issuer, such Defaulting Lender's Revolving Facility Percentage of the outstanding L/C Obligations arising in respect of Letters of Credit issued by such L/C Issuer other than L/C Obligations as to which such Defaulting Lender's participation obligation has been reallocated to other Lenders or Cash Collateralized in accordance with the terms hereof, and (ii) with respect to the Swing Line Lender, such Defaulting Lender's Revolving Facility Percentage of Swing Line Loans other than Swing Line Loans as to which such Defaulting Lender's participation obligation has been reallocated to other Lenders in accordance with the terms hereof.

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

"<u>Funded Debt</u>" means all Indebtedness of Holdings and its Subsidiaries for borrowed money that matures more than one year from the date of its creation or matures within one year from such date that is renewable or extendable, at the option of such Person, to a date more than one year from such date or arises under a revolving credit or similar agreement that

obligates the lender or lenders to extend credit during a period of more than one year from such date, including Indebtedness in respect of the Loans.

------

"<u>GAAP</u>" means generally accepted accounting principles in the United States, as in effect from time to time, set forth in the opinions and pronouncements of the Accounting Principles Board and the American Institute of Certified Public Accountants, in the statements and pronouncements of the Financial Accounting Standards Board (or agencies with similar functions and comparable stature and authority within the accounting profession) that are applicable to the circumstances as of the date of determination. Subject to <u>Section</u> <u>1.03</u>, all references to "GAAP" shall be to GAAP applied consistently with the principles used in the preparation of the financial statements described in <u>Section</u> <u>5.11(a)</u>.

"<u>Governmental Authority</u>" means any nation or government, any state or other political subdivision thereof, any central bank (or similar monetary or regulatory authority) thereof, any entity exercising executive, legislative, judicial, regulatory or administrative functions of or pertaining to government, and any corporation or other entity owned or controlled, through stock or capital ownership or otherwise, by any of the foregoing.

"<u>Guarantee</u>" means, with respect to any Person, without duplication, any obligation (other than endorsements in the ordinary course of business of negotiable instruments for deposit or collection) guaranteeing, intended to guarantee, or having the economic effect of guaranteeing, any Indebtedness of any other Person in any manner, whether direct or indirect, and including, without limitation, any obligation, whether or not contingent, (i) to purchase any such Indebtedness or any property constituting security therefor, (ii) to advance or provide funds or other support for the payment or purchase of such Indebtedness or to maintain working capital, solvency or other balance sheet condition of such other Person (including, without limitation, maintenance agreements, comfort letters, take or pay arrangements, put agreements or similar agreements or arrangements) for the benefit of the holder of Indebtedness of such other Person, (iii) to lease or purchase property, securities or services primarily for the purpose of assuring the owner of such Indebtedness of the ability of the primary obligor to make payments on such Indebtedness or (iv) to otherwise assure or hold harmless the owner of such Indebtedness against loss in respect thereof. The amount of any Guarantee hereunder shall (subject to any limitations set forth therein) be deemed to be an amount equal to the outstanding principal amount (or maximum principal amount, if larger) of the Indebtedness in respect of which such Guarantee is made.

"<u>Guarantors</u>" means, (i) collectively, Holdings, the Subsidiaries of the Borrowers listed on <u>Schedule</u> <u>6.13</u> and each other Subsidiary of any Borrower that shall be required to execute and deliver an Accession Agreement or other guaranty or guaranty supplement pursuant to <u>Section</u> <u>6.13</u> and (ii) with respect to (A) Finance Obligations owing by any Loan Party or any Subsidiary of a Loan Party (other than the Borrowers) under any Secured Hedge Agreement and (B) the payment and performance by each Specified Loan Party of its obligations under its Guaranty with respect to all obligations under Secured Hedge Agreements, the Borrowers.

"<u>Guaranty</u>" means, collectively, the Guaranty made by Holdings and the Subsidiary Guarantors in favor of the Secured Parties, substantially in the form of <u>Exhibit</u> <u>E</u>, together with each other guaranty and guaranty supplement delivered pursuant to <u>Section</u> <u>6.13</u>.

------

"<u>Hazardous Materials</u>" means any substance, material or waste that is classified, regulated or otherwise characterized under any Environmental Law as hazardous, toxic, a contaminant or a pollutant or by other words of similar meaning or regulatory effect, including petroleum or any fraction thereof, asbestos, polychlorinated biphenyls and radioactive substances.

"<u>Hedge Bank</u>" means any Person that, at the time it enters into a Rate Contract required or permitted under <u>Article</u> <u>VI</u> or <u>VII</u>, is a Lender or an Affiliate of a Lender, in its capacity as a party to such Rate Contract.

"<u>Holdings</u>" means Pianissimo Holdings Corp., a Delaware corporation, and its successors.

"<u>Impacted Loans</u>" has the meaning specified in <u>Section</u> <u>3.03(a)</u>.

"<u>Incremental Commitment</u>" has the meaning specified in <u>Section</u> <u>2.14(a)</u>.

"<u>Incremental Commitments Amendment</u>" has the meaning specified in <u>Section</u> <u>2.14(d)</u>.

"<u>Incremental Commitments Effective Date</u>" has the meaning specified in <u>Section</u> <u>2.14(e)</u>.

"<u>Incremental Lender</u>" has the meaning specified in <u>Section</u> <u>2.14(c)</u>.

"<u>Incremental Loans</u>" has the meaning specified in <u>Section</u> <u>2.14(a)</u>.

"<u>Indebtedness</u>" means, as to any Person at a particular time, without duplication: (a) all indebtedness for borrowed money; (b) all obligations issued, undertaken or assumed as the deferred purchase price of Property or services (other than trade payables entered into in the Ordinary Course of Business); (c) the face amount of all letters of credit issued for the account of such Person and without duplication, all drafts drawn thereunder and all reimbursement or payment obligations with respect to letters of credit, surety bonds and other similar instruments issued by such Person; (d) all obligations evidenced by notes, bonds, debentures or similar instruments, including obligations so evidenced incurred in connection with the acquisition of Property, assets or businesses; (e) all indebtedness created or arising under any conditional sale or other title retention agreement, or incurred as financing, in either case with respect to Property acquired by such Person (even though the rights and remedies of the seller or lender under such agreement in the event of default are limited to repossession or sale of such Property); (f) all Capital Lease Obligations; (g) the principal balance outstanding under any synthetic lease, off-balance sheet loan or similar off balance sheet financing product; (h) all obligations of such Person, whether or not contingent, to purchase, redeem, retire, defease or otherwise acquire for value any of its own Stock or Stock Equivalents (or any Stock or Stock Equivalent of a direct or indirect parent entity thereof) prior to the date that is at least 180 days after the Revolving Facility Maturity Date, valued at, in the case of redeemable preferred Stock, the greater of the voluntary liquidation preference and the involuntary liquidation preference of such Stock plus accrued and unpaid dividends, excluding any Stock or Stock Equivalents held by officers, directors and employees required to be repurchased upon termination of employment; (i) all indebtedness referred to in <u>clauses</u> <u>(a)</u> through <u>(h)</u> above secured by (or for which the holder of such

------

Indebtedness has an existing right, contingent or otherwise, to be secured by) any Lien upon or in Property (including accounts and contracts rights) owned by such Person, even though such Person has not assumed or become liable for the payment of such indebtedness; and (j) all Contingent Obligations described in <u>clause (a)</u> of the definition thereof in respect of indebtedness or obligations of others of the kinds referred to in <u>clauses (a)</u> through <u>(i)</u> above.

"<u>Indemnified Taxes</u>" means Taxes, other than Excluded Taxes.

"<u>Indemnitees</u>" has the meaning specified in <u>Section</u> <u>10.04(b)</u>.

"<u>Information</u>" has the meaning specified in <u>Section</u> <u>10.07</u>.

"<u>Initial Borrower</u>" has the meaning specified in the preamble hereto.

"<u>Inspection Triggering Event</u>" means (i) a Default or Event of Default has occurred and is continuing or (ii) Availability is less than 35.0% of the Revolving Facility Commitment for five consecutive Business Days.

"<u>Inspection Trigger Period</u>" means the period commencing on the day that a Inspection Triggering Event has occurred and is continuing until, during the preceding 30 day consecutive period, no Default or Event of Default has existed and Availability is greater than 35.0% of the Revolving Facility Commitment.

"<u>Intellectual Property</u>" means all rights, title and interests in or relating to intellectual property and industrial property arising under any Requirement of Law and all IP Ancillary Rights relating thereto, including all Copyrights, Patents, Software, Trademarks, Internet Domain Names, Trade Secrets and IP Licenses.

"<u>Intercompany Note</u>" has the meaning specified in <u>Section</u> <u>7.04(b)</u>.

"<u>Intercreditor Agreements</u>" means, collectively, the ABL/Term Intercreditor Agreement and the Term Intercreditor Agreement.

"<u>Interest Payment Date</u>" means, (i) as to any Eurodollar Rate Loan, the last day of each Interest Period applicable to such Loan and the Revolving Facility Maturity Date; <u>provided</u>, <u>however</u>, that if any Interest Period for a Eurodollar Rate Loan exceeds three months, the respective dates that fall every three months after the beginning of such Interest Period shall also be Interest Payment Dates; and (ii) as to any Base Rate Loan or Swing Line Loan, the last Business Day of each March, June, September and December and the Revolving Facility Maturity Date.

"<u>Interest Period</u>" means, as to each Eurodollar Rate Loan, the period commencing on the date such Eurodollar Rate Loan is disbursed or converted to or continued as a Eurodollar Rate Loan and ending on the date one, three or six months or, to the extent available to, and agreed to by, all Lenders, twelve months thereafter (in each case, subject to availability), as selected by the Parent Borrower in its Committed Loan Notice or such other period that is twelve months or less requested by the Parent Borrower and consented to by all the Lenders; <u>provided</u> that:

------

&nbsp;&nbsp;&nbsp;&nbsp;&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) any Interest Period which would otherwise end on a day which is not a Business Day shall, subject to <u>clause (iii)</u> below, be extended to the next succeeding Business Day unless such Business Day falls in another calendar month, in which case such Interest Period shall end on the next preceding Business Day;

&nbsp;&nbsp;&nbsp;&nbsp;&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) any Interest Period which begins on the last Business Day of a calendar month (or on a day for which there is no numerically corresponding day in the calendar month at the end of such Interest Period) shall end on the last Business Day of a calendar month; 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;(iii) no Interest Period shall extend beyond the Revolving Facility Maturity Date.

"<u>Internet Domain Name</u>" means all right, title and interest (and all related IP Ancillary Rights) arising under any Requirement of Law in or relating to internet domain names.

"<u>Inventory</u>" means all of the "inventory" (as such term is defined in the UCC) of the Loan Parties, including, but not limited to, all merchandise, raw materials, parts, supplies, work-in-process and finished goods intended for sale, together with all the containers, packing, packaging, shipping and similar materials related thereto, and including such inventory as is temporarily out of a Loan Party's custody or possession, including inventory on the premises of others and items in transit.

"<u>Inventory Reserve</u>" means reserves established by the Administrative Agent to reflect factors that may negatively impact the Value of Inventory, including change in salability, obsolescence, seasonality, theft, shrinkage, imbalance, change in composition or mix, markdowns and vendor chargebacks.

"<u>IP Ancillary Rights</u>" means, with respect to any other Intellectual Property, as applicable, all foreign counterparts to, and all divisional, reversions, continuations, continuations-in-part, reissues, reexaminations, renewals and extensions of, such Intellectual Property and all income, royalties, proceeds and Liabilities at any time due or payable or asserted under or with respect to any of the foregoing or otherwise with respect to such Intellectual Property, including all rights to sue or recover at law or in equity for any past, present or future infringement, misappropriation, dilution, violation or other impairment thereof, and, in each case, all rights to obtain any other IP Ancillary Right.

"<u>IP License</u>" means all Contractual Obligations (and all related IP Ancillary Rights), whether written or oral, granting any right, title and interest in or relating to any Intellectual Property.

"<u>IRS</u>" means the Internal Revenue Service of the United States and any successor thereto.

"<u>ISP98 Rules</u>" has the meaning specified in <u>Section</u> <u>2.03(b)(ii)</u>.

------

"<u>Issuer Document</u>" means with respect to any Letter of Credit, the Letter of Credit Application, and any other document, agreement and instrument entered into by the applicable L/C Issuer and the applicable Borrower (or any Subsidiary) or in favor of the L/C Issuer and relating to such Letter of Credit.

"<u>Joint Lead Arrangers</u>" means Bank of America, N.A. or its designated affiliate and Deutsche Bank Securities Inc. or its designated affiliate, in their capacities as joint lead arrangers and joint book running managers.

"<u>L/C Credit Extension</u>" means, with respect to any Letter of Credit, the issuance thereof or extension of the expiry date thereof, or the increase of the amount thereof.

"<u>L/C Issuer</u>" means Bank of America or such other Lender as designated by the Administrative Agent to the Parent Borrower and reasonably acceptable to the Parent Borrower from time to time.

"<u>L/C Issuer Fees</u>" has the meaning specified in <u>Section</u> <u>2.03(i)</u>.

"<u>L/C Obligations</u>" means, as at any date of determination, the aggregate amount available to be drawn under all outstanding Letters of Credit plus the aggregate of all Unreimbursed Amounts, including all Letter of Credit Borrowings. For purposes of computing the amount available to be drawn under any Letter of Credit, the amount of such Letter of Credit shall be determined in accordance with <u>Section</u> <u>1.06</u>. For all purposes of this Agreement, if on any date of determination a Letter of Credit has expired by its terms but any amount may still be drawn thereunder by reason of the operation of Rule 3.14 of the ISP98 Rules, such Letter of Credit shall be deemed to be "outstanding" in the amount so remaining available to be drawn.

"<u>Lender</u>" means each bank or other lending institution listed on <u>Schedule</u> <u>2.01</u>, each Eligible Assignee that becomes a Lender pursuant to <u>Section</u> <u>10.06(b)</u>, each Incremental Lender, and their respective successors and shall include, as the context may require, the Swing Line Lender in such capacity.

"<u>Lending Office</u>" means with respect to any Lender and for each Type of Loan, the "Lending Office" of such Lender (or of an Affiliate of such Lender) designated for such Type of Loan in such Lender's Administrative Questionnaire or in any applicable Assignment and Assumption pursuant to which such Lender became a Lender hereunder or such other office of such Lender (or of an Affiliate of such Lender) as such Lender may from time to time specify to the Administrative Agent and the Parent Borrower as the office by which its Loans of such Type are to be made and maintained.

"<u>Letter of Credit</u>" has the meaning specified in <u>Section</u> <u>2.03(a)</u>, and shall include the Existing Letters of Credit.

"<u>Letter of Credit Application</u>" has the meaning specified in <u>Section</u> <u>2.03(b)(i)</u>.

"<u>Letter of Credit Borrowing</u>" has the meaning specified in <u>Section</u> <u>2.03(d)(iv)</u>.

------

"<u>Letter of Credit Expiration Date</u>" means the day that is seven days prior to the Revolving Facility Maturity Date then in effect (or, if such day is not a Business Day, the next preceding Business Day).

"<u>Letter of Credit Fee</u>" has the meaning specified in <u>Section</u> <u>2.09(b)</u>.

"<u>Letter of Credit Sublimit</u>" means an amount equal to $15,000,000. The Letter of Credit Sublimit is part of, and not in addition to, the Facility.

"<u>Liabilities</u>" means all claims, actions, suits, judgments, damages, losses, liability, obligations, responsibilities, fines, penalties, sanctions, costs, fees, Taxes, commissions, charges, disbursements and expenses (including, without limitation, those incurred upon any appeal or in connection with the preparation for and/or response to any subpoena or request for document production relating thereto), in each case of any kind or nature (including interest accrued thereon or as a result thereto and fees, charges and disbursements of financial, legal and other advisors and consultants), whether joint or several, whether or not indirect, contingent, consequential, actual, punitive, treble or otherwise.

"<u>LIBOR</u>" has the meaning specified in the definition of "Eurodollar Rate".

"<u>Loan</u>" means an extension of credit by a Lender to the Borrowers under <u>Article</u> <u>II</u> in the form of a Revolving Facility Loan, an Incremental Loan or a Swing Line Loan.

"<u>Loan Documents</u>" means, collectively, this Agreement, the Letters of Credit, the Notes, the Guaranties, the Collateral Documents, the ABL/Term Intercreditor Agreement, each Perfection Certificate, each Accession Agreement and the Fee Letter.

"<u>Loan Modification Agreement</u>" has the meaning specified in <u>Section</u> <u>10.01</u>.

"<u>Loan Modification Offer</u>" has the meaning specified in <u>Section</u> <u>10.01</u>.

"<u>Loan Party</u>" means each of Holdings, the Borrowers, and each Subsidiary Guarantor, and "<u>Loan Parties</u>" means any combination of the foregoing.

"<u>London Banking Day</u>" means any day on which dealings in Dollar deposits are conducted by and between banks in the London interbank eurodollar market.

"<u>Margin Stock</u>" means "margin stock" as such term is defined in Regulation T, U or X of the Federal Reserve Board.

------

"<u>Material Adverse Effect</u>" means (a) a material adverse change in, or a material adverse effect upon, the operations, business, Properties, condition (financial or otherwise) of any Loan Party or the Loan Parties and the Subsidiaries taken as a whole; (b) a material impairment of the ability of any Loan Party, any Subsidiary of any Loan Party or any other Person (other than the Agents or Lenders) to perform in any material respect its obligations under any Loan Document; or (c) a material adverse effect upon (i) the legality, validity, binding effect or enforceability of any Loan Document, or (ii) the perfection or priority of any Lien granted to the Lenders or to the Collateral Agent for the benefit of the Secured Parties under any of the Collateral Documents.

"<u>Material Contract</u>" means, with respect to any Person, any Contractual Obligation of such Person that would reasonably be expected to result in a Material Adverse Effect.

"<u>Material Environmental Liabilities</u>" means Environmental Liabilities exceeding $3,000,000 in the aggregate.

"<u>Maximum Rate</u>" has the meaning specified in <u>Section</u> <u>10.09</u>.

"<u>Merger Agreement</u>" means the Agreement and Plan of Merger, dated as of August 14, 2013, by and among Holdings, AcquisitionCo and the Company.

"<u>Maximum Face Amount</u>" means, with respect to any outstanding Letter of Credit, the face amount of such Letter of Credit including all automatic increases provided for in such Letter of Credit, whether or not such automatic increase has become effective.

"<u>Maximum Undrawn Amount</u>" means, with respect to any outstanding Letter of Credit, the amount of such Letter of Credit that is or may become available to be drawn, including all automatic increases provided for in such Letter of Credit, but only to the extent that any such automatic increase has become effective.

"<u>Measurement Period</u>" means, at any date of determination, the four consecutive Fiscal Quarters of Holdings ending on, or most recently preceding, such date.

"<u>Minimum Collateral Amount</u>" means, at any time, (i) with respect to Cash Collateral consisting of cash or deposit account balances provided to reduce or eliminate Fronting Exposure during the existence of a Defaulting Lender, an amount equal to 105% of the Fronting Exposure of an L/C Issuer with respect to Letters of Credit issued and outstanding at such time, (ii) with respect to Cash Collateral consisting of cash or deposit account balances provided in accordance with the provisions of <u>Section</u> <u>2.16(a)(i)</u>, <u>(a)(ii)</u> or <u>(a)(iii)</u>, an amount equal to 105% of the Outstanding Amount of all L/C Obligations, and (iii) otherwise, an amount determined by the Administrative Agent and the applicable L/C Issuer in their sole discretion.

"<u>MNPI</u>" means material non-public information.

"<u>Moody's</u>" means Moody's Investors Service, Inc., a Delaware corporation, and any successor thereto.

------

"<u>Mortgage</u>" means any deed of trust, leasehold deed of trust, mortgage, leasehold mortgage, deed to secure debt, leasehold deed to secure debt or other document creating a Lien on Real Estate or any interest in Real Estate.

"<u>Mortgage Policies</u>" has the meaning specified in <u>Section</u> <u>6.13(a)</u>.

"<u>Mortgaged Properties</u>" means the Properties of the Loan Parties described in <u>Schedule</u> <u>5.26(c)</u> hereto.

"<u>Multiemployer Plan</u>" means any multiemployer plan, as defined in Section 3(37) or 4001(a)(3) of ERISA, as to which any ERISA Affiliate incurs or otherwise has any obligation or liability, contingent or otherwise.

"<u>Net Issuance Proceeds</u>" means, in respect of any issuance of equity or incurrence of Indebtedness, cash proceeds (including cash proceeds as and when received in respect of non-cash proceeds received or receivable in connection with such issuance), net of underwriting discounts and reasonable out-of-pocket costs and expenses paid or incurred in connection therewith in favor of any Person not an Affiliate of the Parent Borrower.

"<u>Net Proceeds</u>" means proceeds in cash, checks or other cash equivalent financial instruments (including Cash Equivalents) as and when received by the Person making a Disposition, as well as insurance proceeds and condemnation and similar awards received on account of an Event of Loss, net of: (a) in the event of a Disposition (i) the direct costs relating to such Disposition excluding amounts payable to the Borrowers or any Affiliate of the Borrowers, (ii) Taxes paid or reasonably estimated to be payable, directly or indirectly, as a result thereof or any transactions occurring or deemed to occur to effectuate a payment under this Agreement and (iii) amounts required to be applied to repay principal, interest and prepayment premiums and penalties on Indebtedness secured by a Lien on the asset which is the subject of such Disposition and (b) in the event of an Event of Loss, (i) all money actually applied to repair or reconstruct the damaged Property or Property affected by the condemnation or taking, (ii) all of the costs and expenses reasonably incurred in connection with the collection of such proceeds, award or other payments, and (iii) any amounts retained by or paid to parties having superior rights to such proceeds, awards or other payments.

"<u>Non</u><u>-Material Subsidiary</u>" means any Subsidiary that is not a Loan Party whose assets (at fair market value) do not exceed $500,000 and in which the net investment of Holdings and its Subsidiaries is less than $500,000.

------

"<u>Note</u>" means a promissory note, substantially in the form of <u>Exhibit</u> <u>B</u>, evidencing the obligation of the Borrowers to repay outstanding Loans made by a Lender, as such note may be amended, modified or supplemented from time to time.

"<u>Not Otherwise Applied</u>" means, with reference to any amount Net Issuance Proceeds of any Qualifying Equity Issuance, that such amount (directly or indirectly) was not (and is not concurrently being) used for any purpose referred to in <u>clause (ii)</u> of the definition of "Qualifying Equity Issuance" or otherwise applied in determining the permissibility of a transaction under the Loan Documents where such permissibility was (or may have been) contingent on receipt of such amount or utilization of such amount for a specified purpose.

"<u>NYCIDA</u>" means the New York City Industrial Development Agency.

"<u>OEM</u>" means an original equipment manufacturer.

"<u>OFAC</u>" has the meaning specified in <u>Section</u> <u>5.23</u>.

"<u>Ordinary Course of Business</u>" means, in respect of any transaction involving any Loan Party or any Subsidiary of any Loan Party, the ordinary course of such Person's business, as conducted by any such Person in accordance with past practice (including any business that is a reasonable extension, development or expansion of the foregoing or is reasonably related, complementary, ancillary or incidental to any such business) and undertaken by such Person in good faith and not for purposes of evading any covenant or restriction in any Loan Document.

"<u>Organization Documents</u>" means, (a) for any corporation, the certificate or articles of incorporation, the bylaws, any certificate of determination or instrument relating to the rights of preferred shareholders of such corporation, any shareholder rights agreement, (b) for any partnership, the partnership agreement and, if applicable, certificate of limited partnership, (c) for any limited liability company, the operating agreement and articles or certificate of formation or (d) any other document setting forth the manner of election or duties of the officers, directors, managers or other similar persons, or the designation, amount or relative rights, limitations and preference of the Stock of a Person.

"<u>Original Currency</u>" has the meaning specified in <u>Section</u> <u>10.20</u>.

"<u>Other Taxes</u>" means all present or future stamp or documentary taxes or any other excise or property taxes, charges or similar levies arising from any payment made hereunder or under any other Loan Document or from the execution, delivery or enforcement of, or otherwise with respect to, this Agreement or any other Loan Document.

"<u>Outstanding Amount</u>" means (i) with respect to Revolving Facility Loans and Swing Line Loans on any date, the aggregate outstanding principal amount thereof after giving effect to any borrowings and prepayments or repayments of Revolving Facility Loans, and Swing Line Loans, as the case may be, occurring on such date; and (ii) with respect to any L/C Obligations on any date, the amount of such L/C Obligations on such date after giving effect to any L/C Credit Extension occurring on such date and any other changes in the aggregate amount of the L/C Obligations as of such date, including as a result of any reimbursements by the Borrowers of Unreimbursed Amounts or any reductions in the maximum amount available for drawing under Letters of Credit taking effect on such date.

------

"<u>Overadvance</u>" has the meaning specified in <u>Section</u> <u>2.17(b)</u>.

"<u>Parent Borrower</u>" has the meaning specified in the preamble hereto, and its successor or successors in its capacity as the borrowing agent and attorney-in-fact for the Borrowers.

"<u>Participant</u>" has the meaning specified in <u>Section</u> <u>10.06(d)</u>.

"<u>Participant Register</u>" has the meaning specified in <u>Section</u> <u>10.06(d)</u>.

"<u>Patents</u>" means all rights, title and interests (and all related IP Ancillary Rights) arising under any Requirement of Law in or relating to letters patent and applications therefor.

"<u>Participation Commitment</u>" means each Lender's obligation to buy a participation of the Letters of Credit issued hereunder.

"<u>Participation Revolving Loan</u>" has the meaning specified in <u>Section</u> <u>2.03(d)(v)</u>.

"<u>Patriot Act</u>" means the Uniting and Strengthening America by Providing Appropriate Tools Required to Intercept and Obstruct Terrorism Act of 2001 (Title III of Pub. L. 107-56 (signed into Law October 26, 2001)).

"<u>PBGC</u>" means the United States Pension Benefit Guaranty Corporation or any successor thereto.

"<u>Perfection Certificate</u>" means with respect to any Loan Party a certificate, substantially in the form of <u>Exhibit</u> <u>F</u><u>-2</u> to this Agreement, completed and supplemented with the schedules and attachments contemplated thereby to the reasonable satisfaction of the Collateral Agent and duly executed by the president and/or chief executive officer or the chief financial officer of such Loan Party.

"<u>Permit</u>" means, with respect to any Person, any permit, approval, authorization, license, registration, certificate, concession, grant, franchise, variance or permission from, and any other Contractual Obligations with, any Governmental Authority, in each case whether or not having the force of law and 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>Permitted Acquisition</u>" means any Acquisition by (i) a Loan Party (other than Holdings) or a Subsidiary of a Loan Party of all or substantially all of the assets of a Target, or any line of business, unit or division of a Target or (ii) a Loan Party (other than Holdings) of 100% of the Stock and Stock Equivalents of a Target (except for directors' and foreign national qualifying shares in accordance with Requirements of Law) to the extent that each of the following conditions shall have been satisfied:

------

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a) to the extent the Acquisition will be financed in whole or in part with the proceeds of any Loan, the conditions set forth in <u>Section</u> <u>4.02</u> shall have been satisfied;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b) the Parent Borrower shall have furnished to the Administrative Agent and the Lenders at least ten Business Days prior to the consummation of such Acquisition (1) an executed term sheet and/or commitment letter (setting forth in reasonable detail the terms and conditions of such Acquisition) and, at the request of the Administrative Agent, such other information and documents that the Administrative Agent may request, including, without limitation, executed counterparts of the respective agreements, documents or instruments pursuant to which such Acquisition is to be consummated (including, without limitation, any related management, non-compete, employment, option or other material agreements), any schedules to such agreements, documents or instruments and all other material ancillary agreements, instruments and documents to be executed or delivered in connection therewith, (2) pro forma financial statements of the Parent Borrower and its Subsidiaries after giving effect to the consummation of such Acquisition, (3) copies of such other agreements, instruments and other documents (including, without limitation, the Loan Documents required by <u>Section</u> <u>6.13</u>) as the Administrative Agent reasonably shall request;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c) the Parent Borrower and its Subsidiaries (including any new Subsidiary) shall execute and deliver the agreements, instruments and other documents required by <u>Section</u> <u>6.13</u> and the Administrative Agent shall have received, for the benefit of the Secured Parties, a collateral assignment of the seller's representations, warranties and indemnities to the Parent Borrower or any of its Subsidiaries under the acquisition documents;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(d) such Acquisition shall not be hostile and shall have been approved by the board of directors (or other similar governing body) and/or the stockholders or other equity holders of the Target;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(e) no Default or Event of Default shall then exist or would exist after giving effect thereto; and

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(f) the Permitted Transaction Conditions are satisfied at the time of such Permitted Acquisition.

"<u>Permitted Amendments</u>" has the meaning specified in <u>Section</u> <u>10.01</u>.

"<u>Permitted Holders</u>" means (a) Sponsor and its Affiliates, and (b) any investment funds or accounts advised or managed by any of the foregoing (but not including, however, any of their respective portfolio companies).

"<u>Permitted Liens</u>" has the meaning specified in <u>Section</u> <u>7.01</u>.

"<u>Permitted Refinancing</u>" means Indebtedness constituting a refinancing or extension of Indebtedness permitted under <u>subsection</u> <u>7.05(c)</u> or <u>(d)</u> that (a) has an aggregate outstanding principal amount not greater than the aggregate principal amount of the Indebtedness being refinanced or extended, plus any premium or similar amount required to be paid, and fees

------

and expenses, including in the form of original issue discount, incurred, in connection with any of the foregoing, (b) has a Weighted Average Life to Maturity (measured as of the date of such refinancing or extension) and maturity no shorter than that of the Indebtedness being refinanced or extended, (c) is not entered into as part of a sale leaseback transaction, (d) is not secured by a Lien on any assets other than the collateral securing the Indebtedness being refinanced or extended, (e) the obligors of which are the same as the obligors of the Indebtedness being refinanced or extended and (f) is otherwise on terms no less favorable to the Loan Parties, taken as a whole, than those of the Indebtedness being refinanced or extended.

"<u>Permitted Transaction Conditions</u>" means the following conditions:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a) with respect (x) to a Permitted Acquisition and any Investment made pursuant to <u>Section</u> <u>7.04(l)</u> or (y) a Restricted Payment described in <u>clause (iii)</u> of the definition thereof and made pursuant to <u>Section</u> <u>7.11(f)</u> and, in each case, after giving effect to such Permitted Acquisition or Restricted Payment: (i) no Default or Event of Default has occurred or is continuing or will result from any such Permitted Acquisition or Restricted Payment; (ii) the Fixed Charge Coverage Ratio (calculated on the pro forma basis) shall not be less than 1.00:1.00 for the Measurement Period ended immediately prior to the Fiscal Quarter in which such Permitted Acquisition or such Restricted Payment would occur and for which financial statements have been (or are required to be) delivered under <u>Section</u> <u>6.01(a)</u> or <u>(b)</u>, as applicable; and (iii) at all times during the 30 calendar days immediately prior to such Permitted Acquisition or such Restricted Payment and on the date of such Permitted Acquisition or such Restricted Payment, Availability has not been less than 17.5% of the Revolving Facility Commitment; in each case under <u>clauses (i)</u>, <u>(ii)</u> and <u>(iii)</u>, as certified by the Parent Borrower in writing to the Administrative Agent, with supporting calculations in reasonable detail; and

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b) with respect to a Restricted Payment described in <u>clauses (i)</u> and <u>(ii)</u> of the definition thereof and made pursuant to <u>Section</u> <u>7.11(f)</u> and after giving effect to such Restricted Payment: (i) no Default or Event of Default has occurred or is continuing or will result from any such Restricted Payment; (ii) the Fixed Charge Coverage Ratio (calculated on the pro forma basis) shall not be less than 1.10:1.00 for the Measurement Period ended immediately prior to the Fiscal Quarter in which such Restricted Payment would occur and for which financial statements have been (or are required to be) delivered under <u>Section</u> <u>6.01(a)</u> or <u>(b)</u>, as applicable; and (iii) at all times during the 30 calendar days immediately prior to such Restricted Payment and on the date of such Restricted Payment, Availability has not been less than 22.5% of the Revolving Facility Commitment; in each case under <u>clauses (i)</u>, <u>(ii)</u> and <u>(iii)</u>, as certified by the Parent Borrower in writing to the Administrative Agent, with supporting calculations in reasonable detail.

"<u>Person</u>" means any individual, partnership, corporation (including a business trust and a public benefit corporation), joint stock company, estate, association, firm, enterprise, trust, limited liability company, unincorporated association, joint venture and any other entity or Governmental Authority.

"<u>Platform</u>" has the meaning specified in <u>Section</u> <u>6.02</u>.

------

"<u>Pledge and Security Agreement</u>" means the ABL Pledge and Security Agreement, substantially in the form of <u>Exhibit</u> <u>F-1</u> hereto, dated as of the date hereof among Holdings, the Borrowers, the Subsidiary Guarantors and the Collateral Agent, as the same may be amended, modified or supplemented from time to time.

"<u>Pledged Collateral</u>" means, collectively, the "Pledged Debt", "Pledged Equity Interests", "Pledged LLC Interests", "Pledged Partnership Interests", "Pledged Stock" and "Pledged Trust Interests", all as defined in the Pledge and Security Agreement.

"<u>Prepayment Notice</u>" means a notice of prepayment of Loans pursuant to <u>Section</u> <u>2.05(c)</u>, which, if in writing, shall be substantially in the form of <u>Exhibit</u> <u>A</u><u>-3</u>.

"<u>Prime Rate</u>" means, for any day, the rate of interest in effect for such day as publicly announced from time to time by Bank of America as its "prime rate". The "prime rate" is a rate set by Bank of America based upon various factors including Bank of America's costs and desired return, general economic conditions and other factors, and is used as a reference point for pricing some loans, which may be priced at, above or below such announced rate. Any change in such rate announced by Bank of America shall take effect at the opening of business on the day specified in the public announcement of such change.

"<u>Prior Indebtedness</u>" means the Indebtedness and obligations specified in <u>Schedule</u> <u>6.10</u> hereto.

"<u>pro forma basis</u>" means, with respect to compliance with any test or covenant hereunder, compliance with such covenant or test after giving effect to (a) the Closing Date Acquisition, (b) any Permitted Acquisition (to the extent not subsequently Disposed of during such period), (c) the borrowing of any Incremental Loans, (d) any sales or other Dispositions expressly permitted under <u>Section</u> <u>7.02(b)</u>, <u>7.02(d)</u>, <u>7.02(f)</u>, <u>7.02(g)</u>, <u>7.02(h)</u> or <u>7.02(i)</u> or (e) any restructuring of the business of the Parent Borrower or any of its Subsidiaries that the Parent Borrower or any of its Subsidiaries has made and/or has determined to made during the applicable period or subsequent to such application period and on or prior to or simultaneously with the date of calculation of Consolidated EBITDA and which are expected to have a continuing impact and are factually supportable and quantifiable and which are reasonably expected to be realized within the succeeding 1 year period following such relevant transaction (as defined below), including cost savings resulting from head count reduction, closure of facilities and similar operational and other cost savings, which adjustments the Parent Borrower determines are reasonable as set forth in a certificate of a Responsible Officer of the Parent Borrower (the foregoing <u>(a)</u> through <u>(e)</u>, together with any transaction related thereto or in connection therewith, the "relevant transactions"), as if the relative relevant transaction consummated or occurred during the applicable period had been consummated and occurred at the beginning of such period; <u>provided</u> that (i) the effect on any test or covenant from the aggregate amount of the adjustments under <u>clause (e)</u> of this definition and <u>clause</u> <u>(B)(m)</u> of the definition of "Consolidated EBITDA" shall not exceed, for any four consecutive fiscal quarter period, 15% of Consolidated EBITDA for such period (before giving effect to the addback under <u>clause (B)(1)</u> of the definition of "Consolidated EBITDA" and the pro forma effect under this <u>clause (e)</u>) and (ii) on and after the date that is one year after any such relevant transaction, such pro forma calculations shall not give effect to any such cost savings to the extent the steps necessary for realization were not taken during such 1 year period.

------

"<u>Property</u>" means any interest in any kind of property or asset, whether real, personal or mixed, and whether tangible or intangible.

"<u>Public Lender</u>" has the meaning specified in <u>Section</u> <u>6.02</u>.

"<u>Qualifying Equity Issuance</u>" means any Equity Issuance, the Net Issuance Proceeds of which are contributed promptly to the common equity of the Parent Borrower if: (i) after giving effect thereto, no Change of Control shall have occurred; and (ii) the Net Issuance Proceeds thereof shall be used (without duplication and only to the extent Not Otherwise Applied (as defined in the Term Credit Agreement)) only to (A) make (x) Consolidated Capital Expenditures, (y) Permitted Acquisitions and other Investments and (z) Restricted Payments and (D) repay Indebtedness of the Parent Borrower and its Subsidiaries "<u>Rate Contracts</u>" means swap agreements (as such term is defined in Section 101 of the Bankruptcy Code) and any other agreements or arrangements designed to provide protection against fluctuations in interest, currency exchange rates or commodities prices.

"<u>Rate Contracts</u>" means swap agreements (as such term is defined in Section 101 of the Bankruptcy Code) and any other agreements or arrangements designed to provide protection against fluctuations in interest, currency exchange rates of commodities prices.

"<u>Real Estate</u>" means any real estate owned, leased, subleased or otherwise operated or occupied by any Loan Party or any Subsidiary of any Loan Party.

"<u>Register</u>" has the meaning specified in <u>Section</u> <u>10.06(c)</u>.

"<u>Reimbursement Obligations</u>" has the meaning specified in <u>Section</u> <u>2.03(d)(ii)</u>.

"<u>Related Agreements</u>" means the Merger Agreement, the Term Finance Documents, the Second Lien Loan Documents and the Structure Memorandum.

"<u>Related Parties</u>" means, with respect to any Person, such Person's Affiliates and the partners, directors, officers, employees, agents, trustees and advisors of such Person and of such Person's Affiliates.

"<u>Related Transactions</u>" means the transactions contemplated by the Related Agreements and includes, without limitation, the Closing Date Acquisition.

"<u>Releases</u>" means any release, threatened release, spill, emission, leaking, pumping, pouring, emitting, emptying, escape, injection, deposit, disposal, discharge, dispersal, dumping, leaching or migration of Hazardous Material into or through the environment.

"<u>Remedial Action</u>" means all actions required to (a) clean up, remove, treat or in any other way address any Hazardous Material in the indoor or outdoor environment, (b) prevent or minimize any Release so that a Hazardous Material does not migrate or endanger or threaten to endanger public health or welfare or the indoor or outdoor environment or (c) perform pre remedial studies and investigations and post-remedial monitoring and care with respect to any Hazardous Material.

------

"<u>Rent and Charges Reserve</u>" means the aggregate of (a) all past due rent and other amounts owing by a Loan Party to any landlord, warehouseman, processor, repairman, mechanic, shipper, freight forwarder, broker or other Person who possesses any Collateral or could assert a Lien on any Collateral; and (b) a reserve equal to three months rent and other charges that could be payable to any such Person, unless it has executed a Collateral Access Agreement.

"<u>Report</u>" has the meaning specified in <u>Section</u> <u>10.21</u>.

"<u>Request for Credit Extension</u>" means (i) with respect to a Borrowing, conversion or continuation of Loans, a Committed Loan Notice, (ii) with respect to an L/C Credit Extension, a Letter of Credit Application and (iii) with respect to a Swing Line Loan, a Swing Line Loan Notice.

"<u>Required Lenders</u>" means, as of any date of determination, Lenders having (i) Loans outstanding, (ii) L/C Obligations outstanding (with the aggregate amount of each Lender's risk participation and funded participation in funded L/C Obligations being deemed "held" by such Lender), and (iii) Revolving Facility Commitments, that, taken together, represent more than 50% of the sum of all (A) Loans outstanding, (B) L/C Obligations outstanding, and (C) Revolving Facility Commitments at such time. The Loans of any Defaulting Lender shall be disregarded in determining Required Lenders at any time. If there is more than one Lender under this Agreement (other than Defaulting Lenders and Affiliates of such Lender), the Required Lenders must include at least two unaffiliated Lenders.

"<u>Requirement of Law</u>" means, with respect to any Person, the common law and any federal, state, local, foreign, multinational or international laws, statutes, codes, treaties, standards, rules and regulations, guidelines, ordinances, orders, judgments, writs, injunctions, decrees (including administrative or judicial precedents or authorities) and the interpretation or administration thereof by, and other determinations, directives, requirements or requests of, any Governmental Authority, in each case whether or not having the force of law and that are applicable to or binding upon such Person or any of its Property or to which such Person or any of its Property is subject. For the avoidance of doubt, the term "Requirement of Law" shall include FATCA and any intergovernmental agreements with respect thereto between the United States and another jurisdiction.

"<u>Responsible Officer</u>" means the chief executive officer or the president of the Parent Borrower, or any other officer having substantially the same authority and responsibility or otherwise satisfactory to the Administrative Agent; or, with respect to compliance with financial covenants or delivery of financial information, the chief financial officer, chief accounting officer, the treasurer or controller of the Parent Borrower, or any other officer having substantially the same authority and responsibility or otherwise satisfactory to the Administrative Agent.

"<u>Restricted Payment</u>" has the meaning specified in <u>Section</u> <u>7.11</u>.

"<u>Revolving Facility Borrowing</u>" means a Borrowing comprised of Revolving Facility Loans.

------

"<u>Revolving Facility Commitment</u>" means, with respect to each Revolving Facility Lender, the commitment of such Revolving Facility Lender to make Revolving Facility Loans pursuant to <u>Section</u> <u>2.01</u>, expressed as an amount representing the maximum aggregate permitted amount of such Revolving Facility Lender's Revolving Facility Credit Exposure hereunder, as such commitment may be (i) reduced from time to time pursuant to <u>Section</u> <u>2.07</u>, (ii) reduced or increased from time to time pursuant to assignments by or to such Lender under <u>Section</u> <u>10.06</u>, and (iii) increased as provided under <u>Section</u> <u>2.14</u>. The initial amount of each Lender's Revolving Facility Commitment is set forth on <u>Schedule</u> <u>2.01</u>, or in the Assignment and Acceptance or Incremental Assumption Agreement pursuant to which such Lender shall have assumed its Revolving Facility Commitment (or Incremental Revolving Facility Commitment), as applicable. The aggregate amount of the Lenders' Revolving Facility Commitments on the Closing Date is $75,000,000.

"<u>Revolving Facility Credit Exposure</u>" means, at any time, the sum of (a) the aggregate principal amount of the Revolving Facility Loans outstanding at such time, and (b) the aggregate principal amount of L/C Obligations and Swing Line Loans outstanding at such time. The Revolving Facility Credit Exposure of any Revolving Facility Lender at any time shall be the product of (x) such Revolving Facility Lender's Revolving Facility Percentage and (y) the aggregate Revolving Facility Credit Exposure of all Revolving Facility Lenders, collectively, at such time.

"<u>Revolving Facility Lender</u>" means a Lender (including an Incremental Revolving Facility Lender) with a Revolving Facility Commitment or with outstanding Revolving Facility Loans.

"<u>Revolving Facility Loan</u>" means a Loan made by a Revolving Facility Lender pursuant to <u>Section</u> <u>2.01</u>.

"<u>Revolving Facility Maturity Date</u>" means the fifth anniversary of the Closing Date and any later maturity date applicable to any Incremental Commitments or any Incremental Loans, in each case, as extended in accordance with this Agreement from time to time; <u>provided</u>, <u>however</u>, that if such date is not a Business Day, the Revolving Facility Maturity Date shall be the next preceding Business Day.

"<u>Revolving Facility Percentage</u>" means, with respect to any Lender, the percentage (carried out to the ninth decimal place) of such Lender's obligation to make Revolving Facility Loans represented by (i) on or prior to the Closing Date, such Lender's Revolving Facility Commitment at such time and (ii) thereafter, the principal amount of such Lender's Loans at such time, in each case subject to adjustment as provided in <u>Section</u> <u>2.05</u>, <u>2.07</u>, <u>2.14</u>, <u>2.15</u> or <u>2.16</u>. The initial Revolving Facility Percentage of each Lender is set forth opposite the name of such Lender on <u>Schedule</u> <u>2.01</u> or in the Assignment and Assumption pursuant to which such Lender becomes a party hereto, as applicable. If the Revolving Facility Commitments have terminated or expired, the Revolving Facility Percentage shall be determined based upon the Revolving Facility Commitments most recently in effect, giving effect to any subsequent assignments pursuant to <u>Section</u> <u>10.06</u>.

"<u>Royalties</u>" means all royalties, fees, expense reimbursement and other amounts payable by a Borrower under a License.

------

"<u>S&P</u>" means Standard & Poor's Financial Services LLC, a subsidiary of The McGraw Hill Companies, Inc. and any successor thereto.

"<u>SDN List</u>" has the meaning specified in <u>Section</u> <u>5.23</u>.

"<u>SEC</u>" means the Securities and Exchange Commission, or any Governmental Authority succeeding to any of its principal functions.

"<u>Second Currency</u>" has the meaning specified in <u>Section</u> <u>10.20</u>.

"<u>Second Lien Agent</u>" means Bank of America. N.A., in its capacity as agent under the Second Lien Credit Agreement.

"<u>Second Lien Credit Agreement</u>" means the Second Lien Credit Agreement, dated as of September 19, 2013, by and among the Term Loan Parties, the Second Lien Agent and the Second Lien Lenders.

"<u>Second Lien Indebtedness</u>" means the Indebtedness of the Loan Parties owing to the Second Lien Agent and the Second Lien Lenders under the Second Lien Credit Agreement, which Indebtedness is on terms and conditions reasonably acceptable to the Collateral Agent.

"<u>Second Lien Lenders</u>" means the lenders from time to time party to the Second Lien Credit Agreement.

"<u>Second Lien Loan Documents</u>" means the Second Lien Credit Agreement and the other Loan Documents (as defined in the Second Lien Credit Agreement) and each of the other agreements, documents and instruments providing for or evidencing any other Second Lien Indebtedness, and any other document or instrument executed or delivered at any time in connection with any Second Lien Indebtedness, including any intercreditor, accession or joinder agreement among holders of Second Lien Indebtedness, to the extent such are effective at the relevant time.

"<u>Second Lien Obligations</u>" has the meaning given to the term "Term Credit Obligations" in the Second Lien Credit Agreement.

"<u>Second Lien Secured Parties</u>" has the meaning given to the term "Secured Parties" in the Second Lien Credit Agreement.

"<u>Secured Cash Management Agreement</u>" means any Cash Management Agreement that is entered into by and between any Loan Party and any Cash Management Bank.

"<u>Secured Hedge Agreement</u>" means any Rate Contract required or permitted under <u>Article</u> <u>VI</u> or <u>VII</u> that is entered into by and between any Loan Party and any Hedge Bank.

"<u>Secured Parties</u>" means, collectively, the ABL Credit Parties, the Hedge Banks, the Cash Management Banks, the providers of Bank Debt and the other Persons the Finance Obligations owing to which are or are purported to be secured by the Collateral under the terms of the Collateral Documents.

------

"<u>Securities Act</u>" means the Securities Act of 1933, as amended, and the rules and regulations promulgated thereunder.

"<u>Settlement</u>" has the meaning specified in <u>Section</u> <u>2.18(a)</u>.

"<u>Settlement Date</u>" has the meaning specified in <u>Section</u> <u>2.18(a)</u>.

"<u>Software</u>" means all "software" (as defined in the UCC), and also means and includes all software programs, whether now or hereafter owned, licensed or leased by a Loan Party, designed for use on Computer Hardware, including, without limitation, all operating system software, utilities and application programs in whatever form and whether or not embedded in goods, all source code and object code in magnetic tape, disk or hard copy format or any other listings whatsoever, all firmware associated with any of the foregoing all documentation, flowcharts, logic diagrams, manuals, specifications, training materials, charts and pseudo codes associated with any of the foregoing, and all options, warranties, services contracts, program services, test rights, maintenance rights, support rights, renewal rights and indemnifications relating to any of the foregoing.

"<u>Solvent</u>" and "<u>Solvency</u>" mean, with respect to any Person on any date of determination, that on such date (a) the fair value of the assets of such Person and its subsidiaries, on a consolidated basis, at fair valuation, exceeds their debts and liabilities, subordinated, contingent, unliquidated, or otherwise, (b) the present fair saleable value of the property of such Person and its subsidiaries, on a consolidated basis, is greater than the amount that will be required to pay the total amount, on a consolidated basis, of their debts and other liabilities, subordinated, contingent, unliquidated, or otherwise, (c) such Person and its subsidiaries, on a consolidated basis, are able to pay their debts and liabilities, subordinated, contingent or otherwise, on a consolidated basis, as such liabilities become absolute and matured and (d) such Person and its subsidiaries, on a consolidated basis, do not have unreasonably small capital with which to conduct the business in which they are engaged as such business is conducted as of such date and as such business is proposed to be conducted following such date. The amount of any contingent liability at any time shall be computed as the amount that would reasonably be expected to become an actual and matured liability.

"<u>Special Flood Hazard Area</u>" means an area that FEMA's current flood maps indicate has at least a one percent chance of a flood equal to or exceeding the base flood elevation (a 100-year flood) in any given year.

"<u>Specified Equity Contribution</u>" has the meaning specified in <u>Section</u> <u>8.04</u>.

"<u>Specified Loan Party</u>" means any Loan Party that is not an "eligible contract participant" under the Commodity Exchange Act (determined prior to giving effect to Section 2.10 of the Guaranty).

"<u>Specified Representations</u>" means the representations and warranties set forth in <u>Sections</u> <u>5.01</u>, <u>5.02</u>, <u>5.04</u>, <u>5.05</u> (with respect to the absence of litigation seeking to enjoin or restrain the execution, delivery or performance of this Agreement, any other Loan Document or any Related Agreement, or directing that the transactions provided for herein or therein not be consummated only), <u>5.08</u>, <u>5.12</u>, <u>5.13</u>, <u>5.14</u>, <u>5.23</u>, <u>5.24</u> and <u>5.26.</u>

------

"<u>Sponsor</u>" means Paulson & Co. Inc.

"<u>Spot Rate</u>" has the meaning specified in <u>Section</u> <u>1.06</u>.

"<u>Standard Cost Value</u>" means the standard invoice cost paid by any Borrower or Subsidiary Guarantor to an OEM for a Boston Piano and/or an Essex Piano, excluding (a) inventory revaluation, if any, and (b) freight and delivery charges.

"<u>Standstill Period</u>" has the meaning specified in <u>Section</u> <u>8.04</u>.

"<u>Steinway</u>" has the meaning specified in the preamble hereto.

"<u>Steinway and Sons</u>" means Steinway and Sons, a New York corporation (including any division, branch or other unit thereof).

"<u>Steinway Dealer Loans</u>" means loans made by Steinway to Steinway dealers for startup costs or for other purposes (other than those of the type evidenced by the Steinway Dealer Notes).

"<u>Steinway Dealer Notes</u>" means notes made by Steinway dealers in favor of Steinway, that evidence the indebtedness owing by such dealer to Steinway, for extensions of credit made by Steinway to dealers in an amount not to exceed $7,500,000 in the aggregate at any time outstanding for all such Steinway dealers, to acquire Steinway's pianos and other musical instruments.

"<u>Steinway Pianos</u>" means all finished and near-finished Steinway pianos, which term shall exclude Factory Returns, Concert and Artist Bank Pianos, Boston Pianos and Essex Pianos.

"<u>Stock</u>" means all shares of capital stock (whether denominated as common stock or preferred stock), equity interests, beneficial, partnership or membership interests, joint venture interests, participations or other ownership or profit interests in or equivalents (regardless of how designated) of or in a Person (other than an individual), whether voting or non-voting.

"<u>Stock Equivalents</u>" means all securities convertible into or exchangeable for Stock or any other Stock Equivalent and all warrants, options or other rights to purchase, subscribe for or otherwise acquire any Stock or any other Stock Equivalent, whether or not presently convertible, exchangeable or exercisable.

"<u>Structure Memorandum</u>" means that certain structuring memorandum delivered to the Administrative Agent and the Lenders.

"<u>Subordinated Indebtedness</u>" means any Indebtedness of any Loan Party or any Subsidiary of any Loan Party which is subordinated to the Finance Obligations as to right and time of payment and as to other rights and remedies thereunder and having such other terms as are, in each case, reasonably satisfactory to the Administrative Agent.

------

"<u>Subsidiary</u>" of a Person means any corporation, association, limited liability company, partnership, joint venture or other business entity of which more than fifty percent (50%) of the voting Stock (in the case of Persons other than corporations), is owned or controlled directly or indirectly by the Person, or one or more of the Subsidiaries of the Person, or a combination thereof. Unless otherwise specified, all references herein to a "Subsidiary" or to "Subsidiaries" shall refer to a Subsidiary or Subsidiaries of Holdings.

"<u>Subsidiary Guarantor</u>" means each Domestic Subsidiary (other than Excluded Subsidiaries) of the Parent Borrower on the Closing Date and each Domestic Subsidiary (other than Excluded Subsidiaries) of the Parent Borrower that becomes a party to any Guaranty after the Closing Date by execution of an Accession Agreement, and "<u>Subsidiary Guarantors</u>" means any two or more of them. Notwithstanding the foregoing, the Facility will be Guaranteed by each person which is a guarantor under the Term Guaranty or a guarantor of the Second Lien Obligations.

"<u>Swap Obligations</u>" means with respect to any Loan Party any obligation to pay or perform under any agreement, contract or transaction that constitutes a "swap" within the meaning of section 1a(47) of the Commodity Exchange Act.

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

"<u>Swing Line Loan</u>" has the meaning specified in <u>Section</u> <u>2.04(a)</u>.

"<u>Swing Line Loan Notice</u>" means a notice of a Swing Line Borrowing pursuant to <u>Section</u> <u>2.04(b)</u>, which, if in writing, shall be substantially in the form of <u>Exhibit A</u><u>-2</u>.

"<u>Swing Line Sublimit</u>" means an amount equal to $7,500,000. The Swing Line Sublimit is part of, and not in addition to, the Facility.

"<u>Syndication Agent</u>" means Deutsche Bank Securities Inc., in its capacity as syndication agent.

"<u>Target</u>" means any other Person or business unit or asset group of any other Person acquired or proposed to be acquired in an Acquisition.

"<u>Taxes</u>" means all present or future taxes, levies, imposts, duties, deductions, withholdings (including backup withholding), assessments, fees or other charges imposed by any Governmental Authority, including any interest, additions to tax or penalties applicable thereto.

------

"<u>Tax Affiliate</u>" means (a) the Parent Borrower and its Subsidiaries, (b) each other Loan Party and (c) any Affiliate of the Parent Borrower with which the Parent Borrower files or is eligible to file consolidated, combined or unitary Tax returns.

"<u>Tax Return</u>" has the meaning specified in <u>Section</u> <u>5.10</u>.

"<u>Term Administrative Agent</u>" means Bank of America, N.A., in its capacity as agent for the "Secured Parties" under (and as defined in) the Term Credit Agreement, and its successors and assigns in such capacity.

"<u>Term Agent</u>" means the Term Administrative Agent or the Term Collateral Agent and any successor and assigned in such capacity, and "<u>Term Agents</u>" means any two or more of them.

"<u>Term Borrower</u>" means the Parent Borrower in its capacity as the borrower under the Term Credit Agreement.

"<u>Term Collateral Agent</u>" means Bank of America, N.A., in its capacity as collateral agent for the benefit of the Term Finance Parties, and its successor or successors in such capacity.

"<u>Term Collateral Documents</u>" means the "Collateral Documents" (as defined in the Term Credit Agreement) and any other agreement, document or instrument pursuant to which a Lien is granted securing any Term Finance Obligations or under which rights or remedies with respect to such Liens are governed.

"<u>Term Credit Agreement</u>" means the First Lien Credit Agreement dated as of September 19, 2013 among the Term Borrower, Holdings, the banks and other lending institutions party thereto from time to time, the Term Administrative Agent and the other agents named therein, as amended, modified or supplemented from time to time in accordance with the provisions thereof and of this Agreement.

"<u>Term Credit Obligations</u>" means, with respect to each Term Loan Party, without duplication:

&nbsp;&nbsp;&nbsp;&nbsp;&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) in the case of the Term Borrower, all principal of and interest on any Loan, or any Note issued pursuant to, and as defined in, the Term Credit Agreement or any other Term 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;&nbsp;&nbsp;&nbsp;&nbsp;(ii) all fees, expenses, indemnification obligations and other amounts of whatever nature now or hereafter payable by such Term Loan Party pursuant to the Term Credit Agreement or any other Term 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;&nbsp;&nbsp;&nbsp;&nbsp;(iii) all expenses of the Term Administrative Agent, any syndication agents, any documentation agents or the Term Collateral as to which one or more of such Persons have a right to reimbursement by such Term Loan Party pursuant to the Term Credit Agreement or any other Term 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;&nbsp;&nbsp;&nbsp;&nbsp;(iv) all amounts paid by any Indemnitee (as defined in the Term Credit Agreement) as to which such Indemnitee has the right to reimbursement by such Term Loan Party under the Term Credit Agreement or under any other Term Loan Document; 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;(v) in the case of Holdings, and each Term Subsidiary Guarantor, all amounts now or hereafter payable by Holdings or such Term Subsidiary Guarantor under its guaranty of all obligations of the Term Borrower under the Term Credit Agreement and any other Term Loan Document;

together in each case with all renewals, modifications, consolidations or extensions thereof.

"<u>Term Finance Document</u>" means (i) each Term Loan Document and (ii) each Term Secured Hedge Agreement, and "<u>Term Finance Documents</u>" means all of them, collectively.

"<u>Term Finance Obligations</u>" means all obligations outstanding under (i) the Term Credit Agreement and the other Term Loan Documents (including all Term Credit Obligations) and (ii) any Term Secured Hedge Agreement (it being understood, for avoidance of doubt, that Swap Obligations of a Loan Party of or owed to a Person that is both an ABL Credit Party and a Term Lender at the time such Rate Contract was entered into by such Loan Party shall be considered Finance Obligations).

"<u>Term Finance Party</u>" means each Term Lender, the Term Administrative Agent, each co-agent or sub-agent appointed by the Term Administrative Agent from time to time pursuant to the Term Credit Agreement, the Term Collateral Agent and each Indemnitee (as defined in the Term Credit Agreement) and their respective successors and assigns, and "<u>Term Finance Parties</u>" means any two or more of them, collectively.

"<u>Term Guaranty</u>" means the Guaranty (as defined in the Term Credit Agreement) made by Holdings, and the Term Subsidiary Guarantors in favor of the Term Secured Parties, together with each other guaranty and guaranty supplement delivered in accordance with the terms thereof.

"<u>Term Hedge Bank</u>" means any Person that, at the time it enters into a Rate Contract required or permitted under the Term Credit Agreement, is a Term Lender or an Affiliate of a Term Lender, in its capacity as a party to such Rate Contract.

"<u>Term Intercreditor Agreement</u>" means the Intercreditor Agreement, substantially in the form of <u>Exhibit</u> <u>I</u><u>-2</u> hereto, dated as of the date hereof among the Term Agent, the Second Lien Agent, Holdings, the Borrowers and the Term Loan Parties party thereto, as the same may be amended, modified or supplemented from time to time.

"<u>Term Lenders</u>" means the "Lenders" under and as defined in the Term Credit Agreement, in their respective capacities as such under, and as defined in, the Term Credit Agreement, and their respective successors and assigns.

------

"<u>Term Loan Documents</u>" means the Term Credit Agreement and the other Loan Documents (as defined in the Term Credit Agreement) and each of the other agreements, documents and instruments providing for or evidencing any other Term Credit Obligation, and any other document or instrument executed or delivered at any time in connection with any Term Credit Obligations, including any intercreditor, accession or joinder agreement among holders of Term Credit Obligations, to the extent such are effective at the relevant time.

"<u>Term Loan Party</u>" means Holdings, the Term Borrower and each Term Subsidiary Guarantor, and "<u>Term Loan Parties</u>" means all of them, collectively.

"<u>Term Loans</u>" has the meaning given to the term "Loans" in the Term Credit Agreement.

"<u>Term Priority Collateral</u>" means all Collateral other than ABL Priority Collateral.

"<u>Term Secured Hedge Agreement</u>" means any Rate Contract required or permitted under the Term Credit Agreement that is entered into by and between any Term Loan Party and any Term Hedge Bank.

"<u>Term Secured Parties</u>" has the meaning given to the term "Secured Parties" in the Term Credit Agreement.

"<u>Term Subsidiary Guarantor</u>" means at any time, each Subsidiary of Holdings which is a guarantor of the Term Finance Obligations pursuant to the Term Guaranties or any other Term Loan Document.

"<u>Threshold Amount</u>" means $10,000,000.

"<u>Title IV Plan</u>" means a pension plan subject to Title IV of ERISA or Sections 412 and 430 of the Code or Section 302 of ERISA, other than a Multiemployer Plan, to which any ERISA Affiliate incurs or otherwise has any obligation or liability, contingent or otherwise.

"<u>Total Outstandings</u>" means the aggregate Outstanding Amount of all Loans and L/C Obligations.

"<u>Trade Secrets</u>" means all right, title and interest (and all related IP Ancillary Rights) arising under any Requirement of Law in or relating to trade secrets.

"<u>Trademark</u>" means all rights, title and interests (and all related IP Ancillary Rights) arising under any Requirement of Law in or relating to trademarks, trade names, corporate names, company names, business names, fictitious business names, trade styles, service marks, logos and other source or business identifiers and, in each case, all goodwill associated therewith, all registrations and recordations thereof and all applications in connection therewith.

"<u>Transaction</u>" means the events contemplated by this Agreement and the other Loan Documents and the Related Agreements.

"<u>Type</u>" means, with respect to a Loan, its character as a Base Rate Loan, a Eurodollar Rate Loan or a Swing Line Loan.

------

"<u>UCC</u>" means the Uniform Commercial Code of any applicable jurisdiction and, if the applicable jurisdiction shall not have any Uniform Commercial Code, the Uniform Commercial Code as in effect from time to time in the State of New York.

"<u>United States</u>" and "<u>U.S.</u>" mean the United States of America.

"<u>Unreimbursed Amount</u>" has the meaning specified in <u>Section</u> <u>2.03(c)(i)</u>.

"<u>Value</u>" means (a) for Inventory, its value determined on the basis of the lower of cost or market, calculated on a first-in, first-out basis, and excluding any portion of cost attributable to intercompany profit among the Loan Parties and their Affiliates; and (b) for an Account, its face amount, net of any returns, rebates, discounts (calculated on the shortest terms), credits, allowances or Taxes (including sales, excise or other taxes) that have been or could be claimed by the applicable Account Debtor or any other Person.

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

"<u>Wholly</u><u>-Owned Subsidiary</u>" means, with respect to any Person at any date, any Subsidiary of such Person all of the Stock and Stock Equivalents of which (except directors' qualifying shares and foreign national qualifying shares in connection with Requirements of Law) are at the time directly or indirectly owned by such Person.

"<u>Working Capital</u>" means at any date, Consolidated Current Assets of Holdings and its Subsidiaries at such date minus Consolidated Current Liabilities of Holdings and its Subsidiaries at such date, excluding any deferred assets and liabilities and purchase accounting adjustments.

**Section 1.02 <u>Other Interpretative Provisions</u>**. With reference to this Agreement and each other Loan Document, unless otherwise specified herein or in such other Loan Document:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a) The definitions of terms herein shall apply equally to the singular and plural forms of the terms defined. Whenever the context may require, any pronoun shall include the corresponding masculine, feminine and neuter forms. The words "<u>include</u>." "<u>includes</u>" and "<u>including</u>" shall be deemed to be followed by the phrase "<u>without limitation</u>." The word "<u>will</u>" shall be construed to have the same meaning and effect as the word "<u>shall</u>." Unless the context requires otherwise, (i) any definition of or reference to any agreement, instrument or other document (including any Organization Document) shall be construed as referring to such agreement, instrument or other document as from time to time amended, supplemented or otherwise modified (subject to any restrictions on such amendments, supplements or modifications

------

set forth herein or in any other Loan Document), (ii) any reference herein to any Person shall be construed to include such Person's successors and assigns, (iii) the words "<u>hereto</u>", "<u>herein</u>," "<u>hereof</u>" and "<u>hereunder</u>," and words of similar import when used in any Loan Document shall be construed to refer to such Loan Document in its entirety and not to any particular provision thereof, (iv) all references in a Loan Document to Articles, Sections, Preliminary Statements, Exhibits and Schedules shall be construed to refer to Articles and Sections of, and Preliminary Statements, Exhibits and Schedules to, the Loan Document in which such references appear, (v) any reference to any Requirement of Law shall include all statutory and regulatory provisions consolidating, amending, replacing or interpreting such Requirement of Law and any reference to any law or regulation shall, unless otherwise specified, refer to such law or regulation as amended, modified or supplemented from time to time and (vi) the words "<u>asset</u>" and "<u>property</u>" 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.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b) In the computation of periods of time from a specified date to a later specified date, the word "<u>from</u>" means "<u>from and including</u>," the words "to" and "<u>until</u>" each mean "<u>to but excluding</u>," and the word "<u>through</u>" means "<u>to and including</u>."

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

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(d) References to a "Person and its Subsidiaries" or to a "Person or any Subsidiary" (or words of similar import) means to Holdings and its Subsidiaries, unless otherwise specified.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(e) Any reference to "knowledge" of any Loan Party shall mean the knowledge of one or more of such Loan Party's Responsible Officers after reasonable investigation and inquiry with their direct reports.

**Section 1.03 <u>Accounting Terms and Determinations</u>**.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a) *<u>Generally</u>.* All accounting terms not specifically or completely defined herein shall be construed in conformity with, and all financial data (including financial ratios and other financial calculations) required to be submitted pursuant to this Agreement shall be prepared in conformity with, GAAP applied on a consistent basis, as in effect from time to time, applied in a manner consistent with that used in preparing the Audited Financial Statements (or, from and after delivery thereof to the Administrative Agent), except as otherwise specifically prescribed herein. Notwithstanding the foregoing, for purposes of determining compliance with any covenant (including the computation of any financial covenant) contained herein, Indebtedness of the Borrowers and their Subsidiaries shall be deemed to be carried at 100% of the outstanding principal amount thereof, and the effects of FASB ASC 825 and FASB ASC 470-20 on financial liabilities shall be disregarded.

------

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b) *<u>Changes in GAAP</u>.* If at any time any change in GAAP or in the application thereof would affect the computation of any financial ratio or requirement set forth in any Loan Document, and either the Parent Borrower or the Required Lenders shall so request, the Administrative Agent, the Lenders and the Parent Borrower shall negotiate in good faith to amend such ratio or requirement to preserve the original intent thereof in light of such change in GAAP (subject to the approval of the Required Lenders); <u>provided</u> that, until so amended, (i) such ratio or requirement shall continue to be computed in accordance with GAAP prior to such change therein and (ii) the Parent Borrower shall provide to the Administrative Agent and the Lenders financial statements and any other documents required under this Agreement or as reasonably requested hereunder setting forth a reconciliation between calculations of such ratio or requirement made before and after giving effect to such change in GAAP. Without limiting the foregoing, leases shall continue to be classified (including, without limitation, for affirmative and negative covenant purposes) and accounted for on a basis consistent with that reflected in the Audited Financial Statements for all purposes of this Agreement, notwithstanding any change in GAAP relating thereto, unless the parties hereto shall enter into a mutually acceptable amendment addressing such changes, as provided for above.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c) *<u>Computation of Certain Financial Covenants</u>.* Unless otherwise specified herein, all defined financial terms (and all other definitions used to determine such terms) shall be to those determined and computed in respect of Holdings and its Subsidiaries.

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

**Section 1.05 <u>Times of Day; Rates</u>**. Unless otherwise specified, all references herein to times of day shall be references to Eastern time (daylight or standard, as applicable). The Administrative Agent does not warrant, nor accept responsibility, nor shall the Administrative Agent have any liability with respect to the administration, submission or any other matter related to the rates in the definition of "Eurodollar Rate" or with respect to any comparable or successor rate thereto.

**Section 1.06 <u>Currency Equivalents Generally</u>**. Any amount specified in this Agreement (other than in <u>Articles II</u>, <u>IX</u> and <u>X</u>) or any of the other Loan Documents to be in Dollars shall also include the equivalent of such amount in any currency other than Dollars, such equivalent amount thereof in the applicable currency to be determined by the Administrative Agent at such time on the basis of the Spot Rate (as defined below) for the purchase of such currency with Dollars. For purposes of this <u>Section</u> <u>1.06</u>, the "Spot Rate" for a currency means the rate determined by the Administrative Agent to be the rate quoted by the Person acting in such capacity as the spot rate for the purchase by such Person of such currency with another currency through its principal foreign exchange trading office at approximately 11:00 a.m. on the date two Business Days prior to the date of such determination; <u>provided</u> that the Administrative Agent may obtain such spot rate from another financial institution designated by the Administrative Agent if the Person acting in such capacity does not have as of the date of determination a spot buying rate for any such currency.

------

**Section 1.07 <u>Letter of Credit Amounts</u>**. Unless otherwise specified herein, the amount of a Letter of Credit at any time shall be deemed to be the Dollar stated amount of such Letter of Credit at such time; <u>provided</u>, <u>however</u>, that with respect to any Letter of Credit that, by its terms or the terms of any Issuer Document related thereto, provides for one or more automatic increases in the stated amount thereof, the amount of such Letter of Credit shall be deemed to be the Dollar 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 such time.

**ARTICLE II** 

**THE COMMITMENTS AND LOANS** 

**Section 2.01 <u>Commitments</u>**. Subject to the terms and conditions set forth herein, each Revolving Facility Lender severally agrees to make Revolving Facility Loans to the applicable Borrower from time to time on any Business Day during the Availability Period in an aggregate principal amount not to exceed at any time outstanding the amount of such Lender's Revolving Facility Commitment; <u>provided</u>, <u>however</u>, that after giving effect to any Revolving Facility Borrowing, (i) the Revolving Facility Credit Exposure shall not exceed the Revolving Facility Commitments, (ii) the Revolving Facility Credit Exposure of any Revolving Facility Lender shall not exceed such Lender's Revolving Facility Commitment and (iii) the Revolving Facility Credit Exposure shall not exceed the Borrowing Base. Within the limits of each Lender's Revolving Facility Commitment, and subject to the other terms and conditions hereof, the Borrowers may borrow under this <u>Section</u> <u>2.01</u>, prepay under <u>Section</u> <u>2.05</u> and reborrow under this <u>Section</u> <u>2.01</u>. Revolving Facility Loans may be Base Rate Loans or Eurodollar Rate Loans as further provided herein.

**Section 2.02 <u>Borrowings, Conversions and Continuations of Loans</u>**.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a) Each Borrowing, each conversion of Loans from one Type to the other, and each continuation of Eurodollar Rate Loans shall be made upon the Parent Borrower's irrevocable notice to the Administrative Agent, which may be given by telephone or e-mail. Each such notice must be received by the Administrative Agent not later than 11:00 a.m. (i) three Business Days prior to the requested date of any Borrowing of, conversion to or continuation of Eurodollar Rate Loans or of any conversion of Eurodollar Rate Loans to Base Rate Loans, and (ii) on the requested date of any Borrowing of Base Rate Loans; <u>provided</u>, <u>however</u>, that if the Parent Borrower wishes to request Eurodollar Rate Loans having an Interest Period other than one, two, three or six (but not more than twelve) months in duration as provided in the definition of "Interest Period" (an "<u>Alternate Interest Period</u>"), the applicable notice must be received by the Administrative Agent not later than 11:00 a.m. four Business Days prior to the requested date of such Borrowing, conversion or continuation, whereupon the Administrative Agent shall give prompt notice to the Lenders of such request and determine whether the requested Interest Period is acceptable to all of them. Not later than 11:00 a.m., three Business Days before the requested date of such Borrowing, conversion or continuation, the Administrative Agent shall notify the Parent Borrower (which notice may be by telephone) whether or not the requested Alternate Interest Period has been consented to by all the Lenders. Each telephonic or e-mail notice by the Parent Borrower pursuant to this <u>Section</u> <u>2.02(a)</u> must be confirmed promptly by delivery to the Administrative Agent of a written Committed Loan Notice, appropriately completed and signed by a Responsible Officer of the Parent Borrower or any other Person designated by a Responsible Officer of the Parent Borrower in writing to the Administrative Agent; <u>provided</u> that such designation shall be accompanied by (i) a complete copy of resolutions duly adopted by the board of directors (or other

------

similar governing body) of the Parent Borrower authorizing the applicable Responsible Officer to delegate his or her authority to submit such Committed Loan Notice and (ii) a certificate of such Responsible Officer as to the incumbency and specimen signature of the Person so designated. Each Borrowing of, conversion to or continuation of Eurodollar Rate Loans shall be in a principal amount of $5,000,000 or a whole multiple of $1,000,000 in excess thereof. Each Borrowing of or conversion to Base Rate Loans shall be in a principal amount of $500,000 or a whole multiple of $100,000 in excess thereof. Each Committed Loan Notice (whether telephonic or written) shall specify (i) whether the Parent Borrower (or any other Borrower) is requesting a Borrowing, a conversion of Loans from one Type to the other, or a continuation of Eurodollar Rate Loans, (ii) the requested date of the Borrowing, conversion or continuation, as the case may be (which shall be a Business Day), (iii) the principal amount of Loans to be borrowed, converted or continued, (iv) the Type of Loans to be borrowed or to which existing Loans are to be converted, (v) the aggregate amount of all Loans to be outstanding (after giving effect to the requested Borrowing), (vi) if applicable, the duration of the Interest Period with respect thereto and (vii) the location and number of the applicable Borrower's account to which such funds are due to be distributed. If the Parent Borrower fails to specify a Type of Loan in a Committed Loan Notice or if the Parent Borrower fails to give a timely notice requesting a conversion or continuation, then the applicable Loans shall be made as, or converted to, Base Rate Loans. Any such automatic conversion to Base Rate Loans shall be effective as of the last day of the Interest Period then in effect with respect to the applicable Eurodollar Rate Loans. If the Parent Borrower requests a Borrowing of, conversion to, or continuation of Eurodollar Rate Loans in any such Committed Loan Notice, but fails to specify an Interest Period, it will be deemed to have specified an Interest Period of one month. Notwithstanding anything to the contrary herein, a Swing Line Loan may not be converted to a Eurodollar Rate Loan.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b) Following receipt of a Committed Loan Notice, the Administrative Agent shall promptly notify each Lender of the amount of its Revolving Facility Percentage of the applicable Loans, and if no timely notice of a conversion or continuation is provided by the Parent Borrower, the Administrative Agent shall notify each Lender of the details of any automatic conversion to Base Rate Loans described in <u>Section</u> <u>2.02(a)</u>. In the case of a Borrowing, each Lender shall make the amount of its Loan available to the Administrative Agent in immediately available funds at the Administrative Agent's Office not later than 1:00 p.m. on the Business Day specified in the applicable Committed Loan Notice. Upon satisfaction or waiver of the applicable conditions set forth in <u>Section</u> <u>4.01</u> with respect to a Borrowing on the Closing Date, the Administrative Agent shall make all funds so received available to the Parent Borrower in like funds as received by the Administrative Agent either by (i) crediting the account of the Parent Borrower on the books of Bank of America with the amount of such funds or (ii) wire transfer of such funds, in each case in accordance with instructions provided to (and reasonably acceptable to) the Administrative Agent by the Parent Borrower; <u>provided</u> that Base Rate Loans made to finance reimbursement in respect of Letters of Credit shall be remitted by the Administrative Agent to the applicable L/C Issuer.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c) Except as otherwise provided herein, a Eurodollar Rate Loan may be continued or converted only on the last day of an Interest Period for such Eurodollar Rate Loan. During the existence of a Default, no Loans may be requested as, converted to or continued as Eurodollar Rate Loans without the consent of the Required Lenders with respect to Eurodollar Rate Loans at any one time.

------

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(d) The Administrative Agent shall promptly notify the Parent Borrower and the Lenders of the interest rate applicable to any Interest Period for Eurodollar Rate Loans upon determination of such interest rate. At any time that Base Rate Loans are outstanding, the Administrative Agent shall notify the Parent Borrower and the Lenders of any change in Bank of America's prime rate used in determining the Base Rate promptly following the public announcement of such change.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(e) After giving effect to all Borrowings, all conversions of Loans from one Type to the other, and all continuations of Loans as the same Type, there shall not be more than five Interest Periods in effect.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(f) Each Borrower hereby irrevocably appoints the Parent Borrower as the borrowing agent and attorney-in-fact for the Borrowers, which appointment shall remain in full force and effect unless and until the Administrative Agent shall have received prior written notice signed by all of the Borrowers that such appointment has been revoked and that another Borrower has been appointed Parent Borrower. Each Borrower hereby irrevocably appoints and authorizes the Parent Borrower (i) to provide to the Administrative Agent and receive from the Administrative Agent all notices with respect to Loans obtained for the benefit of any Borrower and all other notices and instructions under this Agreement and the other Loan Documents and (ii) to take such action as the Parent Borrower deems appropriate on its behalf to obtain Loans and to exercise such other powers as are reasonably incidental thereto to carry out the purposes of this Agreement. It is understood that the handling of the Collateral of the Borrowers in a combined fashion, as more fully set forth herein and in the Collateral Documents, is done solely as an accommodation to the Borrowers in order to utilize the collective borrowing powers of the Borrowers in the most efficient and economical manner and at their request, and that neither the Agents nor the Lenders shall incur liability to the Borrowers as a result hereof. Each of the Borrowers expects to derive benefit, directly or indirectly, from the handling of the Collateral in a combined fashion since the successful operation of each Borrower is dependent on the continued successful performance of the integrated group.

Each Borrower hereby accepts joint and several liability hereunder and under the other Loan Documents in consideration of the financial accommodations to be provided by the Agents and the Lenders under this Agreement and the other Loan Documents, for the mutual benefit, directly and indirectly, of each of the Borrowers and in consideration of the undertakings of the other Borrowers to accept joint and several liability for the Finance Obligations. Each of the Borrowers, jointly and severally, hereby irrevocably and unconditionally accepts, not merely as a surety but also as a co-debtor, joint and several liability with the other Borrowers, with respect to the payment and performance of all of the Finance Obligations (including, without limitation, any Finance Obligations arising under this <u>Section</u> <u>2.02(f)</u>), it being the intention of the parties hereto that all of the Finance Obligations shall be the joint and several obligations of each of the Borrowers without preferences or distinction among them. If and to the extent that any of the Borrowers shall fail to make any payment with respect to any of the Finance Obligations as and when due or to perform any of the Finance Obligations in accordance with the terms thereof, then in each such event, the other Borrower's will jointly and severally make such payment with respect to, or perform, such Finance Obligation. Subject to the terms and conditions hereof, the Finance Obligations of each of the Borrowers under the provisions of this <u>Section</u> <u>2.02(f)</u> constitute the absolute and unconditional, full recourse Finance Obligations of each of the Borrowers, enforceable against each such Person to the full extent of its properties and assets, irrespective of the validity, regularity or enforceability of this Agreement, the other Loan Documents or any other circumstances whatsoever.

------

**Section 2.03 <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;(a) *<u>Letters of Credit</u>.* Subject to the terms and conditions hereof, the Administrative Agent shall issue or cause the issuance of standby and/or trade letters of credit (collectively, "<u>Letters of Credit</u>") for the account of the Borrowers. The Maximum Undrawn Amount of all outstanding Letters of Credit shall not exceed in the aggregate at any time the Letter of Credit Sublimit. All disbursements or payments related to Letters of Credit shall be deemed to be Revolving Facility Loans and shall bear interest at the applicable Revolving Facility Loans in accordance with <u>Section</u> <u>2.08</u>. Letters of Credit that have not been drawn upon shall not bear interest.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b) *<u>Issuance of Letters of Credit</u>*.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(i) Subject to the terms hereof, the Parent Borrower may request the Administrative Agent to issue or cause the issuance of a Letter of Credit by delivering to the Administrative Agent, at the Administrative Agent's Office, prior to 10:00 a.m. (New York time), at least three Business Days prior to the proposed date of issuance, the Administrative Agent's form of letter of credit application (the "<u>Letter of Credit Application</u>") completed to the reasonable satisfaction of the Administrative Agent and such other certificates, documents and other papers and information as the Administrative Agent may reasonably request.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(ii) Each Letter of Credit shall, among other things, (i) provide for the payment of sight drafts, other written demands for payment, or acceptances of drafts when presented for honor thereunder in accordance with the terms thereof and when accompanied by the documents described therein and (ii) have an expiry date not later than twelve months after such Letter of Credit's date of issuance (subject to automatic renewals) and in no event later than the date that is fifteen days prior to the Revolving Facility Maturity Date. Each standby Letter of Credit shall be subject either to the Uniform Customs and Practice for Documentary Credits (1993 Revision), International Chamber of Commerce Publication No. 600, and any amendments or revision thereof adhered to by the Issuer ("<u>UCP 600</u>") or the International Standby Practices (ISP98-International Chamber of Commerce Publication Number 590) ("<u>ISP98 Rules</u>"), as determined by the Administrative Agent, and each trade Letter of Credit shall be subject to UCP 600.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(iii) The Administrative Agent shall use its reasonable efforts to notify the Collateral Agent and the Lenders of the request by the Borrowers for a Letter of Credit hereunder.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c) *<u>Requirements for Issuance of Letters of Credit</u>.* The Parent Borrower shall authorize and direct the L/C Issuer to name one or more Borrowers as the "Applicant" or "Account Party" of each Letter of Credit. If the Administrative Agent is not the L/C Issuer of any Letter of Credit, the Parent Borrower shall authorize and direct the L/C Issuer to deliver to the Administrative Agent all instruments, documents, and other writings and property received by the L/C Issuer pursuant to such Letter of Credit and to accept and rely upon the Administrative Agent's instructions and agreements with respect to all matters arising in connection with such Letter of Credit or the application therefor.

------

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&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) *<u>Disbursements, Reimbursement</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;&nbsp;&nbsp;&nbsp;&nbsp;(i) Immediately upon the issuance of each Letter of Credit, each Lender shall be deemed to, and hereby irrevocably and unconditionally agrees to, purchase from the Administrative Agent a participation in such Letter of Credit and each drawing thereunder in an amount equal to such Lender's pro rata of the Maximum Face Amount of such Letter of Credit and the amount of such drawing, respectively.

&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) In the event of any request for a drawing under a Letter of Credit by the beneficiary or transferee thereof, the Administrative Agent will promptly notify the Parent Borrower. <u>Provided</u> that the Parent Borrower shall have received such notice by 1:00 pm (New York time), the Borrowers shall reimburse (such obligation to reimburse the Administrative Agent or any Lender together with any interest thereon pursuant to <u>Section</u> <u>2.08</u> shall sometimes be referred to as a "<u>Reimbursement Obligation</u>") the Administrative Agent on behalf of the L/C Issuer and the Lenders prior to 1:00 p.m. (New York time) on such date that an amount is paid by the Administrative Agent on behalf of the L/C Issuer and the Lenders under any Letter of Credit (each such date, a "<u>Drawing Date</u>") in an amount equal to the amount so paid by the Administrative Agent. In the event the Borrowers fail to reimburse the Administrative Agent for the full amount of any drawing under any Letter of Credit by 1.00 p.m. (New York time) on the Drawing Date, the Administrative Agent will promptly notify each Lender thereof, and the Borrowers shall be deemed to have requested that a Revolving Facility Loan that is a Base Rate Loan be made by the Lenders to be disbursed on the Drawing Date in respect of such Letter of Credit pursuant to <u>Section</u> <u>2.01</u> and subject to <u>Article</u> <u>IV</u>. Any notice given by the Administrative Agent pursuant to this <u>Section</u> <u>2.03(d)(ii)</u> may be oral if immediately confirmed in writing; <u>provided</u> that the lack of such an immediate confirmation shall not affect the conclusiveness or binding effect of such notice.

&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) Each Lender shall upon any notice pursuant to <u>Section</u> <u>2.03(d)(ii)</u> make available to the Administrative Agent an amount in immediately available funds equal to its pro rata share of the amount of the drawing, whereupon the participating Lenders shall (subject to <u>Section</u> <u>2.03(d)(iv)</u>) each be deemed to have made a Loan that is a Base Rate Loan to the Borrowers in that amount. If any Lender so notified fails to make available to the Administrative Agent the amount of such Lender's pro rata share of such amount by no later than 2:00 p.m. (New York time) on the Drawing Date, then interest shall accrue on such Lender's obligation to make such payment, from the Drawing Date to the date on which such Lender makes such payment (i) at a rate per annum equal to the Federal Funds Rate during the first three days following the Drawing Date and (ii) at a rate per annum equal to the interest rate on Loans that are Base Rate Loans on and after the fourth day following the Drawing Date. The Administrative Agent will promptly give notice of the occurrence of the Drawing Date, but failure of the Administrative Agent to give any such notice on the Drawing Date or in sufficient time to enable any Lender to

------

effect such payment on such date shall not relieve such Lender from its obligation under this <u>Section</u> <u>2.03(d)(iii)</u>, <u>provided</u> that such Lender shall not be obligated to pay interest as provided in <u>clauses (i)</u> and <u>(ii)</u> until and commencing from the date of receipt of notice from the Administrative Agent of a drawing. Each Lender's payment to the Administrative Agent pursuant to this <u>Section</u> <u>2.03(d)(iii)</u> shall be deemed to be a payment in respect of its participation in such Letter of Credit Borrowing and shall constitute a "<u>Participation Revolving Loan</u>" from such Lender in satisfaction of its Participation Commitment under this <u>Section</u> <u>2.03(d)</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;&nbsp;&nbsp;&nbsp;&nbsp;(iv) With respect to any unreimbursed drawing that is not converted into a Loan to the Borrowers in whole or in part as contemplated by <u>Section</u> <u>2.03(d)(ii)</u>, because of the Borrowers' failure to satisfy the conditions set forth in <u>Section</u> <u>4.02</u> (other than any notice requirements) or for any other reason, the Borrowers shall be deemed to have incurred from the Administrative Agent a borrowing (each a "<u>Letter of Credit Borrowing</u>") in the amount of such drawing. Such Letter of Credit Borrowing shall be due and payable on demand (together with interest) and shall bear interest at the rate per annum equal to the interest rate on Loans that are Base Rate 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;&nbsp;&nbsp;&nbsp;&nbsp;(v) Each Lender's Participation Commitment shall continue until the last to occur of any of the following events: (i) the Administrative Agent ceases to be obligated to issue or cause to be issued Letters of Credit hereunder; (ii) no Letter of Credit issued or created hereunder remains outstanding and uncanceled and (iii) all Persons (other than the Borrowers) have been fully reimbursed for all payments made under or relating to Letters of Credit.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(e) *<u>Repayment of Participation Revolving 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;&nbsp;&nbsp;&nbsp;&nbsp;(i) Upon (and only upon) receipt by the Administrative Agent for its account of immediately available funds from the Borrowers (i) in reimbursement of any payment made by the Administrative Agent under the Letter of Credit with respect to which any Lender has made a Participation Revolving Loan to the Administrative Agent or (ii) in payment of interest on such a payment made by the Administrative Agent under such a Letter of Credit, the Administrative Agent will pay to each Lender, in the same funds as those received by the Administrative Agent, the amount of such Lender's pro rata share of such funds, except the Administrative Agent shall retain the amount of the pro rata share of such funds of any Lender that did not make a Participation Revolving Loan in respect of such payment 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;(ii) If the Administrative Agent is required at any time to return to the Borrowers, or to a trustee, receiver, liquidator, custodian, or any official in any proceeding under any Debtor Relief Law, any portion of the payments made by the Borrowers to the Administrative Agent pursuant to <u>Section</u> <u>2.03(e)(i)</u> in reimbursement of a payment made under a Letter of Credit or interest or fee thereon, each Lender shall, on demand of the Administrative Agent, forthwith return to the Administrative Agent the amount of its pro rata share of any amounts so returned by the Administrative Agent plus interest at the Federal Funds Rate.

------

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(f) *<u>Documentation</u>.* The Borrowers agree to be bound by the terms of each Letter of Credit Application and by the L/C Issuer's interpretations of each Letter of Credit issued for the Borrowers' account and by the L/C Issuer's written regulations and customary practices relating to letters of credit, though the L/C Issuer's interpretations may be different from the Borrowers' own. In the event of a conflict between any Letter of Credit Application and this Agreement, this Agreement shall govern. It is understood and agreed that, except in the case of gross negligence or willful misconduct (as determined by a court of competent jurisdiction in a final nonappealable judgment), the Administrative Agent shall not be liable for any error, negligence and/or mistakes, whether of omission or commission, in following any Borrower's instructions or those contained in any Letter of Credit or any modification, amendment or supplement thereto.

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

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(h) *<u>Nature of Participation and Reimbursement Obligations</u>.* Each Lender's obligation in accordance with this Agreement to make the Loans or Participation Revolving Loans as a result of a drawing under a Letter of Credit, and the obligations of the Borrowers to reimburse the Administrative Agent upon a draw under a Letter of Credit, shall be absolute, unconditional and irrevocable, and shall be performed strictly in accordance with the terms of this <u>Section</u> <u>2.03</u> under all circumstances, including the following circumstances:

&nbsp;&nbsp;&nbsp;&nbsp;&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) any set-off, counterclaim, recoupment, defense or other right which such Lender may have against the Administrative Agent, the Borrowers or any other Person for any reason 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;&nbsp;&nbsp;&nbsp;&nbsp;(ii) the failure of the Borrowers or any other Person to comply, in connection with a Letter of Credit Borrowing, with the conditions set forth in this Agreement for the making of a Loan, it being acknowledged that such conditions are not required for the making of a Letter of Credit Borrowing and the obligation of the Lenders to make Participation Revolving Loans under <u>Section</u> <u>2.03(d)</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;&nbsp;&nbsp;&nbsp;&nbsp;(iii) any lack of validity or enforceability of any 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;&nbsp;&nbsp;&nbsp;&nbsp;(iv) any claim of breach of warranty that might be made by any Borrower or any Lender against the beneficiary of a Letter of Credit, or the existence of any claim, set-off, recoupment, counterclaim, crossclaim, defense or other right which any Borrower or any Lender may have at any time against a beneficiary, any successor beneficiary or any transferee of any Letter of Credit or the proceeds thereof (or any Person for whom any such transferee may be acting), the Administrative Agent or any Lender or any other Person, whether in connection with this Agreement, such Letter of Credit, the transactions contemplated herein or any unrelated transactions (including any underlying transactions between the Borrowers or any other party and the beneficiary for which any Letter of Credit was procured);

------

&nbsp;&nbsp;&nbsp;&nbsp;&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) the lack of power or authority of any signatory of (or any defect in or forgery of any signature or endorsement on) or the form of or lack of validity, sufficiency, accuracy, enforceability or genuineness of any draft, demand, instrument, certificate or other document presented under or in connection with any Letter of Credit, or any fraud or alleged fraud in connection with any Letter of Credit, or the transport of any property or provisions of services relating to a Letter of Credit, in each case even if the Administrative Agent or any of the Administrative Agent's Affiliates has been notified 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;&nbsp;&nbsp;&nbsp;&nbsp;(vi) except as provided in <u>Section</u> <u>2.03(g)</u>, any payment by the Administrative Agent under any Letter of Credit against presentation of a demand, draft or certificate or other document which does not comply with the terms of such Letter of Credit;

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

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

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(ix) any Material Adverse Effect on any Borrower or any Guarantor;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(x) any breach of this Agreement or any Loan Document by any party 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;&nbsp;&nbsp;&nbsp;&nbsp;(xi) the occurrence or continuance of a proceeding under any Debtor Relief Law with respect to any Borrower or any Guarantor;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(xii) the fact that a Default or Event of 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;&nbsp;&nbsp;&nbsp;&nbsp;(xiii) the fact that the Revolving Facility Maturity Date shall have expired or this Agreement or the Finance Obligations hereunder shall have been terminated; 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;(xiv) any other circumstance or happening whatsoever, whether or not similar to any of the foregoing.

------

Nothing contained in this <u>Section</u> <u>2.03(h)</u> shall be deemed to relieve the Administrative Agent or the L/C Issuer from any claim by the Borrowers for the gross negligence or willful misconduct of the Administrative Agent or the L/C Issuer, respectively, in respect of honoring or failing to honor any drawing under any Letter of Credit or otherwise in respect of any Letter of Credit, but any such claim may not be used as a defense to the reimbursement obligation for any such drawing.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(i) *<u>Indemnity</u>*. In addition to amounts payable as provided in <u>Section</u> <u>10.04</u>, the Borrowers hereby agree to protect, indemnify, pay and save harmless the Administrative Agent and the L/C Issuer from and against any and all claims, demands, liabilities, damages, taxes, (except for the imposition or any change in rate of any Taxes for which such Person is indemnified pursuant to <u>Article</u> <u>III</u> or the imposition or any change in the rate of, any Taxes specifically excluded under <u>Article</u> <u>III)</u>, penalties, interest, judgments, losses, costs, charges and expenses (including reasonable fees, expenses and disbursements of outside counsel and allocated costs of internal counsel) which the Administrative Agent or any of the Administrative Agent's Affiliates may incur or be subject to as a consequence, direct or indirect, of the issuance of any Letter of Credit, other than as a result of (a) the gross negligence or willful misconduct of the Administrative Agent or the L/C Issuer (as determined by a court of competent jurisdiction in a final nonappealable judgment) or (b) the wrongful dishonor by the Administrative Agent, the L/C Issuer, or any of the Administrative Agent's or L/C Issuer's Affiliates of a proper demand for payment made under any Letter of Credit, except if such dishonor resulted from any act or omission, whether rightful or wrongful, of any present or future de jure or de facto Governmental Authority (all such acts or omissions herein called "<u>Governmental Acts</u>"). The obligations of the Borrowers under this <u>Section</u> <u>2.03(i)</u> shall survive the termination of this Agreement and the payment of the Loans and all other amounts payable hereunder.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(j) *<u>Liability for Acts and Omissions</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;&nbsp;&nbsp;&nbsp;&nbsp;(i) As between the Borrowers and the Agents and the Lenders, the Borrowers assume all risks of the acts and omissions of, or misuse of the Letters of Credit by, the respective beneficiaries of such Letters of Credit. In furtherance and not in limitation of the foregoing, the Agents and the Lenders shall not be responsible for: (i) the form, validity, sufficiency, accuracy, genuineness or legal effect of any document submitted by any party in connection with the application for an issuance of any such Letter of Credit, even if it should in fact prove to be in any or all respects invalid, insufficient, inaccurate, fraudulent or forged (even if the Administrative Agent shall have been notified thereof); (ii) the validity or sufficiency of any instrument transferring or assigning or purporting to transfer or assign any such Letter of Credit or the rights or benefits thereunder or proceeds thereof, in whole or in part, which may prove to be invalid or ineffective for any reason; (iii) the failure of the beneficiary of any such Letter of Credit, or any other party to which such Letter of Credit may be transferred, to comply fully with any conditions required in order to draw upon such Letter of Credit or any other claim of the Borrowers against any beneficiary of such Letter of Credit, or any such transferee, or any dispute between or among Borrowers and any beneficiary of any Letter of Credit or any such transferee; (iv) errors, omissions, interruptions or delays in transmission or delivery of any messages, by mail, cable, telegraph, telex or otherwise, whether or not they be in cipher; (v) errors in interpretation of technical terms; (vi) any loss or delay in the transmission or otherwise of any document required in order to make a drawing under any such Letter of Credit or of the proceeds thereof; (vii) the misapplication by the beneficiary of any such

------

Letter of Credit of the proceeds of any drawing under such Letter of Credit; or (viii) any consequences arising from causes beyond the control of the Administrative Agent, including any Governmental Acts, and none of the above shall affect or impair, or prevent the vesting of, any of the Administrative Agent's rights or powers hereunder. Nothing in the preceding sentence shall relieve the Administrative Agent from liability for the Administrative Agent's gross negligence or willful misconduct (as determined by a court of competent jurisdiction in a final nonappealable judgment) in connection with actions or omissions described in such <u>clauses (i)</u> through <u>(viii)</u> of such sentence. In no event shall the Administrative Agent or the Administrative Agent's Affiliates be liable to the Borrowers for any indirect, consequential, incidental, punitive, exemplary or special damages or expenses (including without limitation attorneys' fees), or for any damages resulting from any change in the value of any property relating to a Letter of Credit.

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

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

------

**Section 2.04 <u>Swing Line Loans</u>**.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a) *<u>The Swing Line</u>.* Subject to the terms and conditions set forth herein, the Swing Line Lender, in reliance upon the agreements of the other Lenders set forth in this <u>Section</u> <u>2.04</u>, may in its sole discretion make loans (each such loan, a "<u>Swing Line Loan</u>") to one or more Borrowers from time to time on any Business Day during the Availability Period in an aggregate amount not to exceed at any time outstanding the amount of the Swing Line Sublimit, notwithstanding the fact that such Swing Line Loans, when aggregated with the Revolving Facility Percentage of the Outstanding Amount of Revolving Facility Loans and L/C Obligations of the Lender acting as Swing Line Lender, may exceed the amount of such Lender's Revolving Facility Commitment; <u>provided</u>, <u>however</u>, that (x) after giving effect to any Swing Line Loan, (i) the Revolving Facility Credit Exposure shall not exceed the lesser of (I) Revolving Facility Commitments and (II) the Borrowing Base (ii) the Revolving Facility Credit Exposure of any Lender shall not exceed such Lender's Revolving Facility Commitment, (y) the Borrowers shall not use the proceeds of any Swing Line Loan to refinance any outstanding Swing Line Loan and (z) the Swing Line Lender shall not be under any obligation to make any Swing Line Loan if it shall determine (which determination shall be conclusive and binding absent manifest error) that is has, or by such Credit Extension may have, Fronting Exposure. Within the foregoing limits, and subject to the other terms and conditions hereof, the Borrowers may borrow under this <u>Section</u> <u>2.04</u>, prepay under <u>Section</u> <u>2.05</u>, and reborrow under this <u>Section</u> <u>2.04</u>. Each Swing Line Loan shall bear interest only at a rate based on the Base Rate. Immediately upon the making of a Swing Line Loan, each Revolving Facility Lender shall be deemed to, and hereby irrevocably and unconditionally agrees to, purchase from the Swing Line Lender a risk participation in such Swing Line Loan in an amount equal to the product of such Revolving Facility Lender's applicable Revolving Facility Percentage times the amount of such Swing Line Loan.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b) *<u>Borrowing Procedures</u>.* Each Swing Line Borrowing shall be made upon the Parent Borrower's irrevocable notice to the Swing Line Lender and the Administrative Agent, which may be given by telephone. Each such notice must be received by the Swing Line Lender and the Administrative Agent not later than 1:00 p.m. on the requested borrowing date, and shall specify (i) the amount to be borrowed, which shall be a minimum of $500,000 and whole multiples of $100,000 in excess thereof, and (ii) the requested borrowing date, which shall be a Business Day. Each such telephonic notice must be confirmed promptly by delivery to the Swing Line Lender and the Administrative Agent of a written Swing Line Loan Notice, appropriately completed and signed by a Responsible Officer of the Parent Borrower. Promptly after receipt by the Swing Line Lender of any telephonic Swing Line Loan Notice, the Swing Line Lender will confirm with the Administrative Agent (by telephone or in writing) that the Administrative Agent has also received such Swing Line Loan Notice and, if not, the Swing Line Lender will notify the Administrative Agent (by telephone or in writing) of the contents thereof. Unless the Swing Line Lender has received notice (by telephone or in writing) from the Administrative Agent (including at the request of any Revolving Facility Lender) prior to 2:00 p.m. on the date of the proposed Swing Line Borrowing (A) directing the Swing Line Lender not to make such Swing Line Loan as a result of the limitations set forth in the proviso to the first sentence of <u>Section</u> <u>2.04(a)</u>, or (B) that one or more of the applicable conditions specified in <u>Article</u> <u>IV</u> is not then satisfied, then, subject to the terms and conditions hereof, the Swing Line Lender will, not later than 3:00 p.m. on the borrowing date specified in such Swing Line Loan Notice, make the amount of its Swing Line Loan available to the Parent Borrower, including at its office by crediting the account of the Parent Borrower on the books of the Swing Line Lender in immediately available funds.

------

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c) *<u>Refinancing of Swing Line 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;&nbsp;&nbsp;&nbsp;&nbsp;(i) The Swing Line Lender at any time in its sole discretion may request, on behalf of the Borrowers (each of which hereby irrevocably authorizes the Swing Line Lender to so request on its behalf), that each Revolving Facility Lender make a Base Rate Loan in an amount equal to such Lender's applicable Revolving Facility Percentage of the amount of Swing Line Loans then outstanding. Such request shall be made in writing (which written request shall be deemed to be a Committed Loan Notice for purposes hereof) and in accordance with the requirements of <u>Section</u> <u>2.02</u>, without regard to the minimum and multiples specified therein for the principal amount of Base Rate Loans, but subject to the unutilized portion of the Facility and the conditions set forth in <u>Section</u> <u>4.02</u>. The Swing Line Lender shall furnish the Parent Borrower with a copy of the applicable Committed Loan Notice promptly after delivering such notice to the Administrative Agent. Each Revolving Facility Lender shall make an amount equal to its applicable Revolving Facility Percentage of the amount specified in such Committed Loan Notice available to the Administrative Agent in immediately available funds (and the Administrative Agent may apply Cash Collateral available with respect to the applicable Swing Line Loan) for the account of the Swing Line Lender at the Administrative Agent's Office not later than 1:00 p.m., on the day specified in such Committed Loan Notice, whereupon, subject to <u>Section</u> <u>2.04(c)(ii)</u>, each Revolving Facility Lender that so makes funds available shall be deemed to have made a Base Rate Loan to the Parent Borrower in such amount. The Administrative Agent shall remit the funds so received to the Swing Line 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;&nbsp;&nbsp;&nbsp;&nbsp;(ii) If for any reason any Swing Line Loan cannot be refinanced by such a Revolving Facility Borrowing in accordance with <u>Section</u> <u>2.04(c)(i)</u>, the request for Base Rate Loans submitted by the Swing Line Lender as set forth herein shall be deemed to be a request by the Swing Line Lender that each of the Revolving Facility Lenders fund its risk participation in the relevant Swing Line Loan and each Revolving Facility Lender's payment to the Administrative Agent for the account of the Swing Line Lender pursuant to <u>Section</u> <u>2.04(c)(i)</u> shall be deemed payment in respect 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;&nbsp;&nbsp;&nbsp;&nbsp;(iii) If any Revolving Facility Lender fails to make available to the Administrative Agent for the account of the Swing Line Lender any amount required to be paid by such Lender pursuant to the foregoing provisions of this <u>Section</u> <u>2.04(c)</u> by the time specified in <u>Section</u> <u>2.04(c)(i)</u>, the Swing Line Lender shall be entitled to recover from such Lender (acting through the Administrative Agent), on demand, such amount with interest thereon for the period from the date such payment is required to the date on which such payment is immediately available to the Swing Line Lender at a rate per annum equal to the greater of the Federal Funds Rate and a rate determined by the Swing Line Lender in accordance with banking industry rules on interbank compensation, plus any administrative, processing or similar fees customarily charged by the Swing Line Lender in connection with the foregoing. If such Lender pays such amount (with interest and fees as aforesaid), the amount so paid shall constitute such Lender's Revolving Facility Loans included in the relevant Borrowing or funded participation in the relevant Swing Line Loan, as the case may be. A certificate of the Swing Line Lender submitted to any Lender (through the Administrative Agent) with respect to any amounts owing under this <u>clause</u> <u>(iii)</u> 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;&nbsp;&nbsp;&nbsp;&nbsp;(iv) Each Revolving Facility Lender's obligation to make Revolving Facility Loans or to purchase and fund risk participations in Swing Line Loans pursuant to this <u>Section</u> <u>2.04(c)</u> shall be absolute and unconditional and shall not be affected by any circumstance, including (A) any setoff, counterclaim, recoupment, defense or other right which such Lender may have against the Swing Line Lender, any Borrower or any other Person for any reason whatsoever, (B) the occurrence or continuance of a Default or (C) any other occurrence, event or condition, whether or not similar to any of the foregoing; <u>provided</u>, <u>however</u>, that each Revolving Facility Lender's obligation to make Revolving Facility Loans pursuant to this <u>Section</u> <u>2.04(c)</u> is subject to the conditions set forth in <u>Section</u> <u>4.02</u>.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(d) *<u>Repayment of Participations</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;&nbsp;&nbsp;&nbsp;&nbsp;(i) At any time after any Revolving Facility Lender has purchased and funded a risk participation in a Swing Line Loan, if the Swing Line Lender receives any payment on account of such Swing Line Loan, the Swing Line Lender will distribute to such Revolving Facility Lender its applicable Revolving Facility Percentage thereof in the same funds as those received by the Swing Line 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;&nbsp;&nbsp;&nbsp;&nbsp;(ii) If any payment received by the Swing Line Lender in respect of principal or interest on any Swing Line Loan is required to be returned by the Swing Line Lender under any of the circumstances described in <u>Section</u> <u>10.05</u> (including pursuant to any settlement entered into by the Swing Line Lender in its discretion), each Revolving Facility Lender shall pay to the Swing Line Lender its applicable Revolving Facility Percentage thereof on demand of the Administrative Agent, plus interest thereon from the date of such demand to the date such amount is returned, at a rate per annum equal to the Federal Funds Rate. The Administrative Agent will make such demand upon the request of the Swing Line Lender. The obligations of the Lenders under this clause shall survive the payment in full of the ABL Credit Obligations and the termination of this Agreement.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(e) *<u>Interest for Account of Swing Line Lender</u>.* The Swing Line Lender shall be responsible for invoicing the Parent Borrower for interest on the Swing Line Loans. Until each Revolving Facility Lender funds its Base Rate Loan or risk participation pursuant to this <u>Section</u> <u>2.04</u> to refinance such Revolving Facility Lender's applicable Revolving Facility Percentage of any Swing Line Loan, interest in respect of such applicable Revolving Facility Percentage shall be solely for the account of the Swing Line Lender.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(f) *<u>Payments Directly to Swing Line Lender</u>.* The Borrowers shall make all payments of principal and interest in respect of the Swing Line Loans directly to the Swing Line Lender.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(g) *<u>Defaulting Lenders</u>.* Notwithstanding anything to the contrary contained in this <u>Section</u> <u>2.04</u>, the Swing Line Lender shall not be obligated to make any Swing Line Loan at a time when any Revolving Facility Lender is a Defaulting Lender, unless the Swing Line Lender has entered into arrangements satisfactory to it to eliminate its risk with respect to any Defaulting Lender's risk participations in, and all other obligations in respect of, Swing Line Loans, including by cash collateralizing such Defaulting Lender's applicable Revolving Facility Percentage of all Swing Line Loans outstanding or to be outstanding hereunder.

------

**Section 2.05 <u>Prepayments</u>**.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a) *<u>Optional</u>.* Subject to the last sentence of this <u>Section</u> <u>2.05(a)</u>, the Borrowers may at any time or from time to time voluntarily prepay Loans in whole or in part without premium or penalty; <u>provided</u> that: (A) any prepayment of Eurodollar Rate Loans shall be in a principal amount of $1,000,000 or a whole multiple of $500,000 in excess thereof; (B) any prepayment of Base Rate Loans shall be in a principal amount of $500,000 or a whole multiple of $100,000 in excess thereof or, in each case, if less, the entire principal amount thereof then outstanding; and (C) any prepayment of Eurodollar Rate Loans shall be accompanied by all accrued interest on the amount prepaid, together with any additional amounts required by <u>Section</u> <u>2.03(d)</u> and by <u>Section</u> <u>3.05</u>. Each prepayment of the outstanding Loans pursuant to this <u>Section</u> <u>2.05(a)</u> shall be paid to the Lenders in accordance with their respective Revolving Facility Percentages.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b) *<u>Mandatory</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;&nbsp;&nbsp;&nbsp;&nbsp;(i) *<u>Revolving Facility Credit Exposure</u>*. Except as otherwise provided in <u>Section</u> <u>2.17</u>, the Borrowers shall immediately prepay the Loans at any time when the Revolving Facility Credit Exposure exceeds the lesser of (A) the total Revolving Facility Commitments and (B) the Borrowing Base, to the full extent of any such excess. If at any time after the Borrowers have complied with the first sentence of this <u>Section</u> <u>2.05(b)</u>, the aggregate L/C Obligations are greater than the then current Borrowing Base, the Borrowers shall provide Cash Collateral in respect of such excess to the Administrative Agent, which Cash Collateral shall be deposited in a bank account subject to a Cash Management Agreement in favor of the Collateral Agent and, <u>provided</u> that no Default or Event of Default shall have occurred and be continuing, returned to the Borrowers at such time as the aggregate L/C Obligations plus the aggregate principal amount of all outstanding Loans no longer exceeds the then current Borrowing Base (as updated by the weekly reports to the Borrowing Base Certificate described in <u>Section</u> <u>6.01(j)</u>, when applicable) as 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;(ii) *<u>Dispositions; Events of Loss</u>.* Subject to the ABL/Term Intercreditor Agreement, if a Loan Party or any Subsidiary of a Loan Party shall, during a Cash Dominion Period:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&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) make or agree to make a Disposition of ABL Priority Collateral not 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;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(B) or suffer an Event of Loss in respect of the ABL Priority Collateral

and the aggregate amount of the Net Proceeds received by the Loan Parties and their Subsidiaries in connection with such Disposition or Event of Loss and all other such Dispositions and Events of Loss occurring during the Fiscal Year exceeds $2,500,000, then (A) the Parent Borrower shall promptly notify the Administrative Agent of such proposed Disposition or Event of Loss (including the amount of the estimated Net Proceeds to be received by a Loan Party and/or such Subsidiary in respect thereof) and (B) within two Business Days after receipt by a Loan Party and/or such Subsidiary of the Net Proceeds of such Disposition or Event of Loss, the Parent Borrower shall deliver, or cause to be delivered, such excess Net Proceeds to the Administrative Agent for distribution to the Lenders as a prepayment of the Loans without reducing the Revolving Facility Commitment.

------

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c) *<u>Application to the Revolving Facility</u>.* Each prepayment of Loans pursuant to the foregoing provisions of this <u>Section</u> <u>2.05</u> shall be applied <u>first</u>, ratably to pay accrued and unpaid interest in respect of the outstanding L/C Borrowings and the outstanding Swing Line Loans, Overadvances and Agent Advances then being prepaid, <u>second</u>, ratably to prepay the principal of any outstanding Unreimbursed Amounts and any outstanding Swing Line Loans, Overadvances and Agent Advances, if any, <u>third</u>, ratably to the outstanding Revolving Facility Loans (other than Overadvances and Agent Advances), and, <u>fourth</u>, to Cash Collateralize the remaining L/C Obligations; in each case, without permanent reduction of the Revolving Facility Commitments, and the amount remaining, if any, after the prepayment in full of all Unreimbursed Amounts, Swing Line Loans and Revolving Facility Loans outstanding at such time and the Cash Collateralization of the remaining L/C Obligations in full may be retained by the Borrowers for use in the Ordinary Course of Business; <u>provided</u> that, upon the drawing of any Letter of Credit that has been Cash Collateralized, the funds held as Cash Collateral shall be applied (without any further action by or notice to or from any Borrower or any other Loan Party) to reimburse the applicable L/C Issuer or the applicable Lenders, as applicable.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(d) *<u>Prepayment Notices</u>.* Unless otherwise specified in this <u>Section</u> <u>2.05</u>, each prepayment made pursuant to this <u>Section</u> <u>2.05</u> shall be made upon notice by the Parent Borrower to the Administrative Agent, which may be given by telephone or e-mail (and if in writing shall be in the form of a Prepayment Notice appropriately completed and signed by a Responsible Officer of the Parent Borrower), which notice must be received by the Administrative Agent not later than 1:00 p.m. (x) three Business Days prior to any date of prepayment of Eurodollar Rate Loans and (y) on the date of prepayment of Base Rate Loans. Each such notice shall specify the date and amount of such prepayment and the Type(s) of Loans to be prepaid and, if Eurodollar Rate Loans are to be prepaid, the Interest Period(s) of such Loans. Each telephonic notice by the Parent Borrower pursuant to this <u>Section</u> <u>2.05</u> must be confirmed promptly by delivery to the Administrative Agent of a written Prepayment Notice, appropriately completed and signed by a Responsible Officer of the Parent Borrower. The Administrative Agent will promptly notify each Lender of its receipt of each such notice, and of the amount of such Lender's ratable portion of such prepayment (based on such Lender's Revolving Facility Percentage). If such notice is given by the Parent Borrower, the Borrowers shall make such prepayment and the payment amount specified in such notice shall be due and payable on the date specified therein; it being understood and agreed that, if such notice is given in connection with the refinancing of the entire Facility, such notice may be conditioned upon the effectiveness of Indebtedness the proceeds of which are being used to refinance the Facility and such notice may be revoked if such condition is not satisfied. Any prepayment of Eurodollar Rate Loans under this <u>Section</u> <u>2.05</u> shall be accompanied by all accrued interest on the amount prepaid, together with any additional amounts required pursuant to <u>Section</u> <u>3.05</u>. Each such prepayment shall be paid to the Lenders in accordance with their respective Revolving Facility Percentage in the manner described in <u>Section</u> <u>2.05(a)</u> or <u>(b)</u>, as applicable.

------

**Section 2.06 <u>Scheduled Repayment of Loans</u>**.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a) To the extent not previously paid, outstanding Loans shall be due and payable on the Revolving Facility Maturity Date.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b) The Borrowers shall jointly and severally repay each Swing Line Loan on the earlier to occur of (i) the date five Business Days after such Loan is made and (ii) the Revolving Facility Maturity Date.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c) Prior to any repayment of any Loans, the Parent Borrower shall select the Borrowing or Borrowings under the Facility to be repaid and shall notify the Administrative Agent by telephone (confirmed by telecopy) of such selection not later than 1:00 p.m., (i) in the case of a Base Rate Borrowing, one Business Day before the scheduled date of such repayment and (ii) in the case of a Eurodollar Rate Borrowing, three Business Days before the scheduled date of such repayment. Each repayment of a Borrowing shall be applied to the Revolving Facility Loans included in the repaid Borrowing such that each Revolving Facility Lender receives its ratable share of such repayment (based upon the respective Revolving Facility Credit Exposures of the Revolving Facility Lenders at the time of such repayment). Repayments of Eurodollar Rate Borrowings shall be accompanied by accrued interest on the amount repaid, together with any additional amounts required pursuant to <u>Section</u> <u>3.05</u>.

**Section 2.07 <u>Termination and Reduction of Revolving Facility Commitments</u>**.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a) Unless previously terminated, the Revolving Facility Commitments shall terminate on the Revolving Facility Maturity Date.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b) The Borrowers may reduce the Revolving Facility Commitments to an amount (which may be zero) not less than the sum of (A) the aggregate unpaid principal amount of all Loans then outstanding, (B) the aggregate principal amount of all Loans not yet made as to which a Committed Loan Notice has been given by the Parent Borrower under <u>Section</u> <u>2.02</u>, (C) the L/C Obligations at such time, (D) the stated amount of all Letters of Credit not yet issued as to which a request has been made and not withdrawn, (E) the Swing Line Obligations at such time and (F) $10,000,000, unless the total Revolving Facility Commitment is reduced to zero in accordance with the preceding <u>clauses (A)</u> through <u>(E)</u> hereof. Each such reduction (1) shall be in an amount which is an integral multiple of $1,000,000 (or by the full amount of the Revolving Facility Commitment in effect immediately prior to such reduction if such amount at that time is less than $1,000,000) and (2) shall be made by providing not less than five Business Days' prior written notice to the Administrative Agent, <u>provided</u>, that a notice of termination of the Revolving Facility Commitment may state that such notice is conditioned upon the effectiveness of other credit facilities, 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. Once reduced, the Revolving Facility Commitment may not be increased. Each such reduction of the Revolving Facility Commitment shall reduce the Revolving Facility Commitment of each Lender proportionately in accordance with its Revolving Facility Percentage thereof.

------

**Section 2.08 <u>Interest</u>**.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a) *<u>Stated Interest</u>.* Subject to the provisions of <u>Section</u> <u>2.08(b)</u>: (i) each Eurodollar Rate Loan shall bear interest on the outstanding principal amount thereof for each Interest Period at a rate per annum equal to the sum of (A) the Adjusted Eurodollar Rate for such Interest Period plus (B) the Applicable Rate; (ii) each Base Rate Loan shall bear interest on the outstanding principal amount thereof from the applicable borrowing date at a rate per annum equal to the sum of (A) the Base Rate plus (B) the Applicable Rate; and (iii) each Swing Line Loan shall bear interest on the outstanding principal amount thereof from the applicable borrowing date at a rate per annum equal to the sum of (A) the Base Rate plus (B) the Applicable Rate.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b) *<u>Default 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;&nbsp;&nbsp;&nbsp;&nbsp;(i) If any amount of principal of any Loan is not paid when due (after giving effect to any applicable grace periods), whether at stated maturity, by acceleration or otherwise, such overdue amount shall thereafter bear interest at a fluctuating interest rate per annum at all times equal to the Default Rate to the fullest extent permitted by applicable Requirements of 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;&nbsp;&nbsp;&nbsp;&nbsp;(ii) If any amount (other than principal of any Loan) payable by the Borrowers under any Loan Document is not paid when due (after giving effect to any applicable grace periods), whether at stated maturity, by acceleration or otherwise, then upon the request of the Required Lenders such overdue amount shall bear interest from the date when due at a fluctuating interest rate per annum at all times equal to the Default Rate to the fullest extent permitted by applicable Requirements of 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;&nbsp;&nbsp;&nbsp;&nbsp;(iii) During the existence of any Event of Default under <u>Section</u> <u>8.01(f)</u>, the Borrowers shall pay interest on the principal amount of all outstanding ABL Credit Obligations at a fluctuating interest rate per annum at all times equal to the Default Rate to the fullest extent permitted by applicable Requirements of 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;&nbsp;&nbsp;&nbsp;&nbsp;(iv) Accrued and unpaid interest on past due amounts (including interest on past due interest) shall be due and payable upon demand.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c) *<u>Payments of Interest</u>.* Interest on each Loan shall be due and payable in arrears on each Interest Payment Date applicable thereto, upon termination of the Revolving Facility Commitments, on the Revolving Facility Maturity Date and at such other times as may be specified herein. Interest hereunder shall be due and payable in accordance with the terms hereof before and after judgment, and before and after the commencement of any proceeding under any Debtor Relief Law.

**Section 2.09 <u>Fees</u>**.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a) Each of the Borrowers shall, jointly and severally, pay to the Administrative Agent for the account of each Revolving Facility Lender (other than Defaulting Lenders), in accordance with each such Lender's Revolving Facility Percentage, a commitment fee (the "<u>Commitment Fee</u>") equal to 0.375% per annum <u>multiplied by</u> the actual daily amount by which the Revolving Facility exceeds the sum of (i) the Outstanding Amount of Loans and (ii) the

------

Outstanding Amount of L/C Obligations, subject to adjustment as provided in <u>Section</u> <u>2.15</u>; <u>provided</u>, <u>however</u>, that, from and after the date that the third monthly Borrowing Base Certificate is delivered to the Collateral Agent after the Closing Date, if the sum of (i) the Outstanding Amount of Loans and (ii) the Outstanding Amount of L/C Obligations is greater than or equal to 50.0% of the Facility, the Commitment Fee shall be reduced to 0.25% per annum <u>multiplied by</u> the actual daily amount by which the Facility exceeds the sum of (i) the Outstanding Amount of Loans and (ii) the Outstanding Amount of L/C Obligations, subject to adjustment as provided in <u>Section</u> <u>2.15</u>. The Commitment Fee shall accrue at all times during the Availability Period, including at any time during which one or more of the conditions in <u>Article</u> <u>IV</u> is not met, and shall be due and payable quarterly in arrears on the last Business Day of each March, June, September and December, commencing with the first such date to occur after the Closing Date, and on the last day of the Availability Period. The Commitment Fee shall be calculated quarterly in arrears. For the avoidance of doubt, Swing Line Loans shall not be counted towards the Outstanding Amount of Revolving Facility Loans for purposes of determining the Commitment Fee.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b) Each of the Borrowers shall, jointly and severally, pay (i) to the Administrative Agent, for the ratable benefit of the Lenders, a Letter of Credit fee (in addition to the charges, commissions, fees, and costs set forth in <u>clause (ii)</u> below) which shall accrue at a rate per annum equal to the Applicable Rate in effect at such time for Eurodollar Rate Loans, times the daily balance of the Maximum Undrawn Amount of the Letters of Credit, for the period from and excluding the date of issuance of same to and including the date of expiration or termination, such fees to be calculated on the basis of a 360-day year for the actual number of days elapsed and to be payable monthly in arrears on the first day of each month and on the Revolving Facility Maturity Date, and (ii) to the L/C Issuer, (A) a fronting fee of one eighth of one percent (0.125%) per annum multiplied times the Maximum Undrawn Amount of each Letter of Credit, which fee shall be payable monthly in arrears on the first day of each month and on the Revolving Facility Maturity Date, and (B) any and all customary administrative, issuance, amendment, payment and negotiation charges (as per the L/C Issuer's standard fee schedule) with respect to any Letters of Credit and all fees and expenses as agreed upon by the L/C Issuer and the Borrowers in connection with any Letter of Credit, including in connection with the opening, amendment or renewal of any such Letter of Credit and any acceptances created thereunder and shall reimburse the Administrative Agent for any and all fees and expenses, if any, paid by the Administrative Agent to the L/C Issuer, which charges and fees shall be payable on demand or as otherwise mutually agreed upon by the Administrative Agent and the Parent Borrower (all of the foregoing fees and charges in this <u>clause (b)</u>, collectively, the "<u>Letter of Credit Fees</u>"). Any such charge in effect at the time of a particular transaction shall be the charge for that transaction, notwithstanding any subsequent change in the L/C Issuer's prevailing charges for that type of transaction. All Letter of Credit Fees payable hereunder shall be deemed earned in full on the date when the same are due and payable hereunder and shall not be subject to rebate or pro-ration upon the termination of this Agreement for any reason.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c) Each of the Borrowers, jointly and severally, shall pay to the Joint Lead Arrangers and the Administrative Agent for their own respective accounts fees in the amounts and at the times specified in the Fee Letter. Such fees shall be fully earned when paid and shall not be refundable for any reason whatsoever.

------

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(d) Each of the Borrowers acknowledge that pursuant to <u>Section</u> <u>6.09</u>, representatives of the Administrative Agent may visit any or all of the Loan Parties and/or conduct inspections, audits, physical counts, valuations, appraisals, environmental site assessments and/or examinations of any or all of the Loan Parties at any time and from time to time. The Borrowers shall, jointly and severally pay (i) $1,100 per day for any examiner that is an employee of an Agent or its Affiliates plus any third party examiner's out-of-pocket costs and reasonable expenses incurred in connection with all such visits, inspections, audits, physical counts, valuations, appraisals, environmental site assessments and/or examinations and (ii) the cost of all visits, inspections, audits, physical counts, valuations, appraisals, environmental site assessments and/or examinations conducted by each third party on behalf of the Administrative Agent and the Lenders (including any Field Survey and Audit); <u>provided</u>, <u>however</u>, that so long as no Default or Event of Default shall have occurred and be continuing, the Borrowers shall not be obligated to reimburse the Administrative Agent and the Lenders for more than (A) one Field Survey and Audit and collateral inspection during any Fiscal Year, and (B) one appraisal of all or any portion of the Collateral during any Fiscal Year, which, in the first Field Survey and Audit, shall be conducted within 60 days of the Closing Date; <u>provided</u>, <u>further</u>, that notwithstanding the foregoing, regardless of whether a Default or an Event of Default shall have occurred and be continuing (1) the Borrowers shall be obligated, jointly and severally, to reimburse the Administrative Agent for each Field Survey and Audit conducted by them in connection with (and with respect to the assets and/or entities acquired in) any Permitted Acquisition as contemplated by <u>Section</u> <u>7.04</u>, and (2) any such Field Survey and Audit shall not be counted against the limitations set forth in the preceding <u>clauses (A)</u> and <u>(B)</u>. Notwithstanding the foregoing, (i) during an Inspection Trigger Period, the Borrowers shall not be obligated to reimburse the Administrative Agent for more than (A) two Field Survey and Audit and collateral inspections during any Fiscal Year, and (B) two appraisals of all or any portion of the Collateral and (ii) following the occurrence and during the continuance of a Default or Event of Default, such collateral audits, any Field Survey and Audit and inventory appraisals may be conducted at the Borrowers' expense as many times as the Administrative Agent may require.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(e) Each of the Borrowers, jointly and severally, shall pay to the Lenders such fees as shall have been separately agreed upon in writing in the amounts and at the times so specified. Such fees shall be fully earned when paid and shall not be refundable for any reason whatsoever.

**Section 2.10 <u>Computation of Interest and Fees</u>**. All computations of interest for Base Rate Loans (including Base Rate Loans determined by reference to the Eurodollar Rate) shall, to the extent based upon the Prime Rate, be made on the basis of a year of 365 or 366 days, as the case may be, and actual days elapsed. All other computations of fees and interest shall be made on the basis of a 360-day year and actual days elapsed (which results in more fees or interest, as applicable, being paid than if computed on the basis of a 365-day year). Interest shall accrue on each Loan for the day on which the Loan is made, and shall not accrue on a Loan, or any portion thereof, for the day on which the Loan or such portion is paid, <u>provided</u> that any Loan that is repaid on the same day on which it is made shall, subject to <u>Section</u> <u>2.12(a)</u>, bear interest for one day. Each determination by the Administrative Agent of an interest rate or fee hereunder shall be conclusive and binding for all purposes, absent manifest error.

------

**Section 2.11 <u>Evidence of Debt</u>**. The extension of Loans made by each Lender shall be evidenced by one or more accounts or records maintained by such Lender and by the Administrative Agent in the ordinary course of business. The accounts or records maintained by the Administrative Agent and each Lender shall be conclusive absent manifest error of the amount of the Loans made by the Lenders to the Borrowers and the interest and payments thereon. Any failure to so record or any error in doing so shall not, however, limit or otherwise affect the obligations of the Borrowers hereunder to pay any amount owing with respect to the ABL Credit Obligations. In the event of any conflict between the accounts and records maintained by any Lender and the accounts and records of the Administrative Agent in respect of such matters, the accounts and records of the Administrative Agent shall control in the absence of manifest error. Upon the request of any Lender made through the Administrative Agent, the Borrowers shall, jointly and severally, execute and deliver to such Lender (through the Administrative Agent) a Note, which shall evidence such Lender's Loans in addition to such accounts or records.

**Section 2.12 <u>Payments Generally; Administrative Agent</u><u>'</u><u>s Clawback</u>**.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a) *<u>General</u>.* All payments to be made by the Borrowers shall be made jointly and severally, and without condition or deduction for any counterclaim, defense, recoupment or setoff. Except as otherwise expressly provided for herein, all payments by the Borrowers hereunder shall be made to the Administrative Agent, for the account of the respective Lenders to which such payment is owed, at the Administrative Agent's Office in Dollars and in immediately available funds not later than 2:00 P.M. on the date specified herein, except payments to be made directly to the applicable L/C Issuer or the Swing Line Lender, as expressly provided herein. The Administrative Agent will promptly distribute to each Lender its Revolving Facility Percentage (or other applicable share as provided herein) of such payment in like funds as received by wire transfer to such Lender's Lending Office. All payments received by the Administrative Agent after 2:00 PM shall be deemed received on the next succeeding Business Day and any applicable interest or fee shall continue to accrue. If any payment to be made by the Borrowers shall come due on a day other than a Business Day, payment shall be made on the next following Business Day, and such extension of time shall be reflected in computing interest or fees, 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;(b) *<u>Funding and Payments; Presumptions</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;&nbsp;&nbsp;&nbsp;&nbsp;(i) *<u>Funding by Lenders; Presumption by Administrative Agent</u>.* Unless the Administrative Agent shall have received notice from a Lender prior to the proposed date of any Borrowing of Eurodollar Rate Loans (or, in the case of any Borrowing of Base Rate Loans, prior to 12:00 noon on the date of such 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 <u>Section</u> <u>2.02</u> (or, in the case of a Borrowing of Base Rate Loans, that such Lender has made such share available in accordance with and at the time required by <u>Section</u> <u>2.02</u>) 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 applicable Borrowing available to the Administrative Agent, then the applicable Lender and each of the Borrowers severally agree to pay to the Administrative Agent forthwith on demand such corresponding amount in immediately available funds

------

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 (A) in the case of a payment to be made by such Lender, the greater of the Federal Funds Rate and a rate determined by the Administrative Agent in accordance with banking industry rules on interbank compensation, plus any administrative, processing or similar fees customarily charged by the Administrative Agent in connection with the foregoing, and (B) in the case of a payment to be made by the Borrowers, the interest rate applicable to Base Rate Loans. If any Borrower and such Lender shall pay such interest to the Administrative Agent for the same or an overlapping period, the Administrative Agent shall promptly remit to such Borrower the amount of such interest paid by such Borrower for such period. If such Lender pays its share of the applicable Borrowing to the Administrative Agent, then the amount so paid shall constitute such Lender's Loan included in such Borrowing. Any payment by any Borrower shall be without prejudice to any claim any Borrower may have against a Lender that shall have failed to make such payment 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;&nbsp;&nbsp;&nbsp;&nbsp;(ii) *<u>Payments by the Borrowers; Presumptions by Administrative Agent</u>.* Unless the Administrative Agent shall have received notice from the Parent Borrower prior to the time at which any payment is due to the Administrative Agent for the account of the Lenders or the L/C Issuer 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 the amount due. In such event, if the Borrowers haves not in fact made such payment, then each of the Lenders severally agrees to repay to the Administrative Agent forthwith on demand the amount so distributed to such Lender, in immediately available funds with interest thereon, for each day from and including the date such amount is distributed to it to but excluding the date of payment to the Administrative Agent, at the greater of the Federal Funds Rate and a rate determined by the Administrative Agent in accordance with banking industry rules on interbank compensation.

A notice of the Administrative Agent to any Lender or the Parent Borrower with respect to any amount owing under this <u>subsection</u> <u>(b)</u> 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;(c) *<u>Failure to Satisfy Conditions Precedent</u>.* If any Lender makes available to the Administrative Agent funds for any Loan to be made by such Lender as provided in the foregoing provisions of this <u>Article</u> <u>II</u>, and such funds are not made available to the Borrowers by the Administrative Agent because the conditions to the Borrowings set forth in <u>Article</u> <u>IV</u> are not satisfied or waived in accordance with the terms hereof, the Administrative Agent shall return such funds (in like funds as received from such Lender) to such Lender without interest.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(d) *<u>Obligations of Lenders Several</u>.* The obligations of the Lenders hereunder to make Loans, to fund participations in Letters of Credit and Swing Line Loans and to make payments pursuant to <u>Section</u> <u>10.04(c)</u> are several and not joint. The failure of any Lender to make any Loan or to make any payment under <u>Section</u> <u>10.04(c)</u> on any date required hereunder shall not relieve any other Lender of its corresponding obligation to do so on such date, and no Lender shall be responsible for the failure of any other Lender to so make its Loan or to make its payment under <u>Section</u> <u>10.04(c)</u>.

------

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(e) *<u>Funding Source</u>.* Nothing herein shall be deemed to obligate any Lender to obtain the funds for any Loan in any particular place or manner or to constitute a representation by any Lender that it has obtained or will obtain the funds for any Loan in any particular place or manner.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(f) *<u>Insufficient Funds</u>.* If at any time insufficient funds are received by and available to the Administrative Agent to pay fully all amounts of principal, unreimbursed L/C Obligations, interest and fees then due hereunder, such funds shall be applied (i) first, toward payment of interest and fees then due hereunder, ratably among the parties entitled thereto in accordance with the amounts of interest and fees then due to such parties, (ii) second, toward payment of principal of unreimbursed L/C Obligations then due from the Borrowers hereunder, ratably among the parties entitled thereto in accordance with the amounts of principal and unreimbursed L/C Obligations then due to such parties, and (iii) third, towards payment of principal of Loans then due hereunder, ratably among the parties entitled thereto in accordance with the amounts of principal then due to such parties.

**Section 2.13 <u>Sharing of Payments by Lenders</u>**. If any Lender shall, by exercising any right of setoff or counterclaim or otherwise, obtain payment in respect of (i) ABL Credit Obligations due and payable to such Lender hereunder and under the other Loan Documents at such time in excess of its ratable share (according to the proportion of (x) the amount of such ABL Credit Obligations due and payable to such Lender at such time to (y) the aggregate amount of the ABL Credit Obligations due and payable to all Lenders hereunder and under the other Loan Documents at such time) of payments on account of the ABL Credit Obligations due and payable to all Lenders hereunder and under the other Loan Documents at such time obtained by all the Lenders at such time or (ii) ABL Credit Obligations owing (but not due and payable) to such Lender hereunder and under the other Loan Documents at such time in excess of its ratable share (according to the proportion of (x) the amount of such ABL Credit Obligations owing (but not due and payable) to such Lender at such time to (y) the aggregate amount of the ABL Credit Obligations owing (but not due and payable) to all Lenders hereunder and under the other Loan Parties at such time) of payment on account of the ABL Credit Obligations owing (but not due and payable) to all Lenders hereunder and under the other Loan Documents at such time obtained by all of the Lenders at such time then the Lender receiving such greater proportion shall (A) notify the Administrative Agent of such fact, and (B) purchase (for cash at face value) participations in the Loans and subparticipations in L/C Obligations and Swing Line Loans of the other Lenders, or make such other adjustments as shall be equitable, so that the benefit of all such payments shall be shared by the Lenders ratably in accordance with the aggregate amount of ABL Credit Obligations then due and payable to the Lenders or owing (but not due and payable) to the Lenders, as the case may be, <u>provided</u> that:

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

------

&nbsp;&nbsp;&nbsp;&nbsp;&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) the provisions of this Section shall not be construed to apply to (A) any payment made by or on behalf of the Borrowers pursuant to and in accordance with the express terms of this Agreement (including the application of funds arising from the existence of a Defaulting Lender), (B) the application of Cash Collateral provided for in <u>Section</u> <u>2.16</u>, or (C) any payment obtained by a Lender as consideration for the assignment of or sale of a participation in any of its Loans or subparticipations in L/C Obligations or Swing Line Loans to any assignee or participant, other than an assignment to any Borrower or any Subsidiary or Affiliate thereof not otherwise permitted by this Agreement (as to which the provisions of this Section shall apply).

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

**Section 2.14 <u>Incremental Loans</u>**.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a) *<u>Requests for Incremental Loans</u>.* Upon notice by the Parent Borrower to the Administrative Agent (which Administrative Agent shall promptly notify the Lenders), at any time after the Closing Date, the Borrowers may request one or more incremental Revolving Facility Commitments (each an "<u>Incremental Commitment</u>" and all of them, collectively, the "<u>Incremental Commitments</u>" and any such loans, "<u>Incremental Loans</u>"), each of which Incremental Commitment shall be in minimum increments of $1,000,000 and a minimum amount of $10,000,000; <u>provided</u> that after giving effect to any such addition, the aggregate amount of Incremental Commitments that have been added pursuant to this <u>Section</u> <u>2.14</u> 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;(b) *<u>Ranking and Other Provisions</u>.* The Incremental Loans shall rank pari passu or junior in right of payment and in respect of lien priority as to the Collateral with the ABL Credit Obligations in respect of the outstanding Loans and otherwise have terms identical to the Revolving Facility Loans (other than with respect to any fees paid in connection with any Incremental Commitment or Incremental Loans and it being understood that the Borrowers, at their option, may increase the Applicable Rate and fees payable in respect of the Facility to be identical to those paid in connection with any Incremental Commitment or Incremental Loans).

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c) *<u>Notices; Lender Elections</u>.* Each notice from the Parent Borrower pursuant to this Section shall set forth the requested amount and proposed terms of the Incremental Commitments. At the time of the sending of such notice, the Parent Borrower (in consultation with the Administrative Agent) shall specify the time period within which each Lender is requested to respond (which shall in no event be less than ten Business Days from the date of delivery of such notice to the Lenders). Incremental Loans (or any portion thereof) may be made by any existing Lender or by any other bank or investing entity satisfactory to the Administrative Agent and each L/C Issuer (but in no case (i) by any Borrower or any Borrowers' Affiliates or Subsidiaries, (ii) by any Defaulting Lender or any of its Subsidiaries, (iii) by any Person who, upon becoming a Lender hereunder, would constitute any of the foregoing Persons described in <u>clause</u> <u>(ii)</u> or (iv) by any natural person) (each, except to the extent excluded pursuant to the foregoing parenthetical, an "<u>Incremental Lender</u>"), in each case on terms permitted in this Section and otherwise on terms reasonably acceptable to the Administrative Agent and L/C Issuer, <u>provided</u> that the Administrative Agent, L/C Issuer, the Swing Line Lender and the Parent

------

Borrower shall have consented (not to be unreasonably withheld) to such Lender's or Incremental Lender's, as the case may be, making such Incremental Loans if such consent would be required under <u>Section</u> <u>10.06</u> for an assignment of Loans to such Lender or Incremental Lender, as the case may be. No Lender shall be obligated to provide any Incremental Loans, unless it so agrees. Each Lender shall notify the Administrative Agent within such time period whether or not it agrees to provide an Incremental Commitment and, if so, whether by an amount equal to, greater than, or less than its Revolving Facility Percentage of such requested increase (which shall be calculated on the basis of the amount of the funded and unfunded exposure under the Facility). Any Lender not responding within such time period shall be deemed to have declined to provide an Incremental Commitment. The Administrative Agent shall notify the Parent Borrower and each Lender of the Lenders' responses to each request made hereunder. To achieve the full amount of a requested increase, the Parent Borrower may also invite additional Eligible Assignees to become Lenders pursuant to an accession agreement in form and substance reasonably satisfactory to the Administrative Agent and its counsel.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(d) *<u>Incremental Commitments Amendment</u>.* Revolving Facility Commitments in respect of any Incremental Commitments shall become Revolving Facility Commitments under this Agreement pursuant to an amendment (an "<u>Incremental Commitments Amendment</u>") to this Agreement and, as appropriate, the other Loan Documents, executed by Holdings, each Borrower, each Lender agreeing to provide such Revolving Facility Commitment, if any, each Incremental Lender, if any, and the Administrative Agent. An Incremental Commitments Amendment may, without the consent of any other Lenders, effect such amendments to any Loan Documents as may be necessary or appropriate, in the opinion of the Administrative Agent, to effect the provisions of this Section.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(e) *<u>Effective Date and Allocations</u>.* If any Incremental Commitments are added in accordance with this <u>Section</u> <u>2.14</u>, the Administrative Agent and the Parent Borrower shall determine the effective date (the "<u>Incremental Commitments Effective Date</u>") and the final allocation of such addition. The Administrative Agent shall promptly notify the Parent Borrower and the Lenders of the final allocation of such addition, the Incremental Commitments Effective Date and the amount of each Lender's Revolving Facility Percentage of Loans after giving effect to such Incremental Commitments.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(f) *<u>Conditions to Effectiveness of Increase</u>.* The effectiveness of any Incremental Commitments Amendment shall, unless otherwise agreed to by the Administrative Agent, L/C Issuer, each Lender party thereto, if any, and the Incremental Lenders, if any, be subject to the satisfaction or waiver by the Administrative Agent on the date thereof of each 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;&nbsp;&nbsp;&nbsp;&nbsp;(i) the Administrative Agent shall have received on or prior to the Incremental Commitments Effective Date each of the following, each dated the applicable Incremental Commitments Effective Date unless otherwise indicated or agreed to by the Administrative Agent and each in form and substance reasonably satisfactory to the Administrative Agent: (A) the applicable Incremental Commitments Amendment; (B) certified copies of resolutions of the board of directors (or other similar governing body) of each Loan Party approving the execution, delivery and performance of the Incremental Commitments Amendment; and (C) a favorable opinion of counsel for the Loan Parties dated the Incremental Commitments Effective Date, to the extent requested by the Administrative Agent addressed to the Administrative Agent and the Lenders and in form and substance and from counsel 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;&nbsp;&nbsp;&nbsp;&nbsp;(ii) (A) such increase shall be made on the terms and conditions provided for above, (B) both at the time of any request for Incremental Commitments and upon the effectiveness of any Incremental Commitments Amendment, no Default or Event of Default shall exist and at the time that any such Incremental Loan is made (and after giving effect thereto) no Default or Event of Default shall exist, (C) the conditions specified in <u>Section</u> <u>4.02</u> shall have been satisfied, (D) the representations and warranties in the Loan Documents shall be true and correct in all material respects on and as of the date of the incurrence of the Incremental Loans (although any representations and warranties which expressly relate to a given date or period shall be required only to be true and correct in all material respects as of the respective date or for the respective period, as the case may be), before and after giving effect to such incurrence, as though made on and as of such date, and (E) the Fixed Charge Coverage Ratio would not be less than 1.00 to 1.00 as of the most recently completed Measurement Period on a pro forma basis, after giving effect to the incurrence of such Incremental Loans or Incremental Commitments (assuming that the full amount of such Incremental Commitments would be drawn as Incremental Loans); 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;(iii) there shall have been paid to the Administrative Agent, for the account of the Administrative Agent and the Lenders (including any Person becoming a Lender as part of such Incremental Commitments Amendment on the related Incremental Commitments Effective Date), as applicable, all reasonable fees and out-of-pocket expenses (including reasonable out-of-pocket fees, charges and disbursements of counsel) that are due and payable on or before the Incremental Commitments Effective Date.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(g) *<u>Effect of Incremental Commitments Amendment</u>.* On each Incremental Commitments Effective Date, each Lender or Eligible Assignee which is providing an Incremental Commitment (i) shall become a "Lender" for all purposes of this Agreement and the other Loan Documents, (ii) shall have an Incremental Commitment which shall be a "Revolving Facility Commitment" hereunder and (iii) shall make an Incremental Loan to the Borrowers in a principal amount equal to such Incremental Commitment, and such Incremental Loan shall be a "Loan" for all purposes of this Agreement and the other Loan Documents.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(h) *<u>Conflicting Provisions</u>.* This <u>Section</u> <u>2.14</u> shall supersede any provision of <u>Section</u> <u>2.13</u> or <u>Section</u> <u>10.01</u> to the contrary.

**Section 2.15 <u>Defaulting Lenders</u>**.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a) *<u>Adjustments</u>.* Notwithstanding anything to the contrary contained in this Agreement, if any Lender becomes a Defaulting Lender, then, until such time as that Lender is no longer a Defaulting Lender, to the extent permitted by applicable Requirements of 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;&nbsp;&nbsp;&nbsp;&nbsp;(i) That Defaulting Lender's right to approve or disapprove any amendment, waiver or consent with respect to this Agreement or any other Loan Document shall be restricted as set forth in the definition of "Required Lenders" and <u>Section</u> <u>10.01</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;&nbsp;&nbsp;&nbsp;&nbsp;(ii) Any payment of principal, interest, fees or other amounts received by the Administrative Agent for the account of that Defaulting Lender (whether voluntary or mandatory, at maturity, pursuant to <u>Article</u> <u>VIII</u> or otherwise, and including any amounts made available to the Administrative Agent by that Defaulting Lender pursuant to <u>Section</u> <u>10.08)</u>, shall be applied at such time or times as may be determined by the Administrative Agent as follows: <u>first</u>, to the payment of any amounts owing by that Defaulting Lender to the Administrative Agent hereunder; <u>second</u>, to the payment on a pro rata basis of any amounts owing by such Defaulting Lender to any L/C Issuer or Swing Line Lender hereunder; <u>third</u>, to Cash Collateralize the L/C Issuer's Fronting Exposure with respect to such Defaulting Lender in accordance with <u>Section</u> <u>2.16</u>; <u>fourth</u>, as the Parent Borrower may request (so long as no Event of Default exists), to the funding of any Loan in respect of which that Defaulting Lender has failed to fund its portion thereof as required by this Agreement, as determined by the Administrative Agent; <u>fifth</u>, if so determined by the Administrative Agent and the Parent Borrower, to be held in a non-interest bearing deposit account and released in order to (x) satisfy obligations of that Defaulting Lender to fund Loans under this Agreement and (y) Cash Collateralize the L/C Issuer's future Fronting Exposure with respect to such Defaulting Lender with respect to future Letters of Credit issued under this Agreement, in accordance with <u>Section</u> <u>2.16</u>; <u>sixth</u>, to the payment of any amounts owing to the Lenders, the L/C Issuers or Swing Line Lender as a result of any judgment of a court of competent jurisdiction obtained by any Lender, L/C Issuer or Swing Line Lender against that Defaulting Lender as a result of that Defaulting Lender's breach of its obligations under this Agreement; <u>seventh</u>, so long as no Event of Default exists, to the payment of any amounts owing to any Borrower as a result of any judgment of a court of competent jurisdiction obtained by any Borrower against that Defaulting Lender as a result of that Defaulting Lender's breach of its obligations under this Agreement; and <u>eighth</u>, to that Defaulting Lender or as otherwise directed by a court of competent jurisdiction; <u>provided</u> that if (x) such payment is a payment of the principal amount of any Loans or Letter of Credit Borrowings in respect of which that Defaulting Lender has not fully funded its appropriate share and (y) such Loans or the related Letters of Credit were made at a time when the conditions set forth in <u>Section</u> <u>4.01(i)</u> or <u>(k)</u> were satisfied or waived, such payment shall be applied solely to pay the Loans of, and L/C Obligations owed to, all non-Defaulting Lenders on a pro rata basis prior to being applied to the payment of any Loans of, or L/C Obligations owed to, that Defaulting Lender until such time as all Loans and funded and unfunded participations in L/C Obligations and Swing Line Loans are held by the Lenders pro-rata in accordance with the Commitments hereunder without giving effect to <u>Section</u> <u>2.15(a)(v)</u>. Any payments, prepayments or other amounts paid or payable to a Defaulting Lender that are applied (or held) to pay amounts owed by a Defaulting Lender or to post Cash Collateral pursuant to this <u>Section</u> <u>2.16(a)(ii)</u> shall be deemed paid to and redirected by that Defaulting Lender, and each Lender irrevocably consents 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;&nbsp;&nbsp;&nbsp;&nbsp;(iii) That Defaulting Lender shall not be entitled to any fee pursuant to <u>Section</u> <u>2.09(d)</u> for any period during which that 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;&nbsp;&nbsp;&nbsp;&nbsp;(iv) *<u>Certain 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;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(A) Each Defaulting Lender shall be entitled to receive fees payable under <u>Section</u> <u>2.09(a)</u> for any period during which that Lender is a Defaulting Lender only to extent allocable to the sum of (1) the outstanding principal amount of the Revolving Facility Loans funded by it, and (2) its Revolving Facility Percentage of the stated amount of Letters of Credit for which it has provided Cash Collateral pursuant to <u>Section</u> <u>2.16.</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;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(B) Each Defaulting Lender shall be entitled to receive Letter of Credit Fees for any period during which that Lender is a Defaulting Lender only to the extent allocable to its applicable percentage of the stated amount of Letters of Credit for which it has provided Cash Collateral pursuant to <u>Section</u> <u>2.16</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;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(C) With respect to any fee payable under <u>Section</u> <u>2.09(a)</u> or any Letter of Credit Fee not required to be paid to any Defaulting Lender pursuant to <u>clause</u> <u>(A)</u> or <u>(B)</u> above, the Parent Borrower shall (x) pay to each Non-Defaulting Lender that portion of any such fee otherwise payable to such Defaulting Lender with respect to such Defaulting Lender's participation in L/C Obligations or Swing Line Loans that has been reallocated to such Non-Defaulting Lender pursuant to <u>clause (v)</u> below, (y) pay to the applicable L/C Issuers and Swing Line Lender, as applicable, the amount of any such fee otherwise payable to such Defaulting Lender to the extent allocable to such L/C Issuers' or Swing Line Lender's Fronting Exposure to such Defaulting Lender and (z) not be required to pay the remaining amount of any such 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;&nbsp;&nbsp;&nbsp;&nbsp;(v) *<u>Reallocation of Revolving Facility Percentages to Reduce Fronting Exposure</u>.* All or any part of such Defaulting Lender's participation in L/C Obligations and Swing Lien Loans shall be reallocated among the Non-Defaulting Lenders in accordance with their respective Revolving Facility Percentages (calculated without regard to such Defaulting Lender's Revolving Facility Commitment) but only to the extent that (x) the conditions set forth in <u>Section</u> <u>4.02</u> are satisfied at the time of such reallocation (and, unless the Parent Borrower shall have otherwise notified the Administrative Agent at such time, the Parent Borrower shall be deemed to have represented and warranted that such conditions are satisfied at such time), and (y) such reallocation does not cause the aggregate Revolving Facility Credit Exposure of any Non-Defaulting Lender to exceed such Non-Defaulting Lender's Revolving Facility Commitment. No reallocation hereunder shall constitute a waiver or release of any claim of any party hereunder against a Defaulting Lender arising from that Lender having become a Defaulting Lender, including any claim of a Non-Defaulting Lender as a result of such Non-Defaulting Lender's increased exposure following such reallocation.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(vi) *<u>Cash Collateral, Repayment of Swing Line Loans</u>.* If the reallocation described in <u>clause (a)(v)</u> above cannot, or can only partially, be effected, the Borrowers shall, without prejudice to any right or remedy available to it hereunder or under applicable Law, (x) first, prepay Swing Line Loans in an amount equal to the Swing Line Lender's Fronting Exposure and (y) second, Cash Collateralize the L/C Issuers' Fronting Exposure in accordance with the procedures set forth in <u>Section</u> <u>2.16</u>.

------

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b) *<u>Defaulting Lender Cure</u>.* If the Parent Borrower, the Administrative Agent, the Swing Line Lender and one or more applicable L/C Issuer agree in writing in their sole discretion that a Defaulting Lender should no longer be deemed to be a Defaulting Lender, the Administrative Agent will so notify the parties hereto, whereupon as of the effective date specified in such notice and subject to any conditions set forth therein (which may include arrangements with respect to any Cash Collateral), that Lender will, to the extent applicable, purchase that portion of outstanding Loans of the other Lenders or take such other actions as the Administrative Agent may determine to be necessary to cause the Loans and funded and unfunded participations in Letters of Credit and Swing Line Loans to be held on a pro rata basis by the Lenders in accordance with their Revolving Facility Percentages, whereupon that Lender will cease to be a Defaulting Lender; <u>provided</u> that no adjustments will be made retroactively with respect to fees accrued or payments made by or on behalf of the Borrowers while that Lender was a Defaulting Lender; and <u>provided</u>, <u>further</u>, that except to the extent otherwise expressly agreed by the affected parties, no change hereunder from Defaulting Lender to Lender will constitute a waiver or release of any claim of any party hereunder arising from that Lender's having been a Defaulting Lender.

**Section 2.16 <u>Cash Collateral</u>**.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a) *<u>Certain Credit Support Events</u>.* If (i) an L/C Issuer has honored any full or partial drawing request under any Letter of Credit and such drawing has resulted in a Letter of Credit Borrowing, (ii) as of the Letter of Credit Expiration Date, any L/C Obligation for any reason remains outstanding, (iii) the Borrowers shall be required to provide Cash Collateral pursuant to <u>Section</u> <u>8.02</u>, or (iv) there shall exist a Defaulting Lender, the Borrowers shall immediately (in the case of <u>clause (iii)</u> above) or within one Business Day (in all other cases) following any request by the Administrative Agent or the L/C Issuer, provide Cash Collateral in an amount not less than the applicable Minimum Collateral Amount (determined in the case of Cash Collateral provided pursuant to <u>clause (iv)</u> above, after giving effect to <u>Section</u> <u>2.16(a)(iv)</u> and any Cash Collateral provided by the Defaulting Lender).

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b) *<u>Grant of Security Interest</u>.* Each Loan Party and to the extent provided by any Defaulting Lender, such Defaulting Lender, hereby grants to (and subjects to the control of) the Administrative Agent, for the benefit of the Administrative Agent, the L/C Issuers and the Lenders, and agrees to maintain, a first priority security interest in all such cash, deposit accounts and all balances therein, and all other property so provided as collateral pursuant hereto, and in all proceeds of the foregoing, all as security for the obligations to which such Cash Collateral may be applied pursuant to <u>clause (c)</u> below. If at any time the Administrative Agent determines that Cash Collateral is subject to any right or claim of any Person other than the Administrative Agent or an L/C Issuer as herein provided, or that the total amount of such Cash Collateral is less than the Minimum Collateral Amount, the Borrowers will, promptly upon demand by the Administrative Agent, pay or provide to the Administrative Agent additional Cash Collateral in an amount sufficient to eliminate such deficiency. All Cash Collateral (other than credit support not constituting funds subject to deposit) shall be maintained in one or more Controlled Accounts at Bank of America. The Borrowers shall jointly and severally pay on demand therefor from time to time all customary account opening, activity and other administrative fees and charges in connection with the maintenance and disbursement of Cash Collateral.

------

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c) *<u>Application</u>.* Notwithstanding anything to the contrary contained in this Agreement, Cash Collateral provided under any of this <u>Section</u> <u>2.16</u>, <u>2.03</u>, <u>2.15</u> or <u>8.02</u> in respect of Letters of Credit shall be held and applied to the satisfaction of the specific L/C Obligations, obligations to fund participations therein (including, as to Cash Collateral provided by a Defaulting Lender, any interest accrued on such obligation) and other obligations for which the Cash Collateral was so provided, prior to any other application of such property as may otherwise be provided for herein.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(d) *<u>Release</u>.* Cash Collateral (or the appropriate portion thereof) provided to reduce Fronting Exposure or to secure other obligations shall be released promptly following (i) the elimination of the applicable Fronting Exposure or other obligations giving rise thereto (including by the termination of Defaulting Lender status of the applicable Lender (or, as appropriate, its assignee following compliance with <u>Section</u> <u>10.06(b)(vi)</u>) or (ii) the determination by the Administrative Agent and the applicable L/C Issuer that there exists excess Cash Collateral; <u>provided</u>, <u>however</u>, (x) any such release shall be without prejudice to, and any disbursement or other transfer of Cash Collateral shall be and remain subject to, any other Lien conferred under the Loan Documents and the other applicable provisions of the Loan Documents, and (y) the Person providing Cash Collateral and the applicable L/C Issuer may agree that Cash Collateral shall not be released but instead held to support future anticipated Fronting Exposure or other obligations.

**Section 2.17 <u>Agent</u> <u>Advances; Overadvances</u>**.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a) *<u>Agent Advances</u>.* Any Agent may from time to time make such disbursements and advances ("<u>Agent Advances</u>") which such Agent, in its sole discretion, deems necessary or desirable to preserve, protect, prepare for sale or lease or dispose of the Collateral or any portion thereof, to enhance the likelihood or maximize the amount of repayment by the Borrowers of the Loans, L/C Obligations and other ABL Credit Obligations or to pay any other amount chargeable to the Borrowers pursuant to the terms of this Agreement, including, without limitation, costs, fees and expenses as described in <u>Section</u> <u>10.04</u>. The Agent Advances shall be repayable on demand and be secured by the Collateral and shall bear interest at a rate per annum equal to the rate then applicable to Loans that are Base Rate Loans. The Agent Advances shall constitute ABL Credit Obligations hereunder. The Agent making the Agent Advance shall notify the other Agent and each Lender and the Parent Borrower in writing of each such Agent Advance, which notice shall include a description of the purpose of such Agent Advance. Without limitation to its obligations pursuant to <u>Section</u> <u>10.05</u>, each Lender agrees that it shall make available to the Agent making the Agent Advance, upon such Agent's demand, in Dollars in immediately available funds, the amount equal to such Lender's pro rata share of each such Agent Advance. If such funds are not made available to the Agent making such Agent Advance by such Lender, such Agent shall be entitled to recover such funds on demand from such Lender, together with interest thereon for each day from the date such payment was due until the date such amount is paid to such Agent, at the Federal Funds Rate for three Business Days and thereafter at the Base Rate.

------

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b) *<u>Overadvances</u>.* If the aggregate Outstanding Amounts exceed the Borrowing Base ("<u>Overadvance</u>") at any time, the excess amount shall be payable jointly and severally by Borrowers within one (1) Business Day after demand by the Administrative Agent, but all such Loans shall nevertheless constitute ABL Credit Obligations secured by the Collateral and entitled to all benefits of the Loan Documents. Unless its authority has been revoked in writing by the Required Lenders, the Administrative Agent may require Lenders to honor requests for Overadvances and to forbear from requiring Borrowers to cure an Overadvance, (a) when no other Default or Event of Default is known to the Administrative Agent, as long as (i) the Overadvance does not continue for more than 45 consecutive days (and no Overadvance may exist for at least five consecutive days thereafter before further Overadvances are required), and (ii) the Overadvance is not known by the Administrative Agent to exceed 10% of the Borrowing Base at any time while such Overadvance is outstanding; and (b) regardless of whether Default or an Event of Default exists, if the Administrative Agent discovers an Overadvance not previously known by it to exist, as long as from the date of such discovery the Overadvance (i) is not increased by more than $1,000,000, and (ii) does not continue for more than 45 consecutive days. In no event shall Overadvances be required that would cause the outstanding Loans and L/C Obligations to exceed the Aggregate Commitments. Any funding of an Overadvance or sufferance of an Overadvance shall not constitute a waiver by the Administrative Agent or Lenders of the Default or Event of Default caused thereby. In no event shall any Borrower or other Loan Party be deemed a beneficiary of this <u>clause (b)</u> nor authorized to enforce any of its terms.

**Section 2.18 <u>Settlement</u>**. Except as may be specifically provided otherwise herein, it is agreed that each Lender's funded portion of the Loans is intended by the Lenders to be equal at all times to such Lender's applicable pro rata share of the outstanding Loans of such Type. Notwithstanding such agreement, the Administrative Agent and the Lenders agree (which agreement shall not be for the benefit of or enforceable by the Borrowers) that in order to facilitate the administration of this Agreement and the other Loan Documents, settlement among them as to the Loans, including the Agent Advances and Overadvances, shall take place on a periodic basis in accordance with the following provisions:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a) The Administrative Agent shall request settlement (a "<u>Settlement</u>") with the Lenders at least twice a month, or on a more frequent basis if so determined by the Administrative Agent, (i) for itself, with respect to each Agent Advance and Overadvance, as applicable, and (ii) with respect to Collections received, in each case, by notifying the Lenders of such requested Settlement by telecopy, telephone, or other means of written electronic communication, no later than 12:00 noon on the date of such requested Settlement (the "<u>Settlement Date</u>"). Each Revolving Facility Lender (other than the Administrative Agent, in the case of Agent Advances and Overadvances) shall make the amount of such Lender's pro rata share of the outstanding principal amount of Agent Advances and Overadvances, as applicable, with respect to which Settlement is requested available to the Administrative Agent at the Administrative Agent's Office not later than 3:00 p.m. on the Settlement Date applicable thereto, which may occur before or after the occurrence or during the continuation of a Default or an Event of Default and whether or not the applicable conditions precedent set forth in <u>Article</u> <u>IV</u> have then been satisfied. Such amounts made available to the Administrative Agent shall be applied against the amounts of the applicable Agent Advance or Overadvances, as applicable, and shall constitute Revolving Facility Loans of the Lenders. If any such amount is not made available to the Administrative Agent by any Lender on the Settlement Date applicable thereto, the Administrative Agent shall, for itself with respect to each Agent Advance and Overadvance, be entitled to recover such amount on demand from such Lender together with interest thereon at the Federal Funds Rate for the first three days from and after the Settlement Date and thereafter at the Interest Rate then applicable to Revolving Facility Loans that are Base Rate Loans.

------

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b) Notwithstanding the foregoing, not more than one Business Day after demand is made by the Administrative Agent (whether before or after the occurrence of a Default or an Event of Default and regardless of whether the Administrative Agent has requested a Settlement with respect to an Agent Advance or Overadvance), each Lender (i) shall irrevocably and unconditionally purchase and receive from the Administrative Agent, without recourse or warranty, an undivided interest and participation in such Agent Advance or Overadvance, as applicable, equal to such Lender's pro rata share of such Agent Advance and (ii) if Settlement has not previously occurred with respect to such Agent Advances, upon demand by the Administrative Agent, shall pay to the Administrative Agent as the purchase price of such participation an amount equal to one-hundred percent (100%) of such Lender's pro rata share of such Agent Advances or Overadvance, as applicable. If such amount is not in fact made available to the Administrative Agent by any Lender, the Administrative Agent shall be entitled to recover such amount on demand from such Lender together with interest thereon at the Federal Funds Rate for the first three days from and after such demand and thereafter at the Interest Rate then applicable to Base Rate Loans.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c) From and after the date, if any, on which any Lender purchases an undivided interest and participation in any Agent Advance or Overadvance pursuant to <u>clause (b)</u> above, the Administrative Agent shall promptly distribute to such Lender such Lender's pro rata share of all payments of principal and interest and all proceeds of Collateral received by the Administrative Agent in respect of such Agent Advance or Overadvance, as applicable.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(d) During the period between Settlement Dates, the Administrative Agent with respect to Agent Advances or Overadvances, as applicable, and each Lender with respect to the Revolving Facility Loans other than Agent Advances or Overadvances, shall be entitled to interest at the applicable rate or rates payable under this Agreement on the actual average daily amount of funds employed by the Administrative Agent and the Lenders.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(e) Unless the Administrative Agent has received written notice from a Lender to the contrary, the Administrative Agent may assume that the applicable conditions precedent set forth in <u>Article</u> <u>IV</u> have been satisfied and the requested Borrowing will not exceed Availability on any date for funding a Revolving Facility Loan. If any Lender makes available to the Administrative Agent funds for any Revolving Facility Loan to be made by such Lender as provided in the provisions of this <u>Article</u> <u>II</u>, and such funds are not made available to the Borrowers by the Administrative Agent because the conditions set forth in <u>Article</u> <u>IV</u> are not satisfied or waived in accordance with the terms hereof, the Administrative Agent shall return such funds (in like funds as received from such Lender) to such Lender, without interest.

------

**ARTICLE III** 

**TAXES, YIELD PROTECTION AND ILLEGALITY** 

**Section 3.01 <u>Taxes</u>**.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a) *<u>Payments Free of Taxes; Obligation to Withhold; Payments on Account of 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;&nbsp;&nbsp;&nbsp;&nbsp;(i) Any and all payments by or on account of any obligation of the Borrowers hereunder or under any other Loan Document shall to the extent permitted by applicable Requirements of Law be made free and clear of and without reduction or withholding for any Taxes. If, however, applicable Requirements of Law require any Borrower or the Administrative Agent to withhold or deduct any Tax, such Tax shall be withheld or deducted in accordance with such Requirements of Law as determined by the Parent Borrower or the Administrative Agent, as the case may be, upon the basis of the information and documentation to be delivered pursuant to <u>subsection</u> <u>(e)</u> below.

&nbsp;&nbsp;&nbsp;&nbsp;&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) If any Borrower or the Administrative Agent shall be required by the Code to withhold or deduct any Taxes, including both United States federal backup withholding and withholding taxes, from any payment, then (A) the Administrative Agent shall withhold or make such deductions as are determined by the Administrative Agent to be required based upon the information and documentation it has received pursuant to <u>subsection</u> <u>(e)</u> below, (B) the Administrative Agent shall timely pay the full amount withheld or deducted to the relevant Governmental Authority in accordance with the Code and (C) to the extent that the withholding or deduction is made on account of Indemnified Taxes or Other Taxes, the sum payable by the Borrowers shall be increased as necessary so that after any required withholding or the making of all required deductions (including deductions applicable to additional sums payable under this Section) the Administrative Agent or Lender or L/C Issuer, as the case may be, receives an amount equal to the sum it would have received had no such withholding or deduction been made.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b) *<u>Payment of Other Taxes by the Borrowers</u>.* Without limiting the provisions of <u>subsection</u> <u>(a)</u> above, each Borrower shall timely pay any Other Taxes to the relevant Governmental Authority in accordance with applicable Requirement of Law.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c) *<u>Tax Indemnifications</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;&nbsp;&nbsp;&nbsp;&nbsp;(i) Without limiting the provisions of <u>subsection</u> <u>(a)</u> or <u>(b)</u> above, each Borrower shall, and does hereby, jointly and severally, indemnify the Administrative Agent, each Lender and each L/C Issuer, and shall make payment in respect thereof within ten days after written demand therefor, for the full amount of any Indemnified Taxes or Other Taxes (including Indemnified Taxes or Other Taxes imposed or asserted on or attributable to amounts payable under this <u>Section</u> <u>3.01</u>) withheld or deducted by the Borrowers or the Administrative Agent or paid by the Administrative Agent, such Lender or such L/C Issuer, as the case may be, and any penalties, interest and reasonable expenses arising therefrom or with respect thereto, whether or not such Indemnified Taxes or Other Taxes were correctly or legally imposed or asserted by the relevant Governmental

------

Authority. Each Borrower shall also, and does hereby, indemnify the Administrative Agent, and shall make payment in respect thereof within ten days after written demand therefor, for any amount which a Lender or an L/C Issuer for any reason fails to pay indefeasibly to the Administrative Agent as required by <u>clause (ii)</u> of this <u>subsection</u> <u>(c)</u>. A certificate as to the amount of any such payment or liability delivered to the Parent Borrower by a Lender or an L/C Issuer (with a copy to the Administrative Agent), or by the Administrative Agent on its own behalf or on behalf of a Lender or an L/C Issuer, 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;&nbsp;&nbsp;&nbsp;&nbsp;(ii) Without limiting the provisions of <u>subsection</u> <u>(a)</u> or <u>(b)</u> above, each Lender and each L/C Issuer shall, and does hereby, indemnify the Borrowers and the Administrative Agent, and shall make payment in respect thereof within ten days after demand therefor, against any and all Taxes and any and all related losses, claims, liabilities, penalties, interest and expenses (including the fees, charges and disbursements of any counsel for the Borrowers or the Administrative Agent) incurred by or asserted against the Borrowers or the Administrative Agent by any Governmental Authority as a result of the failure by such Lender or such L/C Issuer, as the case may be, to deliver, or as a result of the inaccuracy, inadequacy or deficiency of, any documentation required to be delivered by such Lender or such L/C Issuer, as the case may be, to the Borrowers or the Administrative Agent pursuant to <u>subsection</u> <u>(e)</u>. Each Lender and each L/C Issuer hereby authorizes the Administrative Agent to set off and apply any and all amounts at any time owing to such Lender or such L/C Issuer, as the case may be, under this Agreement or any other Loan Document against any amount due to the Administrative Agent under this <u>clause</u> <u>(ii)</u>. The agreements in this <u>clause (ii)</u> shall survive the resignation and/or replacement of the Administrative Agent, any assignment of rights by, or the replacement of, a Lender or an L/C Issuer, the termination of the Aggregate Commitments and the repayment, satisfaction or discharge of all other Finance Obligations.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(d) *<u>Evidence of Payments</u>.* Upon request by the Parent Borrower or the Administrative Agent, as the case may be, after any payment of Taxes by any Borrower or the Administrative Agent to a Governmental Authority as provided in this <u>Section</u> <u>3.01</u>, the Parent Borrower shall deliver to the Administrative Agent or the Administrative Agent shall deliver to the Parent Borrower, as the case may be, the original or a certified copy of a receipt issued by such Governmental Authority evidencing such payment, a copy of any return required by Requirements of Law to report such payment or other evidence of such payment reasonably satisfactory to the Parent Borrower or the Administrative Agent, 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;(e) *<u>Status of Lenders; Tax Documentation</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;&nbsp;&nbsp;&nbsp;&nbsp;(i) Each Lender shall deliver to the Parent Borrower and to the Administrative Agent, at the time or times prescribed by applicable Requirements of Law or when reasonably requested by the Parent Borrower or the Administrative Agent, such properly completed and executed documentation prescribed by applicable Requirements of Law or by the Taxing authorities of any jurisdiction and such other reasonably requested information as will permit the Parent Borrower or the Administrative Agent, as the case may be, to determine (A) whether or not payments made hereunder or under any other Loan Document are subject to Taxes, (B) if applicable, the required rate of withholding or deduction, and (C) such Lender's entitlement to any available exemption from, or reduction of, applicable Taxes in respect of all payments to be made to such Lender by the Borrowers pursuant to this Agreement or otherwise to establish such Lender's status for withholding Tax purposes in the applicable 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;&nbsp;&nbsp;&nbsp;&nbsp;(ii) Without limiting the generality 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;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(A) any Lender that is a "United States person" within the meaning of Section 7701(a)(30) of the Code shall deliver to the Parent Borrower and the Administrative Agent executed originals of Internal Revenue Service Form W-9 or such other documentation or information prescribed by applicable Requirements of Law or reasonably requested by the Parent Borrower or the Administrative Agent as will enable the Parent Borrower or the Administrative Agent, as the case may be, to determine whether or not such Lender is subject to backup withholding or information reporting requirements; 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;(B) each Foreign Lender that is entitled under the Code or any applicable treaty to an exemption from or reduction of withholding tax with respect to payments hereunder or under any other Loan Document shall 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 request of the Parent Borrower or the Administrative Agent, but only if such Foreign Lender is legally entitled to do so), 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;(1) executed originals of Internal Revenue Service Form W-8BEN claiming eligibility for benefits of an income tax treaty to which the United States is a 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;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(2) executed originals of Internal Revenue Service 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;(3) executed originals of Internal Revenue Service Form W-8IMY and all required supporting documentation;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&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) in the case of a Foreign Lender claiming the benefits of the exemption for portfolio interest under Section 881(c) of the Code, (x) a certificate to the effect that such Foreign Lender is not (A) a "bank" within the meaning of Section 881(c)(3)(A) of the Code, (B) a "10 percent shareholder" of any Borrower within the meaning of Section 881(c)(3)(B) of the Code, or (C) a "controlled foreign corporation" described in Section 881(c)(3)(C) of the Code and (y) executed originals of Internal Revenue Service Form W-8BEN; 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;(5) executed originals of any other form prescribed by applicable Requirements of Law as a basis for claiming exemption from or a reduction in United States federal withholding tax together with such supplementary documentation as may be prescribed by applicable Requirements of Law to permit the Parent Borrower or the Administrative Agent to determine the withholding or deduction required to be 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;&nbsp;&nbsp;&nbsp;&nbsp;(iii) If a payment made to any Lender hereunder or under any other Loan Document would be subject to United States federal withholding tax imposed pursuant to FATCA if such Lender fails to comply with applicable reporting and other requirements of FATCA (including those contained in Section 1471(b) or 1472(b) of the Code, as applicable), such Lender shall use commercially reasonable efforts to deliver to the Parent Borrower and the Administrative Agent, at the time or times prescribed by applicable law or as reasonably requested by the Parent Borrower or the Administrative Agent, (A) two accurate, complete and signed certifications prescribed by applicable law and/or reasonably satisfactory to the Parent Borrower and the Administrative Agent that establish that such payment is exempt from United States federal withholding tax imposed pursuant to FATCA and (B) any other documentation reasonably requested by the Parent Borrower or the Administrative Agent sufficient for the Parent Borrower and the Administrative Agent to comply with their obligations under FATCA and to determine that a Lender has complied with such applicable reporting and other requirements of FATCA.

&nbsp;&nbsp;&nbsp;&nbsp;&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) Each Lender shall promptly (A) notify the Parent Borrower and the Administrative Agent of any change in circumstances which would modify or render invalid any claimed exemption or reduction, and (B) take such steps as shall not be materially disadvantageous to it, in the reasonable judgment of such Lender, and as may be reasonably necessary (including the re-designation of its Lending Office) to avoid any requirement of applicable Requirements of Law of any jurisdiction that the Parent Borrower or the Administrative Agent make any withholding or deduction for Taxes from amounts payable to such Lender.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(f) *<u>Treatment of Certain Refunds</u>.* Unless required by applicable Requirements of Law, at no time shall the Administrative Agent have any obligation to file for or otherwise pursue on behalf of a Lender or an L/C Issuer, or have any obligation to pay to any Lender or any L/C Issuer, any refund of Taxes withheld or deducted from funds paid for the account of such Lender or such L/C Issuer, as the case may be. If the Administrative Agent, any Lender or any L/C Issuer determines, in its sole discretion, that it has received a refund of any Taxes or Other Taxes as to which it has been indemnified by the Borrowers or with respect to which the Borrowers have paid additional amounts pursuant to this <u>Section</u> <u>3.01</u>, it shall pay to the Borrowers an amount equal to such refund (but only to the extent of indemnity payments made, or additional amounts paid, by the Borrowers under this <u>Section</u> <u>3.01</u> with respect to the Taxes or Other Taxes giving rise to such refund), net of all out-of-pocket expenses incurred by the Administrative Agent, such Lender or such L/C Issuer, as the case may be, and without interest (other than any interest paid by the relevant Governmental Authority with respect to such refund), <u>provided</u> that the Borrowers, upon the request of the Administrative Agent, such Lender or such L/C Issuer, agree to jointly and severally repay the amount paid over to the Borrowers (plus any penalties, interest or other charges imposed by the relevant Governmental Authority) to the Administrative Agent, such Lender or such L/C Issuer in the event the Administrative Agent or such Lender is required to repay such refund to such Governmental Authority. This subsection shall not be construed to require the Administrative Agent, any Lender or any L/C Issuer to make available its tax returns (or any other information relating to its taxes that it deems confidential) to the Borrowers or any other Person.

------

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

**Section 3.03 <u>Inability to Determine Rates</u>**. If (a) the Required Lenders determine for any reason in connection with any request for a Loan or a conversion to or continuation thereof that (i) Dollar deposits are not being offered to banks in the applicable offshore interbank market for such currency for the applicable amount and Interest Period of such Loan, (ii) adequate and reasonable means do not exist for determining the Eurodollar Rate for any requested Interest Period with respect to a proposed Eurodollar Rate Loan or in connection with an existing or proposed Base Rate Loan (in each case with respect to <u>clause (a)</u> above, "Impacted Loans") or (b) the Administrative Agent or the Required Lenders determine that for any reason the Eurodollar Rate for any requested Interest Period with respect to a proposed Eurodollar Rate Loan does not adequately and fairly reflect the cost to such Lenders of funding such Eurodollar Rate Loan, the Administrative Agent will promptly so notify the Parent Borrower and each Lender. Thereafter, (i) the obligation of the Lenders to make or maintain Eurodollar Rate Loans shall be suspended and (ii) in the event of a determination described in the preceding sentence with respect to the Eurodollar Rate component of the Base Rate, the utilization of the Adjusted Eurodollar Rate

------

component in determining the Base Rate shall be suspended, in each case until the Administrative Agent upon the instruction of the Required Lenders revokes such notice. Upon receipt of such notice, the Parent Borrower may revoke any pending request for a Borrowing of, conversion to or continuation of Eurodollar Rate Loans or, failing that, will be deemed to have converted such request into a request for a Borrowing of Base Rate Loans in the amount specified therein.

Notwithstanding the foregoing, if the Administrative Agent has made the determination described in <u>clause (a)</u> of the first sentence of this section, the Administrative Agent, in consultation with the Parent Borrower and the affected Lenders, may establish an alternative interest rate for the Impacted Loans, in which case, such alternative rate of interest shall apply with respect to the Impacted Loans until (1) the Administrative Agent revokes the notice delivered with respect to the Impacted Loans under <u>clause (a)</u> of the first sentence of this section, (2) the Administrative Agent or the Required Lenders notify the Administrative Agent and the Parent Borrower that such alternative interest rate does not adequately and fairly reflect the cost to such Lenders of funding the Impacted Loans, or (3) any Lender determines that any Requirement of Law has made it unlawful, or that any Governmental Authority has asserted that it is unlawful, for such Lender or its applicable Lending Office to make, maintain or fund Loans whose interest is determined by reference to such alternative rate of interest or to determine or charge interest rates based upon such rate or any Governmental Authority has imposed material restrictions on the authority of such Lender to do any of the foregoing and provides the Administrative Agent and the Parent Borrower written notice thereof.

**Section 3.04 <u>Increased Costs</u>**.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a) *<u>Increased Costs Generally</u>*. 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;&nbsp;&nbsp;&nbsp;&nbsp;(i) impose, modify or deem applicable any reserve, special deposit, compulsory loan, insurance charge or similar requirement against assets held by, deposits with or for the account of, or credit extended or participated in by, any Lender (or its Lending Office) (except any reserve requirement which is reflected in the determination of the Adjusted Eurodollar Rate hereunder) or any L/C Issuer;

&nbsp;&nbsp;&nbsp;&nbsp;&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) subject any Lender (or its Lending Office) or any L/C Issuer to any Tax of any kind whatsoever with respect to this Agreement, any Letter of Credit or any participation interest in any Letter of Credit, or any Eurodollar Rate Loan made by it, or change the basis of Taxation of payments to such Lender or L/C Issuer in respect thereof (except for Indemnified Taxes or Other Taxes covered by <u>Section</u> <u>3.01</u> and the imposition of, or any change in the rate of, any Excluded Tax payable by such Lender or L/C Issuer); 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;(iii) impose on any Lender (or its Lending Office) or L/C Issuer or the London interbank market any other condition, cost or expense affecting this Agreement or Eurodollar Rate Loans made by such Lender or Letter of Credit issued by such L/C Issuer;

------

and the result of any of the foregoing shall be to increase the cost to such Lender (or its Lending Office) of making, converting to, continuing or maintaining any Loan the interest on which is determined by reference to the Eurodollar Rate (or of maintaining its obligation to make any such Loan), or to increase the cost to such Lender or any L/C Issuer of participating in, issuing or maintaining any Letter of Credit (or of maintaining its obligation to participate in or to issue any Letter of Credit), or to reduce the amount of any sum received or receivable by such Lender or L/C Issuer hereunder (whether of principal, interest or any other amount) then, upon request of such Lender or L/C Issuer, the Borrowers will pay to such Lender or L/C Issuer, as the case may be, such additional amount or amounts as will compensate such Lender or L/C Issuer 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;(b) *<u>Capital Requirements</u>.* If (x) any Lender or an L/C Issuer determines that any Change in Law affecting such Lender or L/C Issuer or any Lending Office of such Lender or such Lender's or L/C Issuer's holding company, if any, regarding capital or liquidity requirements has or would have the effect of reducing the rate of return on such Lender's or L/C Issuer's capital or on the capital of such Lender's or L/C Issuer's holding company, if any, as a consequence of this Agreement, the Revolving Facility Commitments of such Lender or the Loans made by or participations in Letters of Credit or Swing Line Loans held by, such Lender, or the Letters of Credit issued by such L/C Issuer to a level below that which such Lender or L/C Issuer or such Lender's or L/C Issuer's holding company could have achieved but for such Change in Law (taking into consideration such Lender's or L/C Issuer's policies and the policies of such Lender's or L/C Issuer's holding company with respect to capital adequacy) and (y) such Lender or L/C Issuer is, as a policy, seeking compensation in respect of such reduction from other similarly-situated customers, then, subject to <u>subsection</u> <u>(c)</u> or <u>(d)</u> of this <u>Section</u> <u>3.04</u> and <u>Section</u> <u>3.06</u>, then from time to time the Borrowers will pay to such Lender or L/C Issuer such additional amount or amounts as will compensate such Lender or L/C Issuer or such Lender's or L/C Issuer'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;(c) *<u>Certificates for Reimbursement</u>.* A certificate of a Lender or L/C Issuer setting forth the amount or amounts necessary to compensate such Lender or L/C Issuer or its holding company, as the case may be, as specified in <u>subsection</u> <u>(a)</u> or <u>(b)</u> of this <u>Section</u> <u>3.04</u> and delivered to the Parent Borrower shall be conclusive absent manifest error. The Borrowers shall pay such Lender or L/C Issuer the amount shown as due on any such certificate within ten days after receipt thereof.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(d) *<u>Delays in Requests</u>.* Failure or delay on the part of any Lender or L/C Issuer to demand compensation pursuant to the foregoing provisions of this <u>Section</u> <u>3.04</u> shall not constitute a waiver of such Lender's or L/C Issuer's right to demand such compensation; <u>provided</u> that the Borrowers shall not be required to compensate a Lender or L/C Issuer pursuant to the foregoing provisions of this <u>Section</u> <u>3.04</u> for any increased costs incurred or reductions suffered more than nine months prior to the date that such Lender or L/C Issuer, 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 L/C Issuer's intention to claim compensation therefor (except that, if the Change in Law giving rise to such increased costs or reductions is retroactive, then the nine-month period referred to above shall be extended to include the period of retroactive effect thereof).

------

**Section 3.05 <u>Compensation for Losses</u>**. Upon demand of any Lender to the Parent Borrower (with a copy to the Administrative Agent) from time to time, the Borrowers shall promptly (and in no event more than ten days after receipt by the Parent Borrower of notice thereof from such Lender) compensate such Lender for and hold such Lender harmless from any loss, cost or expense incurred by it as a result 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;(i) any continuation, conversion, payment or prepayment of any Loan other than a Base Rate Loan on a day other than the last day of the Interest Period for such Loan (whether voluntary, mandatory, automatic, by reason of acceleration, or otherwise);

&nbsp;&nbsp;&nbsp;&nbsp;&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) any failure by any Borrower (for a reason other than the failure of such Lender to make a Loan) to prepay, borrow, continue or convert any Loan other than a Base Rate Loan on the date or in the amount notified by any Borrower; 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;(iii) any assignment of a Eurodollar Rate Loan on a day other than the last day of the Interest Period therefor as a result of a request by the Parent Borrower pursuant to <u>Section</u> <u>10.13</u>;

including any loss of anticipated profits (other than Applicable Rate) and any loss or expense arising from the liquidation or reemployment of funds obtained by it to maintain such Loan or from fees payable to terminate the deposits from which such funds were obtained and after giving effect to such Lender's commercially reasonable efforts to mitigate damages. The Borrowers shall also pay any customary administrative fees charged by such Lender in connection with the foregoing. For purposes of calculating amounts payable by the Borrowers to the Lenders under this <u>Section</u> <u>3.05</u>, each Lender shall be deemed to have funded each Eurodollar Rate Loan made by it at the Eurodollar Rate used in determining the Adjusted Eurodollar Rate for such Loan by a matching deposit or, other borrowing in the London interbank eurodollar market for a comparable amount and for a comparable period, whether or not such Eurodollar Rate Loan was in fact so funded.

**Section 3.06 <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;(a) *<u>Designation of a Different Lending Office</u>.* If any Lender requests compensation under <u>Section</u> <u>3.04</u>, or the Borrowers are required to pay any additional amount to any Lender, L/C Issuer or any Governmental Authority for the account of any Lender or L/C Issuer pursuant to <u>Section</u> <u>3.01</u>, or if any Lender gives a notice pursuant to <u>Section</u> <u>3.02</u>, then such Lender or L/C Issuer shall, as applicable, 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 or L/C Issuer, such designation or assignment (i) would eliminate or reduce amounts payable pursuant to <u>Section</u> <u>3.01</u> or <u>3.04</u>, as the case may be, in the future, or eliminate the need for the notice pursuant to <u>Section</u> <u>3.02</u>, as applicable, and (ii) in each case, would not subject such Lender or L/C Issuer to any unreimbursed cost or expense and would not otherwise be disadvantageous to such Lender or L/C Issuer, as the case may be. Each of the Borrowers hereby agrees, jointly and severally, to pay all reasonable costs and expenses incurred by any Lender or L/C Issuer 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;(b) *<u>Replacement of Lenders</u>.* If any Lender requests compensation under <u>Section</u> <u>3.04</u>, or if the Borrowers are required to pay any additional amount to any Lender or any Governmental Authority for the account of any Lender or L/C Issuer pursuant to <u>Section</u> <u>3.01</u>, the Parent Borrower may replace such Lender or L/C Issuer in accordance with <u>Section</u> <u>10.13</u>.

**Section 3.07 <u>Survival</u>**. All of the Borrowers' obligations under this <u>Article</u> <u>III</u> shall survive termination of the Revolving Facility Commitments, repayment of all other ABL Credit Obligations hereunder and resignation of the Administrative Agent.

**ARTICLE IV** 

**CONDITIONS PRECEDENT** 

The obligation of (a) each Lender to make Loans and (b) any L/C Issuer to issue Letters of Credit or increase the stated amount of Letters of Credit hereunder (each of <u>clauses (a)</u> and/or <u>(b)</u> a "<u>Credit Event</u>") is subject to the satisfaction or waiver by the Administrative Agent of the following conditions precedent:

**Section 4.01 <u>Conditions to Closing Date Borrowing</u>**. The obligation of each Lender to make its initial Loan as a part of the Borrowing and of the L/C Issuer to issue Letters of Credit, in each case, on the Closing Date is subject to the satisfaction or waiver by the Administrative Agent of the following conditions precedent:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a) *<u>Deliverables</u>.* The Administrative Agent's receipt (or receipt by the Control Agent (as defined in the ABL/Term Intercreditor Agreement) on behalf of the Administrative Agent) of the following, each of which shall be originals or telecopies (followed promptly by originals) unless otherwise specified, each properly executed by a Responsible Officer of the signing Loan Party, each dated the Closing Date (or, in the case of certificates of governmental officials, a recent date before the Closing Date) and each in form and substance satisfactory to the Administrative Agent and each 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;&nbsp;&nbsp;&nbsp;&nbsp;(i) fully executed counterparts of this Agreement and the Guaranty, sufficient in number for distribution to the Administrative Agent, each Lender and the Parent Borrower;

&nbsp;&nbsp;&nbsp;&nbsp;&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) a Note executed by the Borrowers in favor of each Lender requesting a Note;

&nbsp;&nbsp;&nbsp;&nbsp;&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) executed counterparts of the Pledge and Security Agreement and all other Collateral Documents, duly executed by each Loan Party, together with:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&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) a Perfection Certificate from each 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;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(C) copies of reports from CT Corporation or another independent search service reasonably satisfactory to the Collateral Agent listing all effective financing statements, notices of tax, PBGC or judgment liens or similar notices that name Holdings, any Borrower, any other Loan Party, as such (under its present name and any previous name and, if requested by the Collateral Agent, under any trade names), as debtor or seller that are filed in the jurisdictions referred to in <u>clause (B)</u> above or in any other jurisdiction having files which must be searched in order to determine fully the existence of the UCC security interests, notices of the filing of federal tax Liens (filed pursuant to Section 6323 of the Code), Liens of the PBGC (filed pursuant to Section 4068 of ERISA) or judgment Liens on any Collateral, together with copies of such financing statements, notices of tax, PBGC or judgment Liens or similar notices (none of which shall cover the Collateral except to the extent evidencing Permitted Liens or for which the Collateral Agent shall have received estoppel letters or termination statements (Form UCC-3 or such other termination statements as shall be required by local Requirement of Law) authenticated and authorized for filing);

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&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) searches of ownership of intellectual property in the appropriate governmental offices and such patent, trademark and/or copyright filings as may be requested by the Collateral Agent at least 15 days prior to the Closing Date, in each case, to the extent necessary or reasonably advisable to perfect the Collateral Agent's security interest in intellectual property Collateral in 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;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(E) all of the Pledged Collateral, which Pledged Collateral shall be in suitable form for transfer by delivery, or shall be accompanied by duly executed instruments of transfer or assignment in blank, with signatures appropriately guaranteed, accompanied in each case by any required transfer tax stamps, all in form and substance reasonably satisfactory to the Collateral Agent; 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;(iv) Reserved;

&nbsp;&nbsp;&nbsp;&nbsp;&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) a short form collateral assignment or grant of security interest in intellectual property, in form and substance satisfactory to the Administrative Agent, duly executed by each Loan Party, together with evidence that all action that the Administrative Agent may deem necessary or desirable in order to perfect, in the United States, the Liens in intellectual property created under the Pledge and Security Agreements and under such short form assignments or grants of security interests has been taken;

------

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(vi) a copy of the Organization Documents, including all amendments thereto, of each Loan Party, and with respect to the certificate or articles of formation or certificate or articles of incorporation, as applicable, certified as of a recent date by the Secretary of State or other applicable Governmental Authority of its respective jurisdiction of organization, together with:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&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) a certificate as to the good standing of each Loan Party, as of a recent date, from the Secretary of State or other applicable authority of its respective jurisdiction of organization and from each other jurisdiction in which such Loan Party is qualified to do business, together in each case, to the extent taxes are not covered by such certificate of good standing, with a certificate or other evidence of good standing as to payment of any applicable franchise or similar taxes from the appropriate Taxing authority of each such 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;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(B) a certificate of a Responsible Officer, secretary or assistant secretary (or any other officer having substantially the same authority and responsibility or otherwise satisfactory to the Administrative Agent) of each Loan Party dated the Closing Date and certifying (1) that the Organization Documents of such Loan Party have not been amended since the date of the last amendment thereto shown on the certified document from its jurisdiction of organization furnished pursuant to the preamble of this <u>clause (vi)</u> above; (2) that attached thereto is a true and complete copy of the agreement of limited partnership, operating agreement or by-laws of such Loan Party, as applicable, as in effect on the Closing Date and at all times since a date prior to the date of the resolutions described in <u>clause (3)</u> below, (3) that attached thereto is a true and complete copy of resolutions duly adopted by the board of directors (or other similar governing body) of such Loan Party authorizing the execution, delivery and performance of the Loan Documents to which it is to be a party and, in the case of each Borrower, the borrowings hereunder, and that such resolutions have not been modified, rescinded or amended and are in full force and effect; and (4) as to the incumbency and specimen signature of each officer executing any Loan Document or any other document delivered in connection herewith on behalf of such 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;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(C) a certificate of another officer as to the incumbency and specimen signature of a Responsible Officer, secretary or assistant secretary (or any other officer having substantially the same authority and responsibility or otherwise satisfactory to the Administrative Agent) executing the certificate pursuant to <u>clause (B)</u> 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;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(D) such other corporate or other constitutive or organizational documents as the Administrative Agent or Fried, Frank, Harris, Shriver & Jacobson, LLP, counsel for the Administrative Agent, may reasonably request;

------

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(vii) a favorable written opinion of Akin Gump Strauss Hauer & Feld LLP, special counsel to the Loan Parties, addressed to the Administrative Agent, the Collateral Agent, the L/C Issuer and each Lender from time to time party hereto, dated the Closing Date, covering such matters incident to the transactions contemplated hereby as the Administrative Agent may reasonably request;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(viii) Reserved;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(ix) Reserved;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(x) from special Ohio counsel to the Loan Parties organized under the laws of Ohio, a favorable written opinion addressed to the Administrative Agent, the Collateral Agent and each Lender from time to time party hereto, dated the Closing Date, covering such additional matters incident to the transactions contemplated hereby as the Administrative Agent may reasonably request;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(xi) a certificate signed by a Responsible Officer of the Parent Borrower certifying (A) that the conditions specified in <u>Sections</u> <u>4.01(f)</u> through <u>(j)</u>, <u>(m)</u>, <u>(n)</u> and <u>(q)</u> have been satisfied, and (B) that there has been no event or circumstance since the date of the Audited Financial Statements that has had or could reasonably be expected to have, either individually or in the aggregate, 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;&nbsp;&nbsp;&nbsp;&nbsp;(xii) Reserved;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(xiii) a certificate from the chief financial officer of the Parent Borrower addressed to the Administrative Agent and the Lenders from time to time party to this Agreement, reasonably satisfactory in form and substance to the Administrative Agent and the Joint Lead Arrangers and substantially in the form of <u>Exhibit</u> <u>G</u> hereto, demonstrating the financial condition and Solvency of Holdings, the Parent Borrower and their Subsidiaries on a consolidated basis after giving effect to the incurrence of all Loans to occur on the Closing Date and the "rollover" of all Existing Letters of Credit into this Facility, all credit extensions under the Term Credit Agreement and the Second Lien Credit Agreement to occur on the Closing Date and all other elements of the Transaction to occur on the Closing Date and the incurrence of all Indebtedness related thereto, and to the extent reasonably requested by the Administrative Agent, together with copies of additional valuations, appraisals and similar reports prepared by or on behalf of Holdings or any of its Subsidiaries or the Sponsor in connection with the Transaction;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(xiv) evidence that all insurance required to be maintained pursuant to the Loan Documents has been obtained and is in effect, together with the certificates of insurance, naming the Administrative Agent, on behalf of the Lenders, as an additional insured or loss payee, as the case may be, under all insurance policies maintained with respect to the assets and properties of the Loan Parties that constitutes Collateral; 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;(xv) such other assurances, certificates, documents, consents or opinions as the Administrative Agent or any Lender reasonably may require.

------

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b) *<u>Certain Fees</u>.* All fees required to be paid on or before the Closing Date (i) to the Administrative Agent and the Joint Lead Arrangers and (ii) to the Administrative Agent for the benefit of the Lenders shall (to the extent invoiced at least two Business Days prior to the Closing Date, except as otherwise reasonably agreed by the Parent Borrower) in each case have been paid.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c) *<u>Counsel Fees</u>.* The Parent Borrower shall have paid all reasonable fees, out-of-pocket charges and disbursements of one counsel to the Administrative Agent (and any reasonably necessary special counsel and up to one local counsel in each applicable jurisdiction) (directly to such counsel if requested by the Administrative Agent) to the extent invoiced prior to or on the Closing Date, plus such additional amounts of such fees, charges and disbursements as shall constitute its reasonable estimate of such fees, charges and disbursements incurred or to be incurred by it through the closing proceedings (<u>provided</u> that such estimate shall not thereafter preclude a final settling of accounts between the Parent Borrower and the Administrative Agent).

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(d) *<u>Closing Date</u>.* The Closing Date shall have occurred on or before December 12, 2013.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(e) *<u>Financial Information</u>.* The Administrative Agent shall have received (i) the Audited Financial Statements; (ii) unaudited consolidated balance sheets and related statements of income, stockholders' equity and cash flows of the Company and its subsidiaries, for any interim quarterly period which have ended since the Audited Financial Statements at least 45 days prior to the Closing Date, each prepared in accordance with GAAP; and (iii) an unaudited pro forma consolidated balance sheet and related unaudited pro forma consolidated statement of income of Holdings and its subsidiaries as of and for the twelve-month period ending on the last day of the most recently completed four-fiscal quarter period ended at least 45 days prior to the Closing Date, prepared after giving effect to the Transaction as if the Transaction had occurred as of such date (in the case of such pro forma balance sheet) and at the beginning of such period (in the case of such pro forma statement of income) (which, for the avoidance of doubt, excludes the impacts of purchase accounting adjustments arising as a result of the Transaction).

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(f) *<u>Equity Contribution</u>.* On the Closing Date, substantially concurrently with the Borrowing of the initial Term Loans, the initial Loans (if any) and the "rollover" of all Existing Letters of Credit into this Facility, the Administrative Agent shall have received evidence that the Parent Borrower has received cash proceeds from the issuance to the Sponsor and other co-investors (if any) of common equity (or other equity reasonably acceptable to the Administrative Agent) of Holdings (or other equity reasonably acceptable to the Administrative Agent), and the cash contribution thereof to the Parent Borrower (the "<u>Equity Contribution</u>") in an amount equal to at least 35.0% of the total amount of the funds necessary to consummate the Transaction.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(g) *<u>Term Loan Documents</u>.* On or prior to the Closing Date, (i) Holdings and the Term Borrower shall have entered into the Term Credit Agreement on terms and conditions reasonably satisfactory to the Administrative Agent and (ii) the Administrative Agent shall have received true and correct copies, certified as such by an appropriate officer of the Term Borrower of the Term Loan Documents as in effect on the Closing Date and each of the other Term Finance Documents as originally executed and delivered on the Closing Date (each of which shall be 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;(h) *<u>Second Lien Loan Documents</u>.* On or prior to the Closing Date, (i) Holdings and the Term Borrower shall have entered into the Second Lien Credit Agreement on terms and conditions reasonably satisfactory to the Administrative Agent and (ii) the Administrative Agent shall have received true and correct copies, certified as such by an appropriate officer of the Term Borrower of the Second Lien Loan Documents as in effect on the Closing Date and each of the other Second Lien Loan Documents as originally executed and delivered on the Closing Date (each of which shall be 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;(i) *<u>Refinancing of Existing Indebtedness</u>.* On the Closing Date, after giving effect to the Transaction, neither Holdings nor any of its Subsidiaries shall have any material Indebtedness for borrowed money other than the Facility, Indebtedness incurred under the Term Loan Documents, Indebtedness incurred under the Second Lien Loan Documents, working capital facilities for Foreign Subsidiaries, other Indebtedness incurred in the Ordinary Course of Business, other Indebtedness incurred that is permitted pursuant to the terms of the Merger Agreement, and other debt agreed to by the Administrative Agent and the Parent Borrower.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(j) *<u>Representations and Warranties</u>.* Each of the Specified Representations and the representations and warranties made by the Company in the Merger Agreement shall be true and correct in all material respects on and as of the date of such Borrowing, except to the extent that such representations and warranties specifically refer to an earlier date, in which case they shall be true and correct in all material respects as of such earlier date (but in any respect if any such representation or warranty is qualified by "material" or "material adverse effect" such representation or warranty shall 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;(k) *<u>Notice</u>.* The Administrative Agent shall have received a Request for Credit Extension in accordance with the requirements hereof.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(l) *<u>ABL/Term Intercreditor Agreement</u>.* The ABL/Term Intercreditor Agreement shall have been duly executed and delivered by each party thereto 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;(m) *<u>Consummation of the Closing Date Acquisition</u>.* On the Closing Date, immediately prior to the Borrowing of the initial Term Loans, the initial Loans (if any) and the "rollover" of all Existing Letters of Credit, into this Facility, the Closing Date Acquisition shall have been consummated pursuant to the Merger Agreement (without giving effect to any amendment or modification thereof or waiver with respect thereto, in each case, in a manner materially adverse to the Lenders (in their capacities as such) without the prior written consent of the Joint Lead Arrangers (such consent not to be unreasonably withheld, delayed or conditioned (it being agreed by the Joint Lead Arrangers that, with respect to any consent to any amendment, modification or waiver of the Merger Agreement, its consent shall be deemed to have been given if the Joint Lead Arrangers do not object in writing to a written request for such consent within one Business Day after such request for consent is delivered to the Joint Lead Arrangers in writing)); <u>provided</u> that (a) any reduction not in excess of 15% of the aggregate purchase price shall be deemed not to be materially adverse to the Lenders if such reduction is applied to reduce

------

the Equity Contribution and the amount of funded debt on the Closing Date under this Agreement, the Term Credit Agreement and the Second Lien Credit Agreement on a pro rata basis and (b) any amendment or waiver of the definition of Material Adverse Effect or the conditions precedent in the Merger Agreement shall require the consent of the Joint Lead Arrangers (such consent not to be unreasonably withheld, delayed or conditioned)).

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(n) *<u>Company Material Adverse Effect</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;&nbsp;&nbsp;&nbsp;&nbsp;(i) Since January 1, 2013 through August 14, 2013, except as disclosed in (a) the Company SEC Documents (as defined in the Merger Agreement) filed with the SEC (as defined in the Merger Agreement) on or after January 1, 2010, and prior to the date of the Merger Agreement (excluding any exhibits or any disclosures in such SEC Filings contained in the "Risk Factors" and "Forward Looking Statements" sections thereof or any other disclosures in such SEC Filings that are forward-looking or cautionary in nature) or (b) the Company Disclosure Letter (as defined in the Merger Agreement (and provided to the Administrative Agent prior to the August 14, 2013), there has not been any change, effect, event or occurrence that, individually or in the aggregate, has had or would reasonably be expected to have a Company Material Adverse Effect (as defined in the Merger Agreement); 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;(ii) Since August 14, 2013, there shall not have been any change, effect, event or occurrence that, individually or in the aggregate with all other changes, effects, events or occurrences, has resulted in a Company Material Adverse Effect.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(o) *<u>Patriot Act</u>.* The Administrative Agent and the Lenders (to the extent reasonably requested in writing at least ten days prior to the Closing Date) shall have received, at least three Business Days prior to the Closing Date, all documentation and other information that the Administrative Agent reasonably determines to be required by Governmental Authorities under applicable "know your customer" and anti-money-laundering rules and regulations, including the Patriot Act.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(p) *<u>Borrowing Base Certificate</u>.* The Administrative Agent shall have received the borrowing base certificate most recently delivered under the Existing Credit Agreement prior to the Closing Date.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(q) *<u>Outstandings</u>.* On the Closing Date, the total Outstanding Amount shall not exceed $20,000,000.

Without limiting the generality of the provisions of the last paragraph of <u>Section</u> <u>9.03</u>, for purposes of determining compliance with the conditions specified in this <u>Section</u> <u>4.01</u>, each Lender that has signed this Agreement shall be deemed to have consented to, approved or accepted or to be satisfied with, each document or other matter required thereunder to be consented to or approved by or acceptable or satisfactory to a Lender unless the Administrative Agent shall have received notice from such Lender prior to the proposed Closing Date specifying its objection thereto.

------

**Section 4.02 <u>All Credit Events</u>**. On the date of each Credit Event after the Closing Date:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a) *<u>Committed Loan Notice</u>.* The Administrative Agent shall have received, in the case of a Borrowing, a Committed Loan Notice as required by <u>Section</u> <u>2.02(a)</u> or, in the case of the issuance of a Letter of Credit, the applicable L/C Issuer and the Administrative Agent shall have received a Letter of Credit Application as required by <u>Section</u> <u>2.03(b)</u>.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b) *<u>Representations and Warranties</u>.* The representations and warranties set forth in the Loan Documents shall be true and correct in all material respects as of such date (other than an amendment, extension or renewal of a Letter of Credit without any increase in the stated amount of such Letter of Credit), as applicable, with the same effect as though made on and as of such date, except to the extent such representations and warranties expressly relate to an earlier date (in which case such representations and warranties shall be true and correct in all material respects as of such earlier date).

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c) *<u>No Default or Event of Default</u>.* At the time of and immediately after such Borrowing or issuance, amendment, extension or renewal of a Letter of Credit (other than an amendment, extension or renewal of a Letter of Credit without any increase in the stated amount of such Letter of Credit), as applicable, no Event of Default or Default shall have occurred and be continuing or would result therefrom.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(d) *<u>Availability; No Standstill Period</u>.* At the time of and immediately after such Borrowing or issuance, amendment, extension or renewal of a Letter of Credit, as applicable, (i) except as expressly set forth in <u>Section</u> <u>2.17</u>, the total Outstanding Amount does not exceed the Borrowing Base and (ii) no Standstill Period is then in effect.

Each such Credit Event shall be deemed to constitute a representation and warranty by each Borrower on the date of such Borrowing, issuance, amendment, extension or renewal as applicable, as to the matters specified in <u>paragraphs (b)</u>, <u>(c)</u> and <u>(d)</u> of this <u>Section</u> <u>4.02</u>.

**ARTICLE V** 

**REPRESENTATIONS AND WARRANTIES** 

The Loan Parties, jointly and severally, represent and warrant to the Administrative Agent and the Lenders that on the date of each Credit Event the following are true, correct and complete:

**Section 5.01 <u>Corporate Existence and Power; Compliance with Laws</u>**. Each Loan Party and each of their respective Subsidiaries:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a) is a corporation, limited liability company or limited partnership, as applicable, duly organized, validly existing and in good standing under the laws of the jurisdiction of its incorporation, organization or formation, as applicable;

------

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b) has the power and authority and all governmental licenses, authorizations, Permits, consents and approvals to own its assets, carry on its business and execute, deliver, and perform its obligations under, the Loan Documents and the Related Agreements to which it is a party;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c) is duly qualified as a foreign corporation, limited liability company or limited partnership, as applicable, and licensed and in good standing, under the laws of each jurisdiction where its ownership, lease or operation of Property or the conduct of its business requires such qualification or license; and

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(d) is in compliance with all Requirements of Law; except, in each case referred to in <u>clause (c)</u> or <u>clause (d)</u>, to the extent that the failure to do so would not reasonably be expected to have, either individually or in the aggregate, a Material Adverse Effect.

**Section 5.02 <u>Corporate Authorization; No Contravention</u>**. The execution, delivery and performance by each of the Loan Parties of this Agreement, and by each of the Loan Parties and each of their respective Subsidiaries of any other Loan Document and Related Agreement to which such Person is party, have been duly authorized by all necessary action, and do not and will not:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a) contravene the terms of any of that Person's Organization Documents;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b) conflict with or result in any material breach or contravention of, or result in the creation of any Lien under, any document evidencing any material Contractual Obligation to which such Person is a party or any order, injunction, writ or decree of any Governmental Authority to which such Person or its Property is subject; or

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c) violate any material Requirement of Law in any material respect.

**Section 5.03 <u>Governmental Authorization</u>**. No approval, consent, exemption, authorization, or other action by, or notice to, or filing with, any Governmental Authority or any other Person is necessary or required in connection with the execution, delivery or performance by, or enforcement against, any Loan Party or any Subsidiary of any Loan Party of this Agreement, any other Loan Document or Related Agreement except (a) for recordings and filings in connection with the Liens granted to the Collateral Agent under the Collateral Documents and in connection with the Liens granted to the applicable collateral agent under the Term Collateral Documents and the Second Lien Loan Documents, (b) those obtained or made on or prior to the Effective Date, (c) in the case of any approval, consent, authorization, or other action by, or notice to any other Person (other than any Governmental Authority), those which, if not obtained or made, would not reasonably be expected to have, either individually or in the aggregate, a Material Adverse Effect, and (d) in the case of any Related Agreement, those which, if not obtained or made, would not reasonably be expected to have, either individually or in the aggregate, a Material Adverse Effect.

**Section 5.04 <u>Binding Effect</u>**. This Agreement and each other Loan Document and Related Agreement to which any Loan Party or any Subsidiary of any Loan Party is a party have been duly executed and delivered by such Person and constitute the legal, valid and binding obligations of each such Person which is a party thereto, enforceable against such Person in accordance with their respective terms, except as enforceability may be limited by applicable bankruptcy, insolvency, or similar laws affecting the enforcement of creditors' rights generally or by equitable principles relating to enforceability.

------

**Section 5.05 <u>Litigation</u>**. Except as specifically disclosed in <u>Schedule</u> <u>5.05</u>, there are no actions, suits, proceedings, claims or disputes pending, or to the best knowledge of each Loan Party, threatened or contemplated, at law, in equity, in arbitration or before any Governmental Authority, against any Loan Party, any Subsidiary of any Loan Party or any of their respective Properties which:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a) as of the Effective Date, purport to affect or pertain to this Agreement, any other Loan Document or Related Agreement, or any of the transactions contemplated hereby or thereby;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b) as of the Effective Date, would reasonably be expected to result in equitable relief or monetary judgment(s), individually or in the aggregate, in excess of $5,000,000 in excess of applicable insurance coverage; or

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c) would reasonably be expected to result in equitable relief or monetary judgment(s), individually or in the aggregate, that would reasonably have a Material Adverse Effect.

No injunction, writ, temporary restraining order or any order of any nature has been issued by any court or other Governmental Authority purporting to enjoin or restrain the execution, delivery or performance of this Agreement, any other Loan Document or any Related Agreement, or directing that the transactions provided for herein or therein not be consummated as herein or therein provided. As of the Effective Date, except as disclosed on <u>Schedule</u> <u>5.05</u>, no Loan Party or any Subsidiary of any Loan Party is the subject of an audit by the IRS or other Governmental Authority or, to each Loan Party's knowledge, any review or investigation by the IRS or other Governmental Authority concerning the violation or possible violation of any Requirement of Law. No Loan Party and no Subsidiary of any Loan Party is a party to or is otherwise subject to any agreements or instruments or any charter or other internal restrictions which, individually or in the aggregate, could reasonably be expected to result in a Material Adverse Effect.

**Section 5.06 <u>No Default</u>**. No Default or Event of Default exists or would result from the incurring of any Finance Obligations by any Loan Party or the grant or perfection of the Collateral Agent's Liens on the Collateral or the consummation of the Related Transactions. No Loan Party and no Subsidiary of any Loan Party is in default under or with respect to any Contractual Obligation in any respect which, individually or together with all such defaults, would reasonably be expected to have a Material Adverse Effect.

**Section 5.07 <u>ERISA Compliance</u>**. <u>Schedule</u> <u>5.07</u> sets forth, as of the Effective Date, a complete and correct list of, and that separately identifies, (a) all Title IV Plans and (b) all Multiemployer Plans. Except for those that would not, in the aggregate, have a Material Adverse Effect, (x) each Benefit Plan is in compliance with applicable provisions of ERISA, the Code and other Requirements of Law, (y) there are no existing or pending (or to the knowledge of any Loan Party, threatened) claims (other than routine claims for benefits in the normal course), sanctions, actions, lawsuits or other proceedings or investigation involving any Benefit Plan to which any

------

Loan Party incurs or otherwise has or could reasonably be expected to have an obligation or any Liability and (z) no ERISA Event is reasonably expected to occur. On the Effective Date, no ERISA Event has occurred in connection with which obligations and liabilities (contingent or otherwise) remain outstanding except as would not result in a Material Adverse Effect. Except as set forth in <u>Schedule</u> <u>5.07</u>, to the knowledge of any Loan Party, no ERISA Affiliate would have any withdrawal liability as a result of a complete withdrawal from any Multiemployer Plan on the date this representation is made except as would not reasonably be expected to result in a Material Adverse Effect.

**Section 5.08 <u>Use of Proceeds; Margin Regulations</u>**. The proceeds of the Loans are intended to be and shall be used solely for the purposes set forth in and permitted by <u>Section</u> <u>6.10</u>, and are intended to be and shall be used in compliance with <u>Section</u> <u>7.08</u>. No Loan Party and no Subsidiary of any Loan Party is engaged in the business of purchasing or selling Margin Stock or extending credit for the purpose of purchasing or carrying Margin Stock in a manner that would result in a violation of Regulation U of the Federal Reserve Board. The proceeds of the Loans shall not be used for the purpose of purchasing Margin Stock.

**Section 5.09 <u>Ownership of Property; Liens</u>**. As of the Effective Date, the Real Estate listed in <u>Schedule</u> <u>5.09</u> constitutes all of the Real Estate of each Loan Party and each of their respective Subsidiaries. Each of the Loan Parties and each of their respective Subsidiaries has good record and marketable title in fee simple to, or valid leasehold interests in, all Real Estate, and good and valid title to all owned personal property and valid leasehold interests in all leased personal property, in each instance, necessary or used in the ordinary conduct of their respective businesses. As of the Effective Date, none of the Real Estate of any Loan Party or any Subsidiary of any Loan Party is subject to any Liens other than Permitted Liens. As of the Effective Date, <u>Schedule</u> <u>5.09</u> also describes any purchase options, rights of first refusal or other similar contractual rights pertaining to any Real Estate. As of the Effective Date, all material permits required to have been issued or appropriate to enable the Real Estate to be lawfully occupied and used for all of the purposes for which it is currently occupied and used have been lawfully issued and are in full force and effect.

**Section 5.10 <u>Taxes</u>**. Except as disclosed in <u>Schedule</u> <u>5.10</u>, (i) all federal, state, local and foreign income and franchise and other material Tax returns, reports and statements (collectively, the "<u>Tax Returns</u>") required to be filed by any of Holdings, the Borrowers or their Subsidiaries have been filed with the appropriate Governmental Authorities in all jurisdictions in which such Tax Returns are required to be filed, all such Tax Returns are true and correct in all material respects, and all Taxes reflected therein or otherwise due and payable have been timely paid except for those contested in good faith by appropriate proceedings diligently conducted and for which adequate reserves are maintained on the books of the appropriate Tax Affiliate in accordance with GAAP; (ii) as of the Effective Date, no Tax Return is under audit or examination by any Governmental Authority and no written notice of any pending audit or examination or any assertion of any claim for Taxes has been given or made by any Governmental Authority; and (iii) proper and accurate amounts have been withheld for all periods by each of Holdings, the Borrowers and their Subsidiaries from their respective employees in material compliance with the Tax, social security and unemployment withholding provisions of applicable Requirements of Law and such withholdings have been timely paid to the respective Governmental Authorities. No Tax Affiliate has participated in a "transaction" within the meaning of Treasury Regulation Section 1.6011-4(b)(2).

------

**Section 5.11 <u>Financial Condition</u>**.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a) Each of (i) the audited consolidated balance sheet of the Acquired Business and its Subsidiaries dated December 31, 2012, and the related audited consolidated statements of income or operations, shareholders' equity and cash flows for the Fiscal Year ended on that date and (ii) the unaudited interim consolidated balance sheet of the Acquired Business and its Subsidiaries dated June 30, 2013 and the related unaudited consolidated statements of income, shareholders' equity and cash flows for the six fiscal months then ended, in each case, as attached hereto as <u>Schedule</u> <u>5.11(a)</u>:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(i) were prepared in accordance with GAAP (except, in the case of unaudited statements, as permitted by the rules and regulations of the SEC) applied on a consistent basis during the periods involved (except as may be indicated therein or in the notes thereto); and

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(ii) fairly present in all material respects the consolidated financial position of the Company and its consolidated subsidiaries as at the respective dates thereof and their consolidated results of operations and consolidated cash flows for the respective periods then ended (subject, in the case of unaudited statements, to normal year-end audit adjustments and to any other adjustments described therein, including in any notes thereto).

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b) The pro forma unaudited consolidated balance sheet of Holdings and its Subsidiaries dated June 30, 2013 delivered on the Effective Date and attached hereto as <u>Schedule</u> <u>5.11(b)</u> was prepared by Holdings giving pro forma effect to the Related Transactions, was based on the unaudited consolidated and consolidating balance sheets of the Acquired Business and its Subsidiaries dated June 30, 2013, and was prepared in accordance with GAAP, with only such adjustments thereto as would be required in a manner consistent with GAAP.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c) Since December 31, 2012, there has been no Material Adverse Effect.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(d) The Loan Parties and their Subsidiaries (i) have no Indebtedness other than Indebtedness permitted pursuant to <u>Section</u> <u>7.05</u> and have no Contingent Obligations other than Contingent Obligations permitted pursuant to <u>Section</u> <u>7.09</u> and (ii) as of the Effective Date, have no other contingent liabilities or liabilities for long-term leases or unusual forward or long-term commitments except for contingent liabilities or liabilities for long-term leases or unusual forward or long-term commitments that are reflected or reserved against in the financial statements referred to in <u>Section</u> <u>5.11(a)</u> or the notes thereto and which in any such case are material in relation to the business, operations, properties, assets, condition (financial or otherwise) or prospects of the Loan Parties and their respective Subsidiaries.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(e) All financial performance projections delivered to the Administrative Agent, including the financial performance projections delivered on the Effective Date and attached hereto as <u>Schedule</u> <u>5.11(e)</u>, represent the Parent Borrower's best good faith estimate of future financial performance and are based on assumptions believed by the Parent Borrower to be fair and reasonable in light of current market conditions, it being acknowledged and agreed by the Administrative Agent and the Lenders that projections as to future events are not to be viewed as facts and that the actual results during the period or periods covered by such projections may differ from the projected results.

------

**Section 5.12 <u>Environmental Matters</u>**. Except as set forth in <u>Schedule</u> <u>5.12</u>, and except where any failures to comply would not reasonably be expected to result in, either individually or in the aggregate, Material Environmental Liabilities to the Loan Parties and their Subsidiaries, (a) the operations of each Loan Party and each Subsidiary of each Loan Party are and have been in compliance with all applicable Environmental Laws, including obtaining, maintaining and complying with all Permits required by any applicable Environmental Law, (b) no Loan Party and no Subsidiary of any Loan Party is party to, and no Loan Party and no Subsidiary of any Loan Party and no Real Estate currently (or to the knowledge of any Loan Party previously) owned, leased, subleased, operated or otherwise occupied by or for any such Person is subject to or the subject of, any Contractual Obligation or any pending (or, to the knowledge of any Loan Party, threatened) order, action, investigation, suit, proceeding, audit, claim, demand, dispute or notice of violation or of potential liability or similar notice relating in any manner to any Environmental Laws, (c) no Lien in favor of any Governmental Authority securing, in whole or in part, Environmental Liabilities has attached to any Property of any Loan Party or any Subsidiary of any Loan Party and, to the knowledge of any Loan Party, no facts, circumstances or conditions exist that could reasonably be expected to result in any such Lien attaching to any such Property, (d) no Loan Party and no Subsidiary of any Loan Party has caused or suffered to occur a Release of Hazardous Materials at, to or from any Real Estate, (e) all Real Estate currently (or to the knowledge of any Loan Party previously) owned, leased, subleased, operated or otherwise occupied by or for any such Loan Party and each Subsidiary of each Loan Party is free of contamination by any Hazardous Materials, and (f) no Loan Party and no Subsidiary of any Loan Party (i) is or has been engaged in, or has permitted any current or former tenant to engage in, operations in violation of any Environmental Law or (ii) knows of any facts, circumstances or conditions reasonably constituting notice of a violation of any Environmental Law, including receipt of any information request or notice of potential responsibility under the Comprehensive Environmental Response, Compensation and Liability Act of 1980 or similar Environmental Laws. Each Loan Party has made available to the Administrative Agent copies of all existing environmental reports, reviews and audits and all material documents pertaining to actual or potential Environmental Liabilities, in each case to the extent such reports, reviews, audits and documents are in their possession, custody, control or otherwise available to the Loan Parties.

**Section 5.13 <u>Regulated Entities</u>**. No Loan Party, no Person controlling any Loan Party, nor any Subsidiary of any Loan Party, is (a) an "investment company" within the meaning of the Investment Company Act of 1940 or (b) subject to regulation under the Federal Power Act of 1935, the Interstate Commerce Act of 1887, any state public utilities code, or any other federal or state statute, rule or regulation limiting its ability to incur Indebtedness, pledge its assets or perform its obligations under the Loan Documents.

**Section 5.14 <u>Solvency</u>**. Both before and after giving effect to (a) the Loans made and Letters of Credit issued on or prior to the date this representation and warranty is made or remade, (b) the disbursement of the proceeds of such Loans, (c) the consummation of the Related Transactions and (d) the payment and accrual of all transaction costs in connection with the foregoing, Holdings and its Subsidiaries, on a consolidated basis, are Solvent.

------

**Section 5.15 <u>Labor Relations</u>**. There are no strikes, work stoppages, slowdowns or lockouts existing, pending (or, to the knowledge of any Loan Party, threatened) against or involving any Loan Party or any Subsidiary of any Loan Party, except for those that would not, in the aggregate, reasonably be expected to have a Material Adverse Effect. Except as set forth on <u>Schedule</u> <u>5.15</u>, as of the Effective Date, (a) there is no collective bargaining or similar agreement with any union, labor organization, works council or similar representative covering any employee of any Loan Party or any Subsidiary of any Loan Party and (b) no petition for certification or election of any such representative is existing or pending with respect to any employee of any Loan Party or any Subsidiary of any Loan Party.

**Section 5.16 <u>Intellectual Property</u>**. <u>Schedule</u> <u>5.16</u> sets forth a true and complete list as of the Effective Date of the following Intellectual Property each Loan Party owns, licenses or otherwise has the right to use: (i) Intellectual Property that is registered or subject to applications for registration and (ii) Internet Domain Names, separately identifying that owned and licensed to such Loan Party and including for each of the foregoing items (1) the owner, (2) the title, (3) the jurisdiction in which such item has been registered or otherwise arises or in which an application for registration has been filed, (4) as applicable, the registration or application number and registration or application date and (5) any IP Licenses or other rights (including franchises) granted by such Loan Party with respect thereto. Each Loan Party and each Subsidiary of each Loan Party owns, or is licensed to use, all Intellectual Property necessary to conduct its business as currently conducted except for such Intellectual Property the failure of which to own or license would not reasonably be expected to have, either individually or in the aggregate, a Material Adverse Effect. To the knowledge of each Loan Party, (a) the conduct and operations of the businesses of each Loan Party and each Subsidiary of each Loan Party does not infringe, misappropriate, dilute, violate or otherwise impair any Intellectual Property owned by any other Person and (b) no other Person has contested any right, title or interest of any Loan Party or any Subsidiary of any Loan Party in, or relating to, any Intellectual Property, other than, in each case, as cannot reasonably be expected to affect the Loan Documents and the transactions contemplated therein and would not, in the aggregate, reasonably be expected to have a Material Adverse Effect.

**Section 5.17 <u>Brokers</u><u>'</u> <u>Fees; Transaction Fees</u>**. Except as disclosed on <u>Schedule</u> <u>5.17</u> and except for fees payable to the Administrative Agent and the Lenders, none of the Loan Parties or any of their respective Subsidiaries has any obligation to any Person in respect of any finder's, broker's or investment banker's fee in connection with the transactions contemplated hereby.

**Section 5.18 <u>Insurance</u>**. <u>Schedule</u> <u>5.18</u> lists all insurance policies of any nature maintained, as of the Effective Date, for current occurrences by each Loan Party, including issuers, coverages and deductibles. Each of the Loan Parties and each of their respective Subsidiaries and their respective Properties are insured with financially sound and reputable insurance companies which are not Affiliates of the Borrowers, in such amounts, with such deductibles and covering such risks as are customarily carried by companies engaged in similar businesses of the same size and character as the business of the Loan Parties and, to the extent relevant, owning similar Properties in localities where such Person operates.

------

**Section 5.19 <u>Ventures, Subsidiaries and Affiliates; Outstanding Stock</u>**. Except as set forth in <u>Schedule</u> <u>5.19</u>, as of the Effective Date, no Loan Party and no Subsidiary of any Loan Party:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a) has any Subsidiaries, or (b) is engaged in any joint venture or partnership with any other Person, or is an Affiliate of any other Person. All issued and outstanding Stock and Stock Equivalents of each of the Loan Parties and each of their respective Subsidiaries are duly authorized and validly issued, fully paid, non-assessable, and free and clear of all Liens other than, with respect to the Stock and Stock Equivalents of the Borrowers and Subsidiaries of the Borrowers, those in favor of the Collateral Agent, for the benefit of the Secured Parties. All such securities were issued in compliance with all applicable state and federal laws concerning the issuance of securities. All of the issued and outstanding Stock of each Loan Party (other than Holdings), each Subsidiary of each Loan Party and, as of the Effective Date, Holdings is owned by each of the Persons and in the amounts set forth in <u>Schedule</u> <u>5.19</u>. Except as set forth in <u>Schedule</u> <u>5.19</u>, there are no pre-emptive or other outstanding rights to purchase, options, warrants or similar rights or agreements pursuant to which any Loan Party may be required to issue, sell, repurchase or redeem any of its Stock or Stock Equivalents or any Stock or Stock Equivalents of its Subsidiaries. Set forth in <u>Schedule</u> <u>5.19</u> is a true and complete organizational chart of Holdings and all of its Subsidiaries, which the Parent Borrower shall update upon notice to the Administrative Agent promptly following the incorporation, organization or formation of any Subsidiary and promptly following the completion of any Permitted Acquisition.

**Section 5.20 <u>Jurisdiction of Organization; Chief Executive Office</u>**. <u>Schedule</u> <u>5.20</u> lists each Loan Party's jurisdiction of organization, legal name and organizational identification number, if any, and the location of such Loan Party's chief executive office or sole place of business, in each case as of the date hereof, and such <u>Schedule</u> <u>5.20</u> also lists all jurisdictions of organization and legal names of such Loan Party for the five years preceding the Effective Date.

**Section 5.21 <u>Status of Steinway and Sons</u>**. As of the Effective Date, all of the Property of Steinway and Sons (other than Property that (at fair market value) does not exceed $500,000 in the aggregate for all such Property) is located outside of the United States.

**Section 5.22 <u>Full Disclosure</u>**. None of the representations or warranties made by any Loan Party or any of their Subsidiaries in the Loan Documents as of the date such representations and warranties are made or deemed made, and none of the statements contained in each exhibit, report, statement or certificate (including any Borrowing Base Certificate) furnished by or on behalf of any Loan Party or any of their Subsidiaries in connection with the Loan Documents (including the offering and disclosure materials, if any, delivered by or on behalf of any Loan Party to the Administrative Agent or the Lenders prior to the Effective Date), contains any untrue statement of a material fact or omits any material fact required to be stated therein or necessary to make the statements made therein, in light of the circumstances under which they are made, not misleading as of the time when made or delivered.

------

**Section 5.23 <u>Foreign Assets Control Regulations, Export Controls and Anti</u><u>-Money Laundering</u>**. Each Loan Party and each Subsidiary of each Loan Party is in compliance in all material respects with (i) all applicable U.S. economic sanctions Requirements of Law, executive orders and implementing regulations as promulgated by the U.S. Treasury Department's Office of Foreign Assets Control ("<u>OFAC</u>"), (ii) the Export Administration Act and Regulations, the Arms Export Control Act and the International Traffic in Arms Regulations, (iii) all applicable anti-money laundering and counter-terrorism financing Requirements of Law, including, but not limited to, the Bank Secrecy Act, as amended by the Patriot Act and the Money Laundering Control Act of 1986 (i.e., 18 U.S.C. §§ 1956 and 1957); and (iv) any similar applicable Requirements of Law enacted in the United States or any other jurisdictions in which the parties to this agreement operate, as any of the foregoing Requirements of Law may from time to time be amended, renewed, extended, or replaced and all other applicable legal requirements of any Governmental Authority governing, addressing, relating to, or attempting to eliminate, terrorist acts and acts of war and any regulations promulgated pursuant thereto (collectively, "Anti-Money Laundering Laws, Export Controls, and Economic Sanctions"). None of Loan Parties, nor any of their respective Subsidiaries nor any of their respective officers, directors, employees or agents (i) is a Person designated by the U.S. government on the list of the Specially Designated Nationals and Blocked Persons (the "SDN List") with which a U.S. Person cannot deal with or otherwise engage in business transactions, (ii) is a Person who is otherwise the target of U.S. economic sanctions Requirements of Law such that a U.S. Person cannot deal or otherwise engage in business transactions with such Person or (iii) is controlled by (including without limitation by virtue of such person being a director or owning controlling voting shares or interests), or acts, directly or indirectly, for or on behalf of, any person or entity on the SDN List or a foreign government that is the target of U.S. economic sanctions prohibitions such that the entry into, or performance under, this Agreement or any other Loan Document would be prohibited under U.S. Requirement of Law. No part of the proceeds of any Loan will be used directly or indirectly in violation of any Anti-Money Laundering Laws, Export Controls and Economic Sanctions.

**Section 5.24 <u>Patriot Act</u>**. The Loan Parties, and each of their Subsidiaries are in compliance in all material respects with (a) the Trading with the Enemy Act of the United States (50 U.S.C. App. §§ 1 et seq.), as amended, and each of the foreign assets control regulations of the United States Treasury Department (31 CFR, subtitle B, Chapter V, as amended) and any other enabling legislation or executive order relating thereto, (b) the Patriot Act and (c) other applicable federal or state Requirements of Law relating to "know your customer" and anti-money laundering rules and regulations. No part of the proceeds of any Loan will be used directly or indirectly for any payments to any government official or employee, political party, official of a political party, candidate for political office, or anyone else acting in an official capacity, in order to illegally obtain, retain or direct business or obtain any improper advantage, in violation of the United States Foreign Corrupt Practices Act of 1977, as amended, or any other applicable anti-corruption Requirements of Law.

**Section 5.25 <u>No Restricted Payments</u>**. Since August 14, 2013, neither Holdings nor any of its Subsidiaries has directly or indirectly declared, ordered, paid or made, or set apart any sum or property for, any Restricted Payment or agreed to do so, except for purchases, redemption or other acquisition of the Company's common stock required in connection with the forfeiture, exercise or vesting of any stock option outstanding on August 14, 2013 or issued after August 14, 2013 in accordance with the requirement of the Merger Agreement or as permitted pursuant to <u>Section</u> <u>7.11</u>, as disclosed in financial statements previously delivered to Administrative Agent, or as contemplated by the transactions contemplated by the Loan Documents.

------

**Section 5.26 <u>Collateral Documents</u>**.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a) *<u>Article</u> <u>9 Collateral</u>.* The Pledge and Security Agreement is effective to create in favor of the Collateral Agent, for the ratable benefit of the Secured Parties, a legal, valid and enforceable security interest in the Collateral described therein and, when financing statements in appropriate form are filed in the offices specified on <u>Schedule</u> <u>IV</u> to the Pledge and Security Agreement and the Pledged Collateral is delivered to the Collateral Agent, the Pledge and Security Agreement shall constitute a fully perfected Lien on, and security interest in, all right, title and interest of the grantors thereunder in such of the Collateral in which a security interest can be perfected under Article 9 of the UCC, in each case securing the Finance Obligations and prior and superior in right to any other Person (other than the Term Collateral Agent with respect to the Term Priority Collateral), other than with respect to Permitted Liens existing on the Closing Date, other non-consensual Permitted Liens not perfected by the filing of UCC financing statements whose priority is determined by applicable law (other than with respect to the property of any newly formed or acquired Subsidiary or newly acquired property of any existing Loan Party to the extent Holdings and the Borrowers are in compliance with <u>Section</u> <u>6.13</u>) and any title exceptions referred to in the title insurance policies reasonably acceptable to the Collateral Agent.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b) *<u>Intellectual Property</u>.* When financing statements in the appropriate form are filed in the applicable intellectual property offices, the "Notice of Grant of Liens in Patents and Trademarks", in form and substance satisfactory to the Administrative Agent, is filed in the United States Patent and Trademark Office and the "Notice of Grant of Liens in Copyrights", in form and substance satisfactory to the Administrative Agent, is filed in the United States Copyright Office, the Pledge and Security Agreement shall constitute a fully perfected Lien on, and security interest in, all right, title and interest of the grantors thereunder in the United States patents, trademarks, copyrights, licenses and other intellectual property rights covered in such "Notices", in each case securing the Finance Obligations and prior and superior in right to any other Person (other than the Term Collateral Agent with respect to the Term Priority Collateral) (it being understood that subsequent recordings in the United States Patent and Trademark Office and the United States Copyright Office may be necessary to perfect a lien on registered trademarks, trademark applications and copyrights acquired by the Loan Parties after the Closing Date) (other than with respect to such property of any newly formed or acquired Subsidiary or such newly acquired property to the extent Holdings and the Borrowers are in compliance with <u>Section</u> <u>6.13</u>).

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c) *<u>Real Property Mortgages</u>.* The Mortgages are (subject to <u>Section</u> <u>6.15</u>) effective to create in favor of the Collateral Agent, for the ratable benefit of the Secured Parties, a legal, valid and enforceable Lien on all of the right, title and interest of the Loan Parties in and to the Mortgaged Properties thereunder and the proceeds thereof, and when the Mortgages are filed in the recorders' offices of the counties in which the Mortgaged Properties are located, the Mortgages shall constitute a fully perfected Lien on, and security interest in, all right, title and interest of the Loan Parties in such Mortgaged Properties and the proceeds thereof, in each case securing the Finance Obligations and prior in right to any other Person, other than with respect to Liens permitted by <u>Section</u> <u>7.01(g)</u> and non-consensual Permitted Liens not perfected by the filing of UCC financing statements whose priority is determined by applicable law (other than with respect to such property of any newly formed or acquired Subsidiary or such newly acquired property to the extent Holdings and the Borrowers are in compliance with <u>Section</u> <u>6.13</u>).

------

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(d) *<u>Status of Liens</u>.* The Collateral Agent, for the ratable benefit of the Secured Parties, will at all times have the Liens provided for in the Collateral Documents and, subject to the filing by the Collateral Agent of continuation statements to the extent required by the UCC, the Collateral Documents will at all times constitute valid and continuing liens of record and first priority perfected security interests in all the Collateral referred to therein, except as priority may be (i) in the case of Term Priority Collateral but subject to the ABL/Term Intercreditor Agreement, subject only to the Liens of the Term Collateral Documents and (ii) affected by Permitted Liens existing on the Closing Date or by non-consensual Permitted Liens not perfected by the filing of UCC financing statements whose priority is determined by applicable law. As of the Closing Date, no filings or recordings are required in order to perfect the security interests created under the Collateral Documents, except for filings or recordings listed on <u>Schedule</u> <u>IV</u> to the Pledge and Security Agreement, and all such listed filings and recordings shall be made on or about the Closing Date, and the filings and recordings of the Mortgages in accordance with the terms hereof.

**ARTICLE VI** 

**AFFIRMATIVE COVENANTS** 

So long as any Lender shall have any Revolving Facility Commitment hereunder, any Loan or other ABL Credit Obligation hereunder shall remain unpaid or unsatisfied (other than unasserted contingent indemnification obligations not due and payable), and until all Letters of Credit have been canceled or have expired (or shall have been Cash Collateralized or backstopped on terms reasonably satisfactory to the Administrative Agent) and all amounts drawn or paid thereunder have been reimbursed in full, each Loan Party and each of their respective Subsidiaries covenants and agrees that:

**Section 6.01 <u>Financial Statements</u>**. Each Loan Party shall maintain, and shall cause each of its Subsidiaries to maintain, a system of accounting established and administered in accordance with sound business practices to permit the preparation of financial statements in conformity with GAAP (<u>provided</u> that monthly financial statements shall not be required to have footnote disclosures and are subject to normal year-end adjustments). The Parent Borrower shall deliver to the Administrative Agent and each Lender by Electronic Transmission and in detail reasonably satisfactory to the Administrative Agent and the Required Lenders:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a) as soon as available, but not later than 90 days after the end of each Fiscal Year, a copy of the audited consolidated and unaudited Consolidating balance sheets of Holdings and each of its Subsidiaries as at the end of such year and the related consolidated and Consolidating statements of income or operations, shareholders' equity and cash flows for such Fiscal Year, setting forth in each case in comparative form the figures for the previous Fiscal Year, and accompanied by the report of any "Big Four" or other nationally recognized independent certified public accounting firm reasonably acceptable to the Administrative Agent which report shall contain an unqualified opinion stating that such consolidated financial statements present fairly in all material respects the financial position for the periods indicated in conformity with GAAP and shall not be subject to any "going concern" or like qualification or exception or any qualification or exception as to the scope of such audit (except for an explanatory paragraph solely with respect to or resulting solely from an upcoming scheduled maturity date of the Loans or other series of Indebtedness permitted under <u>Section</u> <u>7.05(g)</u>, in each case, occurring within one year from the time such report is delivered); and

------

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b) as soon as available, but not later than 45 days after the end of each of the first three Fiscal Quarters of each Fiscal Year, a copy of the unaudited consolidated and Consolidating balance sheets of Holdings and each of its Subsidiaries, and the related consolidated and Consolidating statements of income, shareholders' equity and cash flows as of the end of such Fiscal Quarter and for the portion of the Fiscal Year then ended, each of which shall fairly present, in all material respects, in accordance with GAAP, the financial position and the results of operations of Holdings and its Subsidiaries, subject to normal year-end adjustments and absence of footnote disclosures.

**Section 6.02 <u>Certificates; Other Information</u>**. The Parent Borrower shall furnish to the Administrative Agent and each Lender by Electronic Transmission:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a) together with each delivery of financial statements pursuant to <u>Sections</u> <u>6.01(a)</u> and <u>6.01(b)</u>, (i) a management report, in reasonable detail, signed by a Responsible Officer of the Parent Borrower, describing the operations and financial condition of the Loan Parties and their Subsidiaries for the Fiscal Quarter and the portion of the Fiscal Year then ended (or for the Fiscal Year then ended in the case of annual financial statements), and (ii) a report setting forth in comparative form the corresponding figures for the corresponding periods of the previous Fiscal Year and the corresponding figures from the most recent projections for the current Fiscal Year delivered pursuant to <u>Section</u> <u>6.02(e)</u> and discussing the reasons for any significant variations;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b) concurrently with the delivery of the financial statements referred to in <u>Sections</u> <u>6.01(a)</u> and <u>6.01(b)</u> a fully and properly completed certificate in the form of <u>Exhibit</u> <u>D</u> (a "<u>Compliance Certificate</u>"), certified on behalf of the Parent Borrower by a Responsible Officer;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c) promptly after the same become publicly available, copies of all financial statements and regular, periodic or special reports which any Loan Party sends to its shareholders or other equity holders, as applicable, or furnishes to, or files with, the SEC or any successor or similar Governmental Authority;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(d) at the time of delivery of each of the quarterly financial statements delivered pursuant to <u>Section</u> <u>6.01</u>, (i) a listing of government contracts of the Borrowers subject to the federal Assignment of Claims Act of 1940 or any similar state law; and (ii) a list of any applications for the registration of any Patent, Trademark or Copyright filed by any Loan Party with the United States Patent and Trademark Office, the United States Copyright Office or any similar office or agency in each case entered into or filed in the prior Fiscal Quarter;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(e) as soon as available and in any event no later than 45 days after the last day of each Fiscal Year of the Parent Borrower, projections of the Loan Parties (and their Subsidiaries') consolidated and Consolidating financial performance for the forthcoming Fiscal Year on a month by month basis;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(f) promptly upon receipt thereof, copies of any reports submitted by the Parent Borrower's certified public accountants in connection with each annual, interim or special audit or review of any type of the financial statements or internal control systems of any Loan Party made by such accountants;

------

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(g) promptly upon receipt thereof, copies of any credit rating materials with respect to any Indebtedness permitted under <u>Section</u> <u>7.05(g)</u>;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(h) promptly, such additional business, financial, collateral, corporate affairs, perfection certificates and other information as the Administrative Agent may from time to time reasonably request;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(i) as soon as available, and in any event within twenty Business Days after the end of each fiscal month of Parent Borrower (commencing with the first fiscal month ending after the Closing Date), reports in form and detail reasonably satisfactory to the Administrative Agent and certified by a Responsible Officer of the Parent Borrower as being accurate and complete in all material respects, but without duplication of the reports and other information otherwise required to be provided pursuant to <u>Section</u> <u>6.01</u> or this <u>Section</u> <u>6.02</u>, as of the last Business Day of the immediately preceding month, (A) listing all Accounts of the Loan Parties in a report consistent in all material respects with the report provided under the Existing Credit Agreement (including such other information as the Administrative Agent may reasonably request), (B) listing all accounts payable of the Loan Parties in a report consistent in all material respects with the report provided under the Existing Credit Agreement (including such other information as the Administrative Agent may reasonably request), and (C) listing of Inventory in a report consistent in all material respects with the report provided under the Existing Credit Agreement (including such other information as the Administrative Agent may reasonably request); and

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(j) (i) as soon as available, and in any event within twenty Business Days after the end of each fiscal month of Parent Borrower (commencing with the first fiscal month ending after the Closing Date), a Borrowing Base Certificate, current as of the close of business on the last Business Day of the immediately preceding month, supported by schedules showing the derivation thereof and containing such detail and other information as the Administrative Agent may request from time to time (it being agreed that the form and detail set forth in <u>Exhibit</u> <u>I</u> is deemed satisfactory) and (ii) at any time (but only) during any Cash Dominion Period, as soon as available and in any event no later than the third Business Day of each week commencing with the first week beginning after the commencement of such Cash Dominion Period, a weekly update report with respect to the most recently delivered Borrowing Base Certificate reflecting sales, receipts of cash, credits and collections during the preceding week, <u>provided</u> that (A) the Borrowing Base set forth in the Borrowing Base Certificate (as updated by the weekly reports, when applicable) shall be effective from and including the date such Borrowing Base Certificate is duly received by the Administrative Agent but not including the date on which a subsequent Borrowing Base Certificate is received by the Administrative Agent, unless the Administrative Agent disputes the eligibility of any property included in the calculation of the Borrowing Base or the valuation thereof by notice of such dispute to the Parent Borrower and (B) in the event of any dispute about the eligibility of any property included in the calculation of the Borrowing Base or the valuation thereof, the Administrative Agent's good faith judgment shall control.

Documents required to be delivered (A) pursuant to <u>Section</u> <u>6.02(c)</u> shall be deemed to have been furnished on the date on which the Administrative Agent receives notice that such Loan Party has filed such document with the SEC and is available on the EDGAR website on the Internet at www.sec.gov or any successor government website that is freely and readily available to the Administrative Agent and the Lenders without charge and (B) pursuant to

------

 <u>Section</u> <u>6.01(a)</u> or <u>(b)</u> or <u>Section</u> <u>6.02(c)</u> (to the extent any such documents are included in materials not otherwise filed with the SEC) may be delivered electronically and if so delivered, shall be deemed to have been delivered on the date (i) on which such Loan Party posts such documents, or provides a link thereto on such Loan Party's website on the Internet at the website address listed on <u>Schedule</u> <u>10.02</u>; or (ii) on which such documents are posted on such Loan Party's behalf on an Internet or Intranet website, if any, to which each Lender and the Administrative Agent have access (whether a commercial, third-party website or whether sponsored by the Administrative Agent); <u>provided</u> that: (i) such Loan Party shall deliver paper copies of such documents to the Administrative Agent or any Lender upon its request to such Loan Party to deliver such paper copies until a written request to cease delivering paper copies is given by the Administrative Agent or such Lender and (ii) such Loan Party shall notify (which may be by facsimile or electronic mail) the Administrative Agent and each Lender of the posting of any such documents and provide to the Administrative Agent by electronic mail electronic versions (i.e., soft copies) of such documents. The Administrative Agent shall have no obligation to request the delivery of or to maintain paper copies of the documents referred to above, and in any event shall have no responsibility to monitor compliance by the such Loan Party with any such request by a Lender for delivery, and each Lender shall be solely responsible for requesting delivery to it or maintaining its copies of such documents.

Each of Holdings and the Borrowers hereby acknowledge that (i) the Administrative Agent and/or the Joint Lead Arrangers will make available to the Lenders materials and/or information provided by or on behalf of Holdings and the Borrowers hereunder (collectively, "<u>Borrower Materials</u>") by posting the Borrower Materials on Intralinks<sup>®</sup> or another similar electronic system (the "<u>Platform</u>") and (ii) certain of the Lenders (each, a "<u>Public Lender</u>") may have personnel who do not wish to receive MNPI with respect to the Borrowers or their respective Affiliates, or the respective securities of any of the foregoing, and who may be engaged in investment and other market-related activities with respect to such Persons' securities. Each of Holdings and the Borrowers hereby agree that so long as Holdings or the Borrowers are the issuer of any outstanding debt or equity securities that are registered or issued pursuant to a private offering or is actively contemplating issuing any such securities it will use commercially reasonable efforts to identify that portion of the Borrower Materials that may be distributed to the Public Lenders and that: (w) all such Borrower Materials shall be clearly and conspicuously marked "PUBLIC" which, at a minimum, shall mean that the word "PUBLIC" shall appear prominently on the first page thereof; (x) by marking Borrower Materials "PUBLIC." Holdings and each Borrower shall be deemed to have authorized the Administrative Agent, the Joint Lead Arrangers and the Lenders to treat such Borrower Materials as not containing any MNPI (although it may be sensitive and proprietary) with respect to Holdings or the Borrowers or any of their securities for purposes of United States federal and state securities laws (<u>provided</u>, <u>however</u>, that to the extent such Borrower Materials constitute Information, they shall be treated as set forth in <u>Section</u> <u>10.07</u>); (y) all Borrower Materials marked "PUBLIC" are permitted to be made available through a portion of the Platform designated "Public Side Information;" and (z) the Administrative Agent and the Joint Lead Arrangers shall be entitled to treat the Borrower Materials that are not marked "PUBLIC" as being suitable only for posting on a portion of the Platform not designated "Public Side Information."

------

**Section 6.03 <u>Notices</u>**. The Parent Borrower shall notify promptly the Administrative Agent, in writing, and each Lender of each of the following (and in no event later than five Business Days after a Responsible Officer becomes aware thereof):

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a) the occurrence or existence of any Default or Event of Default, or any event or circumstance that foreseeably will become a Default or Event of Default;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b) any breach or non-performance of, or any default under, any Contractual Obligation of any Loan Party or any Subsidiary of any Loan Party, or any violation of, or non-compliance with, any Requirement of Law, which would reasonably be expected to result, either individually or in the aggregate, in a Material Adverse Effect, including a description of such breach, non-performance, default, violation or non-compliance and the steps, if any, such Person has taken, is taking or proposes to take in respect thereof;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c) any action, suit, dispute, litigation, investigation, proceeding or suspension which may exist at any time between any Loan Party or any Subsidiary of any Loan Party and any Governmental Authority, other regulatory body or any arbitrator which would reasonably be expected to result, either individually or in the aggregate, 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;(d) the commencement of, or any material development in, any litigation or proceeding affecting any Loan Party or any Subsidiary of any Loan Party or its respective property (i) in which the amount of damages claimed is $3,000,000 or more, (ii) in which injunctive or similar relief is sought and which, if adversely determined, would reasonably be expected to have a Material Adverse Effect, or (iii) in which the relief sought is an injunction or other stay of the performance of this Agreement, any other Loan Document or any Related Agreement;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(e) (i) the receipt by any Loan Party of any notice of violation of or potential liability or similar written notice under Environmental Law that could reasonably be expected to result in Material Environmental Liabilities, (ii)(A) unpermitted Releases, (B) the existence of any condition that could reasonably be expected to result in violations of or Liabilities under, any Environmental Law or (C) the commencement of, or any material change to, any action, investigation, suit, proceeding, audit, claim, demand, dispute alleging a violation of or Liability under any Environmental Law, that, for each of <u>clauses (A)</u>, <u>(B)</u> and <u>(C)</u> above (and, in the case of <u>clause (C)</u>, if adversely determined), in the aggregate for each such clause, could reasonably be expected to result in Material Environmental Liabilities, (iii) the receipt by any Loan Party of notification that any Property of any Loan Party is subject to any Lien in favor of any Governmental Authority securing, in whole or in part, Environmental Liabilities and (iv) any proposed acquisition or lease of Real Estate, if such acquisition or lease would have a reasonable likelihood of resulting in Material Environmental Liabilities;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(f) (i) on or prior to any filing by any ERISA Affiliate of any notice of any reportable event under Section 4043 of ERISA or notice of intent to terminate any Title IV Plan, a copy of such notice, (ii) promptly, and in any event within ten days, after any officer of any ERISA Affiliate knows that a request for a minimum funding waiver under Section 412 of the Code has been filed with respect to any Title IV Plan or Multiemployer Plan, a notice describing such waiver request and the actions, if any, that any ERISA Affiliate proposes to take with respect thereto, together with a copy of any notice filed with the PBGC or the IRS pertaining thereto (but,

------

with respect to a Multiemployer Plan, only if such notices are in possession of the Loan Parties), and (iii) promptly, and in any event within ten days after any officer of the Parent Borrower knows that an ERISA Event will or has occurred, a notice describing such ERISA Event, and the actions, if any, that any ERISA Affiliate proposes to take with respect thereto, together with a copy of any notices received from or filed with the PBGC, IRS, Multiemployer Plan or other Benefit Plan pertaining thereto (but, with respect to a Multiemployer Plan, only if such notices are in possession of the Loan Parties), <u>provided</u>, that if the agent and each lender have previously received notice of an ERISA Event, no notice shall be required of the continuation of such ERISA Event;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(g) any Material Adverse Effect subsequent to the date of the most recent audited financial statements delivered to the Administrative Agent and the Lenders pursuant to this Agreement;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(h) any material change in accounting policies or financial reporting practices by any Loan Party or any Subsidiary of any Loan Party;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(i) any strike, work stoppage, boycott, shutdown or other labor disruption against or involving any Loan Party or any Subsidiary of any Loan Party if the same would reasonably be expected to have, either individually or in the aggregate, a Material Adverse Effect;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(j) the occurrence of any Disposition of property or assets for which the Borrowers are required to notify the Administrative Agent pursuant to <u>Section</u> <u>2.05(b)(ii)</u> or the incurrence or issuance of any Indebtedness for which the Borrowers are required to make a mandatory prepayment pursuant to <u>Section</u> <u>2.05(b)(i)</u>; and

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(k) any announcement by Moody's or S&P of any change in the rating of the Facility as determined by either Moody's or S&P.

Each notice pursuant to this <u>Section</u> <u>6.03</u> shall be in electronic form accompanied by a statement by a Responsible Officer on behalf of the Parent Borrower setting forth details of the occurrence referred to therein, and stating what action the Parent Borrower or other Person proposes to take with respect thereto and at what time. Each notice under <u>Section</u> <u>6.03(a)</u> shall describe with particularity any and all clauses or provisions of this Agreement or other Loan Document that have been breached or violated.

**Section 6.04 <u>Preservation of Corporate Existence, Etc</u>**. Each Loan Party shall, and shall cause each of its Subsidiaries, other than Non-Material Subsidiaries, to:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a) preserve and maintain in full force and effect its organizational existence and good standing under the laws of its jurisdiction of incorporation, organization or formation, as applicable, except, with respect to the Parent Borrower's Subsidiaries, in connection with transactions permitted by <u>Section</u> <u>7.03</u>;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b) preserve and maintain in full force and effect all rights, privileges, qualifications, permits, licenses and franchises necessary in the normal conduct of its business except in connection with transactions permitted by <u>Section</u> <u>7.03</u> and sales of assets permitted by <u>Section</u> <u>5.02</u> and except as would not reasonably be expected to have, either individually or in the aggregate, a Material Adverse Effect;

------

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c) preserve or renew all of its registered Trademarks, the non-preservation of which would reasonably be expected to have, either individually or in the aggregate, 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;(d) conduct its business and affairs without infringement of or interference with any Intellectual Property of any other Person in any respect and shall comply in all respects with the terms of its IP Licenses except, in each case, as would not be expected to have, either individually or in the aggregate, a Material Adverse Effect.

**Section 6.05 <u>Maintenance of Property</u>**. Each Loan Party shall maintain, and shall cause each of its Subsidiaries to maintain, and preserve all its Property which is necessary in its business in good working order and condition, ordinary wear and tear and fire, casualty or condemnation excepted and shall make all necessary repairs thereto and renewals and replacements thereof except where the failure to do so would not reasonably be expected to have, either individually or in the aggregate, a Material Adverse Effect.

**Section 6.06 <u>Insurance</u>**.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a) Each Loan Party shall, and shall cause each of its Subsidiaries to, (i) maintain or cause to be maintained in full force and effect all policies of insurance of any kind with respect to the Property and businesses of the Loan Parties and such Subsidiaries (including policies of life, fire, theft, product liability, public liability, Flood Insurance, property damage, other casualty, employee fidelity, workers' compensation, business interruption and employee health and welfare insurance) with financially sound and reputable insurance companies or associations (in each case that are not Affiliates of the Borrowers) of a nature and providing such coverage as is sufficient and as is customarily carried by businesses of the size and character of the business of the Loan Parties and (ii) cause all such insurance relating to any Property or business of any Loan Party to name the Administrative Agent as additional insured or lenders loss payee as agent for the Lenders, as appropriate. All policies of insurance on real and personal Property of the Loan Parties will contain an endorsement, in form and substance acceptable to the Administrative Agent, showing loss payable to the Administrative Agent (Form CP 1218 or equivalent and naming the Administrative Agent as lenders loss payee as agent for the Lenders) and extra expense and business interruption endorsements. Such endorsement, or an independent instrument furnished to the Administrative Agent, will provide that the insurance companies or the Parent Borrower's insurance broker will give the Administrative Agent at least 30 (or 10 in case of non-payment) days' prior written notice before any such policy or policies of insurance shall be canceled and that no act or default of the Loan Parties or any other Person shall affect the right of the Administrative Agent to recover under such policy or policies of insurance in case of loss or damage. Each Loan Party shall direct all present and future insurers under its "All Risk" policies of property insurance to pay all proceeds payable thereunder directly to the Administrative Agent. If any insurance proceeds are paid by check, draft or other instrument payable to any Loan Party and the Administrative Agent jointly, the Administrative Agent may endorse such Loan Party's name thereon and do such other things as the Administrative Agent may deem advisable to reduce the same to cash. The Administrative Agent reserves the right at any time, upon review of each Loan Party's risk profile, to require additional forms and limits of insurance. Notwithstanding the requirement in <u>clause (i)</u> above, Flood Insurance shall not be required for (x) Real Estate not located in a Special Flood Hazard Area, or (y) Real Estate located in a Special Flood Hazard Area in a community that does not participate in the National Flood Insurance Program.

------

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b) Unless the Loan Parties provide the Administrative Agent with evidence of the insurance coverage required by this Agreement (including, without limitation, Flood Insurance), the Administrative Agent may purchase insurance (including, without limitation, Flood Insurance) at the Loan Parties' expense to protect the Administrative Agent's and the Lenders' interests in the Loan Parties' and their Subsidiaries' properties. This insurance may, but need not, protect the Loan Parties' and their Subsidiaries' interests. The coverage that the Administrative Agent purchases may not pay any claim that any Loan Party or any Subsidiary of any Loan Party makes or any claim that is made against such Loan Party or any Subsidiary in connection with said Property. The Loan Parties may later cancel any insurance purchased by the Administrative Agent, but only after providing the Administrative Agent with evidence that there has been obtained insurance as required by this Agreement. If the Administrative Agent purchases insurance, the Loan Parties will be responsible for the costs of that insurance, including interest and any other charges the Administrative Agent may impose in connection with the placement of insurance, until the effective date of the cancellation or expiration of the insurance. The costs of the insurance shall be added to the Finance Obligations. The costs of the insurance may be more than the cost of insurance the Loan Parties may be able to obtain on their own.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c) Subject to the ABL/Term Intercreditor Agreement, the Loan Parties appoint the Administrative Agent as their attorney-in-fact to settle or adjust all property damage claims under its casualty insurance policies; <u>provided</u>, that such power of attorney shall only be exercised so long as an Event of Default has occurred and is continuing or if the casualty claim exceeds $1,000,000. The Administrative Agent shall have no duty to exercise such power of attorney, but may do so at its discretion.

**Section 6.07 <u>Payment of Obligations</u>**. Each Loan Party shall, and shall cause each of its Subsidiaries to, pay, discharge and perform as the same shall become due and payable or required to be performed:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a) all federal and other material Tax liabilities, assessments and governmental charges or levies upon it or its Property, before the same shall become delinquent or in default, unless the same are being contested in good faith by appropriate proceedings diligently prosecuted which stay the filing or enforcement of any Lien and for which adequate reserves in accordance with GAAP are being maintained by such Person.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b) all lawful claims which, if unpaid, would by law become a Lien upon its Property unless the same are being contested in good faith by appropriate proceedings diligently prosecuted which stay the imposition or enforcement of any Lien and for which adequate reserves in accordance with GAAP are being maintained by such Person:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c) the performance of all obligations under any Contractual Obligation to such Loan Party or any of its Subsidiaries is bound, or to which it or any of its Property is subject, including the Related Agreements, except where the failure to perform would not reasonably be expected to have, either individually or in the aggregate, 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;(d) payments to the extent necessary to avoid the imposition of a Lien on assets of any Loan Party or any of its Subsidiaries with respect to, or the involuntary termination of, any underfunded Benefit Plan that is described in Section 3(2) of ERISA.

**Section 6.08 <u>Compliance with Laws</u>**. Each Loan Party shall, and shall cause each of its Subsidiaries to, comply with all Requirements of Law of any Governmental Authority having jurisdiction over it or its business, except where the failure to comply would not reasonably be expected to have, either individually or in the aggregate, a Material Adverse Effect.

**Section 6.09 <u>Inspection of Property and Books and Records; Quarterly Management Calls</u>**.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a) Each Loan Party shall, and shall cause each of its Subsidiaries to maintain, proper books of record and account, in which full, true and correct entries in conformity with GAAP consistently applied shall be made of all financial transactions and matters involving the assets and business of such Person. Each Loan Party shall, and shall cause each of its Subsidiaries to, with respect to each owned, leased, or controlled property, during normal business hours and upon reasonable advance notice (unless an Event of Default shall have occurred and be continuing, in which event no notice shall be required and the Administrative Agent shall have access at any and all times during the continuance thereof): (a) provide access to such property to the Administrative Agent and any of its Related Parties, as frequently as the Administrative Agent reasonably determines to be appropriate; and (b) permit the Administrative Agent and any of its Related Parties to conduct field examinations (including any Field Survey and Audit), audit, inspect and make extracts and copies (or take originals if reasonably necessary) from all of such Loan Party's books and records, and evaluate and make physical verifications of the Inventory and other Collateral in any manner and through any medium that the Administrative Agent reasonably considers advisable, in each instance, at the Loan Parties' expense; <u>provided</u>, that excluding any such visits and inspections during the continuation of an Event of Default, (x) only the Administrative Agent on behalf of the Lenders may exercise rights of the Administrative Agent and the Lenders under this <u>Section</u> <u>6.09(a)</u>, and the Administrative Agent shall not exercise such rights more often than one time during any calendar year and (y) inventory appraisals may only be performed during an Inspection Trigger Period; <u>provided</u>, <u>further</u>, that when (A) a Default or Event of Default exists, the Administrative Agent or any Lender may do any of the foregoing at the expense of the Borrowers at any time and (B) during an Inspection Trigger Period, the Administrative Agent may do any of the foregoing at the expense of the Borrowers up to one additional time during such calendar year.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b) Promptly after the time of delivery of financial statements with respect to the preceding Fiscal Quarter pursuant to <u>Section</u> <u>6.01(a)</u> or <u>Section</u> <u>6.01(b)</u>, as applicable, (and in no event more than ten days after the time such financial statements are required to be delivered pursuant to <u>Section</u> <u>6.01(a)</u> or <u>Section</u> <u>6.01(b)</u>, as applicable), the Parent Borrower shall, and shall cause its Responsible Officers to, conduct a conference call with the Administrative Agent and the Lenders to discuss such financial statements.

**Section 6.10 <u>Use of Proceeds</u>**. The Borrowers shall use the proceeds of the Loans solely as follows: (a) first, to refinance on the Closing Date Prior Indebtedness and then to pay on the Closing Date a portion of the purchase price for the Acquired Business, (b) to pay costs and expenses of the Related Transactions and costs and expenses required to be paid pursuant to <u>Article</u> <u>IV</u>, and (c) after the Closing Date, for capital expenditures and other general corporate purposes not in contravention of any Requirement of Law and not in violation of this Agreement or the other Loan Documents.

------

**Section 6.11 <u>Collection of Accounts; Management of Collateral</u>**.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a) Within 90 days of the Closing Date (or such later date, subject to <u>Section</u> <u>6.15</u>), the Loan Parties shall have established and thereafter shall maintain cash management services and Cash Management Accounts of a type and on terms reasonably satisfactory to the Collateral Agent, which Cash Management Accounts are in each case subject to a Deposit Account Control Agreement or Securities Account Control Agreement (i) in favor of the Collateral Agent and (ii) which provides that all amounts on deposit in each such Cash Management Account be automatically transferred each Business Day during a Cash Dominion Period (as defined below) to at least one Cash Management Account (as designated by the Collateral Agent) at the Administrative Agent or a Cash Management Bank designated by the Collateral Agent, to be used as a collections account (such account, together with any other collections accounts (including any "lockbox accounts") established by the Loan Parties with the Administrative Agent or Cash Management Bank so designated, the "<u>Cash Management Collections Accounts</u>").

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b) If (i) a Default or Event of Default has occurred and is continuing or (ii) Availability is less than 17.5% of the Revolving Facility Commitment for five consecutive Business Days (each a "<u>Cash Management Triggering Event</u>") and until such Cash Management Triggering Event no longer exists for a 30 consecutive calendar day period (such period, a "<u>Cash Dominion Period</u>"), then (A) the Loan Parties shall deposit or cause to be deposited promptly, and in any event no later than the next Business Day after the occurrence of a Cash Management Triggering Event, all proceeds in respect of any Collateral, all collections of a nature susceptible to a deposit in a bank account and all other amounts received by any Loan Party (including payments made by Account Debtors directly to any Loan Party and remittances on credit card sales) into the Cash Management Collections Accounts, and (B) subject to the conditions set forth in a Cash Management Agreement with respect to a Cash Management Account, pursuant to each applicable Deposit Account Control Agreement or Securities Account Control Agreement (or otherwise at the instruction of the Collateral Agent) all amounts on deposit in the Cash Management Accounts each Business Day to the Cash Management Collections Accounts. At all times prior to and after a Cash Dominion Period, the Loan Parties shall have full dominion and control over the Cash Management Accounts, and the Collateral Agent agrees not to deliver a control notice or take any other action to control the Cash Managements Accounts unless and until a Cash Management Triggering Event has occurred and is continuing. The Collateral Agent further agrees that upon the termination of a Cash Dominion Period, the Collateral Agent shall provide notice to the banks with Cash Management Accounts and take all other commercially reasonable actions necessary to revert control of such Cash Managements Accounts to the Loan Parties.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c) Except as otherwise provided for in <u>Section</u> <u>8.03</u>, all amounts received or deposited into the Cash Management Collections Accounts during a Cash Dominion Period (whether under this <u>Section</u> <u>6.11</u> or otherwise) shall be applied to the payment of the outstanding principal balance of the Loans and the L/C Obligations (or, to the extent such L/C Obligations are contingent, to provide Cash Collateral in respect of such L/C Obligations).

------

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(d) The Loan Parties shall not maintain cash, Cash Equivalents or other amounts in either (i) any Deposit Account, unless the Collateral Agent shall have received a Deposit Account Control Agreement in respect of such Deposit Account (other than Excluded Accounts) or (ii) any securities account, unless the Collateral Agent shall have received a Securities Account Control Agreement in respect of such securities account (other than Excluded Accounts).

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(e) Each Loan Party shall close any of its Cash Management Accounts maintained with a bank or depositary institution promptly and in any event within forty-five days (or such longer period as the Collateral Agent is willing, in its sole discretion, to accommodate from time to time) of notice from the Collateral Agent that the creditworthiness of such bank or depositary institution is no longer acceptable in the Collateral Agent's Credit Judgment, or that the operating performance, funds transfer, or availability procedures or performance of such bank or depositary institution with respect to Cash Management Accounts or the Collateral Agent's liability under any Cash Management Agreement with such bank or depositary institution is no longer acceptable in the Collateral Agent's Credit Judgment.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(f) The Cash Management Accounts with Cash Management Banks shall be cash collateral accounts, with all cash, checks and similar items of payment in such accounts securing payment of the Finance Obligations, and in which the Loan Parties are hereby deemed to have granted a Lien to the Collateral Agent for the benefit of the Secured Parties. All checks, drafts, notes, money orders, acceptances, cash and other evidences of Indebtedness received during a Cash Dominion Period directly by any Loan Party from any of its Account Debtors, as proceeds from Accounts of such Loan Party or as proceeds of any other Collateral shall be held by such Loan Party in trust for the Secured Parties and if of a nature susceptible to a deposit in a bank account, upon receipt be deposited by such Loan Party in original form and no later than the next Business Day after receipt thereof into a Cash Management Account in accordance with <u>Section</u> <u>6.11(b)</u>. Each Loan Party shall not commingle such collections with the proceeds of any Property not included in the Collateral. No checks, drafts or other instrument received by the Administrative Agent shall constitute final payment to the Administrative Agent unless and until such instruments have actually been collected.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(g) The Loan Parties shall take all reasonable steps to enforce, collect and receive all amounts owing on the Accounts of the Loan Parties or any of their Subsidiaries. After the occurrence and during the continuance of a Default or Event of Default, the Collateral Agent may send a notice of assignment and/or notice of the Secured Parties' security interest to any and all Account Debtors or third parties holding or otherwise concerned with any of the Collateral, and thereafter the Collateral Agent or its designee shall have the sole right to collect the Accounts and/or take possession of the Collateral and the books and records relating thereto.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(h) Each Loan Party hereby appoints each Agent or its designee on behalf of such Agent as the Loan Parties' attorney-in-fact with power to endorse any Loan Party's name upon any notes, acceptances, checks, drafts, money orders or other evidences of payment relating to the Accounts, to sign any Loan Party's name on any invoice or bill of lading relating to any of

------

the Accounts, drafts against Account Debtors with respect to Accounts, assignments of Accounts, verification of Accounts of any Account Debtor with an outstanding balance of Accounts owing to the Loan Parties in excess of $1,000,000 and notices to such Account Debtors with respect to Accounts. All acts of said attorney or designee are hereby ratified and approved, and such attorney or designee shall not be liable for any acts of omission or commission (other than acts of omission or commission constituting gross negligence or willful misconduct as determined by a final judgment of a court of competent jurisdiction), or for any error of judgment or mistake of fact or law; this power being coupled with an interest is irrevocable until the date on which all Finance Obligations are paid in full and all of the Loan Documents are terminated. Each Agent agrees not to deliver any such notice or take any such actions unless and until a Cash Management Triggering Event has occurred and is continuing.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(i) Nothing herein contained shall be construed to constitute any Agent as agent of any Loan Party for any purpose whatsoever, and the Agents shall not be responsible or liable for any shortage, discrepancy, damage, loss or destruction of any part of the Collateral wherever the same may be located and regardless of the cause thereof (other than from acts of omission or commission constituting gross negligence or willful misconduct as determined by a final judgment of a court of competent jurisdiction). The Agents shall not, under any circumstance or in any event whatsoever, have any liability for any error or omission or delay of any kind occurring in the settlement, collection or payment of any of the Accounts or any instrument received in payment thereof or for any damage resulting therefrom (other than acts of omission or commission constituting gross negligence or willful misconduct as determined by a final judgment of a court of competent jurisdiction). The Agents, by anything herein or in any assignment or otherwise, do not assume any of the obligations under any contract or agreement assigned to any Agent and shall not be responsible in any way for the performance by any Loan Party of any of the terms and conditions thereof.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(j) If any Account includes a charge for any tax payable to any Governmental Authority, each Agent is hereby authorized (but in no event obligated) in its discretion to pay the amount thereof to the proper taxing authority for the Loan Parties' account and to charge the Loan Parties therefor. The Loan Parties shall notify the Agents if any Account includes any taxes due to any such Governmental Authority and, in the absence of such notice, the Agents shall have the right to retain the full proceeds of such Account and shall not be liable for any taxes that may be due by reason of the sale and delivery creating such Account.

Notwithstanding any other terms set forth in the Loan Documents, the rights and remedies of the Agents and the Lenders herein provided, and the obligations of the Loan Parties set forth herein, are cumulative of, may be exercised singly or concurrently with, and are not exclusive of, any other rights, remedies or obligations set forth in any other Loan Document or as provided by law

**Section 6.12 <u>Landlord Agreements</u>**. Each Loan Party shall use commercially reasonable efforts to obtain a Collateral Access Agreement, from the lessor of each leased property, bailee in possession of any Collateral or mortgagee of any owned property with respect to each location where any Collateral having a value in excess of $500,000 is stored or located, which agreement shall be reasonably satisfactory in form and substance to Agent.

------

**Section 6.13 <u>Further Assurances</u>**. Each Loan Party shall ensure that all written information, exhibits and reports furnished to the Administrative Agent or the Lenders do not and will not contain any untrue statement of a material fact and do not and will not omit to state any material fact or any fact necessary to make the statements contained therein not materially misleading in light of the circumstances in which made, and will promptly disclose to the Administrative Agent and the Lenders and correct any defect or error that may be discovered therein or in any Loan Document or in the execution, acknowledgement or recordation thereof.

------

in each instance with respect to each Loan Party formed or acquired after the Effective Date. In connection with each pledge of Stock and Stock Equivalents, the Loan Parties shall deliver, or cause to be delivered, to the Term Collateral Agent (subject to the ABL/Term Intercreditor Agreement), irrevocable proxies and stock powers and/or assignments, as applicable, duly executed in blank. In the event any Loan Party acquires any fee interest in Real Estate located in the United States (it being understood and agreed that any Real Estate owned by a Governmental Authority in connection with a tax exempt financing and leased by such Governmental Authority to such Loan Party shall be deemed to be owned in fee by such Loan Party) having a fair value exceeding $2,500,000, simultaneously with (or such later date as may be agreed by the Collateral Agent in its sole discretion) such acquisition, such Person shall execute and/or deliver, or cause to be executed and/or delivered, to the Collateral Agent, (w) a fully executed Mortgage, in form and substance reasonably satisfactory to the Collateral Agent together with an A.L.T.A. lender's title insurance policy (any such policy, a "<u>Mortgage Policy</u>") issued by a title insurer reasonably satisfactory to the Collateral Agent, in form and substance and in an amount reasonably satisfactory to the Collateral Agent insuring that the Mortgage is a valid and enforceable first priority Lien on the respective property, free and clear of all defects, encumbrances and Liens other than Permitted Liens and any title exceptions referred to in the title insurance policies reasonably acceptable to the Collateral Agent, and (x) then current A.L.T.A. surveys, certified to the Collateral Agent by a licensed surveyor sufficient to allow the issuer of the lender's title insurance policy to issue such policy without a survey exception. In the event any Loan Party acquires any Real Estate located in the United States having a fair value exceeding $2,500,000, at the Collateral Agent's request, the Loan Parties shall cause to be delivered to the Administrative Agent, within 90 days after such acquisition, an environmental site assessment prepared by a qualified firm reasonably acceptable to the Collateral Agent, in form and substance reasonably satisfactory to the Administrative Agent. In addition to the obligations set forth in <u>Section</u> <u>6.06(a)</u>, within 90 days after written notice from the Administrative Agent to the Loan Parties that any Real Estate is located in a Special Flood Hazard Area, the Loan Parties shall satisfy the Flood Insurance requirements of <u>Section</u> <u>6.06(a)</u>. For the avoidance of doubt, the provisions of this paragraph shall be subject to the terms of the Intercreditor Agreements.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b) Notwithstanding anything herein or in the Collateral Documents to the contrary, on the Effective Date, Conn-Selmer shall pledge all of the Stock and Stock Equivalents of Steinway and Sons to the Collateral Agent, for the benefit of the Secured Parties, to secure the Finance Obligations.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c) The Parent Borrower shall, promptly following receipt of the acknowledgment copy of any financing statements filed under the UCC in any jurisdiction by or on behalf of the Secured Parties, deliver to the Administrative Agent completed requests for information listing such financing statement and all other effective financing statements filed in such jurisdiction that name any Loan Party as debtor, together with copies of such other financing statements.

**Section 6.14 <u>Environmental Matters</u>**. Each Loan Party shall, and shall cause each of its Subsidiaries to, comply with, and maintain its Real Estate, whether owned, leased, subleased or otherwise operated or occupied, in compliance with, all applicable Environmental Laws (including by implementing any Remedial Action necessary to achieve such compliance) or that is required by orders and directives of any Governmental Authority, except in each case where

------

the failure to comply would not reasonably be expected to, individually or in the aggregate, result in a Material Environmental Liability. Without limiting the foregoing, if an Event of Default is continuing or if the Administrative Agent at any time has a reasonable basis to believe that there exist material violations of Environmental Laws by any Loan Party or any Subsidiary of any Loan Party or that there exist any material Environmental Liabilities, then each Loan Party shall, promptly upon receipt of request from the Administrative Agent, cause the performance of, and allow the Administrative Agent and its Related Parties access to such Real Estate for the purpose of conducting, such environmental audits and assessments, including subsurface sampling of soil and groundwater, and cause the preparation of such reports, in each case as the Administrative Agent may from time to time reasonably request. Such audits, assessments and reports, to the extent not conducted by the Administrative Agent or any of its Related Parties, shall be conducted and prepared by reputable environmental consulting firms reasonably acceptable to the Administrative Agent and shall be in form and substance reasonably acceptable to the Administrative Agent.

**Section 6.15 <u>Post</u><u>-Closing Obligations</u>**. The Parent Borrower will, as promptly as practicable, and in any event within the time periods after the Effective Date specified in <u>Schedule</u> <u>6.15</u> (or such later date as may be agreed by the Collateral Agent in its sole discretion), deliver the documents or take the actions specified on <u>Schedule</u> <u>6.15</u>, in each case except to the extent otherwise agreed to by the Required Lenders. In the event of any conflict between the terms set forth on <u>Schedule</u> <u>6.15</u> and the terms of any of <u>Article</u> <u>V</u>, <u>VI</u> or <u>VII</u>, the terms set forth on <u>Schedule</u> <u>6.15</u> shall control.

**Section 6.16 <u>Material Contracts</u>**. Each Loan Party shall, and shall cause each of its Subsidiaries to, perform and observe all the terms and provisions of each Material Contract to be performed or observed by it, maintain each such Material Contract in full force and effect, enforce each such Material Contract in accordance with its terms, take all such action to such end as may be from time to time requested by the Administrative Agent and, upon request of the Administrative Agent, make to each other party to each such Material Contract such demands and requests for information and reports or for action as any Loan Party or any of its Subsidiaries is entitled to make under such Material Contract, and cause each of its Subsidiaries to do so.

**Section 6.17 <u>Designation as Senior Debt</u>**. All ABL Credit Obligations shall be "Designated Senior Indebtedness" or similar term for purposes of and as defined in any documentation with respect to any Subordinated Indebtedness.

**Section 6.18 <u>Change in Collateral; Collateral Records; Account Documentation</u>**.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a) The Parent Borrower shall advise the Collateral Agent promptly, in sufficient detail, of any location not identified in the reports delivered to the Agents pursuant to <u>Section</u> <u>6.02(f)</u> at which Collateral with a fair market value in excess of $500,000 is located and of any material adverse change relating to the type, quantity or quality of the Collateral or the Lien granted thereon, and execute and deliver, and cause each of its Subsidiaries to execute and deliver, to the Collateral Agent for the benefit of the Agents and the Lenders from time to time, solely for the Collateral Agent's convenience in maintaining a record of Collateral, such written statements and schedules as the Collateral Agent may reasonably require, designating, identifying or describing the Collateral.

------

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b) The Loan Parties will at such intervals as the Agents may reasonably require during a Cash Dominion Period, execute and deliver confirmatory written assignments of the Accounts to the Agents and furnish such further schedules and/or information as any Agent may require relating to the Accounts, including, without limitation, sales invoices or the equivalent, credit memos issued, remittance advices, reports and copies of deposit slips and copies of original shipping or delivery receipts for all merchandise sold. The items to be provided under this <u>Section</u> <u>6.18(b)</u> are to be in form reasonably satisfactory to the Collateral Agent and are to be executed and delivered to the Collateral Agent from time to time solely for their convenience in maintaining records of the Collateral. If the Loan Parties become aware of anything materially detrimental to the credit (that is not otherwise public information) of any Account Debtor with an aggregate outstanding balance of Accounts owing to the Borrowers in excess of $1,000,000, the Parent Borrower shall promptly advise the Agents thereof.

**ARTICLE VII** 

**NEGATIVE COVENANTS** 

So long as any Lender shall have any Revolving Facility Commitment hereunder, any Loan or other ABL Credit Obligation hereunder shall remain unpaid or unsatisfied (other than unasserted contingent indemnification obligations not due and payable), and until all Letters of Credit have been canceled or have expired (or shall have been Cash Collateralized or backstopped on terms reasonably satisfactory to the Administrative Agent) and all amounts drawn or paid thereunder have been reimbursed in full, each Loan Party and each of their respective Subsidiaries covenants and agrees that:

**Section 7.01 <u>Limitation on Liens</u>**. No Loan Party shall, and no Loan Party shall suffer or permit any of its Subsidiaries to, directly or indirectly, make, create, incur, assume or suffer to exist any Lien upon or with respect to any part of its Property, whether now owned or hereafter acquired, other than the following ("<u>Permitted Liens</u>"):

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a) any Lien existing on the Property of a Loan Party or a Subsidiary of a Loan Party on the Effective Date and set forth in <u>Schedule</u> <u>7.01</u> securing Indebtedness outstanding on such date and permitted by <u>Section</u> <u>7.05(c)</u>, including replacement Liens on the Property currently subject to such Liens securing Indebtedness permitted by <u>Section</u> <u>7.05(c)</u>;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b) any Lien created under any Loan Document;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c) Liens for Taxes (i) which are not delinquent, or (ii) the non-payment of which is permitted by <u>Section</u> <u>6.07</u>;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(d) carriers', warehousemen's, mechanics', landlords', materialmen's, repairmen's or other similar Liens arising in the Ordinary Course of Business which are not delinquent for more than 90 days or remain payable without penalty or which are being contested in good faith and by appropriate proceedings diligently prosecuted, which proceedings have the effect of preventing the forfeiture or sale of the Property subject thereto and for which adequate reserves in accordance with GAAP are being maintained;

------

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(e) Liens (other than any Lien imposed by ERISA) consisting of pledges or deposits required in the Ordinary Course of Business in connection with workers' compensation, unemployment insurance and other social security legislation or to secure the performance of tenders, statutory obligations, surety, stay, customs and appeals bonds, bids, leases, governmental contract, trade contracts, performance and return of money bonds and other similar obligations (exclusive of obligations for the payment of borrowed money) or to secure liability to insurance earners;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(f) Liens consisting of judgment or judicial attachment liens with respect to judgments the existence of which do not constitute and Event of Default;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(g) any title exceptions referred to in the title insurance policies purchased by any Loan Party in connection with the purchase of Property pursuant to the Merger Agreement, and easements, rights-of-way, zoning and other restrictions, encroachments, minor defects or other irregularities in title, and other similar encumbrances incurred in the Ordinary Course of Business which, either individually or in the aggregate, do not materially detract from the value of the Property subject thereto or interfere in any material respect with the ordinary conduct of the businesses of any Loan Party or any Subsidiary of any Loan Party;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(h) Liens on any Property acquired or held by any Loan Party or any Subsidiary of any Loan Party securing Indebtedness incurred or assumed for the purpose of financing (or refinancing) all or any part of the cost of acquiring such Property and permitted under <u>Section</u> <u>7.05(d)</u>; <u>provided</u> that (i) any such Lien attaches to such Property concurrently with or within 30 days after the acquisition thereof, (ii) such Lien attaches solely to the Property so acquired in such transaction and any accession thereto and proceeds thereof, and (iii) the principal amount of the debt secured thereby does not exceed 100% of the cost of such Property;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(i) Liens securing Capital Lease Obligations permitted under <u>Section</u> <u>7.05(d)</u>;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(j) any interest or title of a lessor or sublessor under any lease permitted by this Agreement and matters affecting the interest or title of a lessor or sublessor to any leased Property;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(k) Liens arising from precautionary UCC financing statements filed under any lease permitted by this Agreement;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(l) licenses, sublicenses, leases or subleases granted to third parties in the Ordinary Course of Business not interfering in any material respect with the business of the Loan Parties or any of their Subsidiaries;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(m) Liens in favor of collecting banks arising by operation of law under Section 4-210 of the UCC or, with respect to collecting banks located in the State of New York, under Section 4-208 of the UCC;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(n) Liens (including the right of set-off) in favor of a bank or other depository institution arising as a matter of law encumbering deposits;

------

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(o) Liens arising out of consignment or similar arrangements for the sale of goods entered into by the Parent Borrower or any of its Subsidiaries 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;(p) Liens arising by operation of law or contract on insurance policies and proceeds thereof to secure premiums payable thereunder;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(q) Liens in favor of customs and revenue authorities arising as a matter of law which secure payment of customs duties in connection with the importation of goods 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;(r) other Liens not described above on assets not constituting Collateral that secure obligations other than Indebtedness, <u>provided</u> that the aggregate outstanding amount of the obligations secured thereby does not exceed $2,500,000 in the aggregate at any one time;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(s) Liens on assets of a Subsidiary acquired in connection with a Permitted Acquisition so long as such Liens were not incurred in anticipation of such Permitted Acquisition and are either Permitted Liens hereunder or encumber assets of such Subsidiary (other than the Stock, Accounts or Inventory of such Subsidiary) with a value not in excess of $5,000,000;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(t) ground leases in respect of real property on which facilities owned or leased by any Loan Party or any of its Subsidiaries are located;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(u) subject to the terms of the Intercreditor Agreements, Liens securing Indebtedness permitted under <u>Section</u> <u>7.05(g)</u> and any Permitted Refinancing thereof;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(v) Liens on assets of Foreign Subsidiaries (including Steinway and Sons, but only for so long as it is not a Loan Party hereunder) to secure Indebtedness permitted by <u>Section</u> <u>7.05(j)</u>; and

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(w) the right, title and interest of NYCIDA to the property located at 19th and Steinway Place pursuant to (i) the Guaranty Agreement, dated as of June 1, 1999 from Steinway to the NYCIDA, (ii) the PILOT Escrow Agreement, dated as of June 1, 1999, by and among Steinway, the NYCIDA and the United States Trust Company and (iii) the Lease Agreement, dated as of June 1, 1999 between Steinway and the NYCIDA.

**Section 7.02 <u>Disposition of Assets</u>**. No Loan Party shall, and no Loan Party shall suffer or permit any of its Subsidiaries to, directly or indirectly, sell, assign, lease, convey, transfer or otherwise dispose of (whether in one or a series of transactions) any Property (including the Stock of any Subsidiary of any Loan Party, whether in a public or a private offering or otherwise, and accounts and notes receivable, with or without recourse) or enter into any agreement to do any of the foregoing (except subject to compliance with, or termination of, this Agreement), except:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a) dispositions of inventory, or used, worn-out or surplus equipment or defaulted receivables for collection, all 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;(b) dispositions not otherwise permitted hereunder which are made for fair market value (excluding Accounts, Inventory and notes receivable); <u>provided</u>, that (i) at the time of any disposition, no Event of Default shall exist or shall result from such disposition, (ii) not less than 75% of the aggregate sales price from such disposition shall be paid in cash, (iii) such dispositions are made for fair market value, (iv) the requirements of <u>Section</u> <u>2.05(b)(ii)</u>, to the extent applicable, are complied with in connection therewith, <u>provided</u> that, all Net Cash Proceeds received from dispositions in any Fiscal Year under this <u>clause (b)</u> in an aggregate amount in excess of $7,500,000 per annum shall be paid in accordance with Section 2.03(b) of the Term Credit Agreement or, if applicable, Second Lien Credit Agreement, and (v) after giving effect to such disposition, the Loan Parties are in compliance on a pro forma basis with the covenant set forth in <u>Section</u> <u>7.19</u>, recomputed for the most recent Fiscal Quarter for which financial statements have been delivered;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c) dispositions of Cash Equivalents;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(d) licenses, sublicenses, leases or subleases granted to third parties in the Ordinary Course of Business not interfering with the business of the Loan Parties or any of their Subsidiaries;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(e) dispositions constituting an Investment or Restricted Payment permitted under this Agreement;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(f) dispositions in connection with an Event of Loss; <u>provided</u> that the requirements of <u>Section</u> <u>2.05(b)</u> and <u>Section</u> <u>2.03(b)</u> of the Term Credit Agreement are complied with in connection therewith;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(g) dispositions of the assets of any Non-Material Subsidiary;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(h) sale-leasebacks of real estate, machinery and equipment with a value not to exceed $10,000,000 in the aggregate;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(i) termination of a lease that is not reasonably likely to result in a Material Adverse Effect and does not result from a default by a Loan Party; and

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(j) any disposition described in the Structure Memorandum.

**Section 7.03 <u>Consolidations and Mergers</u>**. No Loan Party shall, and no Loan Party shall suffer or permit any of its Subsidiaries to, merge, consolidate with or into, or convey, transfer, lease or otherwise dispose of (whether in one transaction or in a series of transactions) all or substantially all of its assets (whether now owned or hereafter acquired) to or in favor of any Person, except upon not less than five Business Days' prior written notice to the Administrative Agent, (a) any Subsidiary of the Parent Borrower may be transferred or conveyed to, merge with, or dissolve or liquidate into, the Parent Borrower or any other Loan Party, <u>provided</u> that the Parent Borrower or such other Loan Party shall be the continuing or surviving entity and all actions required to maintain perfected Liens on the Stock of the surviving entity and other Collateral in favor of the Administrative Agent shall have been completed and (b) any Foreign Subsidiary or Excluded Subsidiary may be transferred or conveyed to, merge with or dissolve or liquidate into another Foreign Subsidiary or Excluded Subsidiary.

------

**Section 7.04 <u>Acquisitions; Loans and Investments</u>**. No Loan Party shall and no Loan Party shall suffer or permit any of its Subsidiaries to (i) purchase or acquire, or make any commitment to purchase or acquire (except subject to compliance with, or termination of, this Agreement), any Stock or Stock Equivalents, or any obligations or other securities of, or any interest in, any Person, including the establishment or creation of a Subsidiary, (ii) make or commit to make (except subject to compliance with, or termination of, this Agreement) any Acquisitions, or any other acquisition of all or substantially all of the assets of another Person, or of any business or division of any Person, including without limitation, by way of merger, consolidation or other combination, or (iii) make or purchase or commit to make or purchase (except subject to compliance with, or termination of, this Agreement), any advance, loan, extension of credit or capital contribution to or any other investment in, any Person including any Affiliate of the Parent Borrower or any Subsidiary of the Parent Borrower but excluding any trade payables arising in the Ordinary Course of Business among the Parent Borrower and its Subsidiaries (the items described in <u>clauses (i)</u>, <u>(ii)</u> and <u>(iii)</u> are referred to as "<u>Investments</u>"), except for:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a) Investments in cash and Cash Equivalents;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b) (x) Investments consisting of (i) capital contributions by Holdings in then existing Loan Parties, (ii) extensions of credit or capital contributions by any Subsidiary of Holdings to or in any other then existing Loan Party (other than Holdings), (iii) extensions of credit or capital contributions by the Parent Borrower or any other Loan Party (other than Holdings) to or in any then existing Subsidiary of the Parent Borrower that is not a Loan Party not to exceed $15,000,000 in the aggregate at any time outstanding for all such extensions of credit and capital contributions in the aggregate plus any returns (including dividends, interest, distributions, returns of principal, profits on sale, repayments, income and similar amounts) actually received by the Parent Borrower or any other Loan Party in cash; <u>provided</u>, that (A) if any Loan Party executes and delivers to any other Loan Party a note (collectively, the "<u>Intercompany Notes</u>") to evidence any debt Investments described in the foregoing <u>clauses (i)</u>, <u>(ii)</u> and <u>(iii)</u>, that Intercompany Note shall be pledged and delivered to the Term Administrative Agent pursuant to the Pledge and Security Agreement (subject to the Term/ABL Intercreditor Agreement) as additional collateral security for the Finance Obligations; (B) the applicable Loan Party shall accurately record all intercompany transactions on its books and records; and (C) at the time any such intercompany loan or advance is made by any Loan Party to any other Loan Party and after giving effect thereto, each such Loan Party shall be Solvent; (iv) extensions of credit by any Subsidiary of the Parent Borrower that is not a Loan Party to any then existing Loan Party; <u>provided</u> that any such indebtedness shall be subordinated to the Finance Obligations in a manner satisfactory to the Administrative Agent, and (v) extensions of credit or capital contributions by any Subsidiary of the Parent Borrower that is not a Loan Party or (y) other Investments described in the Structure Memorandum;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c) loans and advances to employees of Loan Parties in the Ordinary Course of Business for moving, entertainment and travel expenses, drawing accounts and similar expenditures in an amount not to exceed $3,000,000 in the aggregate at any time outstanding;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(d) Investments received as the non-cash portion of consideration received in connection with transactions permitted pursuant to <u>Section</u> <u>7.02(b)</u>;

------

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(e) Investments acquired in connection with the settlement of delinquent Accounts in the Ordinary Course of Business or in connection with the bankruptcy or reorganization of suppliers or customers;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(f) Investments consisting of loans made by Holdings to officers, directors and employees which are used by such Persons to purchase simultaneously Stock (including phantom stock) or Stock Equivalents of Holdings in an amount not to exceed $10,000,000 in the aggregate at any time outstanding;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(g) Investments existing on the Effective Date and set forth on <u>Schedule</u> <u>7.04</u>;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(h) Permitted Acquisitions;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(i) Steinway Dealer Loans in an aggregate amount not to exceed $5,000,000 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;(j) Dealer Notes;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(k) other Investments in the aggregate at any time outstanding not to exceed the sum of $10,000,000 (in the case of this <u>clause (k)</u>, other than for the purposes described in <u>Sections</u> <u>7.04(i)</u> and <u>7.04(j)</u>) plus any returns (including dividends, interest, distributions, returns of principal, profits on sale, repayments, income and similar amounts) actually received by the Parent Borrower or any Subsidiary in cash in respect of any Investments made pursuant to this <u>Section</u> <u>7.04(k)(i)</u>;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(l) other Investments so long as either (i) the Permitted Transaction Conditions are satisfied at the time of such Investment or (ii) the aggregate amount of all such Investments made in reliance on this <u>clause (l)</u> shall not exceed the sum of (x) $10,000,000 and (y) the cumulative amount of Net Issuance Proceeds of all Qualifying Equity Issuances (other than any Specified Equity Contribution) made after the Closing Date and Not Otherwise Applied: and

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(m) purchase or acquisition of inventory of Steinway dealers in the Ordinary Course of Business.

**Section 7.05 <u>Limitation on Indebtedness</u>**. No Loan Party shall, and no Loan Party shall suffer or permit any of its Subsidiaries to, create, incur, assume, permit to exist, or otherwise become or remain directly or indirectly liable with respect to, any Indebtedness, except:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a) Indebtedness incurred pursuant to this Agreement;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b) Indebtedness consisting of Contingent Obligations described in <u>clause (i)</u> of the definition thereof and permitted pursuant to <u>Section</u> <u>7.09</u>;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c) Indebtedness existing on the Effective Date and set forth in <u>Schedule</u> <u>7.05</u> including Permitted Refinancings thereof;

------

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(d) (i) Indebtedness not to exceed $5,000,000 in the aggregate at any time outstanding, consisting of Capital Lease Obligations or secured by Liens permitted by <u>Section</u> <u>7.01(h)</u> and Permitted Refinancings thereof and (ii) additional Capital Lease Obligations as a result of the sale and leasebacks permitted pursuant to <u>Section</u> <u>7.02(h)</u>;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(e) Indebtedness consisting of the financing of insurance premiums 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;(f) unsecured intercompany Indebtedness permitted pursuant to <u>Section</u> <u>7.04(b)</u> or otherwise described in the Structure Memorandum;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(g) subject to the Intercreditor Agreements, Indebtedness under (i) the Term Credit Agreement; <u>provided</u>, that such Indebtedness shall not exceed the Senior Term Debt Cap (as defined in the ABL/Term Intercreditor Agreement) and (ii) the Second Lien Credit Agreement; <u>provided</u>, that such Indebtedness shall not exceed the Junior Term Debt Cap (as defined in the ABL/Term Intercreditor Agreement), in each case, including Permitted Refinancings thereof;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(h) other unsecured subordinated debt issued after the Effective Date by Holdings to former employees for the repurchase of their Holdings Stock so long as such debt is subject to a subordination agreement in favor of the Administrative Agent and which permit no payments of any kind other than those permitted by <u>Section</u> <u>7.11(b)</u> until the Finance Obligations are paid in full and all Commitments are terminated and contain such other terms and conditions as shall be 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;(i) other unsecured Indebtedness not exceeding in the aggregate at any time outstanding $15,000,000; <u>provided</u> that such unsecured Indebtedness (i) shall not have scheduled amortization payments of principal or be subject to mandatory redemption, repurchase, prepayment or sinking fund obligations (except for customary asset sale or change of control provisions that provide for the prior repayment in full of the Loans, the satisfaction of all Letters of Credit (either Cash Collateralized or backstopped on terms reasonably satisfactory to the Administrative Agent) and all other Finance Obligations), in each case prior to the latest Maturity Date at the time such Indebtedness is incurred and (ii) shall not be scheduled to mature or mature prior to the date that is one hundred and eighty (180) days after the latest Maturity Date at the time such Indebtedness is incurred;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(j) Indebtedness incurred by Foreign Subsidiaries (including Steinway and Sons, but only for so long as it is not a Loan Party hereunder) in an aggregate principal amount not to exceed $20,000,000 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;(k) Indebtedness that is in existence when a Person becomes a Subsidiary or that is secured by an asset when acquired by Holdings or a Subsidiary thereof, as long as such Indebtedness was not incurred in contemplation of such Person becoming a Subsidiary or such acquisition, and does not exceed $5,000,000 in the aggregate at any time.

------

**Section 7.06 <u>Employee Loans and Transactions with Affiliates</u>**. No Loan Party shall, and no Loan Party shall suffer or permit any of its Subsidiaries to, enter into any transaction with any Affiliate of the Parent Borrower or of any such Subsidiary, except:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a) as expressly permitted by this Agreement;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b) in the Ordinary Course of Business and pursuant to the reasonable requirements of the business of such Loan Party or such Subsidiary upon fair and reasonable terms no less favorable to such Loan Party or such Subsidiary than would be obtained in a comparable arm's length transaction with a Person not an Affiliate of the Parent Borrower or such Subsidiary;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c) loans and advances to employees of Loan Parties to the extent permitted by <u>Section</u> <u>7.04(c)</u>; and

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(d) non-cash loans or advances made by Holdings to employees of Loan Parties that are simultaneously used by such Persons to purchase Stock or Stock Equivalents of Holdings.

All such transactions existing as of the Effective Date are described in <u>Schedule</u> <u>7.06</u>.

**Section 7.07 <u>Management Fees and Compensation</u>**. No Loan Party shall, and no Loan Party shall permit any of its Subsidiaries to, pay any management, consulting or similar fees to any Affiliate of any Loan Party or to any officer, director or employee of any Loan Party or any Affiliate of any Loan Party or pay or reimburse Sponsor or any of its Affiliates (other than a Loan Party) for any costs, expenses and similar items except:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a) Payment of any management, consulting or similar fees to any Loan Party;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b) payment of reasonable compensation to officers and employees for actual services rendered to the Loan Parties and their Subsidiaries 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;(c) payment of directors' fees and reimbursement of actual out-of-pocket expenses incurred in connection with attending board of director meetings not to exceed in the aggregate, with respect to all such items, $1,500,000 in any Fiscal Year of the Parent Borrower; and

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(d) reimbursement of reasonable out-of-pocket costs and expenses to Sponsor.

**Section 7.08 <u>Use of Proceeds</u>**. No Loan Party shall, and no Loan Party shall suffer or permit any of its Subsidiaries to, use any portion of the Loan proceeds, directly or indirectly, to purchase or carry Margin Stock in a manner that would result in a violation of Regulation U of the Federal Reserve Board, or repay or otherwise refinance Indebtedness of any Loan Party or others incurred to purchase or carry Margin Stock, or otherwise in any manner which is in contravention of any Requirement of Law or in violation of this Agreement.

------

**Section 7.09 <u>Contingent Obligations</u>**. No Loan Party shall, and no Loan Party shall suffer or permit any of its Subsidiaries to, create, incur, assume or suffer to exist any Contingent Obligations except in respect of the Finance Obligations and except:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a) endorsements for collection or deposit 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;(b) Rate Contracts entered into in the Ordinary Course of Business for bona fide hedging purposes and not for speculation with the Administrative Agent's prior written consent;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c) Contingent Obligations of the Loan Parties and their Subsidiaries existing as of the Effective Date and listed in <u>Schedule</u> <u>7.09</u>, including extension and renewals thereof which do not increase the amount of such Contingent Obligations as of the date of such extension or renewal;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(d) Contingent Obligations incurred in the Ordinary Course of Business with respect to surety and appeal bonds, performance bonds and other similar obligations;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(e) Contingent Obligations arising under indemnity agreements to title insurers to cause such title insurers to issue to the Administrative Agent title insurance policies;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(f) Contingent Obligations arising with respect to customary indemnification obligations in favor of (i) sellers in connection with Acquisitions permitted hereunder and (ii) purchasers in connection with dispositions permitted under <u>Section</u> <u>7.02(b)</u>;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(g) Reserved;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(h) Contingent Obligations arising under guarantees made in the Ordinary Course of Business of obligations of any Loan Party (other than Holdings), which obligations are otherwise permitted hereunder; <u>provided</u> that if such obligation is subordinated to the Finance Obligations, such guarantee shall be subordinated to the same extent;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(i) unsecured Contingent Obligations of Holdings with respect to Indebtedness of Foreign Subsidiaries (including Steinway and Sons, but only for so long as it is not a Loan Party hereunder) permitted pursuant to <u>Section</u> <u>7.05(j)</u> or <u>7.05(c)</u> in an aggregate amount not to exceed $5,000,000 at any time outstanding;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(j) other Contingent Obligations not exceeding $4,000,000 in the aggregate 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;(k) Contingent Obligations of Parent Borrower or any of its Subsidiary arising under guarantees of the Indebtedness of the Parent Borrower or any of its Subsidiaries permitted pursuant to <u>Sections</u> <u>7.05</u> (only to the extent that Parent Borrower or any of its Subsidiary that are guarantors of such Indebtedness would be permitted to incur such Indebtedness as primary obligors pursuant to <u>Section</u> <u>7.05</u>) and <u>7.04(b)</u>.

**Section 7.10 <u>Reserved</u>**.

------

**Section 7.11 <u>Restricted Payments</u>**. No Loan Party shall, and no Loan Party shall suffer or permit any of its Subsidiaries to, (i) declare or make any dividend payment or other distribution of assets, properties, cash, rights, obligations or securities on account of any Stock or Stock Equivalent, (ii) purchase, redeem or otherwise acquire for value any Stock or Stock Equivalent now or hereafter outstanding or (iii) make any payment or prepayment of principal of, premium, if any, interest, fees, redemption, exchange, purchase, retirement, defeasance, sinking fund or similar payment with respect to, Subordinated Indebtedness or Indebtedness permitted pursuant to <u>Section</u> <u>7.05(g)(ii)</u> (the items described in <u>clauses (i)</u>, <u>(ii)</u> and <u>(iii)</u> above are referred to as "<u>Restricted Payments</u>"); except that any Subsidiary of the Parent Borrower may declare and pay dividends to the Parent Borrower or any Wholly-Owned Subsidiary of the Parent Borrower, and except that:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a) Holdings may declare and make dividend payments or other distributions payable solely in its Stock or Stock Equivalent; and

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b) the Parent Borrower may make distributions to Holdings which are immediately used by Holdings to redeem from officers, directors and employees whose employment by the Loan Parties has been terminated, Stock and Stock Equivalents (or to repay subordinated notes issued in redemption of such Stock or Stock Equivalents) <u>provided</u> all of the following conditions are satisfied:

&nbsp;&nbsp;&nbsp;&nbsp;&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) no Default or Event of Default has occurred and is continuing or would arise as a result of such Restricted 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;&nbsp;&nbsp;&nbsp;&nbsp;(ii) after giving effect to such Restricted Payment, the Loan Parties are in compliance on a pro forma basis with the covenant set forth in <u>Section</u> <u>7.19</u>, recomputed for the most recent fiscal month for which financial statements have been delivered;

&nbsp;&nbsp;&nbsp;&nbsp;&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) the aggregate Restricted Payments permitted (x) in any Fiscal Year of the Parent Borrower shall not exceed the sum of $3,000,000 and the aggregate amount of such Restricted Payments permitted (but not made) in prior years pursuant to this <u>clause</u> <u>(iii)</u> under this clause and (y) during the term of this Agreement shall not exceed $15,000,000;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(iv) after giving effect to such Restricted Payment, Availability is not less than the greater of $15,000,000 and 20% of the Revolving Facility Commitment;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c) in the event the Parent Borrower files a consolidated, combined, unitary or similar type income Tax return with Holdings and/or the direct or indirect parent or parents of Holdings, the Parent Borrower may make distributions to Holdings and/or the direct or indirect parent or parents of Holdings to permit Holdings and/or the direct or indirect parent or parents of Holdings to pay federal and state income Taxes then due and payable, <u>provided</u>, that (i) the amount of such distribution shall not be greater than the amount of such Taxes or expenses that would have been due and payable by the Parent Borrower and its relevant Subsidiaries had the Parent Borrower not filed a consolidated, combined, unitary or similar type return with Holdings and/or the direct or indirect parent or parents of Holdings and (ii) Holdings and/or the direct or indirect parent or parents of Holdings uses such distribution promptly to pay its Taxes;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(d) the Loan Parties may make (i) payments with respect to Indebtedness permitted pursuant to <u>Section</u> <u>7.05(g)(ii)</u> (A) to the extent not prohibited by the Intercreditor Agreements, (B) in respect of payments of regularly scheduled interest or (C) in respect of Permitted Refinancings thereof permitted pursuant to <u>Section</u> <u>7.05(g)(ii)</u> and (ii) Restricted Payments in the amount of Waivable Mandatory Prepayments applied in accordance with <u>clauses</u> <u>(iii)</u> and <u>(iv)</u> of the last sentence of <u>Section</u> <u>2.05(e)</u>;

------

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(e) the Parent Borrower may make distributions to Holdings to permit Holdings to pay amounts required to maintain its corporate or other legal existence and for other customary overhead expenses; and

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(f) the Parent Borrower may make other Restricted Payments so long as either (i) the Permitted Transaction Conditions are satisfied at the time of such Restricted Payment or (ii) the aggregate amount of all such Restricted Payments made in reliance on this <u>clause (f)</u> shall not exceed the cumulative amount of Net Issuance Proceeds of all Qualifying Equity Issuances (other than any Specified Equity Contribution) made after the Closing Date and Not Otherwise Applied.

**Section 7.12 <u>Change in Business</u>**.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a) No Loan Party shall, and no Loan Party shall permit any of its Subsidiaries to, engage in any material line of business substantially different from those lines of business carried on by it on the Effective Date.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b) Holdings shall not (i) incur, directly or indirectly, any Indebtedness or any other obligation or liability whatsoever other than the Indebtedness and obligations under this Agreement, the other Loan Documents, the Term Loan Documents and the Second Lien Loan Documents and Contingent Obligations permitted pursuant to <u>Section</u> <u>7.09(i)</u>; (ii) create or suffer to exist any Lien upon any property or assets now owned or hereafter acquired, leased or licensed by it other than the Liens created under the Collateral Documents, Term Loan Documents and Second Lien Loan Documents to which it is a party; (iii) engage in any business or activity or own any assets other than (A) holding shares in the Stock of the Parent Borrower; (B) performing its obligations and activities related thereto under the Loan Documents and the Related Agreements and the documents, agreements and other instruments entered into in connection therewith; (C) participating in tax, accounting and other administrative activities as the parent of the consolidated group of Holdings, the Parent Borrower and the Parent Borrower's direct and indirect Subsidiaries, and other activities relating to the maintenance of its legal existence, including paying Taxes; (D) holding any cash or property received in connection with Restricted Payments permitted pursuant to <u>Section</u> <u>7.11</u> pending prompt application thereof in accordance with such Section; (E) providing reasonable and customary indemnification to officers and directors; (F) issuing and offering its Stock, and incurring and paying the costs, fees and expenses in connection therewith, except to the extent any such transaction would result in an Event of Default under <u>Section</u> <u>8.01</u>; (G)(x) incurring and paying fees, costs and expenses related to the transactions permitted by this <u>paragraph</u> <u>(b)</u>, (y) paying management fees and transaction fees to the extent permitted pursuant to <u>Section</u> <u>7.07</u> and (z) otherwise incurring ordinary overhead costs and expenses (including administrative, legal, account and similar expenses); and (H) other activities incidental to the foregoing; (iv) consolidate with or merge with or into, or convey, transfer, lease or license all or substantially all its assets to, any Person; (v) sell or otherwise dispose of any Stock of the Parent Borrower; (vi) create or acquire any Subsidiary or make or own any Investment in any Person other as set forth in <u>clause (iii)(A)</u> above; or (vii) fail to hold itself out to the public as a legal entity separate and distinct from all other Persons.

------

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c) Steinway and Sons shall not own any Property located in the United States other than (i) Property that shall become inventory of a Loan Party within 90 days after its presence in the United States and (ii) Property that (at fair market value) does not exceed $2,000,000 in the aggregate for all such Property described in this <u>clause (ii)</u>.

**Section 7.13 <u>Reserved</u>**.

**Section 7.14 <u>Changes in Accounting, Name or Jurisdiction of Organization</u>**. No Loan Party shall, and no Loan Party shall suffer or permit any of its Subsidiaries to, (i) make any significant change in accounting treatment or reporting practices, except as required by GAAP, (ii) change the Fiscal Year or method for determining Fiscal Quarters of any Loan Party or of any consolidated Subsidiary of any Loan Party, (iii) change its name as it appears in official filings in its jurisdiction of organization or (iv) change its jurisdiction of organization, in the case of <u>clauses</u> <u>(iii)</u> and <u>(iv)</u>, without at least 20 days' prior written notice to the Administrative Agent and after all actions necessary to continue the perfection of the Collateral Agent's Liens have been completed.

**Section 7.15 <u>Amendments to Related Agreements</u>**. No Loan Party shall and no Loan Party shall permit any of its Subsidiaries to (i) amend, supplement, waive or otherwise modify any provision of any Related Agreement in a manner adverse to the Administrative Agent or the Lenders or which would reasonably be expected to have a Material Adverse Effect; <u>provided</u> that any amendment, supplement, waiver or modification of any provision of any Related Agreement permitted pursuant to the terms of the Intercreditor Agreements shall not be considered adverse to the Administrative Agent or the Lenders or an amendment, supplement, waiver or other modification which would reasonably be expected to have a Material Adverse Effect, or (ii) take or fail to take any action under any Related Agreement that would reasonably be expected to have a Material Adverse Effect.

**Section 7.16 <u>No Negative Pledges</u>**.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a) No Loan Party shall, and no Loan Party shall permit any of its Subsidiaries to, directly or indirectly, create or otherwise cause or suffer to exist or become effective any consensual restriction or encumbrance of any kind on the ability of any such Subsidiary to pay dividends or make any other distribution on any of such Subsidiary's Stock or Stock Equivalents or to pay fees, including management fees, or make other payments and distributions to the Parent Borrower or any of its Subsidiaries other than those that exist by reason of any restriction existing under the Loan Documents, the Term Loan Documents or the Second Lien Loan Documents as in effect on the date hereof; <u>provided</u>, <u>however</u>, that agreements governing Indebtedness incurred by Foreign Subsidiaries permitted hereby may contain customary restrictions on the assets of such Foreign Subsidiaries. No Loan Party shall, and no Loan Party shall permit any of its Subsidiaries to, directly or indirectly, enter into, assume or become subject to any Contractual Obligation prohibiting or otherwise restricting the existence of any Lien upon any of its assets in favor of the Administrative Agent, whether now owned or hereafter acquired except (i) in connection with any document or instrument governing (A) Liens permitted pursuant to <u>Section</u> <u>7.01(h)</u>, <u>7.01(i)</u> or <u>7.01(w)</u> <u>provided</u> that any such restriction contained therein relates only to the asset or assets subject to such permitted Liens or (B) Indebtedness permitted pursuant to <u>Section</u> <u>7.05(d)</u> or <u>7.05(g)</u>, (ii) customary provisions restricting subletting or assignment of any lease governing a leasehold interest, (iii) restrictions and conditions applicable to customer deposits imposed by customers of the Loan Parties under contracts entered into the Ordinary Course of Business,

------

(iv) restrictions and conditions contained in agreements relating to the sale of assets permitted hereunder; <u>provided</u> such restrictions are limited to the assets being sold and (v) customary provisions in joint venture agreements relating to purchase options, rights of first refusal or call or similar rights of a third party that owns Stock or Stock Equivalents in such joint venture (excluding for greater certainty, provisions that relate to the pledge of any such Stock or Stock Equivalents in such joint venture which shall be permitted to be made in favor of the Administrative Agent); <u>provided</u> that such restrictions and conditions were not entered into in contemplation or in connection with such Person becoming a Subsidiary.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b) No Loan Party shall issue any Stock or Stock Equivalents (i) if such Issuance would result in an Event of Default under <u>Section</u> <u>8.01(k)</u> and (ii) unless such Stock and Stock Equivalents are pledged to the Collateral Agent, for the benefit of the Secured Parties, as security for the Finance Obligations, on substantially the same terms and conditions as the Stock and Stock Equivalents of the Loan Parties owned by Holdings were pledged to the Collateral Agent as of the Effective Date.

**Section 7.17 <u>Sale</u><u>-Leasebacks</u>**. Except as permitted under <u>Section</u> <u>7.02(h)</u>, no Loan Party shall, and no Loan Party shall permit any of its Subsidiaries to, engage in a sale leaseback, synthetic lease or similar transaction involving any of its assets.

**Section 7.18 <u>Amendment of Organization Documents</u>**. The Loan Parties shall not amend any of its Organization Documents to (i) place any restrictions on the transfer or assignability of its Stock which would be materially adverse to the interests of the Lenders, (ii) place any limitations, directly or indirectly, on the exercise of the Administrative Agent's remedies set forth in the Pledge and Security Agreement, (iii) "opt-out" of Article 8 of the UCC for its state of organization with respect to its Stock or (iv) take any action otherwise prohibited by the Pledge and Security Agreement.

**Section 7.19 <u>Fixed Charge Coverage Ratio</u>**. If a Covenant Triggering Event occurs, Holdings shall not permit the Fixed Charge Coverage Ratio on a pro forma basis to be less than 1.00 to 1.00 for (i) the Measurement Period ended immediately prior to the Fiscal Quarter in which the Covenant Triggering Event occurs and for which financial statements have been (or are required to be) delivered under <u>Section</u> <u>6.01(a)</u> or <u>(b)</u>, as applicable and (ii) each Measurement Period ending on the last day of any Fiscal Quarter while such Covenant Triggering Event is continuing and until the Fiscal Quarter during which no Default or Event of Default shall have existed and Availability shall have first exceeded 15.0% of the Revolving Facility Commitment, in each case, at all times during a period of 30 consecutive days.

**ARTICLE VIII** 

**DEFAULTS** 

**Section 8.01 <u>Events of Default</u>**. An Event of Default shall exist upon the occurrence of any of the following specified events or conditions (each an "<u>Event of Default</u>"):

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a) *<u>Non</u><u>-Payment</u>.* Any Borrower or any other Loan Party fails to (i) pay when and as required to be paid herein, any amount of principal of any Loan, or (ii) pay within three Business Days after the same becomes due, any interest on any Loan, or any fee due hereunder, or (iii) pay within three Business Days after the same becomes due, any other amount payable hereunder or under any other Loan Document.

------

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b) *<u>Covenants</u>.* Any Loan Party 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;&nbsp;&nbsp;&nbsp;&nbsp;(i) default in the due performance or observance of any term, covenant or agreement contained in <u>Section</u> <u>6.02(j)</u>, <u>6.03(a)</u>, <u>6.04(a)</u> (but only to the extent that such Section relates to the maintenance of the organization or existence of any Loan Party or any of its Subsidiaries), <u>6.06</u>, <u>6.09</u>, <u>6.10</u>, <u>6.11</u> or <u>Article</u> <u>VII</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;&nbsp;&nbsp;&nbsp;&nbsp;(ii) default in the due performance or observance of any term, covenant or agreement contained in (A) <u>Section</u> <u>6.01</u>, <u>6.02(a)</u> or <u>6.02(b)</u> and such default shall continue unremedied for a period of five Business Days after the earlier of a Responsible Officer of a Loan party becoming aware of such default or notice thereof given by the Administrative Agent or (B) <u>Section</u> <u>6.02(d)</u> and such default shall continue unremedied for a period of two Business Days after the earlier of a Responsible Officer of a Loan Party becoming aware of such default or notice thereof given by the Administrative Agent; 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;(iii) default in the due performance or observance by it of any term, covenant or agreement (other than those referred to in <u>subsection</u> <u>(a)</u>, <u>(b)(i)</u> or <u>(b)(ii)</u> of this <u>Section</u> <u>8.01</u>) contained in this Agreement and such default shall continue unremedied for a period of 30 days after the earlier of a Responsible Officer of a Loan Party becoming aware of such default or notice thereof given by the Administrative Agent.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c) *<u>Other Loan Documents</u>.* Any Loan Party shall default in the due performance or observance of any term, covenant or agreement (other than those referred to in <u>subsection</u> <u>(a)</u> or <u>(b)</u> of this <u>Section</u> <u>8.01</u>) in any of the other Loan Documents and such default shall continue unremedied for a period of 30 days after the earlier of the chief executive officer or chief financial officer of a Loan Party becoming aware of such default or notice thereof given by the Administrative Agent.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(d) *<u>Representations and Warranties</u>.* Any representation, warranty or statement made or deemed to be made by any Loan Party herein, in any of the other Loan Documents, or in any statement or certificate delivered or required to be delivered pursuant hereto or thereto shall prove to have been incorrect in any material respect on the date as of which it was made or deemed to have been made.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(e) *<u>Cross</u><u>-Default</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;&nbsp;&nbsp;&nbsp;&nbsp;(i) any Loan Party or any Subsidiary thereof (A) fails to make payment within five days of the due date thereof (whether by scheduled maturity, required prepayment, acceleration, demand or otherwise), regardless of amount, in respect of the Term Credit Agreement, the Second Lien Credit Agreement or any other Indebtedness or Guarantee (other than in respect of (x) Indebtedness outstanding under the Loan Documents and (y) Rate Contracts) having an aggregate principal amount (including undrawn committed or available amounts and including amounts owing to all creditors under any combined or syndicated credit arrangement) of more than the Threshold Amount, (B) fails to perform or observe any other condition or covenant, or any other event

------

shall occur or condition shall exist, under the Term Credit Agreement, the Second Lien Credit Agreement or any agreement or instrument relating thereto or such other Indebtedness or Guarantee having an aggregate principal amount (including undrawn committed or available amounts and including amounts owing to all creditors under any combined or syndicated credit arrangement) of more than the Threshold Amount, if the effect of such failure, event or condition is to cause, or to permit the holder or holders or beneficiary or beneficiaries of such Indebtedness or Guarantee (or a trustee or agent on behalf of such holder or holders or beneficiary or beneficiaries) to cause, the Term Credit Agreement or such other Indebtedness to be declared to be due and payable prior to its stated maturity, or such Guarantee to become payable, or cash collateral in respect thereof to be demanded or (C) shall be required by the terms of the Term Credit Agreement, the Second Lien Credit Agreement or such other Indebtedness or Guarantee having an aggregate principal amount (including undrawn committed or available amounts and including amounts owing to all creditors under any combined or syndicated credit arrangement) of more than the Threshold Amount to offer to prepay or repurchase such Indebtedness or the primary Indebtedness underlying such Guarantee (or any portion thereof) prior to the stated maturity thereof; 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;(ii) there occurs under any Rate Contract an Early Termination Date (as defined in such Rate Contract) resulting from (A) any event of default under such Rate Contract as to which Holdings or any of its Subsidiaries is the Defaulting Party (as defined in such Rate Contract) or (B) any Termination Event (as so defined) as to which Holdings or any of its Subsidiaries is an Affected Party (as so defined), and, in either event, the Swap Termination Value owed by Holdings or any of its Subsidiaries as a result thereof is greater than the Threshold Amount.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(f) *<u>Insolvency Proceedings</u>.* Any Loan Party or any Subsidiary thereof institutes or consents to the institution of any proceeding under any Debtor Relief Law, or makes an assignment for the benefit of creditors; or applies for or consents to the appointment of any receiver, interim receiver, trustee, custodian, conservator, monitor, administrator, sequestrator, liquidator, rehabilitator or similar officer for it or for all or any material part of its property; or any receiver, interim receiver, trustee, custodian, conservator, monitor, administrator, sequestrator, liquidator, rehabilitator or similar officer is appointed without the application or consent of such Person and the appointment continues undischarged or unstayed for 60 calendar days; or any proceeding under any Debtor Relief Law relating to any such Person or to all or any material part of its property is instituted without the consent of such Person and continues undismissed or unstayed for 60 calendar days, or an order for relief is entered in any such proceeding.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(g) *<u>Inability to Pay Debts; Attachment</u>,* (i) Any Loan Party or any Subsidiary thereof becomes unable or admits in writing its inability or fails generally to pay its debts as they become due, or (ii) any writ or warrant of attachment or execution or similar process is issued or levied against all or any material part of the property of any such Person and is not released, vacated or fully bonded within 45 days after its issue or levy.

------

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(h) *<u>Judgments</u>.* There is entered against any Loan Party or any Subsidiary thereof (i) one or more final judgments or orders for the payment of money in an aggregate amount (as to all such judgments and orders) exceeding the Threshold Amount (to the extent not covered by independent third-party insurance as to which the insurer is rated at least "A" by A.M. Best Company, has been notified of the potential claim and does not dispute coverage), or (ii) any one or more non-monetary final judgments that have, or could reasonably be expected to have, individually or in the aggregate, a Material Adverse Effect and, in either case of (i) and (ii), (A) enforcement proceedings are commenced by any creditor upon such judgment or order, or (B) there is a period of 20 consecutive days during which a stay of enforcement of such judgment, by reason of a pending appeal or otherwise, is not in effect.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(i) *<u>ERISA</u>.* One or more ERISA Events occur that individually or in the aggregate result in Liability to any Loan Party in an aggregate amount that would 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;(j) *<u>Invalidity of Loan Documents</u>.* Any material provision of any Loan Document, at any time after its execution and delivery and for any reason other than as expressly permitted hereunder or thereunder or satisfaction in full of all the ABL Credit Obligations, ceases to be in full force and effect; or any Loan Party or any of its controlled Affiliates contests in any manner the validity or enforceability of any provision of any Loan Document; or any Loan Party denies that it has any or further liability under any provision of any Loan Document (other than as result of the repayment in full of the Finance Obligations), or purports to revoke, terminate or rescind any provision of any Loan Document.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(k) *<u>Change of Control</u>.* A Change of Control shall occur.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(l) *<u>Collateral Documents</u>.* Any Collateral Document after delivery thereof pursuant to <u>Section</u> <u>4.01</u>, <u>6.11</u> or <u>6.13</u> shall for any reason (other than pursuant to the terms thereof) cease to create a valid and perfected first priority Lien (subject to Liens permitted by <u>Section</u> <u>7.01</u>) on the Collateral with an aggregate fair market value in excess of $5,000,000 purported to be covered thereby, except to the extent that any such loss of perfection or priority results from the failure of the Term Collateral Agent (subject to the ABL/Term Intercreditor Agreement) to maintain possession of certificates actually delivered to it representing securities pledged under the Pledge and Security Agreements and except to the extent that such loss is covered by a Lender's title insurance policy and the Administrative Agent shall be reasonably satisfied with the credit of such insurer.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(m) *<u>Invalidity of Subordination Provisions</u>.* The subordination provisions of either Intercreditor Agreement or any agreement or instrument governing any Subordinated Indebtedness shall for any reason be revoked or invalidated, or otherwise cease to be in full force and effect, or any Person shall contest in any manner the validity or enforceability thereof or deny that it has any further liability or obligation thereunder, or the ABL Credit Obligations, for any reason shall not have the priority contemplated by this Agreement, the Intercreditor Agreements or such subordination provisions.

**Section 8.02 <u>Remedies upon Event of Default</u>**. If any Event of Default occurs and is continuing, the Administrative Agent shall, at the request of, or may, with the consent of, the Required Lenders, take any or all of the following actions:

------

&nbsp;&nbsp;&nbsp;&nbsp;&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) declare the commitment of each Lender to make Loans and of the L/C Issuer to issue Letters of Credit to be terminated, whereupon such commitments and obligation shall be terminated;

&nbsp;&nbsp;&nbsp;&nbsp;&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) declare the unpaid principal amount of all outstanding Loans and L/C Obligations, all interest accrued and unpaid thereon, and all other amounts owing or payable hereunder or under any other Loan Document to be immediately due and payable, without presentment, demand, protest or other notice of any kind, all of which are hereby expressly waived by the Borrowers;

&nbsp;&nbsp;&nbsp;&nbsp;&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) require the Borrowers to Cash Collateralize the L/C Obligations (in an amount equal to the Minimum Collateral Amount 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;&nbsp;&nbsp;&nbsp;&nbsp;(iv) exercise on behalf of itself and the Lenders and the L/C Issuer all rights and remedies available to it and the Lenders under the Loan Documents;

<u>provided</u>, <u>however</u>, that upon the occurrence of an actual or deemed entry of an order for relief with respect to any Borrower or any other Loan Party under the Bankruptcy Code or any other Debtor Relief Law, the obligation of each Lender to make Loans and of the L/C Issuer to issue Letters of Credit shall automatically terminate, the unpaid principal amount of all outstanding Loans and L/C Obligations and all interest and other amounts as aforesaid shall automatically become due and payable, in each case without further act of the Administrative Agent, the L/C Issuer or any Lender.

**Section 8.03 <u>Application of Funds</u>**. After the exercise of remedies provided for in <u>Section</u> <u>8.02</u> (or after the Loans and L/C Obligations have automatically become immediately due and payable as set forth in the proviso to <u>Section</u> <u>8.02</u>), any amounts received on account of the Finance Obligations shall, subject to the provisions of <u>Section</u> <u>2.15</u>, be applied by the Administrative Agent in the following order:

FIRST, to payment of that portion of the Finance Obligations constituting fees, indemnities, expenses and other amounts (including fees, charges and disbursements of counsel to the Administrative Agent and amounts payable under <u>Article</u> <u>III</u>) payable to the Administrative Agent in its capacity as such;

SECOND, to payment of that portion of the Finance Obligations constituting accrued and unpaid Letter of Credit Fees and unpaid principal of the Letter of Credit Borrowings, ratably among the L/C Issuers in proportion to the respective amounts described in this <u>clause Second</u> held by them;

THIRD, to payment of that portion of the Finance Obligations constituting fees, indemnities and other amounts (other than principal and interest) payable to the Lenders and L/C Issuer(s) (including fees, charges and disbursements of counsel to the respective Lenders (including fees and time charges for attorneys who may be employees of any Lender or L/C Issuer)) arising under the Loan Documents and amounts payable under <u>Article</u> <u>III</u>, ratably among them in proportion to the respective amounts described in this <u>clause Third</u> payable to them;

------

FOURTH, to the Administrative Agent for the account of the L/C Issuers, to Cash Collateralize that portion of L/C Obligations comprised of the aggregate undrawn amount of Letters of Credit to the extent not otherwise Cash Collateralized by the Borrowers pursuant to <u>Sections</u> <u>2.03</u> and <u>2.16</u>;

FIFTH, to payment of that portion of the Finance Obligations constituting accrued and unpaid interest on the Loans, L/C Obligations and other ABL Credit Obligations, ratably among the Lenders and L/C Issuer(s) in proportion to the respective amounts described in this <u>clause Fifth</u> payable to them;

SIXTH, to payment of that portion of the Finance Obligations constituting unpaid principal of the Loans and L/C Obligations and amounts then owing under Secured Cash Management Agreements and Secured Hedge Agreements, ratably among the Lenders and L/C Issuer(s) and Cash Management Banks and the Hedge Banks in proportion to the respective amounts described in this <u>clause Sixth</u> held by them;

SEVENTH, to the Term Finance Obligations, if any, as and to the extent required by the ABL/Term Intercreditor Agreement; and

LAST, the balance, if any, after all of the Finance Obligations have been indefeasibly paid in full, to the Borrowers or as otherwise required by law.

Subject to <u>Sections</u> <u>2.03(c)</u> and <u>2.16</u>, amounts used to Cash Collateralize the aggregate undrawn amount of Letters of Credit pursuant to <u>clause Fourth</u> above shall be applied to satisfy drawings under such Letters of Credit as they occur. If any amount remains on deposit as Cash Collateral after all Letters of Credit have either been fully drawn or expired, such remaining amount shall be applied to the other Finance Obligations, if any, in the order set forth above.

Notwithstanding the foregoing, Finance Obligations arising under Secured Cash Management Agreements and Secured Hedge Agreements shall be excluded from the application described above if the Administrative Agent has not received written notice thereof, together with such supporting documentation as the Administrative Agent may request, from the applicable Cash Management Bank or Hedge Bank, as the case may be. Each Cash Management Bank or Hedge Bank not a party to this Agreement that has given the notice contemplated by the preceding sentence shall, by such notice, be deemed to have acknowledged and accepted the appointment of the Administrative Agent pursuant to the terms of <u>Article</u> <u>IX</u> hereof for itself and its Affiliates as if a "Lender" party hereto.

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

------

**Section 8.04 <u>Equity Cure</u>**. (a) In the event the Loan Parties fail to comply with the financial covenant set forth in <u>Section</u> <u>7.19</u> as of the last day of any applicable Fiscal Quarter, any cash equity contribution to the Parent Borrower (funded with proceeds of common equity issued by Holdings or other equity issued by Holdings having terms reasonably acceptable to the Administrative Agent and in any case, not constituting Disqualified Stock) on or prior to the day that is fifteen Business Days after the day on which financial statements are required to be delivered for that Fiscal Quarter (such fifteen Business Day period, the "<u>Standstill Period</u>") will, at the irrevocable election of the Parent Borrower, be included in the calculation of Consolidated EBITDA solely for the purposes of determining compliance with the Fixed Charge Coverage Ratio for the relevant Measurement Period and any portion of subsequent period that includes such Fiscal Quarter (any such equity contribution so included in the calculation of Consolidated EBITDA, a "<u>Specified Equity Contribution</u>"); <u>provided</u> that (a) notice of the Parent Borrower's intent to make a Specified Equity Contribution shall be delivered no later than the day on which financial statements are required to be delivered for the applicable Fiscal Quarter, (b) in each consecutive four Fiscal Quarter period, there shall be at least two Fiscal Quarters in which no Specified Equity Contribution is made and there shall be no more than five Specified Equity Contributions made in the aggregate after the Effective Date, (c) the amount of any Specified Equity Contribution shall be no greater than the amount required to cause the Loan Parties to be in pro forma compliance with the Fixed Charge Coverage Ratio, (d) all Specified Equity Contributions shall be disregarded for purposes of the calculation of Consolidated EBITDA for all other purposes, including calculating basket levels, pricing and other items governed by reference to Consolidated EBITDA, (e) any Indebtedness prepaid with the proceeds of Specified Equity Contributions shall be deemed outstanding for purposes of determining compliance with the Fixed Charge Coverage Ratio for the current Fiscal Quarter and the next three Fiscal Quarters thereafter and (f) during the Standstill Period, no Borrowing shall be permitted to be made, and no Letter of Credit may be issued, amended, extended or renewed.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b) If, after giving effect to the adjustment referred to in <u>clause (a)</u> above, the Borrowers shall then be in compliance with the requirements of the financial covenant set forth in <u>Section</u> <u>7.19</u>, the Borrowers shall be deemed to have satisfied such requirements as of the relevant date of determination with the same effect as though there had been no failure to comply therewith at such date, and the applicable breach or default of the financial covenant set forth in <u>Section</u> <u>7.19</u> that had occurred shall be deemed cured for the purposes of this Agreement.

**ARTICLE IX** 

**AGENCY PROVISIONS** 

**Section 9.01 <u>Appointment and Authority</u>**.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a) *<u>Administrative Agent</u>.* Each of the Lenders and L/C Issuer(s) hereby irrevocably appoints Bank of America to act on its behalf as the Administrative Agent hereunder and under the other Loan Documents and authorizes the Administrative Agent to take such actions on its behalf and to exercise such powers as are delegated to the Administrative Agent by the terms hereof or thereof, together with such actions and powers as are reasonably incidental thereto including, without limitation, the making of one or more Agent Advances or Overadvances; <u>provided</u> that (i) the Administrative Agent agrees, solely for the benefit of the Secured Parties, to exercise its rights and privileges under the ABL/Term Intercreditor Agreement after, and in

------

accordance with, any direction to do so given by the Required Lenders and (ii) the Administrative Agent will not amend, waive or otherwise modify any provision of the ABL/Term Intercreditor Agreement without the prior consent of the Required Lenders. The provisions of this Article are solely for the benefit of the Administrative Agent, L/C Issuer(s) and the Lenders, and the Borrowers 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" herein or in any other Loan Documents (or any other 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 Requirement of Law. Instead such term is used as a matter of market custom, and is intended to create or reflect only an administrative relationship between contracting parties.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b) *<u>Collateral Agent</u>.* The Administrative Agent shall also act as the "collateral agent" under the Loan Documents, and each of the Lenders (including in its capacities as a potential Hedge Bank, Cash Management Bank and L/C Issuer) hereby irrevocably appoints and authorizes the Administrative Agent to act as the agent of such Lender and L/C Issuer for purposes of acquiring, holding and enforcing any and all Liens on Collateral granted by any of the Loan Parties to secure any of the Finance Obligations, together with such powers and discretion as are reasonably incidental thereto. In this connection, the Administrative Agent, as "collateral agent" and any co-agents, sub-agents and attorneys-in-fact appointed by the Administrative Agent pursuant to <u>Section</u> <u>9.05</u> for purposes of holding or enforcing any Lien on the Collateral (or any portion thereof) granted under the Collateral Documents, or for exercising any rights and remedies thereunder at the direction of the Administrative Agent), shall be entitled to the benefits of all provisions of this <u>Article</u> <u>IX</u> and <u>Article</u> <u>X</u> (including <u>Section</u> <u>10.04(c)</u>, as though such co-agents, sub-agents and attorneys-in-fact were the "collateral agent" under the Loan Documents) as if set forth in full herein with respect thereto.

**Section 9.02 <u>Rights as a Lender</u>**. The Person serving as the Administrative Agent hereunder shall, to the extent holding Revolving Facility Commitments or Loans hereunder, 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 the <u>term</u> "Lender" or "Lenders" shall, unless otherwise expressly indicated or unless the context otherwise requires, include the Person serving as the Administrative Agent hereunder in its individual capacity as a holder of Revolving Facility Commitments or Loans hereunder. Such Person and its Affiliates may accept deposits from, lend money to, own securities of, act as the financial advisor or in any other advisory capacity for and generally engage in any kind of business with the Borrowers or any Subsidiary or other Affiliate thereof as if such Person were not the Administrative Agent hereunder and without any duty to account therefor to the Lenders.

**Section 9.03 <u>Exculpatory Provisions</u>**. The Administrative Agent shall not have any duties or obligations except those expressly set forth herein and in the other Loan Documents, and its duties hereunder shall be administrative in nature. Without limiting the generality of the foregoing, 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;(i) shall not be subject to any fiduciary or other implied duties, regardless of whether a Default has occurred and is 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;&nbsp;&nbsp;&nbsp;&nbsp;(ii) shall not have any duty to take any discretionary action or exercise any discretionary powers, except discretionary rights and powers expressly contemplated hereby or by the other Loan Documents that the 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 expressly provided for herein or in the other Loan Documents); <u>provided</u> that the Administrative Agent shall not be required to take any action that, in its opinion or the opinion of its counsel, may expose the Administrative Agent to liability or that is contrary to any Loan Document or applicable law, including for the avoidance of doubt any action that may be in violation of the automatic stay under any Debtor Relief Law or that may effect a forfeiture, modification or termination of property of a Defaulting Lender in violation of any Debtor Relief Law; 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;(iii) shall not, except as expressly set forth herein and in the other Loan Documents, have any duty to disclose, and shall not be liable for the failure to disclose, any information relating to the Borrowers or any of its Affiliates that is communicated to or obtained by the Person serving as the 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 (i) with the consent or at the request of the Required Lenders (or such other number or percentage of the Lenders as shall be necessary, or as the Administrative Agent shall believe in good faith shall be necessary, under the circumstances as provided in <u>Sections</u> <u>10.01</u> and <u>8.02</u>) or (ii) in the absence of its own gross negligence or willful misconduct, as determined by a court of competent jurisdiction by a final and nonappealable judgment. The Administrative Agent shall be deemed not to have knowledge of any Default unless and until notice describing such Default is given in writing to the Administrative Agent by the Parent Borrower, a Lender or an L/C Issuer.

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 this Agreement or any other Loan Document, (ii) the contents of any certificate, report or other document delivered hereunder or thereunder or in connection herewith or therewith, (iii) the performance or observance of any of the covenants, agreements or other terms or conditions set forth herein or therein or the occurrence of any Default, (iv) the validity, enforceability, effectiveness or genuineness of this Agreement, any other Loan Document or any other agreement, instrument or document, (v) the value or the sufficiency of any Collateral or (vi) the satisfaction of any condition set forth in <u>Article</u> <u>IV</u> or elsewhere herein, other than to confirm receipt of, and (in the case of items referred to in <u>Section</u> <u>4.01</u>) whether or not it is reasonably satisfied with, items expressly required to be delivered to the Administrative Agent.

**Section 9.04 <u>Reliance by Administrative Agent</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 (including any electronic message, Internet or intranet website posting or other distribution) believed by it to be genuine and to have been signed, sent or otherwise authenticated by the proper Person. The Administrative Agent also may rely upon any statement made to it orally or by telephone or e-mail and believed by it to have been made by the proper Person, and shall not incur any liability for relying thereon. In determining compliance with any condition hereunder to the making of a Loan or the issuance,

------

extension, renewal or increase of a Letter of Credit that by its terms must be fulfilled to the satisfaction of a Lender or an L/C Issuer, the Administrative Agent may presume that such condition is satisfactory to such Lender or L/C Issuer unless the Administrative Agent shall have received notice to the contrary from such Lender or L/C Issuer prior to the making of such Loan or the issuance, extension, renewal or increase of a Letter of Credit. 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 9.05 <u>Delegation of Duties</u>**. The Administrative Agent may perform any and all of its duties and exercise its rights and powers hereunder or under any other Loan Document by or through any one or more sub-agents appointed by the Administrative Agent. The Administrative Agent and any such sub-agent may perform any and all of its duties and exercise its rights and powers by or through their respective Related Parties. The exculpatory provisions of this <u>Article</u> <u>IX</u> 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 Administrative Agent. The Administrative Agent shall not be responsible for the negligence or misconduct of any sub-agents except to the extent that a court of competent jurisdiction determines in a final and non appealable judgment that the Administrative Agent acted with gross negligence or willful misconduct in the selection of such sub-agents.

**Section 9.06 <u>Resignation of Administrative Agent</u>**.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a) The Administrative Agent may at any time, upon 30 days' notice to the Borrowers, the Lenders and the L/C Issuer(s), resign as the Administrative Agent. Upon receipt of any such notice of resignation, the Required Lenders shall have the right, in consultation with the Parent Borrower, to appoint a successor, which shall be a bank with an office in the United States, or an Affiliate of any such bank with an office in the United States. If no such successor shall have been so appointed by the Required Lenders and shall have accepted such appointment within 30 days after the retiring Administrative Agent gives notice of its resignation, then the retiring Administrative Agent may on behalf of the Lenders and the L/C Issuer(s), appoint a successor Administrative Agent meeting the qualifications set forth above; <u>provided</u> that if the Administrative Agent shall notify the Parent Borrower, the Lenders and each L/C Issuer that no qualifying Person has accepted such appointment, then such resignation shall nonetheless become effective in accordance with such notice and (i) the retiring Administrative Agent shall be discharged from its duties and obligations hereunder and under the other Loan Documents (except that in the case of any collateral security held by the Administrative Agent on behalf of the Lenders and each L/C Issuer under any of the Loan Documents, the retiring Administrative Agent shall continue to hold such collateral security until such time as a successor Administrative Agent is appointed) and (ii) all payments, communications and determinations provided to be made by, to or through the Administrative Agent shall instead be made by or to each Lender or L/C issuer directly, until such time as the Required Lenders appoint a successor Administrative Agent as provided for above in this <u>Section</u> <u>9.06</u>. Upon the acceptance of a successor's appointment as Administrative Agent hereunder, such successor shall succeed to and become vested with all of the rights, powers, privileges and duties of the retiring (or retired) Administrative Agent, and the retiring Administrative Agent shall be discharged from all of its duties and obligations hereunder

------

or under the other Loan Documents (if not already discharged therefrom as provided above in this <u>Section</u> <u>9.06</u>). After the retiring Administrative Agent's resignation hereunder and under the other Loan Documents, the provisions of this Article and <u>Section</u> <u>10.04</u> 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 the retiring Administrative Agent was acting as Administrative Agent.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b) Any resignation by Bank of America as Administrative Agent pursuant to this <u>Section</u> <u>9.06</u> shall also constitute its resignation as L/C Issuer and Swing Line Lender. If Bank of America resigns as an L/C Issuer, it shall retain all the rights, powers, privileges and duties of an L/C Issuer hereunder with respect to all Letters of Credit issued by it which are outstanding as of the effective date of its resignation as an L/C Issuer and all L/C Obligations with respect thereto, including the right to require the Lenders to make Base Rate Loans or fund risk participations in Unreimbursed Amounts pursuant to <u>Section</u> <u>2.03(c)</u>. If Bank of America resigns as Swing Line Lender, it shall retain all the rights of the Swing Line Lender provided for hereunder with respect to Swing Line Loans made by it and outstanding as of the effective date of such resignation, including the right to require the Lenders to make Base Rate Loans or fund risk participations in outstanding Swing Line Loans pursuant to <u>Section</u> <u>2.04(c)</u>. Upon the appointment by the Parent Borrower of a successor L/C Issuer or Swing Line Lender hereunder (which successor shall in all cases be a Lender other than a Defaulting Lender), (a) such successor shall succeed to and become vested with all of the rights, powers, privileges and duties of the retiring L/C Issuer or Swing Line Lender, as applicable, (b) the retiring L/C Issuer and Swing Line Lender shall be discharged from all of its duties and obligations hereunder or under the other Loan Documents, and (c) the successor L/C Issuer shall issue letters of credit in substitution for the Letters of Credit, if any, issued by the retiring L/C Issuer which are outstanding at the time of such succession or make other arrangements satisfactory to Bank of America to effectively assume the obligations of Bank of America with respect to such Letters of Credit.

**Section 9.07 <u>Non</u><u>-Reliance on Administrative Agent and Other Lenders</u>**. Each Lender and L/C Issuer acknowledges that it has, independently and without reliance upon the Administrative Agent or any other Lender or any of their Related Parties and based on such documents and information as it has deemed appropriate, made its own credit analysis and decision to enter into this Agreement. Each Lender and L/C Issuer also acknowledges that it will, independently and without reliance upon the Administrative Agent or any other Lender or any of their Related Parties and based on such documents and information as it shall from time to time deem appropriate, continue to make its own decisions in taking or not taking action under or based upon this Agreement, any other Loan Document or any related agreement or any document furnished hereunder or thereunder.

**Section 9.08 <u>No Other Duties, Etc</u>**. Anything herein to the contrary notwithstanding, none of the Joint Lead Arrangers, the Syndication Agent or any agent listed on the cover page hereof shall have any powers, duties or responsibilities under this Agreement or any of the other Loan Documents, except in its capacity, as applicable, as the Administrative Agent, the Collateral Agent, a Lender or L/C Issuer hereunder, or as expressly set forth herein.

------

**Section 9.09 <u>Administrative Agent May File Proofs of Claim</u>**. In case of the pendency of any proceeding under any Debtor Relief Law or any other judicial proceeding relative to any Loan Party, the Administrative Agent (irrespective of whether the principal of any Loan or L/C Obligation shall then be due and payable as herein expressed or by declaration or otherwise and irrespective of whether the Administrative Agent shall have made any demand on the Borrowers) shall be entitled and empowered, by intervention in such proceeding or otherwise, in each case, subject to the ABL/Term Intercreditor 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;&nbsp;&nbsp;&nbsp;&nbsp;(i) to file and prove a claim for the whole amount of the principal and interest owing and unpaid in respect of the Loans, L/C Obligations and all other ABL Credit Obligations that are owing and unpaid and to file such other documents as may be necessary or advisable in order to have the claims of the Lenders, the L/C Issuers and the Administrative Agent (including any claim for the reasonable compensation, expenses, disbursements and advances of the Lenders, the L/C Issuers and the Administrative Agent and their respective agents and counsel and all other amounts due the Lenders and the Administrative Agent under <u>Sections</u> <u>2.03(h)</u> and <u>(i)</u>, <u>2.09</u> and <u>10.04)</u> allowed in such judicial proceeding; 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;(ii) to collect and receive any monies or other property payable or deliverable on any such claims and to distribute the same;

and any custodian, receiver, assignee, trustee, liquidator, sequestrator or other similar official in any such judicial proceeding is hereby authorized by each Lender to make such payments to the Administrative Agent and, in the event that the Administrative Agent shall consent to the making of such payments directly to the Lenders, to pay to the Administrative Agent any amount due for the reasonable compensation, expenses, disbursements and advances of the Administrative Agent and its agents and counsel, and any other amounts due the Administrative Agent under <u>Sections</u> <u>2.03(h)</u> and <u>(i)</u>, <u>2.09</u> and <u>10.04</u>.

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

**Section 9.10 <u>Collateral and Guaranty Matters</u>**. Each of the Lenders (including in its capacities as a potential Hedge Bank and a potential Cash Management Bank) and the L/C Issuers irrevocably authorize either or both of the Administrative Agent and the Collateral Agent, at its or their option and in its or their 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;&nbsp;&nbsp;&nbsp;&nbsp;(i) to release any Lien on any property granted to or held by the Administrative Agent under any Loan Document (A) upon termination of the Aggregate Commitments and payment in full of all Finance Obligations (other than (x) contingent indemnification obligations and the expiration or termination of all Letters of Credit (other than Letters of Credit as to which other arrangements, including cash collateralization or backstopping, reasonably satisfactory to the Administrative Agent and the L/C Issuers shall have been made), and (y) obligations and liabilities under Secured Hedge Agreements and

------

Secured Cash Management Agreements as to which arrangements satisfactory to the applicable Hedge Bank or Cash Management Bank, as applicable, shall have been made), (B) that is sold or to be sold as part of or in connection with any sale permitted hereunder or under any other Loan Document or (C) if approved, authorized or ratified in writing in accordance with <u>Section</u> <u>10.01</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;&nbsp;&nbsp;&nbsp;&nbsp;(ii) to release any Guarantor from its obligations under the Guaranties if such Person ceases to be a Subsidiary or becomes an Excluded Subsidiary as a result of a transaction permitted hereunder; 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;(iii) to subordinate any Lien on any property granted to or held by the Administrative Agent under any Finance Document to the holder of any Lien on such property that is permitted by <u>Section</u> <u>7.01(h)</u>.

Upon request by the Administrative Agent at any time, the Required Lenders will confirm in writing the Administrative Agent's and/or the Collateral Agent's authority to release or subordinate its interest in particular types or items of property, or to release any Guarantor from its obligations under the Guaranties pursuant to this <u>Section</u> <u>9.10</u>. In each case as specified in this <u>Section</u> <u>9.10</u>, the Administrative Agent or the Collateral Agent, as applicable, will, at the Borrowers' expense, execute and deliver to the applicable Loan Party such documents as such Loan Party may reasonably request to evidence the release of such item of Collateral from the assignment and security interest granted under the Collateral Documents or to subordinate its interest in such item, or to release such Guarantor from its obligations under the Guaranties, in each case in accordance with the terms of the Loan Documents and this <u>Section</u> <u>9.10</u>.

The Administrative Agent shall not be responsible for or have a duty to ascertain or inquire into any representation or warranty regarding the existence, value or collectability of the Collateral, the existence, priority or perfection of the Administrative Agent's Lien thereon, or any certificate prepared by any Loan Party in connection therewith, nor shall the Administrative Agent be responsible or liable to the Lenders for any failure to monitor or maintain any portion of the Collateral.

**Section 9.11 <u>Secured Hedge Agreements and Secured Cash Management Agreements</u>**. Except as otherwise expressly set forth herein or in any Guaranty or any Collateral Document, no Hedge Bank or Cash Management Bank that obtains the benefits of <u>Section</u> <u>8.03</u>, any Guaranty or any Collateral by virtue of the provisions hereof or of any Guaranty or any Collateral Document shall have any right to notice of any action or to consent to, direct or object to any action hereunder or under any other Loan Document or otherwise in respect of the Collateral (including the release or impairment of any Collateral) other than in its capacity as a Lender and, in such case, only to the extent expressly provided in the Loan Documents. Notwithstanding any other provision of this <u>Article</u> <u>IX</u> to the contrary, the Administrative Agent shall not be required to verify the payment of, or that other satisfactory arrangements have been made with respect to. Finance Obligations arising under Secured Hedge Agreements and Secured Cash Management Agreements unless the Administrative Agent has received written notice of such Finance Obligations, together with such supporting documentation as the Administrative Agent may request, from the Hedge Bank or Cash Management Bank, as applicable.

------

**ARTICLE X** 

**MISCELLANEOUS** 

**Section 10.01 <u>Amendments, Etc</u>**. No amendment or waiver of any provision of this Agreement or any other Loan Document, and no consent to any departure by the Borrowers or any other Loan Party therefrom, shall be effective unless in writing signed by the Required Lenders (or by the Administrative Agent with the consent or ratification of the Required Lenders or such other number or percentage of Lenders as may be specified herein) and the Borrowers or the applicable Loan Party, as the case may be, and acknowledged by the Administrative Agent, and each such waiver or consent shall be effective only in the specific instance and for the specific purpose for which given; <u>provided</u> that (x) the Administrative Agent and the Borrowers may, with the consent of the other, amend, modify or supplement this Agreement and any other Loan Document to cure any ambiguity, omission, typographical error, mistake, defect or inconsistency if such amendment, modification or supplement does not adversely affect the rights of any Agent, any Lender or any L/C Issuer and (y) no such amendment, waiver or consent 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;&nbsp;&nbsp;&nbsp;&nbsp;(i) (A) waive any condition set forth in <u>Section</u> <u>4.01</u> without the written consent of each Lender or (B) without limiting the generality of the preceding <u>clause (A)</u>, waive any condition set forth in <u>Section</u> <u>4.02</u> as to any Credit Event under the Facility (it being understood that the waiver of any Default or Event of Default or the amendment or waiver of any covenant or representation contained herein shall not constitute a waiver of any condition set forth in <u>Section</u> <u>4.01</u> or <u>Section</u> <u>4.02</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;&nbsp;&nbsp;&nbsp;&nbsp;(ii) extend or increase the Revolving Facility Commitment of any Lender (or reinstate any Revolving Facility Commitment terminated pursuant to <u>Section</u> <u>8.02</u>) without the written consent 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;&nbsp;&nbsp;&nbsp;&nbsp;(iii) postpone any date fixed by this Agreement or any other Loan Document for any payment (excluding mandatory prepayments) of principal, interest, fees or other amounts due to the Lenders (or any of them) hereunder or under such other Loan Document without the written consent of each Lender entitled to 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;&nbsp;&nbsp;&nbsp;&nbsp;(iv) reduce the principal of, or the rate of interest specified herein on, any Loan or Letter of Credit Borrowing, or (subject to <u>clause (ii)</u> of the second proviso to this <u>Section</u> <u>10.01</u>) any fees or other amounts payable hereunder or under any other Loan Document without the written consent of each Lender entitled to such amount; <u>provided</u>, <u>however</u>, that only the consent of the Required Lenders shall be necessary to amend the definition of "Default Rate" or to waive any obligation of the Borrowers to pay interest or Letter of Credit Fees at the Default 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;&nbsp;&nbsp;&nbsp;&nbsp;(v) change <u>Section</u> <u>2.13</u> or <u>Section</u> <u>8.03</u> in a manner that would alter the pro rata sharing of payments required thereby without the written consent of each Lender (it being agreed that fees in connection with Permitted Amendments do not constitute non-pro rata payments under <u>Sections</u> <u>2.13</u> or <u>8.03</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;&nbsp;&nbsp;&nbsp;&nbsp;(vi) change any provision of this <u>Section</u> <u>10.01</u> or the definition of "Required Lenders" or any other provision hereof specifying the number or percentage of Lenders required to amend, waive or otherwise modify any rights hereunder or make any determination or grant any consent hereunder, without the written consent of each Lender;

------

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(vii) release all or substantially all of the Collateral in any transaction or series of related transactions, without the written consent of each Lender; <u>provided</u> that the Collateral Agent may, without consent from any other Lender, release any Collateral that is sold or transferred by a Loan Party in compliance with <u>Section</u> <u>7.05</u> or released in compliance with <u>Section</u> <u>9.10(i)</u> or <u>(ii)</u> or otherwise as expressly provided in 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;&nbsp;&nbsp;&nbsp;&nbsp;(viii) release all or substantially all of the value of the Guaranties, without the written consent of each Lender, except to the extent the release of any Subsidiary from the Guaranties is permitted pursuant to <u>Section</u> <u>9.10</u> (in which case such release may be made by the Administrative Agent acting alone) or as otherwise expressly provided in the Loan Documents, or release any Borrower without the written consent of each 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;&nbsp;&nbsp;&nbsp;&nbsp;(ix) increase the advance rates set forth in the definition of Borrowing Base without the consent of each Lender; 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;(x) except as otherwise set forth in the definitions of Eligible Accounts and Eligible Inventory, modify the eligibility criteria in respect of the Borrowing Base, or add new asset categories to the Borrowing Base, or otherwise cause the Borrowing Base availability under the Facility to be increased beyond the level permissible under this Agreement as then in effect, in each case without the written consent of each Lender,

and <u>provided</u>, <u>further</u>, that: (i) no amendment, waiver or consent shall, unless in writing and signed by each applicable L/C Issuer in addition to the Lenders required above, affect the rights or duties of such L/C Issuer under this Agreement or any Issuer Document relating to any Letter of Credit issued or to be issued by it; (ii) no amendment, waiver or consent shall, unless in writing and signed by the Swing Line Lender in addition to the Lenders required above, affect the rights or duties of the Swing Line Lender under this Agreement; (iii) no amendment, waiver or consent shall, unless in writing and signed by the Administrative Agent in addition to the Lenders required above, affect the rights or duties of the Administrative Agent under this Agreement or any other Loan Document; and (iii) the Fee Letter may be amended, or rights or privileges thereunder waived, in a writing executed only by the parties thereto. Notwithstanding anything to the contrary herein, no Defaulting Lender shall have any right to approve or disapprove any amendment, waiver or consent hereunder (and any amendment, waiver or consent which by its terms requires the consent of all Lenders or each affected Lender may be effected with the consent of the applicable Lenders other than Defaulting Lenders), except that (x) the Revolving Facility Commitment of any Defaulting Lender may not be increased or extended without the consent of such Lender and (y) any waiver, amendment or modification requiring the consent of all Lenders or each affected Lender that by its terms affects any Defaulting Lender more adversely than other affected Lenders shall require the consent of such Defaulting Lender.

------

Notwithstanding any provision herein to the contrary, the Borrowers may, by written notice by the Parent Borrower to the Administrative Agent from time to time, make one or more offers (each, a "<u>Loan Modification Offer</u>") to all the Lenders to make one or more Permitted Amendments (as defined below) pursuant to procedures reasonably specified by the Administrative Agent and reasonably acceptable to the Parent Borrower. Such notice shall set forth (i) the terms and conditions of the requested Permitted Amendment and (ii) the date on which such Permitted Amendment is requested to become effective (which shall not be less than 10 Business Days nor more than 30 Business Days after the date of such notice) (or such shorter periods as are acceptable to the Administrative Agent). Permitted Amendments shall become effective only with respect to the Loans of those Lenders that accept the applicable Loan Modification Offer (such Lenders, the "<u>Accepting Lenders</u>"). Each Borrower and each Accepting Lender shall execute and deliver to the Administrative Agent an agreement in form and substance satisfactory to the Administrative Agent giving effect to the Permitted Amendment (a "<u>Loan Modification Agreement</u>") and such other documentation as the Administrative Agent shall reasonably specify to evidence the acceptance of the Permitted Amendments and the terms and conditions thereof. The Administrative Agent shall promptly notify each Lender as to the effectiveness of each Loan Modification Agreement. Each of the parties hereto hereby agrees that, upon the effectiveness of any Loan Modification Agreement, this Agreement shall be deemed amended to the extent (but only to the extent) necessary to reflect the existence and terms of the Permitted Amendment evidenced thereby and only with respect to the Loans and Revolving Facility Commitment of the Accepting Lenders. Notwithstanding the foregoing, no Permitted Amendment shall become effective under this paragraph unless the Administrative Agent, to the extent so reasonably requested by the Administrative Agent, shall have received corporate documents, officers' certificates or legal opinions consistent with those delivered on the Closing Date under <u>Section</u> <u>4.01</u>. As used in this paragraph, "<u>Permitted Amendments</u>" shall be limited to (i) an extension of the final maturity date of the Loans of the Accepting Lenders (<u>provided</u> that such extension may not result in having more than two additional final maturity dates in any year, or more than three additional final maturity dates at any time, under this Agreement without the consent of the Administrative Agent), (ii) a reduction, elimination or extension, of the scheduled amortization of the applicable Loans of the Accepting Lenders, (iii) a change in rate of interest (including a change to the Applicable Rate and any provision establishing a minimum rate), premium, or other amount with respect to the applicable Loans of the Accepting Lenders and/or a change in the payment of fees to the Accepting Lenders and/or a change in the payment of fees to the Accepting Lenders (such change and/or payments to be in the form of cash, Stock or other property to the extent not prohibited by this Agreement) and (iv) any other amendment to a Loan Document required to give effect to the Permitted Amendments described in <u>clauses (i)</u> through <u>(iii)</u> of this sentence.

If any Lender does not consent to a proposed amendment, waiver, consent or release with respect to any Loan Document that requires the consent of each Lender and that has been approved by the Required Lenders, the Parent Borrower may replace such non-consenting Lender in accordance with <u>Section</u> <u>10.13</u>; <u>provided</u> that such amendment, waiver, consent or release can be effected as a result of the assignment contemplated by such Section (together with all other such assignments required by the Parent Borrower to be made pursuant thereto).

**Section 10.02 <u>Notices; Effectiveness; Electronic Communication</u>**.

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

------

&nbsp;&nbsp;&nbsp;&nbsp;&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) if to a Borrower, the Administrative Agent, L/C Issuer or Swing Line Lender, to the address, telecopier number, electronic mail address or telephone number specified for such Person on <u>Schedule</u> <u>10.02</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;&nbsp;&nbsp;&nbsp;&nbsp;(ii) if to any other Lender, to the address, telecopier number, electronic mail address or telephone number specified in its Administrative Questionnaire (including, as appropriate, notices delivered solely to the Person designated by a lender on its Administrative Questionnaire then in effect for the delivery of notices that may contain non-public information relating to the Borrowers).

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

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b) *<u>Electronic Communications</u>.* Notices and other communications to the Lenders and L/C Issuers hereunder may be delivered or furnished by electronic communication (including e-mail and Internet or intranet websites) pursuant to procedures approved by the Administrative Agent; <u>provided</u> that the foregoing shall not apply to notices to any Lender or L/C Issuer pursuant to <u>Article</u> <u>II</u> if such Lender or L/C Issuer has notified the Administrative Agent that it is incapable of receiving notices under such Article by electronic communication. The Administrative Agent or the Parent Borrower may, in its discretion, agree to accept notices and other communications to it hereunder by electronic communications 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 prescribes, (i) notices and other communications sent to an e-mail address shall be deemed received upon the sender's receipt of an acknowledgement from the intended recipient (such as by the "return receipt requested" function, as available, return e-mail or other written acknowledgement); <u>provided</u> that if such notice or other communication is not sent during the normal business hours of the recipient, such notice or communication shall be deemed to have been sent at the opening of business on the next business day for the recipient, and (ii) notices or communications posted to an Internet or intranet website shall be deemed received upon the deemed receipt by the intended recipient at its e-mail address as described in the foregoing <u>clause (i)</u> of notification that such notice or communication is available and identifying the website address therefor.

------

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c) *<u>The Platform</u>.* THE PLATFORM IS PROVIDED "AS IS" AND "AS AVAILABLE." THE AGENT PARTIES (AS DEFINED BELOW) DO NOT WARRANT THE ACCURACY OR COMPLETENESS OF THE BORROWER MATERIALS OR THE ADEQUACY OF THE PLATFORM AND EXPRESSLY DISCLAIM LIABILITY FOR ERRORS IN OR OMISSIONS FROM THE BORROWER MATERIALS. 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 BORROWER MATERIALS OR THE PLATFORM. In no event shall the Administrative Agent or any of its Related Parties (collectively, "<u>Agent Parties</u>") have any liability to Holdings, any Borrower, any Lender, any L/C Issuer or any other Person for losses, claims, damages, liabilities or expenses of any kind (whether in tort, contract or otherwise) arising out of any Loan Party's or the Administrative Agent's transmission of Borrower Materials through electronic telecommunications or other information transmission systems, except for direct or "economic" (as such term is used in Title 18, United States Code, Section 1030(g)) (as opposed to special, indirect, consequential or punitive) losses, claims, damages, liabilities or expenses to the extent that such losses, claims, damages, liabilities or expenses (x) are determined by a court of competent jurisdiction by a final an nonappealable judgment to have resulted from the gross negligence or willful misconduct of such Agent Party or (y) result from a claim brought by Holdings, any Borrower or any other Loan Party against an Indemnitee for material breach of such Indemnitee's obligations hereunder or under any other Loan Document in respect of Borrower Materials made available through electronic telecommunications or other information transmission systems, if Holdings, such Borrower or such Loan Party has obtained a final and nonappealable judgment in its favor on such claim as determined by a court of competent jurisdiction; <u>provided</u>, <u>however</u>, that in no event shall any Agent Party have any liability to Holdings any Borrower, any Lender or any other Person for indirect, special, incidental, consequential or punitive damages (as opposed to such direct or "economic" damages).

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(d) *<u>Change of Address, Etc</u>.* Each of the Borrowers and the Administrative Agent may change its address, telecopier or telephone number for notices and other communications hereunder by notice to the other parties hereto. Each other Lender and L/C Issuer may change its address, telecopier or telephone number for notices and other communications hereunder by notice to the Parent Borrower and the Administrative Agent. In addition, each Lender and L/C Issuer agrees to notify the Administrative Agent from time to time to ensure that the Administrative Agent has on record (i) an effective address, contact name, telephone number, telecopier number and electronic mail address to which notices and other communications may be sent and (ii) accurate wire instructions for such Lender or L/C Issuer. Furthermore, each Public Lender agrees to cause at least one individual at or on behalf of such Public Lender to at all times have selected the "Private Side Information" or similar designation on the content declaration screen of the Platform in order to enable such Public Lender or its delegate, in accordance with such Public Lender's compliance procedures and applicable Requirement of Law, including United States Federal and state securities Requirements of Law, to make reference to Borrower Materials that are not made available through the "Public Side Information" portion of the Platform and that may contain MNPI with respect to the Borrowers or their securities for purposes of United States federal or state securities laws.

------

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(e) *<u>Reliance by Administrative Agent, Lenders and L/C Issuer</u>.* The Administrative Agent, the L/C Issuers and the Lenders shall be entitled to rely and act upon any notices (including telephonic notices) purportedly given by or on behalf of the Borrowers or any other Loan Party even if (i) such notices were not made in a manner specified herein, were incomplete or were not preceded or followed by any other form of notice specified herein or (ii) the terms thereof, as understood by the recipient, varied from any confirmation thereof. The Borrowers shall, jointly and severally, indemnify the Administrative Agent, each L/C Issuer, each Lender and the Related Parties of each of them from all losses, costs, expenses and liabilities resulting from the reliance by such Person on each notice purportedly given by or on behalf of the Borrowers. All telephonic notices to and other communications with the Administrative Agent may be recorded by the Administrative Agent, and each of the parties hereto hereby consents to such recording.

**Section 10.03 <u>No Waiver; Cumulative Remedies; Enforcement</u>**. No failure by any Lender, L/C Issuer or by the Administrative Agent to exercise, and no delay by any such Person in exercising, any right, remedy, power or privilege hereunder shall operate as a waiver thereof; nor shall any single or partial exercise of any right, remedy, power or privilege hereunder preclude any other or further exercise thereof or the exercise of any other right, remedy, power or privilege. The rights, remedies, powers and privileges herein provided are cumulative and not exclusive of any rights, remedies, powers and privileges provided by Requirement of Law.

Notwithstanding anything to the contrary contained herein or in any other Loan Document, the authority to enforce rights and remedies hereunder and under the other Loan Documents against the Loan Parties or any of them shall be vested exclusively in, and all actions and proceedings at law in connection with such enforcement shall be instituted and maintained exclusively by, the Administrative Agent in accordance with <u>Section</u> <u>8.02</u> for the benefit of all the Lenders and the L/C Issuers; <u>provided</u>, <u>however</u>, that the foregoing shall not prohibit (i) the Administrative Agent from exercising on its own behalf the rights and remedies that inure to its benefit (solely in its capacity as Administrative Agent) hereunder and under the other Loan Documents, (ii) any L/C Issuer or the Swing Line Lender from exercising the rights and remedies that inure to its benefit (solely in its capacity as L/C Issuer or Swing Line Lender, as the case may be) hereunder and under the other Loan Documents, (iii) subject in all cases to the ABL/Term Intercreditor Agreement, any Lender from exercising setoff rights in accordance with <u>Section</u> <u>10.08</u> (subject to the terms of <u>Section</u> <u>2.10</u>), (iv) subject in all cases to the ABL/Term Intercreditor Agreement, any Lender from filing proofs of claim or appearing and filing pleadings on its own behalf during the pendency of a proceeding relative to any Loan Party under any Debtor Relief Law or (v) any L/C Issuer from exercising the rights and remedies that inure to its benefit solely in its capacity as L/C Issuer hereunder and under the other Loan Documents; <u>provided</u>, <u>further</u>, that if at any time there is no Person acting as Administrative Agent hereunder and under the other Loan Documents, then (x) the Required Lenders shall have the rights otherwise ascribed to the Administrative Agent pursuant to <u>Section</u> <u>8.02</u> and (y) in addition to the matters set forth in <u>clauses (ii)</u>, <u>(iii)</u>, <u>(iv)</u> and <u>(v)</u> of the preceding proviso and subject to <u>Section</u> <u>2.10</u>, any Lender may, with the consent of the Required Lenders, enforce any rights and remedies available to it and as authorized by the Required Lenders.

------

**Section 10.04 <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;(a) *<u>Costs and Expenses</u>.* Holdings and each of the Borrowers, jointly and severally, agree to pay (i) all reasonable and invoiced 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 of the credit facilities provided for herein, the preparation, negotiation, execution, delivery and administration of this Agreement and the other Loan Documents or any amendments, modifications or waivers (including any proposed amendments, modifications or waivers) of the provisions hereof or thereof (whether or not the transactions contemplated hereby or thereby shall be consummated), (ii) all reasonable and documented out-of-pocket expenses incurred by any L/C Issuer in connection with the issuance, amendment, renewal or extension of any Letter of Credit or any demand for payment thereunder and (iii) all reasonable and invoiced out-of-pocket expenses incurred by the Administrative Agent, any Lead Arranger, any Lender or any L/C Issuer (including the fees, charges and disbursements of any counsel for the Administrative Agent, any Lender or any L/C Issuer), in connection with the enforcement or protection of its rights (A) in connection with this Agreement and the other Loan Documents, including its rights under this <u>Section</u> <u>10.04</u>, or (B) in connection with the Loans and Letters of Credit made hereunder, including all such invoiced out-of-pocket expenses incurred during any workout, restructuring or negotiations in respect of such Loans or Letters of Credit; <u>provided</u> that Holdings and the Borrowers shall not be required to reimburse the legal fees and expenses of more than one outside counsel (in addition to any special counsel and up to one local counsel in each applicable local jurisdiction) for all Persons indemnified under this <u>subsection</u> <u>(a)</u> unless, in the reasonable opinion of those indemnified Persons seeking reimbursement of such legal fees and expenses under this <u>subsection</u> <u>(a)</u>, representation of all such indemnified persons would be inappropriate due to the existence of an actual or potential conflict of interest, in which case Holdings and the Borrowers shall only be required to reimburse the invoiced out-of-pocket legal fees and expenses of no more than such minimum number of additional outside counsel for the indemnified persons as is necessary to avoid any actual or potential conflict of interest.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b) *<u>Indemnification</u>.* Holdings and each Borrower, jointly and severally, shall indemnify the Administrative Agent (and any sub-agent thereof), the Lead Arranger, each Lender, each L/C Issuer and each Related Party of any of the foregoing Persons (each such Person being called an "<u>Indemnitee</u>") against, and hold each Indemnitee harmless from, any and all actual losses, claims, damages, liabilities and related expenses (including the reasonable fees, out-of-pocket charges and disbursements of any outside counsel for any Indemnitee), incurred by any Indemnitee or asserted against any Indemnitee by any third party or by any Borrower or any other Loan Party arising out of, in connection with, or as a result of (i) the execution or delivery of this Agreement, any other Loan Document or any agreement or instrument contemplated hereby or thereby, the performance by the parties hereto of their respective obligations hereunder or thereunder or the consummation of the transactions contemplated hereby or thereby or, in the case of the Administrative Agent (and any sub-agent thereof) and its Related Parties only, the administration of this Agreement and the other Loan Documents, (ii) any Loan or Letter of Credit or the use or proposed use of the proceeds therefrom (including any refusal by an L/C Issuer 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), (iii) any actual or alleged presence or release of Hazardous Materials on or from any property owned or operated by any Borrower or any of its Subsidiaries, or any liability under Environmental Laws related in any way to any Borrower or any of its Subsidiaries, or (iv) any actual or prospective claim, litigation, investigation or proceeding brought by a third party or by any Borrower or any other Loan Party or any Borrower's or such Loan Party's directors, shareholders or creditors, and regardless of whether any Indemnitee is a party thereto; <u>provided</u> that such indemnity shall not, as to any Indemnitee, be

------

available to the extent that such losses, claims, damages, liabilities or related expenses are determined by a court of competent jurisdiction by final and non-appealable judgment to have resulted from the gross negligence or willful misconduct of such Indemnitee; <u>provided</u> <u>further</u> that Holdings, the Borrowers and the other Loan Parties shall not be required to reimburse the legal fees and expenses of more than one outside counsel (in addition to any reasonably necessary special counsel and up to one local counsel in each applicable local jurisdiction) for all Indemnitees unless, in the reasonable opinion of such indemnified Persons seeking indemnity under this <u>subsection</u> <u>(b)</u> representation of all such Indemnitees would be inappropriate due to the existence of an actual or potential conflict of interest, in which case Holdings and the Borrowers shall only be required to reimburse the invoiced out-of-pocket fees and expenses of no more than such minimum number of additional outside counsel for the Indemnitees as is necessary to avoid any actual or potential conflict of interest.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c) *<u>Reimbursement by Lenders</u>.* To the extent that Holdings and the Borrowers for any reason fail indefeasibly to pay any amount required under <u>subsection</u> <u>(a)</u> or <u>(b)</u> of this <u>Section</u> <u>10.04</u> to be paid by it or them to the Administrative Agent (or any sub-agent thereof), any L/C Issuer, the Swing Line Lender or any Related Party of any of the foregoing, each Lender and each L/C Issuer severally agrees to pay to the Administrative Agent (or any such sub-agent), the Swing Line Lender or such Related Party, as the case may be, such Lender's Revolving Facility Percentage (determined as of the time that the applicable unreimbursed expense or indemnity payment is sought) of such unpaid amount; <u>provided</u> that the unreimbursed expense or indemnified loss, claim, damage, liability or related expense, as the case may be, was incurred by or asserted against the Administrative Agent (or any such sub-agent), an L/C Issuer or the Swing Line Lender in its capacity as such, or against any Related Party of any of the foregoing acting for the Administrative Agent (or any such sub-agent) in connection with such capacity. The obligations of the Lenders under this <u>subsection</u> <u>(c)</u> are subject to the provisions of <u>Section</u> <u>2.12(d)</u>.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(d) *<u>Waiver of Consequential Damages</u>.* To the fullest extent permitted by applicable Requirement of Law, Holdings and the Borrowers shall not assert, and hereby waives, and acknowledges that no other Person shall have, any claim against any Indemnitee, on any theory of liability, for special, indirect, consequential or punitive damages (as opposed to direct or actual damages) arising out of, in connection with, or as a result of, this Agreement, any other Loan Document or any agreement or instrument contemplated hereby, the transactions contemplated hereby or thereby, any Loan or Letter of Credit or the use of the proceeds thereof. No Indemnitee referred to in <u>subsection</u> <u>(b)</u> above shall be liable for any damages arising from the use by unintended recipients of any information or other materials distributed by it through telecommunications, electronic or other information transmission systems in connection with this Agreement or the other Loan Documents or the transactions contemplated hereby or thereby other than for direct or actual damages resulting from the gross negligence or willful misconduct of such Indemnitee as determined by a final and nonappealable judgment of a court of competent jurisdiction.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(e) *<u>Payments</u>.* All amounts due under this <u>Section</u> <u>10.04</u> shall be payable not later than fifteen Business Days after written demand therefor, including a reasonable detail of such amount to be paid.

------

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(f) *<u>Survival</u>.* The agreements in this <u>Section</u> <u>10.04</u> and the indemnity provisions of <u>Section</u> <u>10.02(e)</u> shall survive the resignation of the Administrative Agent, any L/C Issuer and the Swing Line Lender, the replacement of any Lender, the termination of the Aggregate Commitments and the repayment, satisfaction or discharge of all the other ABL Credit Obligations.

**Section 10.05 <u>Payments Set Aside</u>**. To the extent that any payment by or on behalf of the Borrowers or any other Loan Party is made to the Administrative Agent, any L/C Issuer or any Lender, or the Administrative Agent, L/C Issuer or any Lender exercises its right of set-off, and such payment or the proceeds of such set-off or any part thereof is subsequently invalidated, declared to be fraudulent or preferential, set aside or required (including pursuant to any settlement entered into by the Administrative Agent, such L/C Issuer or such Lender in its discretion) to be repaid to a trustee, receiver or any other party, in connection with any proceeding under any Debtor Relief Law or otherwise, then (i) to the extent of such recovery, the obligation or part thereof originally intended to be satisfied shall be revived and continued in full force and effect as if such payment had not been made or such set-off had not occurred, and (ii) each Lender and L/C Issuer severally agrees to pay to the Administrative Agent upon demand its applicable share of any amount so recovered from or repaid by the Administrative Agent, plus interest thereon from the date of such demand to the date such payment is made at a rate per annum equal to the Federal Funds Rate from time to time in effect. The obligations of the Lenders under <u>clause (ii)</u> of the preceding sentence shall survive the payment in full of the ABL Credit Obligations and the termination of this Agreement.

**Section 10.06 <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;(a) *<u>Successors and Assigns Generally</u>.* The provisions of this Agreement shall be binding upon and inure to the benefit of the parties hereto and their respective successors and assigns permitted hereby, except that neither the Borrowers nor any other Loan Party may assign or otherwise transfer any of its rights or obligations hereunder without the prior written consent of the Administrative Agent and each Lender and no Lender may assign or otherwise transfer any of its rights or obligations hereunder except (i) to an assignee in accordance with the provisions of <u>Section</u> <u>10.06(b)</u>, (ii) by way of participation in accordance with the provisions of <u>Section</u> <u>10.06(d)</u>, or (iii) by way of pledge or assignment of a security interest subject to the restrictions of <u>Section</u> <u>10.06(e)</u> (and any other attempted assignment or transfer by any party hereto shall be null and void). Nothing in this Agreement, expressed or implied, shall be construed to confer upon any Person (other than the parties hereto, their respective successors and assigns permitted hereby, Participants to the extent provided in <u>subsection</u> <u>(d)</u> of this <u>Section</u> <u>10.06</u> and, to the extent expressly contemplated hereby, the Related Parties of each of the Administrative Agent 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;(b) *<u>Assignments by Lenders</u>.* Any Lender may at any time assign to one or more assignees all or a portion of its rights and obligations under this Agreement (including all or a portion of its Revolving Facility Commitment(s) and the Loans (including for purposes of this <u>Section</u> <u>10.06(b)</u>, participations in L/C Obligations) at the time owing to it); <u>provided</u> that any such assignment shall be subject to the following conditions:

------

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(i) *<u>Minimum Amounts</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) in the case of an assignment of the entire remaining amount of the assigning Lender's Revolving Facility Commitment and the Loans at the time owing to it or in the case of an assignment to a Lender, an Affiliate of a Lender or an Approved Fund, no minimum amount need be assigned; 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) in any case not described in <u>subsection</u> <u>(b)(i)(A)</u> of this <u>Section</u> <u>10.06</u>, the aggregate amount of the Revolving Facility Commitment (which for this purpose includes Loans outstanding thereunder) or, if the Revolving Facility Commitment is not then in effect, the principal outstanding balance of the Loans of the assigning Lender subject to each such assignment, determined as of the date the Assignment and Assumption with respect to such assignment is delivered to the Administrative Agent or, if "Trade Date" is specified in the Assignment and Assumption, as of the Trade Date, shall not be less than $1,000,000, unless each of the Administrative Agent and, so long as no Event of Default has occurred and is continuing, the Parent Borrower otherwise consents (each such consent not to be unreasonably withheld or delayed); <u>provided</u>, <u>however</u>, that concurrent assignments to members of an Assignee Group and concurrent assignments from members of an Assignee Group to a single Eligible Assignee (or to an Eligible Assignee and members of its Assignee Group) will be treated as a single assignment for purposes of determining whether such minimum amount has been met;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(ii) *<u>Proportionate Amounts</u>.* 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 with respect to the Revolving Facility Loans or the Revolving Facility Commitment assigned, except that this <u>clause (ii)</u> shall not (A) apply to the Swing Line Lender's rights and obligations in respect of Swing Line Loans or (B) prohibit any Lender from assigning all or a portion of its rights and obligations among separate Facilities and any facilities provided pursuant the second paragraph of <u>Section</u> <u>10.01</u> on a non-pro rata basis.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(iii) *<u>Required Consents</u>.* No consent shall be required for any assignment except to the extent required by <u>subsection</u> <u>(b)(i)(B)</u> of this <u>Section</u> <u>10.06</u> and, in addition:

&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 consent of the Parent Borrower (such consent not to be unreasonably withheld or delayed) shall be required unless (1) an Event of Default has occurred and is continuing at the time of such assignment or (2) such assignment is to a Lender, an Affiliate of a Lender or an Approved Fund; <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 Business Days after having received notice thereof; and <u>provided</u>, <u>further</u>, that the Parent Borrower's consent shall not be required during the primary syndication of the Facility;

------

&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 consent of the Administrative Agent (such consent not to be unreasonably withheld or delayed) shall be required for assignments in respect of (i) any Revolving Facility Commitment if such assignment is to a Person that is not a Lender with a Revolving Facility Commitment, an Affiliate of such Lender or an Approved Fund with respect to such Lender or (ii) any Loan to a Person that is not a Lender, an Affiliate of a Lender or an Approved Fund; 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;(C) the consent of each L/C Issuer and the Swing Line Lender (such consent not to be unreasonably withheld or delayed) shall be required for any assignment in respect of the Facility.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(iv) *<u>Assignment and Assumption</u>.* The parties to each assignment shall execute and deliver to the Administrative Agent an Assignment and Assumption, together with a processing and recordation fee in the amount of $3,500 (treating multiple, simultaneous assignments within an Assignee Group as a single assignment); <u>provided</u>, <u>however</u>, that the Administrative Agent may, in its sole discretion, elect to waive such processing and recordation fee in the case of any assignment. The assignee, if it is not a Lender, shall deliver to the Administrative Agent an Administrative Questionnaire.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(v) *<u>No Assignment to Certain Persons</u>.* No such assignment shall be made (i) to any Borrower or any of the Borrowers' Affiliates or Subsidiaries (other than as set forth in <u>Section</u> <u>10.06(g)</u>), (ii) to any Defaulting Lender or any of its Subsidiaries, or any Person who, upon becoming a Lender hereunder, would constitute any of the foregoing Persons described in this <u>clause (ii)</u> or (iii) to a natural person.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(vi) *<u>Certain Additional Payments</u>.* In connection with any assignment of rights and obligations of any Defaulting Lender hereunder, no such assignment shall be effective unless and until, in addition to the other conditions thereto set forth herein, the parties to the assignment shall make such additional payments to the Administrative Agent in an aggregate amount sufficient, upon distribution thereof as appropriate (which may be outright payment, purchases by the assignee of participations or subparticipations, or other compensating actions, including funding, with the consent of the Parent Borrower and the Administrative Agent, the applicable pro rata share of Loans previously requested but not funded by the Defaulting Lender, to each of which the applicable assignee and assignor hereby irrevocably consent), to (x) pay and satisfy in full all payment liabilities then owed by such Defaulting Lender to the Administrative Agent or any Lender hereunder (and interest accrued thereon) and (y) acquire (and fund as appropriate) its full pro rata share of all Loans and participations in Letters of Credit and Swing Line Loans in accordance with its Revolving Facility Percentage. Notwithstanding the foregoing, in the event that any assignment of rights and obligations of any Defaulting Lender hereunder shall become effective under applicable Requirement of Law without compliance with the provisions of this paragraph, then the assignee of such interest shall be deemed to be a Defaulting Lender for all purposes of this Agreement until such compliance occurs.

------

Subject to acceptance and recording thereof by the Administrative Agent pursuant to <u>subsection</u> <u>(c)</u> of this <u>Section</u> <u>10.06</u>, from and after the effective date specified in each Assignment and Assumption, the assignee thereunder shall be a party to this Agreement and, to the extent of the interest assigned by such Assignment and Assumption, have the rights and obligations of a Lender under this Agreement, and the assigning Lender thereunder shall, to the extent of the interest assigned by such Assignment and Assumption, be released from its obligations under this Agreement (and, in the case of an Assignment and Assumption covering all of the assigning Lender's rights and obligations under this Agreement, such Lender shall cease to be a party hereto but shall continue to be entitled to the benefits of <u>Sections</u> <u>3.01</u>, <u>3.04</u>, <u>3.05</u> and <u>10.04</u> with respect to facts and circumstances occurring prior to the effective date of such assignment); <u>provided</u>, 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. Upon request to the Parent Borrower, the Borrowers (at their expense) shall execute and deliver a Note to the assignee Lender. Any assignment or transfer by a Lender of rights or obligations under this Agreement that does not comply with this subsection shall be treated for purposes of this Agreement as a sale by such Lender of a participation in such rights and obligations in accordance with <u>Section</u> <u>10.06(d)</u>.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c) *<u>Register</u>.* The Administrative Agent, acting solely for this purpose as an agent of the Borrowers (and such agency being solely for Tax purposes), shall maintain at the Administrative Agent's Office a copy of each Assignment and Assumption delivered to it (or the equivalent thereof in electronic form) and a register for the recordation of the names and addresses of the Lenders and L/C Issuers, and the Revolving Facility Commitment of, and principal amounts (and stated interest) of the Loans and Letter of Credit Borrowings owing to, each Lender and L/C Issuer pursuant to the terms hereof from time to time (the "<u>Register</u>"). The entries in the Register shall be conclusive absent manifest error, and the Borrowers, the Administrative Agent, the Lenders and the L/C Issuer may treat each Person whose name is recorded in the Register pursuant to the terms hereof as a Lender or L/C Issuer hereunder for all purposes of this Agreement, notwithstanding notice to the contrary. In addition, the Administrative Agent shall maintain on the Register information regarding the designation, and revocation of designation, of any Lender as a Defaulting Lender. The Register shall be available for inspection by the Borrowers and any Lender, at any reasonable time and from time to time upon reasonable prior notice.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(d) *<u>Participations</u>.* Any Lender may at any time, without the consent of, or notice to, any Borrower or the Administrative Agent, sell participations to any Person (other than a natural person, a Defaulting Lender, any Borrower or any of the Borrowers' Affiliates or Subsidiaries) (each, a "<u>Participant</u>") in all or a portion of such Lender's rights and/or obligations under this Agreement (including all or a portion of its Revolving Facility Commitment and/or the Loans (including such Lender's participation in L/C Obligations and/or Swing Line 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 Lenders and the L/C Issuer 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, waiver or other modification described in <u>clause (v)</u> of the first proviso to <u>Section</u> <u>10.01</u> that affects such Participant. Subject to <u>subsection</u> <u>(c)</u> of this Section, the Borrowers agree that each Participant shall be entitled to the

------

benefits and subject to the requirements of <u>Sections</u> <u>3.01</u>, <u>3.04</u> and <u>3.05</u> to the same extent as if it were a Lender and had acquired its interest by assignment pursuant to <u>Section</u> <u>10.06(b)</u> (it being understood that the documentation required under <u>Section</u> <u>3.01(e)</u> shall be delivered to the Lender who sells the participation) to the same extent as if it were a Lender and had acquired its interest by assignment pursuant to <u>paragraph (b)</u> of this Section; <u>provided</u> that such Participant agrees to be subject to the provisions of <u>Sections</u> <u>3.06</u> and <u>10.13</u> as if it were an assignee under <u>paragraph</u> <u>(b)</u> of this Section. Each Lender that sells a participation agrees, at the Parent Borrower's request and expense, to use reasonable efforts to cooperate with the Parent Borrower to effectuate the provisions of <u>Section</u> <u>3.06</u> with respect to any Participant. To the extent permitted by law, each Participant also shall be entitled to the benefits of <u>Section</u> <u>10.08</u> as though it were a Lender, <u>provided</u> such Participant agrees to be subject to <u>Section</u> <u>2.11</u> 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 the Loan Documents (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 any 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 under Section 5f.103-1(c) of the United States Treasury Regulations. The entries in the Participant Register shall be conclusive absent manifest error, and such Lender shall treat each Person whose name is recorded in the Participant Register as the owner of such participation for all purposes of this Agreement notwithstanding any notice to the contrary. For the avoidance of doubt, the 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;(e) *<u>Limitation Upon Participant Rights</u>.* A Participant shall not be entitled to receive any greater payment under <u>Section</u> <u>3.01</u> or <u>3.04</u> than the applicable Lender would have been entitled to receive with respect to the participation sold to such Participant, unless the sale of the participation to such Participant is made with the Parent Borrower's prior written consent. A Participant that would be a Foreign Lender if it were a Lender shall not be entitled to the benefits of <u>Section</u> <u>3.01</u> unless the Parent Borrower is notified of the participation sold to such Participant and such Participant agrees, for the benefit of the Borrowers, to comply with <u>Section</u> <u>3.01(e)</u> as though it were a Lender.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(f) *<u>Certain Pledges</u>.* Any Lender may at any time pledge or assign a security interest in all or any portion of its rights under this Agreement (including under its Note, if any) to secure obligations of such Lender, including any pledge or assignment to secure obligations to a Federal Reserve Bank; <u>provided</u> that no such pledge or assignment shall release such Lender from any of its obligations hereunder or substitute any such pledgee or assignee for such Lender as a party hereto.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(g) *<u>Resignation as an L/C Issuer or Swing Line Lender after Assignment</u>.* Notwithstanding anything to the contrary contained herein, if at any time Bank of America assigns all of its Revolving Facility Commitment and Loans pursuant to <u>Section</u> <u>10.06(b)</u>, Bank of America may, (i) upon 30 days' notice to the Parent Borrower and the Lenders, resign as an L/C Issuer and/or (ii) upon 30 days' notice to the Parent Borrower, resign as Swing Line Lender. In

------

the event of any such resignation as an L/C Issuer or Swing Line Lender, the Parent Borrower shall be entitled to appoint from among the Lenders a successor L/C Issuer or Swing Line Lender hereunder; <u>provided</u>, <u>however</u>, that no failure by the Parent Borrower to appoint any such successor shall affect the resignation of Bank of America as an L/C Issuer or Swing Line Lender. If Bank of America resigns as an L/C Issuer, it shall retain all the rights, powers, privileges and duties of an L/C Issuer hereunder with respect to all Letters of Credit issued by it which remain outstanding as of the effective date of its resignation as an L/C Issuer and all L/C Obligations with respect thereto (including the right to require the Lenders to make Base Rate Loans or fund risk participations in Unreimbursed Amounts pursuant to <u>Section</u> <u>2.03(c)</u>). If Bank of America resigns as the Swing Line Lender, it shall retain all the rights of the Swing Line Lender provided for hereunder with respect to Swing Line Loans made by it and outstanding as of the effective date of such resignation, including the right to require the Lenders to make Base Rate Loans or fund risk participations in outstanding Swing Line Loans pursuant to <u>Section</u> <u>2.04(c)</u>. Upon the appointment of a successor L/C Issuer and/or Swing Line Lender, (i) such successor shall succeed to and become vested with all of the rights, powers, privileges and duties of the retiring L/C Issuer or Swing Line Lender, as the case may be, and (ii) the successor L/C Issuer shall issue letters of credit in substitution for the Letters of Credit, if any, issued by the retiring L/C Issuer and remaining outstanding at the time of such succession or make other arrangements satisfactory to Bank of America to effectively assume the obligations of Bank of America with respect to such Letters of Credit.

**Section 10.07 <u>Treatment of Certain Information; Confidentiality</u>**. Each of the Administrative Agent, the L/C Issuers and the Lenders agrees to maintain the confidentiality of the Information, except that Information (as defined below) may be disclosed: (i) to its Affiliates and to it and its Affiliates' respective partners, directors, officers, employees, agents, trustees, advisors and representatives (it being understood that the Persons to whom such disclosure is made will be informed of the confidential nature of such Information and instructed to keep such Information confidential); (ii) to the extent required or requested by any regulatory authority purporting to have jurisdiction over it (including any self-regulatory authority, such as the National Association of Insurance Commissioners) in which case the Administrative Agent, L/C Issuer or such Lender, as applicable, shall use reasonable efforts ((x) to the extent legally permissible but (y) not in the case of any such requests which are part of, or arise out of, normal reporting or review procedures to, or examination by, any such regulatory authority) to notify the Parent Borrower prior to such disclosure; (iii) to the extent required by applicable Laws or regulations or by any subpoena or similar legal process in which case the Administrative Agent, such L/C Issuer or such Lender, as applicable, shall use reasonable efforts (to the extent permitted) to notify the Parent Borrower prior to such disclosure; (iv) to any other party hereto; (v) in connection with the exercise of any remedies hereunder or under any other Loan Document or any action or proceeding relating to this Agreement or any other Loan Document or the enforcement of rights hereunder or thereunder, (vi) subject to an agreement containing provisions substantially the same as those of this <u>Section</u> <u>10.07</u>, to (A) any assignee of or Participant in, or any prospective assignee of or Participant in, any of its rights or obligations under this Agreement or (B) any actual or prospective counterparty (or its advisors) to any swap or derivative transaction relating to the Borrowers and their obligations, (vii) on a confidential basis to (A) any ratings agency in connection with rating Holdings, the Borrowers or their Subsidiaries or the credit facilities provided hereunder or (B) the CUSIP Service Bureau or any similar agency in connection with the issuance and monitoring of CUSIP numbers or other market identifiers with respect to the credit facilities provided hereunder,

------

(viii) with the consent of the Parent Borrower or (ix) to the extent such Information (A) becomes publicly available other than as a result of a breach of this <u>Section</u> <u>10.07</u> or (B) becomes available to the Administrative Agent, any Lender or any of their respective Affiliates on a nonconfidential basis (to their knowledge) from a source other than the Borrowers. For purposes of this <u>Section</u> <u>10.07</u>, "<u>Information</u>" means all information received from Holdings or any of its Subsidiaries relating to any of them or any of their respective businesses, other than any such information that is available to the Administrative Agent or any Lender on a nonconfidential basis prior to disclosure by Holdings or any of its Subsidiaries; <u>provided</u> that, in the case of information received from Holdings or any of its Subsidiaries after the date hereof, such information is clearly identified at the time of delivery as confidential or delivered pursuant to <u>Section</u> <u>6.01</u>, <u>6.02</u> or <u>6.03</u> hereof. Any Person required to maintain the confidentiality of Information as provided in this <u>Section</u> <u>10.07</u> 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. Notwithstanding the foregoing, any Agent and any Lender may place advertisements in financial and other newspapers and periodicals or on a home page or similar place for dissemination of information on the Internet or worldwide web as it may choose, and circulate similar promotional materials, after the closing of the transactions contemplated by this Agreement in the form of a "tombstone" or otherwise describing the names of the Loan Parties, or any of them, and the amount, type and closing date of such transactions, all at their sole expense.

Each of the Administrative Agent, L/C Issuer and the Lenders acknowledges that (i) the Information may include MNPI concerning Holdings, the Borrowers or one or more Subsidiaries, as the case may be, (ii) it has developed compliance procedures regarding the use of MNPI and (iii) it will handle such MNPI in accordance with applicable Requirements of Law, including federal and state securities Requirements of Law.

**Section 10.08 <u>Right of Setoff</u>**. If an Event of Default shall have occurred and be continuing, each Lender and each L/C Issuer and each of their respective Affiliates is hereby authorized at any time and from time to time, to the fullest extent permitted by applicable Requirement of Law (subject to the provisions of the ABL/Term Intercreditor Agreement, if applicable) to set off and apply any and all deposits (general or special, time or demand, provisional or final, in whatever currency) at any time held and other obligations (in whatever currency) at any time owing by such Lender or L/C Issuer or any such Affiliate to or for the credit or the account of the Borrowers or any other Loan Party against any and all of the obligations of the Borrowers or such Loan Party now or hereafter existing under this Agreement or any other Loan Document to such Lender or L/C Issuer, irrespective of whether or not such Lender shall have made any demand under this Agreement or any other Loan Document and although such obligations of the Borrowers or such Loan Party may be contingent or unmatured or are owed to a branch or office of such Lender or L/C Issuer different from the branch or office holding such deposit or obligated on such indebtedness; <u>provided</u>, that in the event that any Defaulting Lender shall exercise any such right of setoff, (x) all amounts so set off shall be paid over immediately to the Administrative Agent for further application in accordance with the provisions of <u>Section</u> <u>2.15</u> and, pending such payment, shall be segregated by such Defaulting Lender from its other funds and deemed held in trust for the benefit of the Administrative Agent, the L/C Issuers and the Lenders, and (y) the Defaulting Lender shall provide promptly to the Administrative Agent a statement describing in reasonable detail the Finance Obligations owing to such Defaulting Lender as to which it exercised

------

such right of setoff. The rights of each Lender, each L/C Issuer and their respective Affiliates under this <u>Section</u> <u>10.08</u> are in addition to other rights and remedies (including other rights of setoff) that such Lender, L/C Issuer or their respective Affiliates may have. Each Lender and each L/C Issuer agrees to notify the Parent Borrower and the Administrative Agent promptly after any such setoff and application; <u>provided</u> that the failure to give such notice shall not affect the validity of such setoff and application.

**Section 10.09 <u>Interest Rate Limitation</u>**. Notwithstanding anything to the contrary contained in any Loan Document, the interest paid or agreed to be paid under the Loan Documents shall not exceed the maximum rate of non-usurious interest permitted by applicable Requirements of Law (the "<u>Maximum Rate</u>"). If the Administrative Agent or any Lender shall receive interest in an amount that exceeds the Maximum Rate, the excess interest shall be applied to the principal of the Loans or, if it exceeds such unpaid principal, refunded to the Borrowers. In determining whether the interest contracted for, charged, or received by the Administrative Agent or a Lender exceeds the Maximum Rate, such Person may, to the extent permitted by applicable Requirement of Law, (i) characterize any payment that is not principal as an expense, fee, or premium rather than interest, (ii) exclude voluntary prepayments and the effects thereof and (iii) amortize, prorate, allocate, and spread in equal or unequal parts the total amount of interest throughout the contemplated term of the ABL Credit Obligations hereunder.

**Section 10.10 <u>Counterparts; Integration; Effectiveness</u>**. This Agreement may be executed in counterparts (and by different parties hereto in different counterparts), each of which shall constitute an original, but all of which when taken together shall constitute a single contract. This Agreement and the other Loan Documents constitute the entire contract among the parties relating to the subject matter hereof and supersede any and all previous agreements and understandings, oral or written, relating to the subject matter hereof. Except as provided in <u>Section</u> <u>4.01</u>, 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 that, when taken together, bear the signatures of each of the other parties hereto. Delivery of an executed counterpart of a signature page of this Agreement by telecopy or other electronic imaging means shall be effective as delivery of a manually executed counterpart of this Agreement.

**Section 10.11 <u>Survival of Representations and Warranties</u>**. All representations and warranties made hereunder and in any other Loan Document or other document delivered pursuant hereto or thereto or in connection herewith or therewith shall survive the execution and delivery hereof and thereof. Such representations and warranties have been or will be relied upon by the Administrative Agent, each Lender and each L/C Issuer, regardless of any investigation made by any Agent, any Lender or any L/C Issuer or on their behalf and notwithstanding that the Administrative Agent, any Lender or any L/C Issuer may have had notice or knowledge of any Default or Event of Default at the time of any Borrowing, and shall continue in full force and effect as long as any Loan or any other ABL Credit Obligation shall remain unpaid or unsatisfied or any Letter of Credit shall remain outstanding.

**Section 10.12 <u>Severability</u>**. If any provision of this Agreement or the other Loan Documents is held to be illegal, invalid or unenforceable, (i) the legality, validity and enforceability of the remaining provisions of this Agreement and the other Loan Documents shall not be affected or impaired thereby and (ii) the parties shall endeavor in good faith negotiations to

------

replace the illegal, invalid or unenforceable provisions with valid provisions the economic effect of which comes as close as possible to that of the illegal, invalid or unenforceable provisions. The invalidity of a provision in a particular jurisdiction shall not invalidate or render unenforceable such provision in any other jurisdiction. Without limiting the foregoing provisions of this <u>Section</u> <u>10.12</u>, if and to the extent that the enforceability of any provisions in this Agreement relating to Defaulting Lenders shall be limited by Debtor Relief Laws, as determined in good faith by the Administrative Agent, then such provisions shall be deemed to be in effect only to the extent not so limited.

**Section 10.13 <u>Replacement of Lenders</u>**. If any Lender requests compensation under <u>Section</u> <u>3.04</u>, or if the Borrowers are required to pay any additional amount to any Lender or any Governmental Authority for the account of any Lender pursuant to <u>Sections</u> <u>3.06</u> or <u>3.01</u>, if any Lender is a Defaulting Lender or if any other circumstance exists hereunder that gives the Parent Borrower the right to replace a Lender as a party hereto, then the Parent Borrower may, at its sole expense and effort, upon notice to such Lender and the Administrative Agent, require such Lender to assign and delegate, without recourse (in accordance with and subject to the restrictions contained in, and consents required by, <u>Section</u> <u>10.06</u>), all of its interests, rights (other than its existing rights to payments pursuant to <u>Sections</u> <u>3.01</u> and <u>3.04</u>) and obligations under this Agreement and the related Loan Documents to an assignee that shall assume such obligations (which assignee may be another Lender, if a Lender accepts such assignment), <u>provided</u> that:

&nbsp;&nbsp;&nbsp;&nbsp;&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) the Parent Borrower shall have paid to the Administrative Agent the assignment fee specified in <u>Section</u> <u>10.06(b)</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;&nbsp;&nbsp;&nbsp;&nbsp;(ii) such Lender shall have received payment of an amount equal to 100% of the outstanding principal of its Loans, accrued interest thereon, accrued fees and all other amounts payable to it hereunder and under the other Loan Documents (including any amounts under <u>Section</u> <u>3.05)</u> from the assignee (to the extent of such outstanding principal and accrued interest and fees) or the Parent Borrower (in the case of all other amounts);

&nbsp;&nbsp;&nbsp;&nbsp;&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) in the case of any assignment resulting from a claim for compensation under <u>Section</u> <u>3.04</u> or payments required to be made pursuant to <u>Section</u> <u>3.01</u>, such assignment will result in a reduction in such compensation or payments thereafter; 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;(iv) such assignment does not conflict with applicable Requirements of Law.

A Lender shall not be required to make any such assignment or delegation if, prior thereto, as a result of a waiver by such Lender or otherwise, the circumstances entitling the Borrowers to require such assignment and delegation cease to apply. Each Lender agrees that, if the Borrowers elect to replace such Lender in accordance with this Section, it shall promptly execute and deliver to the Administrative Agent an Assignment and Assumption to evidence such sale and purchase and shall deliver to the Administrative Agent any Note (if Notes have been issued in respect of such Lender's Loans) subject to such Assignment and Assumption; <u>provided</u> that the failure of any such non-consenting Lender to execute an Assignment and Assumption shall not render such sale and purchase (and the corresponding assignment) invalid and such assignment shall be recorded in the Register.

------

**Section 10.14 <u>Governing Law; Jurisdiction Etc</u>**.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a) *<u>Governing Law</u>.* THIS AGREEMENT AND THE OTHER LOAN DOCUMENTS AND THE RIGHTS AND OBLIGATIONS OF THE PARTIES HEREUNDER AND THEREUNDER SHALL BE GOVERNED BY AND CONSTRUED AND INTERPRETED IN ACCORDANCE WITH THE INTERNAL LAWS OF THE STATE OF NEW YORK (INCLUDING, WITHOUT LIMITATION, SECTION 5-1401 OF THE GENERAL OBLIGATIONS LAW OF THE STATE OF NEW YORK); <u>PROVIDED</u>, <u>HOWEVER</u>, THAT IF THE LAWS OF ANY JURISDICTION OTHER THAN NEW YORK SHALL GOVERN IN REGARD TO THE VALIDITY, PERFECTION OR EFFECT OF PERFECTION OF ANY LIEN OR IN REGARD TO PROCEDURAL MATTERS AFFECTING ENFORCEMENT OF ANY LIENS IN COLLATERAL, SUCH LAWS OF SUCH OTHER JURISDICTIONS SHALL CONTINUE TO APPLY TO THAT EXTENT.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b) *<u>Submission to Jurisdiction</u>.* HOLDINGS, EACH BORROWER, EACH AGENT, EACH LENDER AND EACH L/C ISSUER EACH IRREVOCABLY AND UNCONDITIONALLY SUBMITS, FOR ITSELF AND ITS PROPERTY, TO THE EXCLUSIVE JURISDICTION OF THE COURTS OF THE STATE OF NEW YORK SITTING IN NEW YORK CITY IN THE BOROUGH OF MANHATTAN AND OF THE UNITED STATES DISTRICT COURT OF THE SOUTHERN DISTRICT OF NEW YORK, AND ANY APPELLATE COURT FROM ANY THEREOF, IN ANY ACTION OR PROCEEDING ARISING OUT OF OR RELATING TO THIS AGREEMENT OR ANY OTHER LOAN DOCUMENT, OR FOR RECOGNITION OR ENFORCEMENT OF ANY JUDGMENT, AND EACH OF THE PARTIES HERETO IRREVOCABLY AND UNCONDITIONALLY AGREES THAT ALL CLAIMS IN RESPECT OF ANY SUCH ACTION OR PROCEEDING MAY BE HEARD AND DETERMINED IN SUCH NEW YORK STATE COURT OR, TO THE FULLEST EXTENT PERMITTED BY APPLICABLE 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. EACH PARTY HERETO AGREES THAT THE AGENTS, THE JOINT LEAD ARRANGERS, L/C ISSUERS AND LENDERS RETAIN THE RIGHT TO SERVE PROCESS IN ANY OTHER MANNER PERMITTED BY LAW OR TO BRING PROCEEDINGS AGAINST ANY LOAN PARTY IN THE COURTS OF ANY OTHER JURISDICTION IN CONNECTION WITH THE EXERCISE OF ANY RIGHTS HEREUNDER OR UNDER ANY COLLATERAL DOCUMENT OR ANY OTHER LOAN DOCUMENT OR THE ENFORCEMENT OF ANY JUDGMENT.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c) *<u>Waiver of Venue</u>.* EACH BORROWER AND EACH OTHER LOAN PARTY 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 <u>PARAGRAPH</u> <u>(B)</u> OF THIS <u>SECTION</u> <u>10.14</u>. 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;(d) *<u>Service of Process</u>.* EACH PARTY HERETO IRREVOCABLY CONSENTS TO SERVICE OF PROCESS IN THE MANNER PROVIDED FOR NOTICES IN <u>SECTION 10.02</u>. NOTHING IN THIS AGREEMENT WILL AFFECT THE RIGHT OF ANY PARTY HERETO TO SERVE PROCESS IN ANY OTHER MANNER PERMITTED BY APPLICABLE LAW.

**Section 10.15 <u>Waiver of Jury Trial</u>**. EACH PARTY HERETO HEREBY IRREVOCABLY 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 OR 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, AGENT OR ATTORNEY OF ANY OTHER PERSON HAS REPRESENTED, EXPRESSLY OR OTHERWISE, THAT SUCH OTHER PERSON WOULD NOT, IN THE EVENT OF LITIGATION, SEEK TO ENFORCE THE FOREGOING WAIVER AND (B) ACKNOWLEDGES THAT IT AND THE OTHER PARTIES HERETO HAVE BEEN INDUCED TO ENTER INTO THIS AGREEMENT AND THE OTHER LOAN DOCUMENTS BY, AMONG OTHER THINGS, THE MUTUAL WAIVERS AND CERTIFICATIONS IN THIS <u>SECTION 10.15</u>.

**Section 10.16 <u>No Advisory or Fiduciary Responsibility</u>**. In connection with all aspects of each transaction contemplated hereby (including in connection with any amendment, waiver or other modification hereof or of any other Loan Document), the Borrowers acknowledge and agree, and acknowledge their respective Affiliates' understanding, that: (i) (A) the arranging and other services regarding this Agreement provided by the Administrative Agent, the Syndication Agent and the Joint Lead Arrangers are arm's-length commercial transactions between the Borrowers and their respective Affiliates, on the one hand, and the Administrative Agent, the Syndication Agent and the Joint Lead Arrangers, on the other hand, (B) the Borrowers have consulted their own legal, accounting, regulatory and tax advisors to the extent they have deemed appropriate, and (C) the Borrowers are capable of evaluating, and understand and accept, the terms, risks and conditions of the transactions contemplated hereby and by the other Loan Documents; (ii) (A) the Administrative Agent, the Syndication Agent and the Joint Lead Arrangers each is and has been acting solely as a principal and, except as expressly agreed in writing by the relevant parties, has not been, is not, and will not be acting as an advisor, agent or fiduciary for the Borrowers or any of their Affiliates, or any other Person and (B) none of the Administrative Agent, the Syndication or the Joint Lead Arrangers has any obligation to the Borrowers or any of their respective Affiliates with respect to the transactions contemplated hereby except those obligations expressly set forth herein and in the other Loan Documents; and (iii) the Administrative Agent, the Syndication Agent and the Joint Lead Arrangers and their respective Affiliates may be engaged in a broad range of transactions that involve interests that differ from those of the Borrowers and their Affiliates, and none of the Administrative Agent, the Syndication Agent or the Joint Lead

------

Arrangers has any obligation to disclose any of such interests to the Borrowers or their respective Affiliates. To the fullest extent permitted by Law, the Borrowers hereby waive and release any claims that it may have against the Administrative Agent, the Syndication Agent and the Joint Lead Arrangers with respect to any breach or alleged breach of agency or fiduciary duty in connection with any aspect of any transaction contemplated hereby.

**Section 10.17 <u>Electronic Execution of Assignments and Certain Other Documents</u>**. The words "execution," "signed," "signature," and words of like import in any Assignment and Assumption or in any amendment or other modification hereof (including waivers and consents) shall be deemed to include electronic signatures, the electronic matching of assignment terms and contract formations on electronic platforms approved by the Administrative Agent or the keeping of records in electronic form, each of which shall be of the same legal effect, validity or enforceability as a manually executed signature or the use of a paper-based recordkeeping system, as the case may be, to the extent and as provided for in any applicable law, including the Federal Electronic Signatures in Global and National Commerce Act, the New York State Electronic Signatures and Records Act, or any other similar state laws based on the Uniform Electronic Transactions Act.

**Section 10.18 <u>Patriot Act Notice</u>**. Each Lender that is subject to the Patriot Act and the Administrative Agent (for itself and not on behalf of any Lender) hereby notifies the Borrowers that pursuant to the requirements of the Patriot Act, it is required to obtain, verify and record information that identifies each Borrower, which information includes the name and address of each Borrower and other information that will allow such Lender or the Administrative Agent, as applicable, to identify each Borrower in accordance with the Patriot Act. The Borrowers shall, promptly following a request by the Administrative Agent or any Lender, provide all documentation and other information that the Administrative Agent or such Lender requests in order to comply with its ongoing obligations under applicable "know your customer" an anti-money laundering rules and regulations, including the Patriot Act.

**Section 10.19 <u>Intercreditor Agreements</u>**. Each Lender party hereto understands, acknowledges and agrees that it is the intention of the parties hereto that each of the Finance Obligations, the Term Finance Obligations and the Second Lien Obligations are intended to constitute a distinct and separate class from the other, and, as between each of the ABL Credit Parties, the Term Secured Parties and the Second Lien Secured Parties, it is the intention of the parties that (i) the Finance Obligations (including all post-petition interest with respect thereto) have a first priority security interest in all ABL Priority Collateral, the Term Finance Obligations (including all post-petition interest with respect thereto) have a second priority security interest in all ABL Priority Collateral and the Second Lien Obligations (including all post-petition interest with respect thereto) have a third priority security interest in all ABL Priority Collateral and (ii) the Term Finance Obligations (including all post-petition interest with respect thereto) have a first priority security interest in all Term Priority Collateral, the Second Lien Obligations (including all post-petition interest with respect thereto) have a second priority security interest in all Term Priority Collateral and that the Finance Obligations (including all post-petition interest with respect thereto) have a third priority security interest in all Term Priority Collateral. Each Lender further understands, acknowledges and agrees that (i) the provisions setting forth the priorities as between the ABL Credit Parties and the Term Secured Parties (as representative for themselves and the Second Lien Secured Parties) are set forth in the ABL/Term Intercreditor Agreement and (ii) the provisions setting forth the priorities as between the Term Secured Parties and the Second Lien Secured Parties are set forth in the Term Intercreditor Agreement.

------

Each Lender agrees that it will be bound by, and will take no actions contrary to, the provisions of the ABL/Term Intercreditor Agreement. Each Lender authorizes and instructs the Administrative Agent and the Collateral Agent to enter into the Collateral Documents and the ABL/Term Intercreditor Agreement on behalf of such Lender and to take all actions (and execute all documents) required (or deemed advisable) by the Administrative Agent or the Collateral Agent in accordance with the terms of the Collateral Documents and the ABL/Term Intercreditor Agreement.

The provisions of this <u>Section</u> <u>10.19</u> are not intended to summarize all relevant provisions of the Intercreditor Agreements. Reference must be made to the Intercreditor Agreements to understand all terms and conditions thereof. Each Lender is responsible for making its own analysis and review of the ABL/Term Intercreditor Agreement and the terms and provision thereof, and neither the Administrative Agent nor the Collateral Agent or any of their respective affiliates, representatives, advisors, attorneys or other Person makes any representation to any Lender as to the sufficiency or advisability of the provisions contained in the ABL/Term Intercreditor Agreement.

**Section 10.20 <u>Judgment Currency</u>**. If for the purpose of obtaining judgment in any court it is necessary to convert an amount due hereunder in the currency in which it is due (the "<u>Original Currency</u>") into another currency (the "<u>Second Currency</u>"), the rate of exchange applied shall be that at which, in accordance with normal banking procedures, the Administrative Agent could purchase in the New York foreign exchange market, the Original Currency with the Second Currency on the date two Business Days preceding that on which judgment is given. Each Loan Party agrees that its obligation in respect of any Original Currency due from it hereunder shall, notwithstanding any judgment or payment in such other currency, be discharged only to the extent that, on the Business Day following the date the Agent receives payment of any sum so adjudged to be due hereunder in the Second Currency, the Administrative Agent may, in accordance with normal banking procedures, purchase, in the New York foreign exchange market, the Original Currency with the amount of the Second Currency so paid; and if the amount of the Original Currency so purchased or could have been so purchased is less than the amount originally due in the Original Currency, each Loan Party agrees as a separate obligation and notwithstanding any such payment or judgment to indemnify the Administrative Agent against such loss. The term "rate of exchange" in this <u>Section</u> <u>10.20</u> means the spot rate at which the Administrative Agent, in accordance with normal practices, is able on the relevant date to purchase the Original Currency with the Second Currency, and includes any premium and costs of exchange payable in connection with such purchase.

**Section 10.21 <u>Field Audit and Examination Reports; Disclaimer by Lenders</u>**. By signing this Agreement, each Lender: (i) is deemed to have requested that the Administrative Agent furnish such Lender, promptly after it becomes available, a copy of each field audit or examination report (each a "<u>Report</u>" and collectively, "<u>Reports</u>") prepared by or on behalf of the Administrative Agent; (ii) expressly agrees and acknowledges that neither Bank of America nor the Administrative Agent (A) makes any representation or warranty as to the accuracy of any Report, or (B) shall be liable for any information contained in any Report; (iii) expressly agrees

------

and acknowledges that the Reports are not comprehensive audits or examinations, that the Administrative Agent, Bank of America or other party performing any audit or examination will inspect only specific information regarding the Borrowers and will rely significantly upon the Borrowers' books and records, as well as on representations of the Borrowers' personnel; (iv) agrees to keep all Reports confidential and strictly for its internal use, and not to distribute except to its participants, or use any Report in any other manner; and (v) without limiting the generality of any other indemnification provision contained in this Agreement, agrees: (A) to hold the Administrative Agent and any such other Lender preparing a Report harmless from any action the indemnifying Lender may take or conclusion the indemnifying Lender may reach or draw from any Report in connection with any loans or other credit accommodations that the indemnifying Lender has made or may make to the Borrowers, or the indemnifying Lender's participation in, or the indemnifying Lender's purchase of, a loan or loans of the Borrowers; and (B) to pay and protect, and indemnify, defend, and hold the Administrative Agent and any such other Lender preparing a Report harmless from and against, the claims, actions, proceedings, damages, costs, expenses, and other amounts incurred by or on behalf of the Administrative Agent and any such other Lender preparing a Report as the direct or indirect result of any third parties who might obtain all or part of any Report through the indemnifying Lender.

**Section 10.22 <u>Additional Borrowers</u>**. Subject to any applicable limitations set forth in the other Loan Documents and notwithstanding anything to the contrary herein, upon the request of the Parent Borrower from time to time, any direct or indirect Wholly Owned Subsidiary that is a Domestic Subsidiary may become a Borrower hereunder, effective upon the execution and delivery to the Administrative Agent (a) by such Subsidiary, of (i) an instrument of accession or joinder and amendments or joinders to any outstanding Notes issued under <u>Section</u> <u>2.11</u> and (ii) any other Collateral Documents and other documents that such Domestic Subsidiary would be required to deliver pursuant to <u>Section</u> <u>6.13</u> if it were becoming a guarantor (with such modifications thereto as are reasonably necessary to accommodate such Subsidiary becoming a Borrower and not a guarantor), and (b) by Holdings and each Subsidiary Guarantor, reaffirmations from each of their respective Guaranties under the Loan Documents.

[Signature Pages Follow]

------

IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be duly executed by their respective authorized officers as of the day and year first above written.

---

| | |
|:---|:---|
| PIANISSIMO HOLDINGS CORP. | PIANISSIMO HOLDINGS CORP. |
| By: | /s/ Michael Waldorf |
|  | Name: Michael Waldorf |
|  | Title: President |
| PIANISSIMO ACQUISITION CORP. | PIANISSIMO ACQUISITION CORP. |
| By: | /s/ Lisa Chun |
|  | Name: Lisa Chun |
|  | Title: Vice President |
| The undersigned hereby acknowledges and agrees that upon the effectiveness of the Closing Date Acquisition it will succeed by operation of law to all of the rights and obligations of AcquisitionCo set forth herein or in any other Loan Document and that all references herein and therein to the "Parent Borrower" and the "Borrower" shall thereupon be deemed to be references to the undersigned, as applicable: | The undersigned hereby acknowledges and agrees that upon the effectiveness of the Closing Date Acquisition it will succeed by operation of law to all of the rights and obligations of AcquisitionCo set forth herein or in any other Loan Document and that all references herein and therein to the "Parent Borrower" and the "Borrower" shall thereupon be deemed to be references to the undersigned, as applicable: |
| STEINWAY MUSICAL INSTRUMENTS, INC. | STEINWAY MUSICAL INSTRUMENTS, INC. |
| By: | /s/ Dennis M. Hanson |
|  | Name: Dennis M. Hanson |
|  | Title: Senior Executive Vice President |
| STEINWAY, INC. | STEINWAY, INC. |
| By: | /s/ Dennis M. Hanson |
|  | Name: Dennis M. Hanson |
|  | Title: Executive Vice President |
| CONN-SELMER, INC. | CONN-SELMER, INC. |
| By: | /s/ Dennis M. Hanson |
|  | Name: Dennis M. Hanson |
|  | Title: Executive Vice President |

---

[*Signature Page to the ABL Credit Agreement*]

------

---

| | |
|:---|:---|
| BANK OF AMERICA, N.A., as Administrative Agent | BANK OF AMERICA, N.A., as Administrative Agent |
| By: | /s/ Nicole Caneswsi |
|  | Name: Nicole Caneswsi |
|  | Title: Senior Vice President |

---

[*Signature Page to the ABL Credit Agreement*]

------

---

| | |
|:---|:---|
| DEUTSCHE BANK SECURITIES INC., as Syndication Agent | DEUTSCHE BANK SECURITIES INC., as Syndication Agent |
| By: | /s/ Philip Saliba |
|  | Name: Philip Saliba |
|  | Title: Director |
| By: | /s/ Frank Fazio |
|  | Name: Frank Fazio |
|  | Title: Director |

---

[*Signature Page to the ABL Credit Agreement*]

------

---

| | |
|:---|:---|
| BANK OF AMERICA, N.A., as Lender | BANK OF AMERICA, N.A., as Lender |
| By: | /s/ Nicole Caneswsi |
| Name: | Nicole Caneswsi |
| Title: | President |

---

------

---

| | |
|:---|:---|
| DEUTSCHE BANK AG NEW YORK BRANCH, as Lender | DEUTSCHE BANK AG NEW YORK BRANCH, as Lender |
| By: | /s/ Dusan Lazarov |
|  | Name: Dusan Lazarov |
|  | Title: Director |
| By: | /s/ Michael Getz |
|  | Name: Michael Getz |
|  | Title: Vice President |

---

[*Signature Page to the ABL Credit Agreement*]

------

**SCHEDULES** 

---

| | |
|:---|:---|
| Schedule 2.01 | Commitments and Revolving Facility Percentage |
| Schedule 2.03 | Existing Letters of Credit |
| Schedule 5.05 | Litigation; Tax Matters |
| Schedule 5.07 | ERISA |
| Schedule 5.09 | Ownership of Property; Liens |
| Schedule 5.10 | Taxes |
| Schedule 5.11(a) | Historical Financial Statements |
| Schedule 5.11(b) | Pro-Forma Financial Statements |
| Schedule 5.11(e) | Projections |
| Schedule 5.12 | Environmental |
| Schedule 5.15 | Labor Relations |
| Schedule 5.16 | Intellectual Property |
| Schedule 5.17 | Brokers' and Transaction Fees |
| Schedule 5.18 | Insurance |
| Schedule 5.19 | Ventures, Subsidiaries and Affiliates; Outstanding Stock |
| Schedule 5.20 | Jurisdiction of Organization; Chief Executive Office |
| Schedule 5.26(c) | Mortgaged Properties |
| Schedule 6.10 | Prior Indebtedness |
| Schedule 6.13 | Guarantors |
| Schedule 6.15 | Post-Closing Obligations |
| Schedule 7.01 | Liens |
| Schedule 7.04 | Investments |
| Schedule 7.05 | Continuing Indebtedness |
| Schedule 7.06 | Transactions with Affiliates |
| Schedule 7.09 | Contingent Obligations |
| Schedule 10.02 | Administrative Agent's Office; Certain Addresses for Notices |

---

## Exhibit 10.11

**Exhibit 10.11** 

**GUARANTY** 

**dated as of September 19, 2013** 

**among** 

**PIANISSIMO HOLDINGS CORP.,** 

**PIANISSIMO ACQUISITION CORP.,** 

**STEINWAY MUSICAL INSTRUMENTS, INC.** 

**STEINWAY, INC,** 

**CONN-SELMER, INC.** 

**THE SUBSIDIARY GUARANTORS FROM TIME TO TIME PARTY HERETO** 

**and** 

**BANK OF AMERICA, N.A.,** 

**as Administrative Agent** 

------

**TABLE OF CONTENTS**

---

| | | |
|:---|:---|:---|
|  |  | Page |
| **Article I** DEFINITIONS | **Article I** DEFINITIONS | 2 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Section 1.01 | Credit Agreement Definitions | 2 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Section 1.02 | Additional Defined Terms | 2 |
| **Article II** GUARANTY | **Article II** GUARANTY | 3 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Section 2.01 | The Guaranty | 3 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Section 2.02 | Guaranty Absolute | 5 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Section 2.03 | Payments | 7 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Section 2.04 | Discharge; Reinstatement in Certain Circumstances | 8 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Section 2.05 | Waiver by the Guarantors | 8 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Section 2.06 | Security for Guaranty | 11 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Section 2.07 | Agreement to Pay; Subordination of Subrogation Claims | 11 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Section 2.08 | Stay of Acceleration | 12 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Section 2.09 | No Set-Off | 12 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Section 2.10 | Keepwell | 12 |
| **Article III** INDEMNIFICATION, SUBROGATION AND CONTRIBUTION | **Article III** INDEMNIFICATION, SUBROGATION AND CONTRIBUTION | 13 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Section 3.01 | Indemnity and Subrogation | 13 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Section 3.02 | Contribution and Subrogation | 13 |
| **Article IV** REPRESENTATIONS, WARRANTIES AND COVENANTS | **Article IV** REPRESENTATIONS, WARRANTIES AND COVENANTS | 13 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Section 4.01 | Representations and Warranties; Certain Agreements | 13 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Section 4.02 | Information | 14 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Section 4.03 | Subordination by Guarantors | 14 |
| **Article V** SET-OFF | **Article V** SET-OFF | 15 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Section 5.01 | Right of Set-Off | 15 |
| **Article VI** MISCELLANEOUS | **Article VI** MISCELLANEOUS | 15 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Section 6.01 | Notices | 15 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Section 6.02 | Benefit of Agreement | 16 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Section 6.03 | No Waivers; Non-Exclusive Remedies | 16 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Section 6.04 | Enforcement | 17 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Section 6.05 | Amendments and Waivers | 17 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Section 6.06 | Governing Law; Submission to Jurisdiction | 17 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Section 6.07 | Limitation of Law; Severability | 17 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Section 6.08 | Counterparts; Integration; Effectiveness | 18 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Section 6.09 | WAIVER OF JURY TRIAL | 18 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Section 6.10 | Additional Guarantors | 18 |

---

------

Section 6.11 Termination; Release of Subsidiary Guarantors 18 <br> Section 6.12 Conflict 19

ii

------

**GUARANTY** dated as of September 19, 2013 (as amended, restated, amended and restated, modified or supplemented from time to time, this "<u>Agreement</u>") among PIANISSIMO HOLDINGS CORP., PIANISSIMO ACQUISITION CORP., STEINWAY MUSICAL INSTRUMENTS, INC., STEINWAY, INC., CONN-SELMER, INC., the SUBSIDIARY GUARANTORS from time to time party hereto and BANK OF AMERICA, N.A., as Administrative Agent for the benefit of the Secured Parties referred to herein.

Pianissimo Acquisition Corp., a Delaware corporation (the "<u>Initial Borrower</u>"), which upon consummation of the Closing Date Acquisition on the Closing Date will be merged with and into Steinway Musical Instruments, Inc., a Delaware corporation (the "<u>Company</u>", with the Company being the survivor of such merger and thereafter, together with its successors and permitted assigns, the "<u>Parent Borrower</u>"), proposes to enter into that certain ABL Credit Agreement, date as of September 19, 2013 (as amended, restated, amended and restated, modified or supplemented from time to time and including any agreement extending the maturity of, refinancing or otherwise amending, amending and restating or otherwise modifying or restructuring all or any portion of the obligations of the Borrowers under such agreement or any successor agreement, the "<u>Credit Agreement</u>") among Pianissimo Holdings Corp., a Delaware corporation (together with its successors and permitted assigns, "<u>Holdings</u>"), the Parent Borrower, Steinway, Inc., a Delaware corporation ("<u>Steinway</u>"), Conn-Selmer, Inc., a Delaware corporation ("<u>Conn-Selmer</u>" and together with the Parent Borrower and Steinway, each a "<u>Borrower</u>" and, collectively and jointly and severally, the "<u>Borrowers</u>"), the banks and other lending institutions from time to time party thereto (each a "<u>Lender</u>" and, collectively, the "<u>Lenders</u>"), Bank of America, N.A., as Administrative Agent (together with its successor or successors in each such capacity, the "<u>Administrative Agent</u>"), and Deutsche Bank Securities Inc., as Syndication Agent (together with its successor or successors in each such capacity, the "<u>Syndication Agent</u>").

Certain Lenders and their Affiliates (i) at the time acting as Hedge Banks may from time to time provide forward rate agreements, options, swaps, caps, floors and other Rate Contracts to the Loan Parties and (ii) at the time acting as Cash Management Banks may from time to time provide cash management services, including treasury, depository, overdraft, credit or debit card, electronic funds transfer and other cash management arrangements to the Loan Parties. The Lenders, each L/C Issuer, the Swing Line Lender, the Administrative Agent, each co-agent or sub-agent appointed by the Administrative Agent from time to time pursuant to the Credit Agreement, Bank of America, N.A., as collateral agent (together with its successor or successors in such capacity, the "<u>Collateral Agent</u>"), and each Indemnitee and their respective successors and assigns are herein referred to individually as a "<u>ABL Credit Party</u>" and collectively as the "<u>ABL Credit Parties</u>", and the ABL Credit Parties, the Hedge Banks, the Cash Management Banks and their respective successors and assigns are herein referred to individually as a "<u>Secured Party</u>" and collectively as the "<u>Secured Parties</u>".

To induce the Lenders and L/C Issuers to enter into the Credit Agreement and the other Loan Documents, the Hedge Banks to enter into Secured Hedge Agreements and the Cash Management Banks to enter into the Secured Cash Management Agreements (the Loan Documents, the Secured Hedge Agreements and the Secured Cash Management Agreements being herein collectively referred to as the "<u>Finance Documents</u>"), and as a condition precedent to the obligations of the Lenders and L/C Issuers under the Credit Agreement, Holdings and each of the subsidiaries of Holdings listed on the signature pages hereof or which shall become parties hereto

------

from time to time in accordance with <u>Section</u> <u>6.10</u> hereof (each a "<u>Subsidiary Guarantor</u>" and, collectively, the "<u>Subsidiary Guarantors</u>" and, together with Holdings and, with respect to the payment and performance by each Specified Loan Party of its obligations hereunder with respect to all obligations under Secured Hedge Agreements, the Borrowers, each a "<u>Guarantor</u>" and, collectively, the "<u>Guarantors</u>") have agreed, jointly and severally, to provide a guaranty of all obligations of the Borrowers and the other Loan Parties (as defined below) under and in respect of the Finance Documents. The Borrowers and the Guarantors are referred to herein individually as a "<u>Loan Party</u>" and collectively as the "<u>Loan Parties.</u>" As used herein, "<u>Other Loan Parties</u>" means, with respect to any Guarantor, any and all of the Loan Parties other than such Guarantor.

Holdings is the direct or indirect parent of the Borrowers, each of the Subsidiary Guarantors is a direct or indirect Subsidiary of Holdings, and the Guarantors will receive not insubstantial benefits from the Credit Agreement and the Loans and other financial accommodations to be made, issued or entered into thereunder and from the other financial accommodations to be made under the other Finance Documents. Accordingly, each Guarantor hereby agrees with the Administrative Agent for the benefit of the Secured Parties as follows:

**ARTICLE I** 

**DEFINITIONS** 

**Section 1.01 <u>Credit Agreement Definitions</u>**. Capitalized terms used in this Agreement and not otherwise defined herein have the respective meanings assigned thereto in the Credit Agreement. Whenever any term used in this Agreement and not otherwise defined herein is used herein, such reference shall be deemed to have the same effect as if such term had been independently set forth herein in full on the date hereof. The rules of construction specified in <u>Section</u> <u>1.02</u> of the Credit Agreement shall also apply to this Agreement.

**Section 1.02 <u>Additional Defined Terms</u>**. As used in this Agreement, the following additional terms have the meanings specified below:

"<u>Guaranteed Obligations</u>" has the meaning specified in <u>Section</u> <u>2.01</u>.

"<u>Qualified ECP Guarantor</u>" shall mean, at any time, each Loan Party with total assets exceeding $10,000,000 or that qualifies at such time as an "eligible contract participant" under the Commodity Exchange Act and can cause another Person to qualify as an "eligible contract participant" at such time under Section 1a(18)(A)(v)(II) of the Commodity Exchange Act.

"<u>Specified Loan Party</u>" means any Loan Party that is not an "eligible contract participant" under the Commodity Exchange Act (determined prior to giving effect to <u>Section</u> <u>2.10</u>).

------

**ARTICLE II** 

**GUARANTY** 

**Section 2.01 <u>The Guaranty</u>**. Each Guarantor unconditionally guarantees, jointly and severally with the other Guarantors, as a primary obligor and not merely as a surety: (x) the due and punctual payment of:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(i) all principal of, premium, if any, and interest on any Loan incurred by any Other Loan Party under, or any Note issued by any Other Loan Party pursuant to, the Credit Agreement or any other Loan Document (including, without limitation, any interest which accrues after the commencement of any (A) voluntary or involuntary case or proceeding under any Debtor Relief Laws with respect to any Loan Party, (B) other voluntary or involuntary insolvency, reorganization or bankruptcy case or proceeding, or any receivership, liquidation or similar case or proceeding with respect to any Loan Party or any material portion of its respective assets, (C) liquidation, dissolution, reorganization or winding up of any Loan Party whether voluntary or involuntary and whether or not involving insolvency or bankruptcy or (D) assignment for the benefit of creditors or any other marshalling of assets and liabilities of any Loan Party (each an "<u>Insolvency or Liquidation Proceeding</u>"), whether or not allowed or allowable as a claim in any such proceeding);

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(ii) all fees, expenses, indemnification obligations and other amounts of whatever nature now or hereafter payable by any Other Loan Party pursuant to the Credit Agreement or any other Loan Document (including, without limitation, any amounts which accrue after the commencement of any Insolvency or Liquidation Proceeding with respect to such Other Loan Party, whether or not allowed or allowable as a claim in any such proceeding);

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(iii) all expenses of any Agent as to which one or more of them have a right to reimbursement by any Loan Party under <u>Section</u> <u>2.07</u> of this Agreement, <u>Section</u> <u>10.04(a)</u> of the Credit Agreement or under any other similar provision of any other Loan Document, including, without limitation, any and all sums advanced by the Collateral Agent to preserve the Collateral or preserve its security interests in the Collateral to the extent permitted under any Loan Document or applicable Requirement of Law;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(iv) all amounts paid by any Indemnitee as to which such Indemnitee has the right to reimbursement by any Loan Party under <u>Section</u> <u>10.04(b)</u> of the Credit Agreement or under any other similar provision of any other Loan Document;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(v) all other amounts now or hereafter payable by any Other Loan Party and all other obligations or liabilities now existing or hereafter arising or incurred on the part of any Other Loan Party pursuant to any Loan Document (including, without limitation, any amounts which accrue after the commencement of any Insolvency or Liquidation Proceeding with respect to such Other Loan Party, whether or not allowed or allowable as a claim in any such proceeding);

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(vi) all obligations (other than Excluded Swap Obligations) of a Loan Party permitted under the Credit Agreement owed or owing under any Secured Hedge Agreement to any Hedge Bank and all costs and expenses incurred in connection with enforcement and collection of the obligations described in this clause (vi), including the fees, charges and disbursement of counsel; and

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(vii) all obligations of a Loan Party permitted under the Credit Agreement owed or owing under any Secured Cash Management Agreement to any Cash Management Bank and all costs and expenses incurred in connection with enforcement and collection of the obligations described in this clause (vii), including the fees, charges and disbursement of counsel;

------

in each case together with all renewals, modifications, consolidations or extensions thereof and whether now or hereafter due, owing or incurred in any manner, whether actual or contingent, whether incurred solely or jointly with any other Person and whether as principal or surety (and including all liabilities in connection with any notes, bills or other instruments accepted by any Secured Party in connection therewith), together in each case with all renewals, modifications, consolidations or extensions thereof; and (y) the due and punctual performance of all covenants, agreements, obligations and liabilities of Holdings and each Other Loan Party under or pursuant to the Finance Documents (all such monetary and other obligations referred to in <u>clauses (x)</u> and <u>(y)</u> above (other than Excluded Swap Obligations) being herein collectively referred to as the "<u>Guaranteed Obligations</u>").

The books and records of the Administrative Agent showing the amount of the Guaranteed Obligations shall be admissible in evidence in any action or proceeding, and shall be binding upon each Guarantor and conclusive, absent manifest error, for the purpose of establishing the amount of the Guaranteed Obligations.

Anything contained in this Agreement to the contrary notwithstanding, the obligations of each Subsidiary Guarantor (other than any parent of the Borrowers with respect to Guaranteed Obligations owed or owing by such Borrowers or its Subsidiaries, to the extent constituting a downstream guarantee not subject to Fraudulent Transfer Laws) hereunder shall be limited to a maximum aggregate amount equal to the greatest amount that would not render such Subsidiary Guarantor's obligations hereunder subject to avoidance as a fraudulent transfer or conveyance under Section 548 of the Bankruptcy Code or any provisions of applicable state law (collectively, the "<u>Fraudulent Transfer Laws</u>"), in each case after giving effect to all other liabilities of such Subsidiary Guarantor, contingent or otherwise, that are relevant under the Fraudulent Transfer Laws (specifically excluding, however, any liabilities of such Subsidiary Guarantor (i) in respect of intercompany indebtedness to any Other Loan Party or any of its Affiliates to the extent that such indebtedness (A) would be discharged or would be subject to a right of set-off in an amount equal to the amount paid by such Subsidiary Guarantor hereunder or (B) has been pledged to, and is enforceable by, the Collateral Agent on behalf of the Secured Parties and (ii) under any guaranty of Indebtedness subordinated in right of payment to the Guaranteed Obligations which guaranty contains a limitation as to a maximum amount similar to that set forth in this paragraph pursuant to which the liability of such Subsidiary Guarantor hereunder is included in the liabilities taken into account in determining such maximum amount) and after giving effect as assets of such Subsidiary Guarantor to the value (as determined under the applicable provisions of the Fraudulent Transfer Laws) of any rights to subrogation, contribution, reimbursement, indemnity or similar rights of such Subsidiary Guarantor pursuant to (A) applicable Requirements of Law or (B) any agreement providing for an equitable allocation among such Subsidiary Guarantor and any Other Loan Party and its Affiliates of obligations arising under guaranties by such parties (including the agreements in Article III of this Agreement). If any Subsidiary Guarantor's liability hereunder is limited pursuant to this paragraph to an amount that is less than the total amount of the Guaranteed Obligations, then it is understood and agreed that the portion of the Guaranteed Obligations for which such Subsidiary Guarantor is liable hereunder shall be the last portion of the Guaranteed Obligations to be repaid by such Subsidiary Guarantor.

------

For the avoidance of doubt, no Guarantor shall be deemed under this Agreement to be a guarantor of any Swap Obligations to the extent that the providing of such guaranty by such Guarantor would violate the Commodity Exchange Act by virtue of such Guarantor's failure to constitute an "eligible contract participant" as defined in the Commodity Exchange Act at the time such guaranty becomes effective with respect to such Swap Obligations.

**Section 2.02 <u>Guaranty Absolute</u>**. Each Guarantor guarantees that the Guaranteed Obligations will be paid and performed strictly in accordance with the terms of the Loan Documents, regardless of any Requirement of Law now or hereafter in effect in any jurisdiction affecting any of such terms or the rights of the Secured Parties with respect thereto. The obligations of the Guarantors under this Agreement are independent of the Guaranteed Obligations, and a separate action or actions may be brought and prosecuted against each Guarantor to enforce this Agreement, irrespective of whether any action is brought against any Borrower or any Other Loan Party or whether any Borrower or any Other Loan Party is joined in any such action or actions. This Agreement is an absolute and unconditional guaranty of payment when due, and not of collection, by each Guarantor, jointly and severally with each other Guarantor of the Guaranteed Obligations in each and every particular. The obligations of each Guarantor hereunder are several from those of the Other Loan Parties and are primary obligations concerning which each Guarantor is the principal obligor. The Secured Parties shall not be required to mitigate damages or take any action to reduce, collect or enforce the Guaranteed Obligations.

The obligations of each Guarantor hereunder shall not be subject to any reduction, limitation, impairment or termination for any reason, including the existence of any claim, set-off or other right which any Guarantor may have at any time against any Other Loan Party, any Agent or other Secured Party or any other Person, whether in connection herewith or any unrelated transactions. Without limiting the generality of the foregoing, each Guarantor's liability shall extend to all amounts that constitute part of the Guaranteed Obligations and would be owed by any Other Loan Party to any Secured Party under the Loan Documents but for the fact that they are unenforceable or not allowable due to the existence of a bankruptcy, reorganization or similar proceeding involving any Borrower or such Other Loan Party.

Without limiting the generality of the foregoing, the obligations of each Guarantor hereunder shall not be released, discharged or otherwise affected or impaired by:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(i) any extension, renewal, settlement, compromise, acceleration, waiver or release in respect of any obligation of any Other Loan Party under the Credit Agreement, the Notes, any Secured Hedge Agreement, and Secured Cash Management Agreement or any other Finance Document or any other agreement or instrument evidencing or securing any Guaranteed Obligation, by operation of law or otherwise;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(ii) any change in the manner, place, time or terms of payment of any Guaranteed Obligation or any other amendment, supplement or modification to the Credit Agreement, the Notes, any other Finance Document or any other agreement or instrument evidencing or securing any Guaranteed Obligation;

------

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(iii) any release, non-perfection or invalidity of any direct or indirect security for any Guaranteed Obligation, any sale, exchange, surrender, realization upon, offset against or other action in respect of any direct or indirect security for any Guaranteed Obligation or any release of any Other Loan Party or any other guarantor or guarantors of any Guaranteed Obligation;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(iv) any change in the existence, structure or ownership of any Other Loan Party or any insolvency, bankruptcy, reorganization, arrangement, readjustment, composition, liquidation or other similar proceeding affecting any Other Loan Party or its assets or any resulting disallowance, release or discharge of all or any portion of any Guaranteed Obligation;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(v) the existence of any claim, set-off or other right which any Guarantor may have at any time against any Other Loan Party, any Agent, any other Secured Party or any other Person, whether in connection herewith or any unrelated transaction; provided that nothing herein shall prevent the assertion of any such claim by separate suit or compulsory counterclaim;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(vi) any invalidity or unenforceability relating to or against any Other Loan Party for any reason of the Credit Agreement, any Note, any other Finance Document or any other agreement or instrument evidencing or securing any Guaranteed Obligation or any provision of applicable Requirements of Law purporting to prohibit the payment by any Other Loan Party of any Guaranteed Obligation;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(vii) any failure by any Agent or any other Secured Party: (A) to file or enforce a claim against any Other Loan Party or its estate (in a bankruptcy or other proceeding); (B) to give notice of the existence, creation or incurrence by any Other Loan Party of any new or additional indebtedness or obligation under or with respect to the Guaranteed Obligations; (C) to commence any action against any Other Loan Party; (D) to disclose to any Guarantor any facts which such Agent or such other Secured Party may now or hereafter know with regard to any Other Loan Party; or (E) to proceed with due diligence in the collection, protection or realization upon any collateral securing the Guaranteed Obligations;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(viii) any direction as to application of payment by any Other Loan Party or any other Person;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(ix) any subordination by any Secured Party of the payment of any Guaranteed Obligation to the payment of any other liability (whether matured or unmatured) of any Other Loan Party to its creditors;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(x) any act or failure to act by the Administrative Agent or any other Secured Party under this Agreement or otherwise which may deprive any Guarantor of any right to subrogation, contribution or reimbursement against any Other Loan Party or any right to recover full indemnity for any payments made by such Guarantor in respect of the Guaranteed Obligations; or

------

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(xi) any other act or omission to act or delay of any kind by any Borrower, any Other Loan Party, the Administrative Agent or any Secured Party or any other Person or any other circumstance whatsoever which might, but for the provisions of this clause, constitute a legal or equitable discharge of any Guarantor's obligations hereunder.

Each Guarantor has irrevocably and unconditionally delivered this Agreement to the Administrative Agent, for the benefit of the Secured Parties, and the failure by any Other Loan Party or any other Person to sign this Agreement or a guaranty similar to this Agreement or otherwise shall not discharge the obligations of any Guarantor hereunder. The irrevocable and unconditional liability of each Guarantor hereunder applies whether it is jointly and severally liable for the entire amount of the Guaranteed Obligations, or only for a pro-rata portion, and without regard to any rights (or the impairment thereof) of subrogation, contribution or reimbursement that such Guarantor may now or hereafter have against any Other Loan Party or any other Person. This Agreement is and shall remain fully enforceable against each Guarantor irrespective of any defenses that any Other Loan Party may have or assert in respect of the Guaranteed Obligations, including, without limitation, failure of consideration, breach of warranty, payment, statute of frauds, statute of limitations, accord and satisfaction and usury, except that a Guarantor may assert the defense of final payment in full of the Guaranteed Obligations.

**Section 2.03 <u>Payments</u>**.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a) *Payments to be Made Upon Default*. If any Loan Party fails to pay or perform any Guaranteed Obligation when due in accordance with its terms (whether at stated maturity, by acceleration or otherwise) or if any Default or Event of Default specified in <u>Section</u> <u>8.01(f)</u> and (g) of the Credit Agreement occurs with respect to any Loan Party, the Guarantors shall, forthwith on demand of the Administrative Agent, pay the aggregate amount of all Guaranteed Obligations to the Administrative Agent.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b) *General Provisions as to Payments*. Each payment hereunder shall be made without set-off, counterclaim or other deduction, in federal or other funds immediately available to the Administrative Agent at the address(es) referred to in <u>Section</u> <u>6.01</u>. Without limiting the foregoing, each Guarantor shall make all payments hereunder free and clear of and without deduction for any taxes, levies, imposts, duties, charges, fees, deductions, withholdings, compulsory loans, restrictions or conditions of any nature now or hereafter imposed or levied by any jurisdiction or any political subdivision thereof or taxing or other authority therein unless the Guarantor is compelled by law to make such deduction or withholding. Subject to <u>Section</u> <u>3.01</u> of the Credit Agreement, if any such obligation (other than one arising in respect of Excluded Taxes) is imposed upon any Guarantor with respect to any amount payable by it hereunder, such Guarantor will pay to the Administrative Agent for the account of the Secured Parties, on the date on which such amount is due and payable hereunder, such additional amount in U.S. dollars as shall be necessary to enable the applicable Secured Party or Parties to receive the same net amount which it or they would have received on such due date had no such obligation been imposed upon such Guarantor. The obligations of the Guarantors under this paragraph shall survive the payment in full of the Guaranteed Obligations and termination of this Agreement. The obligations hereunder shall not be affected by any acts of any legislative body or governmental authority affecting any Borrower, any Guarantor or any Other Loan Party, including but not limited to, any restrictions on the conversion of currency or repatriation or control of funds or any total or partial expropriation of any Borrower's property or the property of any Guarantor or any Other Loan Party, or by economic, political, regulatory or other events in the countries where any Borrower, any Guarantor or any Other Loan Party is located.

------

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c) *Application of Payments; Priority of Distributions*. All payments received by the Administrative Agent hereunder, subject to an applicable Intercreditor Agreement with respect to proceeds of Collateral, shall be applied as provided in <u>Section</u> <u>8.03</u> of the Credit Agreement.

**Section 2.04 <u>Discharge; Reinstatement in Certain Circumstances</u>**. Each Guarantor's obligations hereunder shall remain in full force and effect until the latest to occur of (i) payment in full in cash of the principal of and interest (including interest accruing on or after the commencement of any Insolvency or Liquidation Proceeding, whether or not a claim for such interest is, or would be, allowed in such Insolvency or Liquidation Proceeding) and premium, if any, on all Indebtedness (other than contingent obligations) outstanding under the Loan Documents and termination of all commitments to lend or otherwise extend credit under the Loan Documents, and (ii) (A) payment in full in cash of all other Guaranteed Obligations (other than contingent obligations) that are due and payable or otherwise accrued and owing at or prior to the time such principal and interest are paid (including legal fees and other expenses, costs or charges accruing on or after the commencement of any Insolvency or Liquidation Proceeding, whether or not a claim for such fees, expenses, costs or charges is, or would be, allowed in such Insolvency or Liquidation Proceeding but excluding unasserted contingent indemnification obligations) and (B) termination or cash collateralization (in an amount reasonably satisfactory to each applicable Hedge Bank or Cash Management Bank) of all Secured Hedge Agreements and Secured Cash Management Agreements (the occurrence of all of the foregoing being referred to herein as "<u>Discharge of Finance Obligations</u>"). No payment or payments made by any Other Loan Party or any other Person or received or collected by any Secured Party from any Other Loan Party or any other Person by virtue of any action or proceeding or any set-off or appropriation or application at any time or from time to time in reduction of or in payment of the Guaranteed Obligations shall be deemed to modify, reduce, release or otherwise affect the liability of any Guarantor hereunder, it being understood that each Guarantor shall, notwithstanding any such payment or payments, remain liable for the Guaranteed Obligations until the Discharge of Finance Obligations. If at any time any payment by any Other Loan Party or any other Person of any ABL Credit Obligations constituting Guaranteed Obligation is rescinded or must otherwise be restored or returned upon the insolvency, bankruptcy, dissolution, liquidation or reorganization of any Other Loan Party or other Person or upon or as a result of the appointment of a receiver, intervener or conservator of, or trustee or similar officer for, such Other Loan Party or other Person or any substantial part of its respective property or otherwise, each Guarantor's obligations hereunder with respect to such payment shall be reinstated as though such payment had been due but not made at such time. Each Guarantor party hereto agrees that payment or performance of any of the Guaranteed Obligations or other acts which toll any statute of limitations applicable to the Guaranteed Obligations shall also toll the statute of limitations applicable to each such Guarantor's liability hereunder.

**Section 2.05 <u>Waiver by the Guarantors</u>**. Each Guarantor hereby waives presentment to, demand of payment from and protest to the Other Loan Parties of any of the Guaranteed Obligations, and also waives promptness, diligence, notice of acceptance of its guarantee, any other notice with respect to any of the Guaranteed Obligations and this Agreement and any requirement that any Agent or any other Secured Party protect, secure, perfect or insure any Lien

------

or any property subject thereto. Each Guarantor further waives any right to require that resort be had by any Agent or any other Secured Party to any security held for payment of the Guaranteed Obligations or to any balance of any deposit, account or credit on the books of any Agent or any other Secured Party in favor of any Loan Party or any other Person. Each Guarantor hereby consents and agrees to each of the following to the fullest extent permitted by law, and agrees that such Guarantor's obligations under this Agreement shall not be released, diminished, impaired, reduced or adversely affected by any of the following, and waives any rights (including rights to notice) which such Guarantor might otherwise have as a result of or in connection with any of the following:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(i) any renewal, extension, modification, increase, decrease, alteration or rearrangement of all or any part of the Guaranteed Obligations or any instrument executed in connection therewith, or any contract or understanding with any Other Loan Party, any Agent, the other Secured Parties, or any of them, or any other Person, pertaining to the Guaranteed Obligations;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(ii) any adjustment, indulgence, forbearance or compromise that might be granted or given by any Agent or any other Secured Party to any Other Loan Party or any other Person liable on the Guaranteed Obligations; or the failure of any Agent or any other Secured Party to assert any claim or demand or to exercise any right or remedy against any Other Loan Party under the provisions of any Finance Document or otherwise; or any rescission, waiver, amendment or modification of, or any release from any of the terms or provisions of, any Finance Document or any other agreement, including with respect to any Other Loan Party under this Agreement;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(iii) the insolvency, bankruptcy, arrangement, adjustment, composition, liquidation, disability, dissolution or lack of power of any Other Loan Party or any other Person at any time liable for the payment of all or part of the Guaranteed Obligations; or any dissolution of any Other Loan Party, or any change, restructuring or termination of the corporate structure or existence of any Other Loan Party, or any sale, lease or transfer of any or all of the assets of any Other Loan Party, or any change in the shareholders, partners, or members of any Other Loan Party; or any default, failure or delay, willful or otherwise, in the performance of the Guaranteed Obligations;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(iv) the invalidity, illegality or unenforceability of all or any part of the Guaranteed Obligations, or any document or agreement executed in connection with the Guaranteed Obligations, for any reason whatsoever, including the fact that the Guaranteed Obligations, or any part thereof, exceed the amount permitted by law, the act of creating the Guaranteed Obligations or any part thereof is ultra vires, the officers or representatives executing the documents or otherwise creating the Guaranteed Obligations acted in excess of their authority, the Guaranteed Obligations violate applicable usury laws, any Other Loan Party has valid defenses, claims or offsets (whether at law, in equity or by agreement) which render the Guaranteed Obligations wholly or partially uncollectible from such Other Loan Party, the creation, performance or repayment of the Guaranteed Obligations (or the execution, delivery and performance of any document or instrument representing part of the Guaranteed Obligations or executed in connection with the Guaranteed Obligations or given to secure the repayment of the Guaranteed Obligations) is illegal, uncollectible, legally impossible or unenforceable, or the documents or instruments pertaining to the Guaranteed Obligations have been forged or otherwise are irregular or not genuine or authentic;

------

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(v) any full or partial release of the liability of any Other Loan Party or of any other Person now or hereafter liable, whether directly or indirectly, jointly, severally, or jointly and severally, to pay, perform, guarantee or assure the payment of the Guaranteed Obligations or any part thereof, it being recognized, acknowledged and agreed by each Guarantor that such Guarantor may be required to pay the Guaranteed Obligations in full without assistance or support of any other Person, and such Guarantor has not been induced to enter into this Agreement on the basis of a contemplation, belief, understanding or agreement that any party other than the Borrowers will be liable to perform the Guaranteed Obligations, or that the Secured Parties will look to any other party to perform the Guaranteed Obligations;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(vi) the taking or accepting of any other security, collateral or guarantee, or other assurance of payment, for all or any part of the Guaranteed Obligations;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(vii) any release, surrender, exchange, subordination, deterioration, waste, loss or impairment (including negligent, willful, unreasonable or unjustifiable impairment) of any letter of credit, collateral, property or security, at any time existing in connection with, or assuring or securing payment of, all or any part of the Guaranteed Obligations;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(viii) any right that any Guarantor may now or hereafter have under Section 3606 of the UCC or otherwise to unimpaired collateral;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(ix) the failure of any Agent, any other Secured Party or any other Person to exercise diligence or reasonable care in the preservation, protection, enforcement, sale or other handling or treatment of all or any part of such collateral, property or security;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(x) the fact that any collateral, security, security interest or lien contemplated or intended to be given, created or granted as security for the repayment of the Guaranteed Obligations shall not be properly perfected or created, or shall prove to be unenforceable or subordinate to any other security interest or lien, it being recognized and agreed by each Guarantor that such Guarantor is not entering into this Agreement in reliance on, or in contemplation of the benefits of, the validity, enforceability, collectibility or value of any of the Collateral;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(xi) any payment by any Other Loan Party to the Administrative Agent, any other Agent or any other Secured Party being held to constitute a preference under the Bankruptcy Code or any similar federal, foreign or state law, or for any reason any Agent or any other Secured Party being required to refund such payment or pay such amount to any Other Loan Party or someone else;

------

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(xii) any other action taken or omitted to be taken with respect to the Guaranteed Obligations, or the security and collateral therefor, whether or not such action or omission prejudices any Guarantor or increases the likelihood that any Guarantor will be required to pay the Guaranteed Obligations pursuant to the terms hereof, it being the unambiguous and unequivocal intention of each Guarantor that such Guarantor shall be obligated to pay the Guaranteed Obligations when due, notwithstanding any occurrence, circumstance, event, action or omission whatsoever, whether or not contemplated, and whether or not otherwise or particularly described herein, except for the full and final payment and satisfaction of the Guaranteed Obligations in cash;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(xiii) the fact that all or any of the Guaranteed Obligations cease to exist by operation of law, including by way of a discharge, limitation or tolling thereof under applicable Debtor Relief Laws;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(xiv) the existence of any claim, set-off or other right which any Guarantor may have at any time against any Other Loan Party, the Administrative Agent, any other Secured Party or any other Person, whether in connection herewith or any unrelated transactions; provided that nothing herein shall prevent the assertion of any such claim by separate suit or compulsory counterclaim; or (xv) any other circumstance that might in any manner or to any extent otherwise constitute a defense available to, vary the risk of, or operate as a discharge of, such Guarantor as a matter of law or equity.

All waivers herein contained shall be without prejudice to the right of the Administrative Agent at its option to proceed against any Loan Party or any other Person, whether by separate action or by joinder.

**Section 2.06 <u>Security for Guaranty</u>**. Each Guarantor party hereto authorizes the Collateral Agent in accordance with the terms and subject to the conditions set forth in the Collateral Documents, (i) to take and hold security for the payment of the Guaranteed Obligations and its obligations under this Agreement and to exchange, enforce, waive and release any such security, (ii) to apply such security and direct the order or manner of sale thereof in accordance with the Collateral Documents and (iii) to release or substitute any one or more endorsees, other Guarantors or Other Loan Parties. The Collateral Agent may, at its election, in accordance with the terms and subject to the conditions set forth in the Collateral Documents, foreclose on any security held by it by one or more judicial or nonjudicial sales, or exercise any other right or remedy available to it against any Loan Party, or any security, without affecting or impairing in any way the liability of any Guarantor hereunder.

**Section 2.07 <u>Agreement to Pay; Subordination of Subrogation Claims</u>**. In furtherance of the foregoing and not in limitation of any other right that the Administrative Agent, any other Agent or any other Secured Party has at law or in equity against any Guarantor by virtue hereof, upon the failure of any Other Loan Party to pay any Guaranteed Obligation when and as the same shall become due, whether at maturity, by acceleration, after notice of prepayment or otherwise, each Guarantor hereby promises to and will forthwith pay, or cause to be paid, to the Administrative Agent or such other Secured Party as designated thereby in cash the amount of such unpaid Guaranteed Obligations. Upon payment by any Guarantor of any sums to the Administrative Agent or any Secured Party as provided above, all rights of such Guarantor against any Other Loan Party arising as a result thereof by way of right of subrogation, contribution, reimbursement, indemnity or otherwise shall (including, without limitation, in the case of any Subsidiary Guarantor, any rights of such Guarantor arising under Article III of this Agreement) in

------

all respects be subordinate and junior in right of payment to the prior indefeasible payment in full in cash of all the Guaranteed Obligations and Discharge of Finance Obligations. No failure on the part of any Other Loan Party or any other Person to make any payments in respect of any subrogation, contribution, reimbursement, indemnity or similar right (or any other payments required under applicable Requirements of Law or otherwise) shall in any respect limit the obligations and liabilities of any Guarantor with respect to its obligations hereunder. If any amount shall erroneously be paid to any Guarantor on account of such subrogation, contribution, reimbursement, indemnity or similar right, such amount shall be held in trust for the benefit of the Secured Parties and shall forthwith be turned over to the Administrative Agent in the exact form received by such Guarantor (duly endorsed by such Guarantor to the Administrative Agent, if required) to be credited against the payment of the Guaranteed Obligations, whether matured or unmatured, in accordance with the terms of the Loan Documents.

**Section 2.08 <u>Stay of Acceleration</u>**. If acceleration of the time for payment of any amount payable by any Other Loan Party under or with respect to the Guaranteed Obligations is stayed upon the insolvency or bankruptcy of such Other Loan Party, all such amounts otherwise subject to acceleration under the terms of the Credit Agreement, the Notes, any Secured Hedge Agreement, any Secured Cash Management Agreement or any other agreement or instrument evidencing or securing the Guaranteed Obligations shall nonetheless be payable by the Guarantors hereunder, jointly and severally, forthwith on demand by the Administrative Agent in the manner provided in <u>Section</u> <u>2.01</u>.

**Section 2.09 <u>No Set-Off</u>**. Except as set forth in <u>Section</u> <u>5.01</u>, no act or omission of any kind or at any time on the part of any Secured Party in respect of any matter whatsoever shall in any way affect or impair the rights of the Administrative Agent or any other Secured Party to enforce any right, power or benefit under this Agreement, and no set-off, claim, reduction or diminution of any Guaranteed Obligation or any defense of any kind or nature which any Guarantor has or may have against any Other Loan Party or any Secured Party shall be available against the Administrative Agent or any other Secured Party in any suit or action brought by the Administrative Agent or any other Secured Party to enforce any right, power or benefit provided for by this Agreement; provided that nothing herein shall prevent the assertion by any Guarantor of any such claim by separate suit or compulsory counterclaim. Nothing in this Agreement shall be construed as a waiver by any Guarantor of any rights or claims which it may have against any Secured Party hereunder or otherwise, but any recovery upon such rights and claims shall be had from such Secured Party separately, it being the intent of this Agreement that each Guarantor shall be unconditionally, absolutely and jointly and severally obligated to perform fully all its obligations, covenants and agreements hereunder for the benefit of each Secured Party.

**Section 2.10 <u>Keepwell</u>**. Each Loan Party that is a Qualified ECP Guarantor at the time the Guaranty or the grant of the security interest hereunder, in each case, by any Specified Loan Party, becomes effective with respect to any Swap Obligation, hereby jointly and severally, absolutely, unconditionally and irrevocably undertakes to provide such funds or other support to each Specified Loan Party with respect to such Swap Obligation as may be needed by such Specified Loan Party from time to time to honor all of its obligations under this Guaranty and the other Loan Documents in respect of such Swap Obligation (but, in each case, only up to the maximum amount of such liability that can be hereby incurred without rendering such Qualified ECP Guarantor's obligations and undertakings under this Article II voidable under applicable law

------

relating to fraudulent conveyance or fraudulent transfer, and not for any greater amount). The obligations and undertakings of each Qualified ECP Guarantor under this Section shall remain in full force and effect until the Guaranteed Obligations have been indefeasibly paid and performed in full. Each Qualified ECP Guarantor intends this Section to constitute, and this Section shall be deemed to constitute, a guarantee of the obligations of, and a "keepwell, support, or other agreement" for the benefit of, each Specified Loan Party for all purposes of the Commodity Exchange Act.

**ARTICLE III** 

**INDEMNIFICATION, SUBROGATION AND CONTRIBUTION** 

**Section 3.01 <u>Indemnity and Subrogation</u>**. In addition to all such rights of indemnity and subrogation as the Guarantors may have under applicable Requirements of Law (but subject to <u>Section</u> <u>2.07</u> above), Holdings and each Borrower agree that (i) if a payment shall be made by any Guarantor (other than Holdings) under this Agreement, Holdings and the Borrowers shall jointly and severally indemnify such Guarantor for the full amount of such payment, and such Guarantor shall be subrogated to the rights of the Person to whom such payment shall have been made to the extent of such payment and (ii) if any assets of any Guarantor shall be sold pursuant to any Collateral Document to satisfy a claim of any Secured Party, the Borrowers shall indemnify such Guarantor in an amount equal to the greater of the book value or the fair market value of the assets so sold.

**Section 3.02 <u>Contribution and Subrogation</u>**. Each Guarantor (a "<u>Contributing Guarantor</u>") agrees (subject to <u>Section</u> <u>2.07</u> above) that, if a payment shall be made by any other Guarantor under this Agreement or assets of any other Guarantor shall be sold pursuant to any Collateral Document to satisfy a claim of any Secured Party and such other Guarantor (the "<u>Claiming Guarantor</u>") shall not have been fully indemnified by Holdings and the Borrowers as provided in <u>Section</u> <u>3.01</u>, the Contributing Guarantor shall indemnify the Claiming Guarantor in an amount equal to the amount of such payment or the greater of the book value or the fair market value of such assets, as the case may be, in each case multiplied by a fraction the numerator of which shall be the net worth of the Contributing Guarantor on the date that the obligation(s) supporting such claim were incurred under this Agreement and the denominator of which shall be the aggregate net worth of all the Guarantors on such date (or, in the case of any Guarantor becoming a party hereto pursuant to <u>Section</u> <u>6.10</u>, the date of the Accession Agreement executed and delivered by such Guarantor). Any Contributing Guarantor making any payment to a Claiming Guarantor pursuant to this <u>Section</u> <u>3.02</u> shall be subrogated to the rights of such Claiming Guarantor under <u>Section</u> <u>3.01</u> to the extent of such payment, in each case subject to the provisions of <u>Section</u> <u>2.07</u>.

**ARTICLE IV** 

**REPRESENTATIONS, WARRANTIES AND COVENANTS** 

**Section 4.01 <u>Representations and Warranties; Certain Agreements</u>**. Each Guarantor hereby represents and warrants to, and covenants with the Collateral Agent, for the benefit of the ABL Credit Parties as follows:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a) All representations and warranties contained in the Loan Documents that relate to such Guarantor are true and correct in all material respects.

------

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b) Such Guarantor agrees to comply with each of the covenants contained in the Loan Documents that impose or purport to impose, through agreements with the Borrowers, restrictions or obligations on such Guarantor.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c) Such Guarantor acknowledges that any default in the due observance or performance by such Guarantor of any covenant, condition or agreement contained herein may constitute an Event of Default under <u>Section</u> <u>8.01</u> of the Credit Agreement, subject to the terms, conditions and grace periods set forth therein.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(d) Such Guarantor has, independently and without reliance upon the Administrative Agent or any other Secured Party and based on such documents and information as it has deemed appropriate, made its own credit analysis and decision to enter into this Agreement. Such Guarantor has investigated fully the benefits and advantages which will be derived by it from execution of this Agreement, and the board of directors (or persons performing similar functions in case of a Guarantor which is not a corporation) of such Guarantor has decided that a direct or an indirect benefit will accrue to such Guarantor by reason of the execution of this Agreement.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(e) (i) This Agreement is not given with actual intent to hinder, delay or defraud any Person to which such Guarantor is or will become, on or after the date hereof, indebted; (ii) such Guarantor has received at least a reasonably equivalent value in exchange for the giving of this Agreement; (iii) such Guarantor, together with the other Loan Parties, is Solvent on the date hereof (or, in the case of any Guarantor becoming a party hereto pursuant to <u>Section</u> <u>6.10</u>, the date of the Accession Agreement executed and delivered by such Guarantor) and will not cease to be Solvent as a result of the giving of this Agreement; (iv) such Guarantor is not engaged in a business or transaction, nor is it about to engage in a business or transaction, for which any property remaining with such Guarantor constitutes an unreasonably small amount of capital; and (v) such Guarantor does not intend to incur debts that will be beyond such Guarantor's ability to pay as such debts mature.

**Section 4.02 <u>Information</u>**. Each of the Guarantors assumes all responsibility for being and keeping itself informed of the financial condition and assets of the Other Loan Parties 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 such Guarantor assumes and incurs hereunder, and agrees that none of the Administrative Agent, any other Agent or any other Secured Party will have any duty to advise any of the Guarantors of information known to it or any of them regarding such circumstances or risks.

**Section 4.03 <u>Subordination by Guarantors</u>**. In addition to the terms of subordination provided for under <u>Section</u> <u>2.07</u>, each Guarantor hereby subordinates in right of payment all indebtedness of the Other Loan Parties owing to it, whether originally contracted with such Guarantor or acquired by such Guarantor by assignment, transfer or otherwise, whether now owed or hereafter arising, whether for principal, interest, fees, expenses or otherwise, together with all renewals, extensions, increases or rearrangements thereof, to the prior indefeasible payment in full in cash of the Guaranteed Obligations, whether now owed or hereafter arising, whether for

------

principal, interest (including interest accruing during the pendency of any Insolvency or Liquidation Proceeding, regardless of whether allowed or allowable in such proceeding), fees, expenses or otherwise, together with all renewals, extensions, increases or rearrangements thereof; provided that, unless an Event of Default is continuing and the Collateral Agent in its sole discretion has given notice to the Parent Borrower to suspend such intercompany payments, payments in respect of such indebtedness shall be permitted.

**ARTICLE V** 

**SET-OFF** 

**Section 5.01 <u>Right of Set-Off</u>**. If an Event of Default shall have occurred and be continuing, each Secured Party is hereby authorized at any time and from time to time, to the fullest extent permitted by applicable Requirements of Law (subject to the provisions of an applicable Intercreditor Agreement), to set off and apply any and all deposits (general or special, time or demand, provisional or final, in whatever currency) at any time held and other obligations (in whatever currency) at any time owing by such Secured Party to or for the credit or the account of a Guarantor against any and all of the obligations of the Borrowers or such Guarantor now or hereafter existing under this Agreement or any other Loan Document to such Secured Party, irrespective of whether or not such Secured Party shall have made any demand under this Agreement or any other Loan Document and although such obligations of such Guarantor may be contingent or unmatured or are owed to a branch or office of such Secured Party different from the branch or office holding such deposit or obligated on such indebtedness; provided, that in the event that any Defaulting Lender shall exercise any such right of setoff, (x) all amounts so set off shall be paid over immediately to the Administrative Agent for further application in accordance with the provisions of <u>Section</u> <u>2.15</u> of the Credit Agreement and, pending such payment, shall be segregated by such Defaulting Lender from its other funds and deemed held in trust for the benefit of the Administrative Agent and the other Secured Parties, and (y) the Defaulting Lender shall provide promptly to the Administrative Agent a statement describing in reasonable detail the obligations owing to such Defaulting Lender as to which it exercised such right of setoff. The rights of each Secured Party and their respective Affiliates under this <u>Section</u> <u>5.01</u> are in addition to other rights and remedies (including other rights of setoff) that such Secured Party or their respective Affiliates may have. Each Secured Party agrees to notify the respective Guarantor and the Administrative Agent promptly after any such setoff and application; provided that the failure to give such notice shall not affect the validity of such setoff and application.

**ARTICLE VI** 

**MISCELLANEOUS** 

**Section 6.01 <u>Notices</u>**.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a) *<u>Notices Generally</u>*. (i) Unless otherwise expressly provided herein, all notices and other communications provided for hereunder shall be in writing (including by facsimile transmission) and mailed, faxed or delivered, to the address, facsimile number or (subject to <u>subsection (b)</u> below) electronic mail address specified for notices: (i) in the case of any Guarantor, as set forth on the signature pages hereto; (ii) in the case of a Borrower, the Administrative Agent, L/C Issuer or any Lender, as specified in or pursuant to <u>Section</u> <u>10.02</u> of the Credit Agreement; (iii) in the case of the Collateral Agent, as specified in or pursuant to <u>Section</u> <u>11.01</u> of the Pledge

------

and Security Agreement; (iv) in the case of any Hedge Bank as set forth in any applicable Secured Hedge Agreement, (v) in the case of any Cash Management Bank as set forth in the applicable Secured Cash Management Agreement or (vi) in the case of any party, at such other address as shall be designated by such party in a notice to the Administrative Agent and each other party hereto. All such notices and other communications shall be deemed to be given or made upon the earlier to occur of: (i) actual receipt by the intended recipient and (ii)(A) if delivered by hand or by courier, when signed for by the intended recipient; (B) if delivered by mail, four Business Days after deposit in the mails, postage prepaid; (C) if delivered by facsimile transmission, when sent and receipt has been confirmed by telephone; and (D) unless the Administrative Agent otherwise prescribes, notices and other communications sent to an by electronic mail 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); provided that if such notice or other communication is not sent during the normal business hours of the recipient, such notice or communication shall be deemed to have been sent at the opening of business on the next business day for the recipient.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b) *<u>Electronic Communications</u>*. Notices and other communications hereunder may be delivered or furnished by electronic communication (including e-mail and Internet or intranet websites) pursuant to procedures approved by the Administrative Agent, provided that the foregoing shall not apply to notices to any Lender or L/C Issuer if such Lender or L/C Issuer has notified the Administrative Agent that it is incapable of receiving notices by electronic communication. The Administrative Agent may, in its discretion, agree to accept notices and other communications to it hereunder by electronic communications pursuant to procedures approved by it, provided that approval of such procedures may be limited to particular notices or communications.

**Section 6.02 <u>Benefit of Agreement</u>**. This Agreement shall be binding upon and inure to the benefit of and be enforceable by the respective successors and assigns of the parties hereto; provided that none of the Guarantors may assign or transfer any of its interests and obligations without prior written consent of the Administrative Agent (and any such purported assignment or transfer without such consent shall be void); provided further that the rights of each Lender to transfer, assign or grant participations in its rights and/or obligations hereunder shall be limited as set forth in <u>Section</u> <u>10.06</u> of the Credit Agreement. Upon the assignment by any ABL Credit Party of all or any portion of its rights and obligations under the Credit Agreement (including all or any portion of its Commitments and the Loans owing to it) or any other Loan Document to any other Person, such other Person shall thereupon become vested with all the benefits in respect thereof granted to such transferor or assignor herein or otherwise.

**Section 6.03 <u>No Waivers; Non-Exclusive Remedies</u>**. No failure or delay on the part of any Agent or any Secured Party to exercise, no course of dealing with respect to, and no delay in exercising any right, power or privilege under this Agreement or any other Finance Document, or other document or agreement contemplated hereby or thereby shall operate as a waiver thereof nor shall any single or partial exercise of any such right, power or privilege preclude any other or further exercise thereof or the exercise of any other right, power or privilege. The rights and remedies provided herein and in the other Finance Documents are cumulative and are not exclusive of any other rights or remedies provided by Requirements of Law.

------

**Section 6.04 <u>Enforcement</u>**. The Secured Parties agree that this Agreement may be enforced only by the action of the Administrative Agent (acting upon the instructions of the Required Lenders if required under the Loan Documents), and that no other Secured Party shall have any right individually to seek to enforce this Agreement, it being understood and agreed that such rights and remedies may be exercised by the Administrative Agent for the benefit of the Secured Parties upon the terms of this Agreement.

**Section 6.05 <u>Amendments and Waivers</u>**. Any provision of this Agreement may be amended or waived if, but only if, such amendment or waiver is in writing and is signed by each Guarantor directly affected by such amendment or waiver (it being understood that the addition or release of any Guarantor hereunder shall not constitute an amendment or waiver affecting any Guarantor other than the Guarantor so added or released) and at all times prior to the time at which all Finance Obligations have been paid in full (other than (x) unasserted contingent indemnification obligations not due and payable and (y) obligations and liabilities under Secured Hedge Agreements or Secured Cash Management Agreements, as applicable, as to which arrangements satisfactory to the applicable Hedge Bank or Cash Management Bank shall have been made), the Administrative Agent (with the consent of the Required Lenders or, to the extent required by <u>Section</u> <u>10.01</u> of the Credit Agreement, such other portion of the Lenders as may be specified therein).

**Section 6.06 <u>Governing Law; Submission to Jurisdiction</u>**. THIS AGREEMENT AND THE RIGHTS AND OBLIGATIONS OF THE PARTIES HEREUNDER SHALL BE GOVERNED BY AND CONSTRUED AND INTERPRETED IN ACCORDANCE WITH THE INTERNAL LAWS OF THE STATE OF NEW YORK (INCLUDING, WITHOUT LIMITATION, SECTION 5-1401 OF THE GENERAL OBLIGATIONS LAW OF THE STATE OF NEW YORK), WITHOUT REGARD TO CONFLICTS OF LAWS PRINCIPLES THAT WOULD REQUIRE THE APPLICATION OF LAWS OF ANOTHER JURISDICTION. Any legal action or proceeding with respect to this Agreement may be brought in the courts of the State of New York in New York County, or of the United States for the Southern District of New York, and, by execution and delivery of this Agreement, each of the Guarantors hereby irrevocably accepts for itself and in respect of its property, generally and unconditional, the exclusive jurisdiction of such courts. Each of the Guarantors irrevocably waives, to the fullest extent permitted by law, any objection which it may now or hereafter have to the laying of the venue of any such proceeding brought in such court and any claim that any such proceeding brought in any such court has been brought in an inconvenient forum.

**Section 6.07 <u>Limitation of Law; Severability</u>**.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a) All rights, remedies and powers provided in this Agreement may be exercised only to the extent that the exercise thereof does not violate any applicable provision of Requirements of Law, and all of the provisions of this Agreement are intended to be subject to all applicable mandatory provisions of Requirements of Law which may be controlling and be limited to the extent necessary so that they will not render this Agreement invalid, unenforceable in whole or in part, or not entitled to be recorded, registered or filed under the provisions of any applicable Requirements of Law.

------

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b) If any provision hereof is invalid or unenforceable in any jurisdiction, then, to the fullest extent permitted by Requirements of Law: (i) the other provisions hereof shall remain in full force and effect in such jurisdiction and shall be liberally construed in favor of the Agents and the other Secured Parties in order to carry out the intentions of the parties hereto as nearly as may be possible; and (ii) the invalidity or unenforceability of any provision hereof in any jurisdiction shall not affect the validity or enforceability of such provisions in any other jurisdiction.

**Section 6.08 <u>Counterparts; Integration; Effectiveness</u>**. This Agreement may be signed in any number of counterparts, each of which shall be an original, with the same effect as if the signatures thereto and hereto were upon the same instrument. This Agreement and the other Loan Documents constitute the entire agreement and understanding among the parties hereto and supersede any and all prior agreements and understandings, oral or written, relating to the subject matter hereof and thereof. This Agreement shall become effective with respect to each Guarantor when the Administrative Agent shall have received counterparts hereof signed by itself and such Guarantor. Delivery of an executed counterpart of a signature page of this Agreement by facsimile or other electronic imaging (i.e., "pdf' or "tif') means shall be effective as delivery of a manually executed counterpart of this Agreement

**Section 6.09 <u>WAIVER OF JURY TRIAL</u>**. EACH PARTY HERETO HEREBY IRREVOCABLY WAIVES ANY AND ALL RIGHT TO TRIAL BY JURY IN ANY LEGAL PROCEEDING ARISING OUT OF OR RELATING TO THIS AGREEMENT OR THE TRANSACTIONS CONTEMPLATED HEREBY.

**Section 6.10 <u>Additional Guarantors</u>**. It is understood and agreed that any Subsidiary of Holdings that is required by the Credit Agreement to execute an Accession Agreement, in the form of Exhibit J to the Credit Agreement, and counterpart of this Agreement after the date hereof shall automatically become a Subsidiary Guarantor hereunder with the same force and effect as if originally named as a Subsidiary Guarantor hereunder by executing an Accession Agreement and counterpart hereof and delivering the same to the Administrative Agent. The execution and delivery of any such instrument shall not require the consent of any other Guarantor or other parts hereunder. The rights and obligations of each Guarantor or other party hereunder shall remain in full force and effect notwithstanding the addition of any new Subsidiary Guarantor as a party to this Agreement.

**Section 6.11 <u>Termination; Release of Subsidiary Guarantors</u>**.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a) *<u>Termination</u>*. Upon the full, final and irrevocable payment and performance of all ABL Credit Obligations under the Credit Agreement (other than (x) unasserted contingent indemnification obligations not due and payable and (y) obligations and liabilities under Secured Hedge Agreements or Secured Cash Management Agreements, as applicable, as to which arrangements satisfactory to the applicable Hedge Bank or Cash Management Bank shall have been made), this Agreement shall terminate and have no further force or effect.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b) *<u>Release of Guarantors</u>*. If all of the capital stock of one or more of the Subsidiary Guarantors is sold or otherwise disposed of or liquidated in compliance with the requirements of the Credit Agreement (or such sale, other disposition or liquidation has been approved in writing by the Required Lenders (or all or such other portion of the Lenders, if required by <u>Section</u> <u>10.01</u>

------

of the Credit Agreement), such Subsidiary Guarantor or Subsidiary Guarantors shall be released from this Agreement, and this Agreement shall, as to each such Subsidiary Guarantor or Subsidiary Guarantors, terminate and have no further force or effect (it being understood and agreed that the sale of one or more Persons that own, directly or indirectly, all of the capital stock of any Subsidiary Guarantor shall be deemed to be a sale of such Subsidiary Guarantor for purposes of this <u>Section</u> <u>6.11(b)</u>).

**Section 6.12 <u>Conflict</u>**. To the extent that there is a conflict or inconsistency between any provision hereof, on the one hand, and any provision of the Credit Agreement, on the other hand, the Credit Agreement shall control.

[Signature Pages Follow]

------

IN WITNESS WHEREOF, each Guarantor has executed this Agreement as of the day and year first above written.

---

| | |
|:---|:---|
| **PIANISSIMO HOLDINGS CORP.** | **PIANISSIMO HOLDINGS CORP.** |
| By: | /s/ Michael Waldorf |
|  | Name: Michael Waldorf |
|  | Title: President |
| Notice Address: | Notice Address: |
| c/o Paulson & Co. Inc. 1251 Avenue of the Americas | c/o Paulson & Co. Inc. 1251 Avenue of the Americas |
| New York, New York 10020 | New York, New York 10020 |
| Phone: [\*\*\*] | Phone: [\*\*\*] |
| Fax: [\*\*\*] | Fax: [\*\*\*] |
| Attention: Michael Waldorf, Lisa Chun  | Attention: Michael Waldorf, Lisa Chun  |
| with a copy (which shall not constitute notice) to: | with a copy (which shall not constitute notice) to: |
| Akin Gump Strauss Hauer & Feld LLP<br> One Bryant Park<br> New York 10036<br> Phone: [\*\*\*]<br> Fax: [\*\*\*]<br> Attention: Patrick J. Dooley; Brian Kim | Akin Gump Strauss Hauer & Feld LLP<br> One Bryant Park<br> New York 10036<br> Phone: [\*\*\*]<br> Fax: [\*\*\*]<br> Attention: Patrick J. Dooley; Brian Kim |
| Akin Gump Strauss Hauer & Feld LLP<br> One Bryant Park<br> New York 10036<br> Phone: [\*\*\*]<br> Fax: [\*\*\*]<br> Attention: Patrick J. Dooley; Brian Kim | Akin Gump Strauss Hauer & Feld LLP<br> One Bryant Park<br> New York 10036<br> Phone: [\*\*\*]<br> Fax: [\*\*\*]<br> Attention: Patrick J. Dooley; Brian Kim |
| Akin Gump Strauss Hauer & Feld LLP<br> One Bryant Park<br> New York 10036<br> Phone: [\*\*\*]<br> Fax: [\*\*\*]<br> Attention: Patrick J. Dooley; Brian Kim | Akin Gump Strauss Hauer & Feld LLP<br> One Bryant Park<br> New York 10036<br> Phone: [\*\*\*]<br> Fax: [\*\*\*]<br> Attention: Patrick J. Dooley; Brian Kim |
| Akin Gump Strauss Hauer & Feld LLP<br> One Bryant Park<br> New York 10036<br> Phone: [\*\*\*]<br> Fax: [\*\*\*]<br> Attention: Patrick J. Dooley; Brian Kim | Akin Gump Strauss Hauer & Feld LLP<br> One Bryant Park<br> New York 10036<br> Phone: [\*\*\*]<br> Fax: [\*\*\*]<br> Attention: Patrick J. Dooley; Brian Kim |
| Akin Gump Strauss Hauer & Feld LLP<br> One Bryant Park<br> New York 10036<br> Phone: [\*\*\*]<br> Fax: [\*\*\*]<br> Attention: Patrick J. Dooley; Brian Kim | Akin Gump Strauss Hauer & Feld LLP<br> One Bryant Park<br> New York 10036<br> Phone: [\*\*\*]<br> Fax: [\*\*\*]<br> Attention: Patrick J. Dooley; Brian Kim |
| Akin Gump Strauss Hauer & Feld LLP<br> One Bryant Park<br> New York 10036<br> Phone: [\*\*\*]<br> Fax: [\*\*\*]<br> Attention: Patrick J. Dooley; Brian Kim | Akin Gump Strauss Hauer & Feld LLP<br> One Bryant Park<br> New York 10036<br> Phone: [\*\*\*]<br> Fax: [\*\*\*]<br> Attention: Patrick J. Dooley; Brian Kim |

---

**[***Signature Page to Guaranty (ABL)***]**

------

---

| | |
|:---|:---|
| **PIANISSIMO ACQUISITION CORP.** | **PIANISSIMO ACQUISITION CORP.** |
| By: | /s/ Lisa Chun |
|  | Name: Lisa Chun |
|  | Title: Vice President |
| Notice Address: | Notice Address: |
| c/o Paulson & Co. Inc. | c/o Paulson & Co. Inc. |
| 1251 Avenue of the Americas | 1251 Avenue of the Americas |
| New York, New York 10020 | New York, New York 10020 |
| Phone: [\*\*\*] | Phone: [\*\*\*] |
| Fax: [\*\*\*] | Fax: [\*\*\*] |
| Attention: Michael Waldorf, Lisa Chun | Attention: Michael Waldorf, Lisa Chun |
| with a copy (which shall not constitute notice) to: | with a copy (which shall not constitute notice) to: |
| Akin Gump Strauss Hauer & Feld LLP<br> One Bryant Park<br> New York 10036<br> Phone: [\*\*\*]<br> Fax: [\*\*\*]<br> Attention: Patrick J. Dooley; Brian Kim | Akin Gump Strauss Hauer & Feld LLP<br> One Bryant Park<br> New York 10036<br> Phone: [\*\*\*]<br> Fax: [\*\*\*]<br> Attention: Patrick J. Dooley; Brian Kim |
| Akin Gump Strauss Hauer & Feld LLP<br> One Bryant Park<br> New York 10036<br> Phone: [\*\*\*]<br> Fax: [\*\*\*]<br> Attention: Patrick J. Dooley; Brian Kim | Akin Gump Strauss Hauer & Feld LLP<br> One Bryant Park<br> New York 10036<br> Phone: [\*\*\*]<br> Fax: [\*\*\*]<br> Attention: Patrick J. Dooley; Brian Kim |
| Akin Gump Strauss Hauer & Feld LLP<br> One Bryant Park<br> New York 10036<br> Phone: [\*\*\*]<br> Fax: [\*\*\*]<br> Attention: Patrick J. Dooley; Brian Kim | Akin Gump Strauss Hauer & Feld LLP<br> One Bryant Park<br> New York 10036<br> Phone: [\*\*\*]<br> Fax: [\*\*\*]<br> Attention: Patrick J. Dooley; Brian Kim |
| Akin Gump Strauss Hauer & Feld LLP<br> One Bryant Park<br> New York 10036<br> Phone: [\*\*\*]<br> Fax: [\*\*\*]<br> Attention: Patrick J. Dooley; Brian Kim | Akin Gump Strauss Hauer & Feld LLP<br> One Bryant Park<br> New York 10036<br> Phone: [\*\*\*]<br> Fax: [\*\*\*]<br> Attention: Patrick J. Dooley; Brian Kim |
| Akin Gump Strauss Hauer & Feld LLP<br> One Bryant Park<br> New York 10036<br> Phone: [\*\*\*]<br> Fax: [\*\*\*]<br> Attention: Patrick J. Dooley; Brian Kim | Akin Gump Strauss Hauer & Feld LLP<br> One Bryant Park<br> New York 10036<br> Phone: [\*\*\*]<br> Fax: [\*\*\*]<br> Attention: Patrick J. Dooley; Brian Kim |
| Akin Gump Strauss Hauer & Feld LLP<br> One Bryant Park<br> New York 10036<br> Phone: [\*\*\*]<br> Fax: [\*\*\*]<br> Attention: Patrick J. Dooley; Brian Kim | Akin Gump Strauss Hauer & Feld LLP<br> One Bryant Park<br> New York 10036<br> Phone: [\*\*\*]<br> Fax: [\*\*\*]<br> Attention: Patrick J. Dooley; Brian Kim |

---

**[***Signature Page to Guaranty (ABL)***]**

------

---

| | |
|:---|:---|
| **STEINWAY MUSICAL INSTRUMENTS, INC.** | **STEINWAY MUSICAL INSTRUMENTS, INC.** |
| By: | /s/ Dennis M. Hanson |
|  | Name: Dennis M. Hanson |
|  | Title: Senior Executive Vice President |
| Notice Address: | Notice Address: |
| [\*\*\*] | [\*\*\*] |
| Phone: [\*\*\*] | Phone: [\*\*\*] |
| Attention: Dennis Hanson  | Attention: Dennis Hanson  |
| with a copy (which shall not constitute notice) to: | with a copy (which shall not constitute notice) to: |
| Akin Gump Strauss Hauer & Feld LLP<br> One Bryant Park<br> New York 10036<br> Phone: [\*\*\*]<br> Fax: [\*\*\*]<br> Attention: Patrick J. Dooley; Brian Kim | Akin Gump Strauss Hauer & Feld LLP<br> One Bryant Park<br> New York 10036<br> Phone: [\*\*\*]<br> Fax: [\*\*\*]<br> Attention: Patrick J. Dooley; Brian Kim |
| Akin Gump Strauss Hauer & Feld LLP<br> One Bryant Park<br> New York 10036<br> Phone: [\*\*\*]<br> Fax: [\*\*\*]<br> Attention: Patrick J. Dooley; Brian Kim | Akin Gump Strauss Hauer & Feld LLP<br> One Bryant Park<br> New York 10036<br> Phone: [\*\*\*]<br> Fax: [\*\*\*]<br> Attention: Patrick J. Dooley; Brian Kim |
| Akin Gump Strauss Hauer & Feld LLP<br> One Bryant Park<br> New York 10036<br> Phone: [\*\*\*]<br> Fax: [\*\*\*]<br> Attention: Patrick J. Dooley; Brian Kim | Akin Gump Strauss Hauer & Feld LLP<br> One Bryant Park<br> New York 10036<br> Phone: [\*\*\*]<br> Fax: [\*\*\*]<br> Attention: Patrick J. Dooley; Brian Kim |
| Akin Gump Strauss Hauer & Feld LLP<br> One Bryant Park<br> New York 10036<br> Phone: [\*\*\*]<br> Fax: [\*\*\*]<br> Attention: Patrick J. Dooley; Brian Kim | Akin Gump Strauss Hauer & Feld LLP<br> One Bryant Park<br> New York 10036<br> Phone: [\*\*\*]<br> Fax: [\*\*\*]<br> Attention: Patrick J. Dooley; Brian Kim |
| Akin Gump Strauss Hauer & Feld LLP<br> One Bryant Park<br> New York 10036<br> Phone: [\*\*\*]<br> Fax: [\*\*\*]<br> Attention: Patrick J. Dooley; Brian Kim | Akin Gump Strauss Hauer & Feld LLP<br> One Bryant Park<br> New York 10036<br> Phone: [\*\*\*]<br> Fax: [\*\*\*]<br> Attention: Patrick J. Dooley; Brian Kim |
| Akin Gump Strauss Hauer & Feld LLP<br> One Bryant Park<br> New York 10036<br> Phone: [\*\*\*]<br> Fax: [\*\*\*]<br> Attention: Patrick J. Dooley; Brian Kim | Akin Gump Strauss Hauer & Feld LLP<br> One Bryant Park<br> New York 10036<br> Phone: [\*\*\*]<br> Fax: [\*\*\*]<br> Attention: Patrick J. Dooley; Brian Kim |

---

**[***Signature Page to Guaranty (ABL)***]**

------

---

| | |
|:---|:---|
| **THE O.S. KELLY COMPANY** | **THE O.S. KELLY COMPANY** |
| By: | /s/ Dennis M. Hanson |
|  | Name: Dennis M. Hanson |
|  | Title: Senior Executive Vice President |
| Notice Address: | Notice Address: |
| [\*\*\*] | [\*\*\*] |
| Phone: [\*\*\*] | Phone: [\*\*\*] |
| Attention: Dennis Hanson | Attention: Dennis Hanson |
| with a copy (which shall not constitute notice) to: | with a copy (which shall not constitute notice) to: |
| Akin Gump Strauss Hauer & Feld LLP<br> One Bryant Park<br> New York 10036<br> Phone: [\*\*\*]<br> Fax: [\*\*\*]<br> Attention: Patrick J. Dooley; Brian Kim | Akin Gump Strauss Hauer & Feld LLP<br> One Bryant Park<br> New York 10036<br> Phone: [\*\*\*]<br> Fax: [\*\*\*]<br> Attention: Patrick J. Dooley; Brian Kim |
| Akin Gump Strauss Hauer & Feld LLP<br> One Bryant Park<br> New York 10036<br> Phone: [\*\*\*]<br> Fax: [\*\*\*]<br> Attention: Patrick J. Dooley; Brian Kim | Akin Gump Strauss Hauer & Feld LLP<br> One Bryant Park<br> New York 10036<br> Phone: [\*\*\*]<br> Fax: [\*\*\*]<br> Attention: Patrick J. Dooley; Brian Kim |
| Akin Gump Strauss Hauer & Feld LLP<br> One Bryant Park<br> New York 10036<br> Phone: [\*\*\*]<br> Fax: [\*\*\*]<br> Attention: Patrick J. Dooley; Brian Kim | Akin Gump Strauss Hauer & Feld LLP<br> One Bryant Park<br> New York 10036<br> Phone: [\*\*\*]<br> Fax: [\*\*\*]<br> Attention: Patrick J. Dooley; Brian Kim |
| Akin Gump Strauss Hauer & Feld LLP<br> One Bryant Park<br> New York 10036<br> Phone: [\*\*\*]<br> Fax: [\*\*\*]<br> Attention: Patrick J. Dooley; Brian Kim | Akin Gump Strauss Hauer & Feld LLP<br> One Bryant Park<br> New York 10036<br> Phone: [\*\*\*]<br> Fax: [\*\*\*]<br> Attention: Patrick J. Dooley; Brian Kim |
| Akin Gump Strauss Hauer & Feld LLP<br> One Bryant Park<br> New York 10036<br> Phone: [\*\*\*]<br> Fax: [\*\*\*]<br> Attention: Patrick J. Dooley; Brian Kim | Akin Gump Strauss Hauer & Feld LLP<br> One Bryant Park<br> New York 10036<br> Phone: [\*\*\*]<br> Fax: [\*\*\*]<br> Attention: Patrick J. Dooley; Brian Kim |
| Akin Gump Strauss Hauer & Feld LLP<br> One Bryant Park<br> New York 10036<br> Phone: [\*\*\*]<br> Fax: [\*\*\*]<br> Attention: Patrick J. Dooley; Brian Kim | Akin Gump Strauss Hauer & Feld LLP<br> One Bryant Park<br> New York 10036<br> Phone: [\*\*\*]<br> Fax: [\*\*\*]<br> Attention: Patrick J. Dooley; Brian Kim |

---

*[Signature Page to Guaranty (ABL)]* 

------

---

| | |
|:---|:---|
| **ARKIVMUSIC, LLC** | **ARKIVMUSIC, LLC** |
| By: | STEINWAY MUSICAL INSTRUMENTS, INC., as the Sole Member |
| By: | /s/ Dennis M. Hanson |
|  | Name: Dennis M. Hanson |
|  | Title: Senior Executive Vice President |
| Notice Address: | Notice Address: |
| [\*\*\*] | [\*\*\*] |
| Phone: [\*\*\*] | Phone: [\*\*\*] |
| Attention: Dennis Hanson | Attention: Dennis Hanson |
| with a copy (which shall not constitute notice) to: | with a copy (which shall not constitute notice) to: |
| Akin Gump Strauss Hauer & Feld LLP<br> One Bryant Park<br> New York 10036<br> Phone: [\*\*\*]<br> Fax: [\*\*\*]<br> Attention: Patrick J. Dooley; Brian Kim | Akin Gump Strauss Hauer & Feld LLP<br> One Bryant Park<br> New York 10036<br> Phone: [\*\*\*]<br> Fax: [\*\*\*]<br> Attention: Patrick J. Dooley; Brian Kim |
| Akin Gump Strauss Hauer & Feld LLP<br> One Bryant Park<br> New York 10036<br> Phone: [\*\*\*]<br> Fax: [\*\*\*]<br> Attention: Patrick J. Dooley; Brian Kim | Akin Gump Strauss Hauer & Feld LLP<br> One Bryant Park<br> New York 10036<br> Phone: [\*\*\*]<br> Fax: [\*\*\*]<br> Attention: Patrick J. Dooley; Brian Kim |
| Akin Gump Strauss Hauer & Feld LLP<br> One Bryant Park<br> New York 10036<br> Phone: [\*\*\*]<br> Fax: [\*\*\*]<br> Attention: Patrick J. Dooley; Brian Kim | Akin Gump Strauss Hauer & Feld LLP<br> One Bryant Park<br> New York 10036<br> Phone: [\*\*\*]<br> Fax: [\*\*\*]<br> Attention: Patrick J. Dooley; Brian Kim |
| Akin Gump Strauss Hauer & Feld LLP<br> One Bryant Park<br> New York 10036<br> Phone: [\*\*\*]<br> Fax: [\*\*\*]<br> Attention: Patrick J. Dooley; Brian Kim | Akin Gump Strauss Hauer & Feld LLP<br> One Bryant Park<br> New York 10036<br> Phone: [\*\*\*]<br> Fax: [\*\*\*]<br> Attention: Patrick J. Dooley; Brian Kim |
| Akin Gump Strauss Hauer & Feld LLP<br> One Bryant Park<br> New York 10036<br> Phone: [\*\*\*]<br> Fax: [\*\*\*]<br> Attention: Patrick J. Dooley; Brian Kim | Akin Gump Strauss Hauer & Feld LLP<br> One Bryant Park<br> New York 10036<br> Phone: [\*\*\*]<br> Fax: [\*\*\*]<br> Attention: Patrick J. Dooley; Brian Kim |
| Akin Gump Strauss Hauer & Feld LLP<br> One Bryant Park<br> New York 10036<br> Phone: [\*\*\*]<br> Fax: [\*\*\*]<br> Attention: Patrick J. Dooley; Brian Kim | Akin Gump Strauss Hauer & Feld LLP<br> One Bryant Park<br> New York 10036<br> Phone: [\*\*\*]<br> Fax: [\*\*\*]<br> Attention: Patrick J. Dooley; Brian Kim |

---

*[Signature Page to Guaranty (ABL)]* 

------

---

| | |
|:---|:---|
| **CONN-SELMER, INC.**  | **CONN-SELMER, INC.**  |
| By: | /s/ Dennis M. Hanson |
|  | Name: Dennis M. Hanson |
|  | Title: Senior Executive Vice President |
| Notice Address: | Notice Address: |
| [\*\*\*] | [\*\*\*] |
| Phone: [\*\*\*] | Phone: [\*\*\*] |
| Attention: Dennis Hanson | Attention: Dennis Hanson |
| with a copy (which shall not constitute notice) to: | with a copy (which shall not constitute notice) to: |
| Akin Gump Strauss Hauer & Feld LLP<br> One Bryant Park<br> New York 10036<br> Phone: [\*\*\*]<br> Fax: [\*\*\*]<br> Attention: Patrick J. Dooley; Brian Kim | Akin Gump Strauss Hauer & Feld LLP<br> One Bryant Park<br> New York 10036<br> Phone: [\*\*\*]<br> Fax: [\*\*\*]<br> Attention: Patrick J. Dooley; Brian Kim |
| Akin Gump Strauss Hauer & Feld LLP<br> One Bryant Park<br> New York 10036<br> Phone: [\*\*\*]<br> Fax: [\*\*\*]<br> Attention: Patrick J. Dooley; Brian Kim | Akin Gump Strauss Hauer & Feld LLP<br> One Bryant Park<br> New York 10036<br> Phone: [\*\*\*]<br> Fax: [\*\*\*]<br> Attention: Patrick J. Dooley; Brian Kim |
| Akin Gump Strauss Hauer & Feld LLP<br> One Bryant Park<br> New York 10036<br> Phone: [\*\*\*]<br> Fax: [\*\*\*]<br> Attention: Patrick J. Dooley; Brian Kim | Akin Gump Strauss Hauer & Feld LLP<br> One Bryant Park<br> New York 10036<br> Phone: [\*\*\*]<br> Fax: [\*\*\*]<br> Attention: Patrick J. Dooley; Brian Kim |
| Akin Gump Strauss Hauer & Feld LLP<br> One Bryant Park<br> New York 10036<br> Phone: [\*\*\*]<br> Fax: [\*\*\*]<br> Attention: Patrick J. Dooley; Brian Kim | Akin Gump Strauss Hauer & Feld LLP<br> One Bryant Park<br> New York 10036<br> Phone: [\*\*\*]<br> Fax: [\*\*\*]<br> Attention: Patrick J. Dooley; Brian Kim |
| Akin Gump Strauss Hauer & Feld LLP<br> One Bryant Park<br> New York 10036<br> Phone: [\*\*\*]<br> Fax: [\*\*\*]<br> Attention: Patrick J. Dooley; Brian Kim | Akin Gump Strauss Hauer & Feld LLP<br> One Bryant Park<br> New York 10036<br> Phone: [\*\*\*]<br> Fax: [\*\*\*]<br> Attention: Patrick J. Dooley; Brian Kim |
| Akin Gump Strauss Hauer & Feld LLP<br> One Bryant Park<br> New York 10036<br> Phone: [\*\*\*]<br> Fax: [\*\*\*]<br> Attention: Patrick J. Dooley; Brian Kim | Akin Gump Strauss Hauer & Feld LLP<br> One Bryant Park<br> New York 10036<br> Phone: [\*\*\*]<br> Fax: [\*\*\*]<br> Attention: Patrick J. Dooley; Brian Kim |

---

*[Signature Page to Guaranty (ABL)]* 

------

---

| | |
|:---|:---|
| **STEINWAY, INC.** | **STEINWAY, INC.** |
| By: | /s/ Dennis M. Hanson |
|  | Name: Dennis M. Hanson |
|  | Title: Senior Executive Vice President |
| Notice Address: | Notice Address: |
| [\*\*\*] | [\*\*\*] |
| Phone: [\*\*\*] | Phone: [\*\*\*] |
| Attention: Dennis Hanson | Attention: Dennis Hanson |
| with a copy (which shall not constitute notice) to: | with a copy (which shall not constitute notice) to: |
| Akin Gump Strauss Hauer & Feld LLP<br> One Bryant Park<br> New York 10036<br> Phone: [\*\*\*]<br> Fax: [\*\*\*]<br> Attention: Patrick J. Dooley; Brian Kim | Akin Gump Strauss Hauer & Feld LLP<br> One Bryant Park<br> New York 10036<br> Phone: [\*\*\*]<br> Fax: [\*\*\*]<br> Attention: Patrick J. Dooley; Brian Kim |
| Akin Gump Strauss Hauer & Feld LLP<br> One Bryant Park<br> New York 10036<br> Phone: [\*\*\*]<br> Fax: [\*\*\*]<br> Attention: Patrick J. Dooley; Brian Kim | Akin Gump Strauss Hauer & Feld LLP<br> One Bryant Park<br> New York 10036<br> Phone: [\*\*\*]<br> Fax: [\*\*\*]<br> Attention: Patrick J. Dooley; Brian Kim |
| Akin Gump Strauss Hauer & Feld LLP<br> One Bryant Park<br> New York 10036<br> Phone: [\*\*\*]<br> Fax: [\*\*\*]<br> Attention: Patrick J. Dooley; Brian Kim | Akin Gump Strauss Hauer & Feld LLP<br> One Bryant Park<br> New York 10036<br> Phone: [\*\*\*]<br> Fax: [\*\*\*]<br> Attention: Patrick J. Dooley; Brian Kim |
| Akin Gump Strauss Hauer & Feld LLP<br> One Bryant Park<br> New York 10036<br> Phone: [\*\*\*]<br> Fax: [\*\*\*]<br> Attention: Patrick J. Dooley; Brian Kim | Akin Gump Strauss Hauer & Feld LLP<br> One Bryant Park<br> New York 10036<br> Phone: [\*\*\*]<br> Fax: [\*\*\*]<br> Attention: Patrick J. Dooley; Brian Kim |
| Akin Gump Strauss Hauer & Feld LLP<br> One Bryant Park<br> New York 10036<br> Phone: [\*\*\*]<br> Fax: [\*\*\*]<br> Attention: Patrick J. Dooley; Brian Kim | Akin Gump Strauss Hauer & Feld LLP<br> One Bryant Park<br> New York 10036<br> Phone: [\*\*\*]<br> Fax: [\*\*\*]<br> Attention: Patrick J. Dooley; Brian Kim |
| Akin Gump Strauss Hauer & Feld LLP<br> One Bryant Park<br> New York 10036<br> Phone: [\*\*\*]<br> Fax: [\*\*\*]<br> Attention: Patrick J. Dooley; Brian Kim | Akin Gump Strauss Hauer & Feld LLP<br> One Bryant Park<br> New York 10036<br> Phone: [\*\*\*]<br> Fax: [\*\*\*]<br> Attention: Patrick J. Dooley; Brian Kim |

---

*[Signature Page to Guaranty (ABL)]* 

------

Agreed to and Accepted:

**BANK OF AMERICA, N.A.**, as Administrative Agent

---

| | |
|:---|:---|
| By: | /s/ Nicole Caneswi |
| Name: | Nicole Caneswi |
| Title: | Senior Vice President |

---

*[Signature Page to Guaranty (ABL)]*

## Exhibit 10.12

**Exhibit 10.12** 

THIS AGREEMENT AND ANY LIEN CREATED HEREIN IS SUBJECT TO THE LIEN PRIORITY AND OTHER PROVISIONS SET FORTH IN THAT CERTAIN INTERCREDITOR AGREEMENT DATED AS OF SEPTEMBER 19, 2013, AMONG BANK OF AMERICA, N.A., AS ABL AGENT, BANK OF AMERICA, N.A., AS SENIOR TERM CREDIT AGREEMENT AGENT AND INITIAL TERM REPRESENTATIVE, BANK OF AMERICA, N.A., AS JUNIOR TERM CREDIT AGREEMENT AGENT, PIANISSIMO HOLDINGS CORP., PIANISSIMO ACQUISITION CORP. (TO BE MERGED WITH AND INTO STEINWAY MUSICAL INSTRUMENTS, INC.), STEINWAY, INC., CONN-SELMER, INC. AND THE OTHER PARTIES NAMED THEREIN, AS AMENDED, RESTATED, SUPPLEMENTED OR OTHERWISE MODIFIED FROM TIME TO TIME. IN THE EVENT OF ANY CONFLICT BETWEEN THE TERMS OF THE INTERCREDITOR AGREEMENT AND THE TERMS OF THIS AGREEMENT, THE TERMS OF THE INTERCREDITOR AGREEMENT SHALL GOVERN.

**ABL PLEDGE AND SECURITY AGREEMENT** 

**dated as of September 19, 2013** 

**among** 

**PIANISSIMO HOLDINGS CORP.,** 

**PIANISSIMO ACQUISITION CORP. (to be merged with and into STEINWAY** 

**MUSICAL INSTRUMENTS, INC.),** 

**STEINWAY, INC.,** 

**CONN-SELMER, INC.,** 

**THE O.S. KELLY COMPANY,** 

**ARKIVMUSIC, LLC,** 

**THE OTHER SUBSIDIARIES OF PIANISSIMO HOLDINGS CORP.** 

**FROM TIME TO TIME PARTY HERETO,** 

**and** 

**BANK OF AMERICA, N.A.,** 

**as Collateral Agent** 

------

****TABLE OF CONTENTS**<sup>1</sup>** 

---

| | | |
|:---|:---|:---|
|  |  | **Page** |
|  ARTICLE I DEFINITIONS | ARTICLE I DEFINITIONS | 2 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Section 1.01 | Credit Agreement Definitions | 2 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Section 1.02 | Terms Defined in the UCC | 2 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Section 1.03 | General Definitions | 2 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Section 1.04 | Terms Generally | 6 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Section 1.05 | Bailee for Perfections | 7 |
|  ARTICLE II GRANT OF SECURITY | ARTICLE II GRANT OF SECURITY | 7 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Section 2.01 | Grant of Security | 7 |
|  ARTICLE III SECURITY FOR OBLIGATIONS | ARTICLE III SECURITY FOR OBLIGATIONS | 9 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Section 3.01 | Security for Finance Obligations | 9 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Section 3.02 | Continuing Liability under Collateral | 9 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Section 3.03 | Security Interests Absolute | 9 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Section 3.04 | L/C Cash Collateral Account | 11 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Section 3.05 | Investment of Funds in Collateral Accounts | 12 |
|  ARTICLE IV REPRESENTATIONS, WARRANTIES AND COVENANTS | ARTICLE IV REPRESENTATIONS, WARRANTIES AND COVENANTS | 12 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Section 4.01 | Generally | 12 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Section 4.02 | Equipment and Inventory | 15 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Section 4.03 | Receivables | 16 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Section 4.04 | Investment Related Property | 18 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Section 4.05 | Letter-of-Credit Rights | 24 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Section 4.06 | Intellectual Property | 25 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Section 4.07 | Commercial Tort Claims | 27 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Section 4.08 | Government Contracts | 28 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Section 4.09 | Bonding | 28 |
|  ARTICLE V FURTHER ASSURANCES AND ADDITIONAL GRANTORS | ARTICLE V FURTHER ASSURANCES AND ADDITIONAL GRANTORS | 28 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Section 5.01 | Further Assurances | 28 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Section 5.02 | Additional Grantors | 29 |
|  ARTICLE VI AGENT APPOINTED ATTORNEY-IN-FACT | ARTICLE VI AGENT APPOINTED ATTORNEY-IN-FACT | 30 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Section 6.01 | Power of Attorney | 30 |

---

------

<sup>1</sup> The **Table of Contents** is not a part of the Pledge and Security Agreement.

i

------

---

| | | |
|:---|:---|:---|
|  ARTICLE VII REMEDIES | ARTICLE VII REMEDIES | 31 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Section 7.01 | Generally | 31 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Section 7.02 | Application of Proceeds | 33 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Section 7.03 | Sales on Credit | 33 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Section 7.04 | Investment Related Property | 33 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Section 7.05 | Intellectual Property | 34 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Section 7.06 | Direct Obligation | 36 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Section 7.07 | Commercially Reasonable | 36 |
|  ARTICLE VIII THE COLLATERAL AGENT | ARTICLE VIII THE COLLATERAL AGENT | 37 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Section 8.01 | The Collateral Agent | 37 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Section 8.02 | Compensation and Expenses of the Collateral Agent; Indemnification | 38 |
|  ARTICLE IX CONTINUING SECURITY INTEREST; TRANSFER OF FINANCE OBLIGATIONS | ARTICLE IX CONTINUING SECURITY INTEREST; TRANSFER OF FINANCE OBLIGATIONS | 40 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Section 9.01 | Continuing Security Interest; Transfer of Finance Obligations | 40 |
|  ARTICLE X STANDARD OF CARE; COLLATERAL AGENT MAY PERFORM | ARTICLE X STANDARD OF CARE; COLLATERAL AGENT MAY PERFORM | 40 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Section 10.01 | Standard of Care; Collateral Agent May Perform | 40 |
|  ARTICLE XI MISCELLANEOUS | ARTICLE XI MISCELLANEOUS | 41 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Section 11.01 | Notices | 41 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Section 11.02 | Amendments | 41 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Section 11.03 | Release | 41 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Section 11.04 | Cumulative Rights | 41 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Section 11.05 | Waivers | 41 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Section 11.06 | Reinstatement | 42 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Section 11.07 | Independent Obligations | 42 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Section 11.08 | Successors and Assigns | 42 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Section 11.09 | Independence of Covenants | 42 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Section 11.10 | Survival of Representations, Warranties and Agreements | 42 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Section 11.11 | Marshalling | 42 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Section 11.12 | Severability | 43 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Section 11.13 | Governing Law; Jurisdiction Etc. | 43 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Section 11.14 | Waiver of Jury Trial | 44 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Section 11.15 | Subordination | 44 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Section 11.16 | Counterparts | 44 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Section 11.17 | Effectiveness | 45 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Section 11.18 | Entire Agreement | 45 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Section 11.19 | Intercreditor Agreements | 45 |

---

ii

------

---

| | |
|:---|:---|
|  **Schedules:** |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Schedule I | Location of Collateral |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Schedule II | Investment Related Property |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Schedule III | Commercial Tort Claims |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Schedule IV | Filings to Perfect Security Interests |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Schedule V | Government Contracts |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Schedule VI | Bonding |

---

---

| | | |
|:---|:---|:---|
| **Exhibits:** |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Exhibit A | –  | Form of Grant of Security Interest in United States Copyrights |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Exhibit B |  | Form of Grant of Security Interest in United States Patents and Trademarks |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Exhibit C |  | Form of Collateral Access Agreement |

---

iii

------

This **ABL PLEDGE AND SECURITY AGREEMENT**, dated as of September 19, 2013 (as amended, modified or supplemented from time to time, this "<u>Agreement</u>"), among PIANISSIMO HOLDINGS CORP., a Delaware corporation ("<u>Holdings</u>"), PIANISSIMO ACQUISITION CORP., a Delaware corporation ("<u>AcquisitionCo</u>" or the "<u>Initial Borrower</u>"), which upon consummation of the Closing Date Acquisition on the Closing Date will be merged with and into STEINWAY MUSICAL INSTRUMENTS. INC., a Delaware corporation (the "<u>Company</u>", with the Company being the survivor of such merger, and the "<u>Parent Borrower</u>"), Steinway, Inc., a Delaware corporation ("<u>Steinway</u>"), Conn-Selmer, Inc., a Delaware corporation ("<u>Conn-Selmer</u>", and, together with the Initial Borrower, Parent Borrower and Steinway, each a "<u>Borrower</u>" and, collectively and jointly and severally, the "<u>Borrowers</u>"), the other SUBSIDIARY GUARANTORS from time to time parties hereto (together with Holdings and the Borrowers, each a "<u>Grantor</u>" and collectively, the "<u>Grantors</u>"), and BANK OF AMERICA, N. A. as Collateral Agent (as defined below) for the benefit of the Secured Parties referred to herein.

Holdings and the Borrowers propose to enter into that certain ABL Credit Agreement, dated as of September 19, 2013 (as amended, restated, amended and restated, modified or supplemented from time to time and including any agreement extending the maturity of, refinancing or otherwise amending, amending and restating or otherwise modifying or restructuring all or any portion of the obligations of the Borrowers under such agreement or any successor agreement, the "<u>Credit Agreement</u>"; capitalized terms used in this Agreement and not otherwise defined herein have the respective meanings assigned thereto in the Credit Agreement) among Holdings, the Borrowers, the banks and other lending institutions from time to time party thereto (each a "<u>Lender</u>" and, collectively, the "<u>Lenders</u>"). Bank of America. N.A., as Administrative Agent (together with its successor or successors in such capacity, the "<u>Administrative Agent</u>"), and Deutsche Bank Securities Inc., as Syndication Agent.

Certain Lenders and their Affiliates (i) at the time acting as Hedge Banks may from time to time provide forward rate agreements, options, swaps, caps, floors and other Rate Contracts to the Loan Parties and (ii) at the time acting as Cash Management Banks may from time to time provide cash management services, including treasury, depository, overdraft, credit or debit card, electronic funds transfer and other cash management arrangements to the Loan Parties. The Lenders, each L/C Issuer, the Swing Line Lender, the Administrative Agent, each co-agent or sub-agent appointed by the Administrative Agent from time to time pursuant to the Credit Agreement, Bank of America, N.A., as collateral agent (together with its successor or successors in such capacity, the "<u>Collateral Agent</u>"), and each Indemnitee and their respective successors and assigns are herein referred to individually as a "<u>ABL Credit Party</u>" and collectively as the "<u>ABL Credit Parties</u>" and the ABL Credit Parties, the Hedge Banks, the Cash Management Banks and their respective successors and assigns are herein referred to individually as a "<u>Secured Party</u>" and collectively as the "<u>Secured Parties</u>".

To induce the Lenders and L/C Issuers to enter into the Credit Agreement and the other Loan Documents, the Hedge Banks to enter into Secured Hedge Agreements and the Cash Management Banks to enter into Secured Cash Management Agreements permitted under the Credit Agreement, and as a condition precedent to the obligations of the Lenders and L/C Issuers under the Credit Agreement. Holdings and each of the subsidiaries of Holdings listed on the signature pages hereof or which shall become parties hereto from time to time in accordance with <u>Section</u> <u>5.02</u> hereof (each a "<u>Subsidiary Guarantor</u>" and, collectively, the "<u>Subsidiary Guarantors</u>"

------

and, together with Holdings, and, with respect to the payment and performance by each Specified Loan Party of its obligations hereunder with respect to all obligations under Secured Hedge Agreements, the Borrowers, each a "<u>Guarantor</u>" and, collectively, the "<u>Guarantors</u>") have agreed, jointly and severally, to provide a guaranty of all obligations of the Borrowers and the other Loan Parties (as defined below) under and in respect of the Finance Documents.

The Borrowers and the Guarantors are referred to herein individually as a "<u>Loan Party</u>" and collectively as the "<u>Loan Parties</u>."

As a further condition precedent to the obligations of the Lenders under the Loan Documents, the Loan Parties have agreed or will agree to grant a continuing security interest in favor of the Collateral Agent in and to the Collateral to secure the Finance Obligations.

Accordingly, in consideration of the premises and the agreements, provisions and covenants herein contained, each Grantor and the Collateral Agent agree as follows:

**ARTICLE I** 

**DEFINITIONS** 

**Section 1.01 <u>Credit Agreement Definitions</u>**. Whenever any term used in this Agreement and not otherwise defined herein or in the Credit Agreement is used herein, such reference shall be deemed to have the same effect as if such tern had been independently set forth herein in full on the date hereof. The rules of construction specified in <u>Section</u> <u>1.02</u> of the Credit Agreement shall also apply to this Agreement.

**Section 1.02 <u>Terms Defined in the UCC</u>**. Unless otherwise defined herein or in the Credit Agreement or as the context otherwise requires, the following terms, together with any uncapitalized terms used herein which are defined in the UCC (as defined below), have the respective meanings provided in the UCC: "Certificated Security" "Chattel Paper", "Document", "Electronic Chattel Paper" "Equipment", "Fixtures" "Goods", "Instrument", "Investment Property", "Money" "Payment Intangible" "Security" "Securities Account", "Security Entitlement" "Tangible Chattel Paper" and "Uncertificated Security".

**Section 1.03 <u>General Definitions</u>**. Terms defined in the introductory statements above have the respective meanings set forth therein. The following additional terms, as used herein, have the following respective meanings:

"<u>ABL Priority Collateral</u>" means any "<u>ABL Priority Collateral</u>" as defined in the ABL/Term Intercreditor Agreement as in effect on the date hereof.

"<u>Account Debtor</u>" means an "account debtor" (as defined in the UCC), and also means and includes Persons obligated to pay negotiable instruments and other Receivables.

"<u>Additional Grantors</u>" means those additional Persons that may become parties to this Agreement as additional Grantors in accordance with <u>Section</u> <u>5.02.</u>

"<u>Agreement</u>" has the meaning set forth in the preamble to this Agreement.

------

"<u>Cash Proceeds</u>" means all proceeds of any Collateral consisting of cash, checks and other Cash Equivalents.

"<u>Collateral</u>" has the meaning set forth in <u>Section</u> <u>2.01</u> hereof.

"<u>Collateral Agent</u>" has the meaning set forth in the preamble to this Agreement.

"<u>Collateral Support</u>" means all property (real or personal) collaterally assigned, hypothecated or otherwise securing any Collateral and shall include any security agreement or other agreement granting a Lien or security interest in property.

"<u>Commercial Tort Claims</u>" means all "commercial tort claims" (as defined in the UCC) for amounts greater than $2,000,000, including, without limitation, each of the claims described on <u>Schedule</u> <u>III</u> hereto, as such schedule may be amended, modified or supplemented from time to time, and also means and includes all claims, causes of action and similar rights and interests (however characterized) of a Loan Party, whether arising in contract, tort or otherwise, and whether or not subject to any action, suit, investigation or legal, equitable, arbitration or administrative proceedings.

"<u>Control Agreement</u>" means, with respect to a Deposit Account, a Deposit Account Control Agreement and, with respect to a Securities Account, a Securities Account Control Agreement.

"<u>Copyright Security Agreement</u>" means an agreement, substantially in the form of <u>Exhibit</u> <u>A</u> hereto, between a Grantor that is the owner of any registered Copyright and the Collateral Agent, in proper form for recording with the United States Copyright Office in which said Copyright is registered and in form and substance reasonably satisfactory to the Collateral Agent, together with all supplements to the schedules thereto.

"<u>Deposit Accounts</u>" means all "deposit accounts" (as defined in the UCC) and also means and includes all demand, time, savings, passbook or similar accounts maintained by a Loan Party with a bank or other financial institution, whether or not evidenced by an Instrument, all cash and other funds held therein and all passbooks related thereto and all certificates and Instruments, if any, from time to time representing, evidencing or deposited into such deposit accounts.

"<u>Deposit Account Control Agreement</u>" means a Deposit Account control agreement in form and substance reasonably satisfactory to the Collateral Agent to be executed by an institution maintaining a Deposit Account for a Grantor (other than Excluded Accounts), in favor of the Collateral Agent, for the benefit of Secured Parties, as security for the Finance Obligations.

"<u>Direct Exposure</u>" has the meaning specified in <u>Section</u> <u>3.04</u> of this Agreement.

"<u>Dominion Account</u>" means a deposit account established by one or more of the Borrowers at Bank of America, N.A. or another bank reasonably acceptable to the Administrative Agent and subject to a Deposit Account Control Agreement among the Collateral Agent, the applicable Grantor and the financial institution at which such account is maintained.

"<u>Excluded Assets</u>" has the meaning set forth in <u>Section</u> <u>2.01.</u>

------

"<u>Excluded Equity Interests</u>" means (i) any voting Stock and Stock Equivalents of any Foreign Subsidiary directly owned by a Loan Party or of any Excluded Domestic Holdco directly owned by a Loan Party in excess of 65% of such Foreign Subsidiary's or such Excluded Domestic Holdco's outstanding voting Stock or Stock Equivalents and (ii) equity interests in partnerships, joint ventures and non-Wholly-Owned Subsidiaries to the extent that the grant of a security interest therein would (x) require the consent of any Person (other than a Grantor or any other Affiliate of any Borrower) who owns equity interests in such partnership, joint venture or Subsidiary which consent has not been obtained (other than to the extent that such consent requirement is rendered ineffective pursuant to Section 9-406, 9-407, 9-408 or 9-409 of the UCC (or any successor provision or provisions) of any relevant jurisdiction or other applicable law (the "<u>Anti-Non-Assignment Clauses</u>")), (y) result in adverse tax or accounting consequences to the applicable Grantor or (z) with respect to any equity interests, would violate applicable law or regulation or a shareholder agreement or other contractual obligation that was not entered into for purposes of evading the grant of the security interest hereunder (after giving effect to the Anti-Non-Assignment Clauses); <u>provided</u>, <u>however</u>, that the security interests specified in clauses (x) and (z) shall attach immediately at such time as and, to the extent severable, to any portion of such assets that does not constitute or result or no longer constitutes or results in any of the consequences specified in clauses (x) or (z).

"<u>Excluded Perfection Actions</u>" means the following actions: (i) taking actions (other than the filing of UCC financing statements) in respect of Letter-of-Credit Rights, (ii) taking actions necessary to establish Collateral Agent's control of any Excluded Account, (iii) taking actions (other than the filing of UCC financing statements) in respect of motor vehicles and other assets subject to certificates of title and (iv) entering into non-U.S. law security or pledge agreements or making non-U.S. Intellectual Property filings.

"<u>General Intangibles</u>" means all "general intangibles" (as defined in the UCC), including, without limitation, (i) all Payment Intangibles and other obligations and indebtedness owing to any Loan Party in respect of Collateral and (ii) all interests in limited liability companies and/or partnerships which interests do not constitute Securities.

"<u>Investment Accounts</u>" means, collectively, the Deposit Accounts and Securities Accounts, in each case of the Grantors.

"<u>Investment Related Property</u>" means (i) all Investment Property (other than Excluded Assets) and (ii) all of the following (regardless of whether classified as "investment property" under the UCC): (A) Pledged Stock, (B) Pledged Debt, (C) the Investment Accounts and (D) certificates of deposit.

"<u>L/C Cash Collateral Account</u>" has the meaning specified in <u>Section</u> <u>3.04</u> of this Agreement

"<u>Letter-of-Credit Right</u>" means all "letter-of-credit rights" (as defined in the UCC) and also means and includes all rights of a Loan Party to demand payment or performance under a letter of credit (as defined in Article V of the UCC).

------

"<u>Liquid Investments</u>" has the meaning specified in <u>Section</u> <u>3.05</u> of this Agreement.

"<u>Patent Security Agreement</u>" means an agreement, substantially in the form of <u>Exhibit</u> <u>B</u> hereto, between a Grantor that is the owner of any applied for or registered Patent and the Collateral Agent, in proper form for recording with the United States Patent and Trademark Office and in form and substance reasonably satisfactory to the Collateral Agent, together with all supplements to the schedules thereto.

"<u>Payment Item</u>" means each check, draft or other item of payment payable to a Loan Party, in an amount exceeding $250,000 individually, including those constituting proceeds of any Collateral.

"<u>Pledged Debt</u>" means (i) the Conn-Selmer Dealer Notes, (ii) the Steinway Dealer Notes and (iii) all other indebtedness for borrowed money owed to any Grantor, whether or not evidenced by any instrument or promissory note, including, without limitation, all indebtedness for borrowed money described on <u>Schedule</u> <u>II</u> hereto (as such schedule may be amended or supplemented from time to time in accordance with the terms hereof) under the heading "<u>Pledged Debt,</u>" all monetary obligations owing to any Grantor from any other Grantor, the instruments evidencing any of the foregoing and all interest, cash, instruments and other property or proceeds from time to time received, receivable or otherwise distributed in respect of or in exchange for any or all of the foregoing.

"<u>Pledged Stock</u>" means all Stock or Stock Equivalents owned by any Grantor, including, without limitation, all Stock or Stock Equivalents listed on <u>Schedule</u> <u>II</u> hereto (as such schedule may be amended or supplemented from time to time in accordance with the terms hereof) under the heading "<u>Pledged Stock,</u>" and the certificates, if any, representing such Stock or Stock Equivalents and any other interest of such Grantor on the books and records of the issuer of such interests or on the books and records of any securities intermediary pertaining to such interests, and all dividends, distributions, cash, warrants, rights, options, instruments, securities and other property or proceeds from time to time received, receivable or otherwise distributed in respect of or in exchange for any or all of such shares and any other warrant, right or option to acquire any of the foregoing; <u>provided</u> that Pledged Stock shall not include any Excluded Assets.

"<u>Proceeds</u>" means (i) all "proceeds" as defined in Article 9 of the UCC, (ii) all payments or distributions made with respect to any Investment Related Property and (iii) whatever is receivable or received when Collateral or proceeds are sold, leased, licensed, exchanged, collected or otherwise Disposed of, whether such Disposition is voluntary or involuntary, including, without limitation, all proceeds of and unearned premiums with respect to insurance policies and all claims against any Person for loss, damage or destruction of the relevant Collateral.

"<u>Receivables</u>" means all (i) Accounts, (ii) Chattel Paper (including Electronic Chattel Paper), (iii) Payment Intangibles, (iv) Instruments, (v) Letter-of-Credit Rights, (vi) Supporting Obligations, and (vii) to the extent not otherwise included in <u>clauses (i)</u> through (<u>vi</u>), all other rights to payment, whether or not earned by performance, for goods or other property sold, leased, licensed, assigned or otherwise disposed of, or services rendered or to be rendered, regardless of how classified under the UCC.

------

"<u>Relevant Contingent Exposure</u>" has the meaning specified in <u>Section</u> <u>3.04</u> of this Agreement.

"<u>Securities Account Control Agreement</u>" means an agreement in form and substance reasonably satisfactory to the Collateral Agent, to be executed by a Grantor, the Collateral Agent and each securities intermediary maintaining a Securities Account or Security Entitlement of such Grantor, pursuant to which such securities intermediary agrees to comply with the Collateral Agent's "entitlement orders" without further consent by such Grantor.

"<u>Supporting Obligations</u>" means a Letter-of-Credit Right, Guarantee or other secondary obligation supporting or any Lien securing the payment or performance of one or more Receivables, General Intangibles, Documents or Investment Property.

"<u>Term Documents</u>" means any "<u>Term Documents</u>" as defined in the ABL/Term Intercreditor Agreement as in effect as of the date hereof.

"<u>Term Obligations</u>" means any "<u>Term Obligations</u>" as defined in the ABL/Term Intercreditor Agreement as in effect as of the date hereof.

"<u>Term Priority Collateral</u>" means any "<u>Term Priority Collateral</u>" as defined in the ABL/Term Intercreditor Agreement as in effect as of the date hereof.

"<u>Term Representative Agent</u>" means the "<u>Term Representative Agent</u>" as defined in the ABL/Term Intercreditor Agreement as in effect as of the date hereof.

"<u>Trademark Security Agreement</u>" means an agreement, substantially in the form of <u>Exhibit</u> <u>B</u> hereto, between a Grantor that is the owner of any applied for or registered Trademark and the Collateral Agent, in proper form for recording with the United States Patent and Trademark Office in which such Trademark is applied for or registered and in form and substance reasonably satisfactory to the Collateral Agent, together with all supplements to the schedules thereto.

"<u>UCC</u>" means the Uniform Commercial Code as in effect from time to time in the State of New York; <u>provided</u> that if by reason of mandatory provisions of law, the perfection, the effect of perfection or non-perfection or the priority of the Collateral Agent's and the Secured Parties' security interests in any Collateral is governed by the Uniform Commercial Code as in effect in a jurisdiction other than the State of New York, the term "<u>UCC</u>" means the Uniform Commercial Code as in effect in such other jurisdiction for purposes of the provisions hereof relating to such perfection, effect of perfection or non-perfection or priority.

**Section 1.04 <u>Terms Generally</u>**. The definitions in Sections 1.02 and 1.03 shall apply equally to both 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". All references herein to Articles, Sections, Exhibits and Schedules shall be deemed references to Articles and Sections of, and Exhibits and Schedules to, this Agreement unless the context shall otherwise require. Unless otherwise expressly provided herein, the word "day" means a calendar day.

------

**Section 1.05 <u>Bailee for Perfections</u>**. So long as a Term Representative Agent is acting as bailee and as agent for perfection or control on behalf of the Collateral Agent pursuant to the terms of the ABL/Term Intercreditor Agreement, any obligation of any Grantor in this Agreement that requires delivery or control of Collateral that is Term Priority Collateral to, or in the possession or control of such Collateral with, the Collateral Agent shall be deemed complied with and satisfied if such delivery of such Collateral is made to, or such possession or control of such Collateral is with, the Term Representative Agent.

**ARTICLE II** 

**GRANT OF SECURITY** 

**Section 2.01 <u>Grant of Security</u>**. (a) To secure the due and punctual payment of all Finance Obligations of it and of all other Loan Parties, howsoever created, arising or evidenced, whether direct or indirect, absolute or contingent, now or hereafter existing or due or to become due, in accordance with the terms thereof and to secure the performance of all of its obligations and the obligations of all other Loan Parties hereunder and under the other Finance Documents, each Loan Party hereby grants to the Collateral Agent for the benefit of the Secured Parties a security interest in, and each Loan Party hereby pledges and collaterally assigns to the Collateral Agent for the benefit of the Secured Parties, all of such Loan Party's right, title and interest in, to and under the following, whether now owned or existing or hereafter acquired, created or arising, whether tangible or intangible, and regardless of where located (all of which are herein collectively called the "<u>Collateral</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;&nbsp;&nbsp;&nbsp;&nbsp;(i) all Receivables;

&nbsp;&nbsp;&nbsp;&nbsp;&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) all Deposit Accounts and Securities Accounts;

&nbsp;&nbsp;&nbsp;&nbsp;&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) all Documents and all Supporting Obligations of any kind given by any Person with respect 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;&nbsp;&nbsp;&nbsp;&nbsp;(iv) all Equipment;

&nbsp;&nbsp;&nbsp;&nbsp;&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) all Fixtures;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(vi) all General Intangibles;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(vii) all Goods;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(viii) all Intellectual Property;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(ix) all Inventory;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(x) all Investment Related Property and all Supporting Obligations of any kind given by any Person with respect 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;&nbsp;&nbsp;&nbsp;&nbsp;(xi) all Letter-of-Credit Rights;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(xii) all Money;

------

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(xiii) all Commercial Tort Claims;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(xiv) all books and records (including, without limitation, customer lists, credit files, computer programs, printouts and other computer materials and records) of each Loan Party pertaining to any of the Collateral; 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;(xv) to the extent not otherwise included, all Proceeds of, accessions to, substitutions or replacements for, and products of, any and all of the foregoing and all collateral security and guarantees given by any Person with respect to the forgoing.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b) Notwithstanding anything herein to the contrary, this Agreement shall not constitute a grant of security in, and in no event shall the Collateral (and any component definition thereof) include, and no Grantor shall be deemed to have assigned, pledged or granted a security interest in, any of such Grantor's right, title or interest:

&nbsp;&nbsp;&nbsp;&nbsp;&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) in any assets subject to a Lien securing Capital Lease Obligations or purchase money debt obligations, in each case permitted under the Credit Agreement, if the contract or other agreement in which such Lien is granted prohibits the creation of any other Lien on such assets or shall constitute or result in a breach or would give the other party thereto the right to terminate such contract or agreement (other than to the extent that any such prohibition is rendered ineffective pursuant to the Anti-Non-Assignment Clauses); <u>provided</u>, <u>however</u>, that such security interest shall attach immediately at such time as and, to the extent severable, to any portion of such assets that do not constitute or result or no longer constitutes or results in any of the consequences specified 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;&nbsp;&nbsp;&nbsp;&nbsp;(ii) in any Excluded Equity Interests;

&nbsp;&nbsp;&nbsp;&nbsp;&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) in any Excluded Accounts;

&nbsp;&nbsp;&nbsp;&nbsp;&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) in any leaseholds of real property; 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;(v) in any lease, license or agreement to which any Grantor is a party 011 the Closing Date if and for so long as the assignment, pledge or grant of such security interest (1) shall be prohibited by any valid and enforceable provision of any such lease, license or agreement (that was not included in such lease, license or agreement for the purpose of avoiding the grant of the security interest hereunder), (2) would give any other party to such lease, license or agreement the right to terminate its obligations thereunder, (3) is permitted only with the consent of another party to such lease, license or agreement if such consent has not been obtained (despite commercially reasonable efforts of the relevant Grantor to obtain such consent), (4) shall constitute or result in the abandonment, invalidation or unenforceability of any right, title or interest of any Grantor therein, (5) shall constitute or result in a breach or termination (or result in any party thereto having the right to terminate) pursuant to the terms of, or a default under, any such lease, license or agreement or (6) shall constitute or result in a violation under any law, regulation, permit, order or decree of any Governmental Authority, unless and until all required material consents shall have been obtained in each case as to clauses (1) through (6), other than to the extent that any such term is rendered ineffective pursuant to the Anti-Non-Assignment

------

Clauses or any other applicable law; <u>provided</u>, <u>however</u>, that such security interest shall attach immediately at such time as and, to the extent severable, to any portion of such lease, license or agreement that does not constitute or result or no longer constitutes or results in any of the conditions or consequences specified in the immediately preceding clauses (1) through (6) above.

The items described in the foregoing clauses (i) through (v), inclusive, being referred to as "<u>Excluded Assets</u>."

**ARTICLE III** 

**SECURITY FOR OBLIGATIONS** 

**Section 3.01 <u>Security for Finance Obligations</u>**. This Agreement and the grant of the security interest and Lien herein secures, in the case of each Grantor, and the Collateral is collateral security for, the prompt and complete payment or performance in full when due, whether at stated maturity, by required prepayment, declaration, acceleration, demand or otherwise (including the payment of amounts that would become due but for the operation of the automatic stay under <u>Section</u> <u>362(a)</u> of the Bankruptcy Code (and any successor provision thereof)), of all Finance Obligations of and with respect to such Grantor and every other Grantor.

**Section 3.02 <u>Continuing Liability under Collateral</u>**. Notwithstanding anything herein to the contrary, (i) each Grantor shall remain liable to observe and perform all the terms and conditions to be observed and performed by it under any contract, agreement, warranty or other obligation with respect to the Collateral, and nothing contained herein is intended or shall be a delegation of duties to the Collateral Agent or any Secured Party and (ii) each Grantor shall remain liable under each of the agreements included in the Collateral, including, without limitation, any agreements relating to Pledged Stock and Pledged Debt, to perform all of the obligations undertaken by it thereunder and neither the Collateral Agent nor any Secured Party shall have any obligation or liability under any of such agreements by reason of or arising out of this Agreement or any other document related thereto, nor shall the Collateral Agent nor any Secured Party have any obligation to make any inquiry as to the nature or sufficiency of any payment received by it or the sufficiency of the performance of any party's obligations with respect to any Collateral or have any obligation to take any action to collect or enforce any rights under any agreement included in the Collateral, including, without limitation, any agreements relating to Pledged Stock and Pledged Debt and (iii) the exercise by the Collateral Agent of any of its rights hereunder shall not release any Grantor from any of its duties or obligations under the contracts and agreements included in the Collateral.

**Section 3.03 <u>Security Interests Absolute</u>**. All rights of the Collateral Agent, all security interests hereunder and all obligations of each Grantor hereunder are unconditional and absolute and independent and separate from any other security for or guaranty of the Finance Obligations, whether executed by such Grantor, any other Grantor or any other Person. Without limiting the generality of the foregoing, the obligations of each Grantor hereunder shall not be released, discharged or otherwise affected or impaired 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;&nbsp;&nbsp;&nbsp;&nbsp;(i) any extension, renewal, settlement, compromise, acceleration, waiver or release in respect of any obligation of any other Grantor under any Loan Document or any other agreement or instrument evidencing or securing any Finance Obligation, by operation of law 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;&nbsp;&nbsp;&nbsp;&nbsp;(ii) any change in the manner, place, time or terms of payment of any Finance Obligation or any other amendment, supplement or modification to any Loan Document or any other agreement or instrument evidencing or securing any Finance Obligation;

&nbsp;&nbsp;&nbsp;&nbsp;&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) any release, non-perfection or invalidity of any direct or indirect security for any Finance Obligation, any sale, exchange, surrender, realization upon, offset against or other action in respect of any direct or indirect security for any Finance Obligation or any release of any other obligor or Grantors in respect of any Finance Obligation;

&nbsp;&nbsp;&nbsp;&nbsp;&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) any change in the existence, structure or ownership of any Grantor, or any insolvency, bankruptcy, reorganization, arrangement, readjustment, composition, liquidation or other similar proceeding affecting any Grantor or its assets or any resulting disallowance, release or discharge of all or any portion of any Finance Obligation;

&nbsp;&nbsp;&nbsp;&nbsp;&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) the existence of any claim, set-off or other right which any Grantor may have at any time against any other Grantor, the Collateral Agent, any other Secured Party or any other Person, whether in connection herewith or any unrelated transaction; <u>provided</u> that nothing herein shall prevent the assertion of any such claim by separate suit or compulsory counterclaim;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(vi) any invalidity or unenforceability relating to or against any other Grantor for any reason of any Loan Document or any other agreement or instrument evidencing or securing any Finance Obligation or any provision of applicable Requirement of Law or regulation purporting to prohibit the payment by any other Grantor of any Finance Obligation;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(vii) any failure by any Secured Party; (A) to file or enforce a claim against any Grantor or its estate (in a bankruptcy or other proceeding); (B) to give notice of the existence, creation or incurrence by any Grantor of any new or additional indebtedness or obligation under or with respect to the Finance Obligations; (C) to commence any action against any Grantor; (D) to disclose to any Grantor any facts which such Secured Party may now or hereafter know with regard to any Grantor; or (E) to proceed with due diligence in the collection, protection or realization upon any collateral securing the Finance 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;&nbsp;&nbsp;&nbsp;&nbsp;(viii) any direction as to application of payment by any other Grantor 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;&nbsp;&nbsp;&nbsp;&nbsp;(ix) any subordination by any Secured Party of the payment of any Finance Obligation to the payment of any other liability (whether matured or unmarred) of any Grantor to its creditors;

------

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(x) any act or failure to act by the Collateral Agent or any other Secured Party under this Agreement or otherwise which may deprive any Grantor of any right to subrogation, contribution or reimbursement against any other Grantor or any right to recover full indemnity for any payments made by such Grantor in respect of the Finance Obligations; 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;(xi) any other act or omission to act or delay of any kind by any Grantor or any Secured Party or any other Person or any other circumstance whatsoever which might, but for the provisions of this <u>Section</u> <u>3.03.</u> constitute a legal or equitable discharge of any Grantor's obligations hereunder, except that a Grantor may assert the defense of final payment in full of the Finance Obligations.

Each Grantor has irrevocably and unconditionally delivered this Agreement to the Collateral Agent, for the benefit of the Secured Parries, and the failure by any other Person to sign this Agreement or a pledge or other security agreement similar to this Agreement or otherwise shall not discharge the obligations of any Grantor hereunder.

To the fullest extent permitted by law, this Agreement shall remain fully enforceable against each Grantor irrespective of any defenses that any other Grantor may have or assert in respect of the Finance Obligations, including, without limitation, failure of consideration, breach of warranty, payment, statute of frauds, statute of limitations, accord and satisfaction and usury, except that a Grantor may assert the defense of final payment of the Finance Obligations.

**Section 3.04 <u>L/C Cash Collateral Account</u>**. All amounts required to be deposited by any Loan Party as cash collateral for L/C Obligations pursuant to <u>Section</u> <u>2.05(b)(</u><u>i</u><u>)</u> or <u>Section</u> <u>8.03</u> of the Credit Agreement, any similar provision of any other Loan Document or pursuant to <u>Section</u> <u>7.02</u> hereof shall be deposited in a Deposit Account or Securities Account (the "<u>L/C Cash Collateral Account</u>") established and maintained by such Loan Party at the offices of the Collateral Agent or such other bank or other financial institution as such Loan Party and the Collateral Agent may agree, in the name and under the exclusive control of the Collateral Agent. If the L/C Cash Collateral Account is not maintained at an office of the Collateral Agent, then forthwith upon the establishment of such account, the applicable Loan Party shall notify the Collateral Agent of the location, account name and account number of such account and shall deliver to the Collateral Agent an Account Control Agreement with respect to such L/C Cash Collateral Account duly executed by such Loan Party and the depository bank or Securities Intermediary maintaining such L/C Cash Collateral Account. Any income received with respect to the balance from time to time standing to the credit of the L/C Cash Collateral Account, including any interest or capital gains on Liquid Investments, shall remain, or be deposited, in the L/C Cash Collateral Account. All right, title and interest in and to the cash amounts on deposit from time to time in the L/C Cash Collateral Account together with any Liquid Investments from time to time made pursuant to <u>Section</u> <u>3.05</u> and any other property or assets from time to time deposited in or credited to the L/C Cash Collateral Account shall vest in and be under the sole dominion and control of the Collateral Agent for the benefit of the Secured Parties, shall constitute part of the Collateral hereunder and shall not constitute payment of the Finance Obligations until applied thereto as hereinafter provided. If and when any portion of the L/C Obligations on which any deposit in the L/C Cash Collateral Account was based (the "<u>Relevant Contingent Exposure</u>") shall become fixed (a "<u>Direct Exposure</u>") as a result of the payment by the L/C Issuer with respect

------

thereto of a draft presented under any Letter of Credit, the amount of such Direct Exposure (but not more than the amount in the L/C Cash Collateral Account at the time) shall be withdrawn by the Collateral Agent from the L/C Cash Collateral Account and shall be paid to the Administrative Agent for application pursuant to the Credit Agreement, and the Relevant Contingent Exposure shall thereupon be reduced by such amount. If at any time the amount in the L/C Cash Collateral Account exceeds the Relevant Contingent Exposure, the excess amount shall, so long as no Default or Event of Default shall have occurred and be continuing, be withdrawn by the Collateral Agent and paid to the applicable Loan Party or its order. Each Loan Party hereby irrevocably consents and agrees to each such distribution. If a Default or Event of Default shall have occurred and be continuing, the excess of the funds in the L/C Cash Collateral Account over the Relevant Contingent Exposure shall be retained in the L/C Cash Collateral Account and, upon the occurrence and continuation of an Default or Event of Default, may be withdrawn by the Collateral Agent and applied in the manner specified in <u>Section</u> <u>7.02</u>. If immediately available cash on deposit in the L/C Cash Collateral Account is not sufficient to make any distribution to a Loan Party referred to in this <u>Section</u> <u>3.04.</u> the Collateral Agent shall cause to be liquidated as promptly as practicable such Liquid Investments in the Cash Collateral Account designated by such Loan Party as are required to obtain sufficient cash to make such distribution and, notwithstanding any other provision of this <u>Section</u> <u>3.04.</u> such distribution shall not be made until such liquidation has taken place.

**Section 3.05 <u>Investment of Funds in Collateral Accounts</u>**. Amounts on deposit in the L/C Cash Collateral Account shall be invested and re-invested from time to time in such Liquid Investments as the Parent Borrower shall determine, which Liquid Investments shall be held in the name and be under the control of the Collateral Agent; provided that, if an Event of Default has occurred and is continuing, the Collateral Agent may liquidate any such Liquid Investments and apply or cause to be applied the proceeds thereof in the manner specified in <u>Section</u> <u>7.02</u>. For this purpose, "<u>Liquid Investments</u>" means Cash Equivalents maturing within 30 days after a Cash Equivalent is acquired by the Collateral Agent.

**ARTICLE IV** 

**REPRESENTATIONS, WARRANTIES AND COVENANTS** 

**Section 4.01 <u>Generally</u>**.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a) *<u>Representations and Warranties</u>.* Each Grantor hereby represents and warrants that:

&nbsp;&nbsp;&nbsp;&nbsp;&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) The Grantors have good and marketable title to, or valid license or leasehold interest in, all of the Collateral in which the Grantors have granted a security interest 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;&nbsp;&nbsp;&nbsp;&nbsp;(ii) The Grantors own each item of the Collateral free and clear of any and all Liens, other than Permitted Liens. Except as set forth on <u>Schedule</u> <u>7.01</u> to the Credit Agreement, no financing statement, mortgage, security agreement or other similar or equivalent document or instrument or public notice with respect to all or any part of the Collateral is on file or of record in any public office, except filings evidencing Permitted Liens and filings for which termination statements have been delivered to the Collateral 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;(iii) The Liens granted to the Collateral Agent hereunder constitute valid security interests under the UCC securing the Finance 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;&nbsp;&nbsp;&nbsp;&nbsp;(iv) Upon (A) the filing of all UCC financing statements in the filing offices set forth opposite such Grantor's name on <u>Schedule</u> <u>IV</u> hereto naming such Grantor as "debtor" and the Collateral Agent as "secured party" and describing the Collateral, (B) the execution and delivery of all Control Agreements with respect to each Deposit Account and Securities Account (other than Excluded Accounts) of the Grantors in existence on the Closing Date to the extent required to be delivered hereunder, (C) the delivery of the Pledged Stock and instruments evidencing Pledged Debt to the Collateral Agent (or the Term Representative Agent, as applicable, as required pursuant to the terms of the ABL/Term Intercreditor Agreement), (D) the completion of all steps necessary to grant control to the Collateral Agent with respect to Investment Related Property and Electronic Chattel Paper, (E) the recordation of the Patent Security Agreement and the Trademark Security Agreement in the United States Patent and Trademark Office and the Copyright Security Agreement in the United States Copyright Office and (F) the execution and delivery of each consent to the Collateral Agent pursuant to <u>Section</u> <u>4.05</u>, the security interests granted to the Collateral Agent hereunder shall constitute a valid and perfected Lien in favor of the Collateral Agent subject to no other Lien other than, to the extent subject to the Intercreditor Agreements, the Permitted Liens in favor of the Term Agent and the Second Lien Agent, and other Permitted Liens and senior in priority to all other Liens other than, to the extent subject to the Intercreditor Agreements, the Permitted Liens in favor of the Term Agent and the Second Lien Agent and other Permitted Liens permitted to be senior to the Liens of the Collateral Agent in such Collateral (other than, in each case, any Collateral with respect to which Excluded Perfection Actions are not required to be taken).

&nbsp;&nbsp;&nbsp;&nbsp;&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) [Reserved.]

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(vi) [Reserved.]

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(vii) All certifications set forth in the Perfection Certificate are true and complete in all material respects as of the date such information is required to be provided pursuant to 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;&nbsp;&nbsp;&nbsp;&nbsp;(viii) On the Closing Date, <u>Schedule</u> <u>I</u> (as such schedule may be amended or supplemented from time to time in accordance with the terms hereof) sets forth (a) each place of business of each Grantor (including its chief executive office); (b) all locations (other than as disclosed pursuant to <u>clause (a)</u>) where any of the Inventory or Equipment owned by each Grantor is kept, except (1) locations with respect to Inventory in transit, (2) locations at which Inventory or Equipment with a fair market value of less than $500,000 in the aggregate for each location is kept and (3) locations for Inventory with respect to "bill and hold" or consignment arrangements with a fair market value of less than $2,000,000 in the aggregate for each location, which may be located at other locations; and

------

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; (c) whether such Collateral location and place of business (including each Grantor's chief executive office) is owned or leased (and if leased, specifies the complete name and notice address of each lessor).

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(ix) None of the Collateral constitutes, or is the Proceeds or products of, "farm products", "as-extracted collateral", "health-care-insurance receivables" or "timber to be cut" (in each case, as defined in the UCC), vessels, aircraft or any other property subject to any certificate of title or other registration statute of the United States, any State or other jurisdiction (other than vehicles).

&nbsp;&nbsp;&nbsp;&nbsp;&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) *<u>Covenants and Agreements</u>.* Each Grantor hereby covenants and agrees that:

&nbsp;&nbsp;&nbsp;&nbsp;&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) All of the Inventory manufactured, assembled, or with respect to which each Grantor may be liable for wages as a result of its manufacture or assembly, and, to the knowledge of such Grantor, all of such Grantor's other Inventory, has or will be produced in compliance in all material respects with the applicable requirements of the Fair Labor Standards Act, as amended from time to time, or any successor statute, and regulations promulgated thereunder.

&nbsp;&nbsp;&nbsp;&nbsp;&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) [Reserved.]

&nbsp;&nbsp;&nbsp;&nbsp;&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) It shall promptly notify the Collateral Agent if any material portion of the Collateral is damaged or destroyed.

&nbsp;&nbsp;&nbsp;&nbsp;&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) Except as permitted by the Loan Documents, it shall not take any action which could reasonably be expected to adversely affect the Collateral Agent's rights in the Collateral, including to sell, assign, transfer, license, grant any option with respect to the purchase of, or create any Lien upon, any Collateral, except for Permitted Liens.

&nbsp;&nbsp;&nbsp;&nbsp;&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) It shall continue to collect, at its own expense, all amounts due or to become due to such Grantor in respect of any Collateral unless such Grantor shall in accordance with its sound business judgment reasonably determine in respect of any such amounts that such efforts would be of negligible value. Notwithstanding the foregoing, subject to the rights of the Collateral Agent and the Secured Parties hereunder, such Grantor may allow as adjustments to amounts owing under its Receivables (1) an extension or renewal of the time or times of payment, or settlement for less than the total unpaid balance, which such Grantor finds appropriate in accordance with sound business judgment and (2) a refund or credit due as a result of returned or damaged merchandise, all in accordance with such Grantor's Ordinary Course of Business. In connection with such collections, each Grantor may take (and, at the Collateral Agent's reasonable direction, shall take) such action as such Grantor or the Collateral Agent may deem reasonably necessary or advisable to enforce collection of such amounts.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(vi) Subject to the terms of the ABL/Term Intercreditor Agreement, to the extent such Grantor receives any cash. Payment Items or other Proceeds with respect to any Collateral which is not required to be remitted to the Term Representative Agent for payment of the Term Obligations in accordance with the terms of the Term Documents and the ABL/Term Intercreditor Agreement, it shall hold the same in trust for the Collateral Agent and promptly (not later than the next Business Day) deposit the same into a Dominion Account.

------

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(vii) Such Grantor shall keep full and accurate books and records relating to the Collateral, including, but not limited to, the originals of all Instruments and Chattel Paper and copies of all material documentation with respect to such Collateral, records of all payments received, all credits granted thereon, all merchandise returned and all other material dealings therewith, and such Grantor will, subject to the terms of <u>Section</u> <u>6.09</u> of the Credit Agreement, make the same available to the Collateral Agent for inspection. Upon direction by the Collateral Agent, such Grantor shall stamp or otherwise mark any Chattel Paper or Instrument with a value in excess of $2,000,000 included in such books and records in such manner as the Collateral Agent may reasonably require in order to reflect the security interests granted 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;&nbsp;&nbsp;&nbsp;&nbsp;(viii) [Reserved.]

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(ix) To the extent required by the Collateral Agent in respect of the ABL Priority Collateral pursuant to the Collateral Documents, the Grantors shall use commercially reasonable efforts to deliver in favor of the Collateral Agent a Collateral Access Agreement executed by the lessor of such property or by such warehouseman, as applicable, within 90 days following request therefore, it being understood and agreed that no Default or Event of Default shall arise under the Credit Agreement if, after the exercise of such commercially reasonable efforts, the Grantors shall fail within any such 90-day period to procure any such Collateral Access Agreement. Notwithstanding the foregoing, the Grantors shall not be required to obtain Collateral Access Agreements with respect to any such Collateral unless it has a value, when aggregated with all other Collateral in respect of which the Grantors have not obtained Collateral Access Agreements, in excess of $500,000 per location.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(x) It will, promptly upon written request of the Collateral Agent, provide to the Collateral Agent all information and evidence that the Collateral Agent may reasonably request concerning the Collateral to enable the Collateral Agent to enforce the provisions of this Agreement.

**Section 4.02 <u>Equipment and Inventory</u>**.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a) [Reserved].

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b) *<u>Covenants and Agreements with respect to Equipment and Inventors</u>*. Each Grantor covenants and agrees that:

&nbsp;&nbsp;&nbsp;&nbsp;&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) It shall not deliver any Document evidencing any Goods to any Person other than to the issuer of such Document to claim the Goods evidenced thereby or to the Collateral Agent or the Term Representative Agent, as applicable (as required by the ABL/Term Intercreditor Agreement), unless the Collateral Agent has received a perfected security interest in such 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;&nbsp;&nbsp;&nbsp;&nbsp;(ii) It will ensure that none of the Inventory or Equipment is ever subject to or covered by a negotiable document of title, unless the Collateral Agent has received a perfected security interest in such negotiable document of title.

&nbsp;&nbsp;&nbsp;&nbsp;&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) If any Equipment (other than Equipment constituting Excluded Assets) or Inventory of such Grantor is in possession or control of any third party and no Collateral Access Agreement has been executed by such third party in accordance with <u>Section</u> <u>4.01(b)(ix)</u>, other than with respect to locations for which a Collateral Access Agreement is not required pursuant to <u>Section</u> <u>4.01(b)(ix)</u> or for which such Grantor has used commercially reasonable efforts to obtain a Collateral Access Agreement and was unable to do so, such Grantor shall, upon the reasonable request of the Collateral Agent, in the case of any consignee or processor, file financing statements, to the extent permitted by the applicable UCC, naming such consignee or processor as debtor, such Grantor as the secured party and the Collateral Agent as assignee in accordance with the requirements of the applicable UCC and, during the continuation of an Event of Default, deliver any notices to secured creditors of such consignee or processor required to maintain the perfection and priority of the Collateral Agent's security interest in such Equipment (other than Equipment constituting Excluded Assets) or Inventory; <u>provided</u>, <u>however</u>, that no Grantor shall be required to take any of the foregoing actions if the value of such Inventory or Equipment in respect to which it and the other Grantors have not taken such action, does not exceed $500,000 per location.

**Section 4.03 <u>Receivables</u>**.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a) [Reserved].

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b) *<u>Covenants and Agreements with respect to Receivables</u>*: Each Grantor hereby covenants and agrees that:

&nbsp;&nbsp;&nbsp;&nbsp;&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) It shall mark conspicuously, in form and manner reasonably satisfactory to the Collateral Agent, all Chattel Paper and Instruments (other than any delivered to the Collateral Agent pursuant to the teens hereof or evidencing Receivables with a fair market value in excess of $2,000,000, individually), with an appropriate reference to the fact that the Collateral Agent has a security interest therein.

&nbsp;&nbsp;&nbsp;&nbsp;&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) Such Grantor shall use its commercially reasonable efforts to cause to be collected from each Account Debtor, as and when due, any and all amounts owing under or on account of each Receivable (including, without limitation, Receivables which are delinquent, such Receivables to be collected in accordance with lawful collection procedures) unless such Grantor shall reasonably determine in respect of any such Receivable that such efforts would be of negligible economic value, and shall apply forthwith upon receipt thereof all such amounts as are so collected to the outstanding balance of such Receivable. Such Grantor shall not rescind or cancel any indebtedness or obligation evidenced by any Receivable, modify, make adjustments to, extend, renew, compromise or settle any material dispute, claim, suit or legal proceeding relating to, or sell or assign, any Receivable, or interest therein, without the prior written consent of the Collateral Agent. Notwithstanding the foregoing, subject to the rights of the Collateral

------

Agent and the Secured Parties hereunder, such Grantor may allow as adjustments to amounts owing under its Receivables (1) an extension or renewal of the time or times of payment, or settlement for less than the total unpaid balance, which such Grantor finds appropriate in accordance with sound business judgment and (2) a refund or credit due as a result of returned or damaged merchandise, all in accordance with such Grantor's Ordinary Course of Business. The costs and expenses (including, without limitation, attorneys' fees) of collection of Receivables, whether incurred by such Grantor or the Collateral Agent, shall be borne by the Grantors.

&nbsp;&nbsp;&nbsp;&nbsp;&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) During the continuation of an Event of Default, the Collateral Agent shall have the right at any time, in the name of the Collateral Agent, any designee of the Collateral Agent or any Grantor, to verify the validity, amount or any other matter relating to any Accounts of the Grantors by mail, telephone or otherwise, which such verifications may be performed in the name of the Grantors. The Grantors shall cooperate fully with the Collateral Agent in an effort to facilitate and promptly conclude any such verification process. Upon the occurrence and during the continuance of an Event of Default, each Grantor, at its own expense, will cause its chief financial officer to furnish to the Collateral Agent at any time and from time to time promptly upon the Collateral Agent's reasonable request (i) a reconciliation of all Receivables, (ii) an aging of all Receivables, (iii) trial balances and (iv) a test verification of such Receivables, all as the Collateral Agent may reasonably request.

&nbsp;&nbsp;&nbsp;&nbsp;&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) Upon the occurrence and during the continuance of any Default or Event of Default and if so requested by the Collateral Agent, such Grantor will promptly notify (and such Grantor hereby authorizes the Collateral Agent so to notify) each Account Debtor in respect of any Receivable that such Collateral has been assigned to the Collateral Agent hereunder for the benefit of the Secured Parties, and that any payments due or to become due in respect of such Collateral are to be made directly to the Collateral Agent or its designee.

&nbsp;&nbsp;&nbsp;&nbsp;&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) It shall use its commercially reasonable efforts to keep in full force and effect any Supporting Obligation or Collateral Support (other than any Excluded Assets) relating to any Receivable.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(vi) [Reserved.]

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c) *<u>Delivery and Control of Receivables</u>.* With respect to any Receivables that are evidenced by, or constitute, Tangible Chattel Paper or Instruments, each Grantor shall cause each originally executed copy thereof to be delivered to the Collateral Agent (or its agent or designee, unless the ABL/Term Intercreditor Agreement requires delivery thereof to the Term Representative Agent) appropriately indorsed to the Collateral Agent or indorsed in blank: (i) with respect to any such Receivables in existence on the date hereof, on or prior to the date hereof and (ii) with respect to any such Receivables hereafter arising, promptly upon such Grantor acquiring rights therein. With respect to any Receivables which would constitute Electronic Chattel Paper, each Grantor shall take all steps necessary to give the Collateral Agent control over such Receivables (within the meaning of Section 9-105 of the UCC) (unless the ABL/Term Intercreditor Agreement requires control thereof to be given to the Term Representative Agent): (i) with respect

------

to any such Receivables in existence on the date hereof, on or prior to the date hereof and (ii) with respect to any such Receivables hereafter arising, promptly upon such Grantor acquiring rights therein; <u>provided</u>, <u>however</u>, that 110 Grantor shall be required to take any of the foregoing actions if the value of such Tangible Chattel Paper, Electronic Chattel Paper or Instrument in respect to which it and the other Grantors have not taken such actions, does not exceed $2,000,000 per item.

**Section 4.04 <u>Investment Related Property</u>**.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a) *<u>Representations and Warranties with respect to Pledged Stock</u>*. Each Grantor hereby represents and warrants that:

&nbsp;&nbsp;&nbsp;&nbsp;&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) <u>Schedule</u> <u>II</u> hereto (as such schedule may be amended or supplemented from time to time in accordance with the terms hereof) sets forth under the heading "Pledged Stock," all of the Pledged Stock owned by any Grantor, and such Pledged Stock constitutes all of the issued and outstanding Stock or Stock Equivalents of the respective issuers (or, in the case of any Foreign Subsidiary that is directly owned by a Loan Party or any Excluded Domestic Holdco that is directly owned by a Loan Party, 65% of all issued and outstanding voting Stock or Stock Equivalents thereof and 100% of all issued and outstanding non-voting Stock or Stock Equivalents thereof) owned by such Grantor.

&nbsp;&nbsp;&nbsp;&nbsp;&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) Each Pledged Stock has been duly authorized, validly issued and is fully paid and nonassessable, unless the issuer is an unlimited liability company.

&nbsp;&nbsp;&nbsp;&nbsp;&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) Except as disclosed on <u>Schedule</u> <u>II</u> hereto (as such schedule may be amended or supplemented from time to time in accordance with the terms hereof), there are no outstanding warrants, options or other rights to purchase, or shareholder, voting trust or similar agreements outstanding with respect to, or property that is convertible into, or that requires the issuance or sale of, any Pledged Stock.

&nbsp;&nbsp;&nbsp;&nbsp;&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) [Reserved.]

&nbsp;&nbsp;&nbsp;&nbsp;&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) (a) None of the Pledged Stock representing partnership or membership interests are or represent interests in issuers that are (x) registered as investment companies or (y) are dealt in or traded on securities exchanges or markets and (b) each issuer that is a limited liability company or a partnership has ensured, or will ensure, that its limited liability agreement, partnership agreement or other applicable organizational documents governing the interests issued by it, either expressly provides that each such interest shall be represented by a certificate and is and will remain a "security" within the meaning of, and governed by, Article 8 of the UCC or, if such documents do not expressly so provide, shall remain uncertificated and shall not be amended to "opt-in" to Article 8 of the UCC unless all actions are taken by the applicable Grantor to ensure that the Collateral Agent has a perfected and continuing security interest in such membership interests in accordance with <u>Section</u> <u>4.04</u>(<u>b)</u>(<u>i)</u> hereof.

------

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b) *<u>Covenants and Agreements with respect to Pledged Stock</u>*. Each Grantor hereby covenants and agrees that:

&nbsp;&nbsp;&nbsp;&nbsp;&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) Without the prior written consent of the Collateral Agent, it shall not vote, or take any other action, to: (a) other than as expressly permitted by the Loan Documents, amend or terminate any partnership agreement, limited liability company agreement, certificate of incorporation, by-laws or other organizational documents in any way that materially adversely affects the value, validity, perfection or priority of the Collateral Agent's security interest therein, (b) other than as expressly permitted by the Loan Documents, permit any issuer of any Pledged Stock of such Grantor to issue any additional stock, partnership interests, limited liability company interests or other Equity Interests of any nature or to issue securities convertible into or granting the right of purchase or exchange for any stock or other Equity Interest of any nature of such issuer, (c) other than as expressly permitted under the Loan Documents, permit any issuer of any Pledged Stock to dispose of all or a material portion of its assets or (d) cause any issuer of any Pledged Stock representing partnership or membership interest of such Grantor which are not securities (for purposes of the UCC) on the date hereof to elect or otherwise take any action to cause such partnership or membership interest to be treated as securities for purposes of the UCC; <u>provided</u>, <u>however</u>, notwithstanding the foregoing, if any issuer of any partnership or membership interests take any such action in violation of the foregoing in this <u>clause (d)</u>, such Grantor shall promptly notify the Collateral Agent in writing of any such election or action and, in such event, shall take all steps necessary or advisable to establish the Collateral Agent's "control" thereof. Without limiting the foregoing, no agreement or other organizational document providing (i) that any such interest is and will remain a security under Article 8 of the UCC, (ii) that a partnership or membership interest is represented by a certificate (in which the Collateral Agent's security interest has been or is required to be perfected pursuant to this Agreement) or (iii) that a partnership or membership interest is not represented by a certificate (in which the Collateral Agent's security interest has been or is required to be perfected pursuant to this Agreement), shall be amended, modified or supplemented to provide otherwise without the consent of the Collateral 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;(ii) It shall comply with all of its material obligations under any limited liability company agreement, partnership agreement or other applicable organizational documents governing the Pledged Stock.

&nbsp;&nbsp;&nbsp;&nbsp;&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) [Reserved.]

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c) *<u>Representations and Warranties with respect to Pledged Debt</u>.* Each Grantor hereby represents and warrants that <u>Schedule</u> <u>II</u> hereto (as such schedule may be amended or supplemented from time to time in accordance with the terms hereof) sets forth under the heading "<u>Pledged Debt</u>" all of the Pledged Debt owned by such Grantor evidenced by an Instrument with an outstanding principal amount of over $2,000,000, and to the knowledge of such Grantor, all of such Pledged Debt has been duly authorized, authenticated or issued and delivered and constitutes the legal, valid and binding obligation of the debtor thereunder, enforceable in accordance with its terms (subject to the effects of bankruptcy, insolvency, fraudulent conveyance, reorganization, moratorium and other similar laws relating to or affecting creditors' rights generally, general equitable principles (whether considered in a proceeding in equity or at law) and an implied covenant of good faith and fair dealing).

------

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(d) *<u>Representations and Warranties with respect to Investment Accounts</u>*. Each Grantor hereby represents and warrants that:

&nbsp;&nbsp;&nbsp;&nbsp;&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) <u>Schedule</u> <u>II</u> hereto (as such schedule may be amended or supplemented from time to time in accordance with the terms hereof) sets forth, under the heading "<u>Securities Accounts</u>", all of the Securities Accounts (other than Excluded Accounts) in which each Grantor has an interest, and such Schedule correctly identifies the name, address and any other relevant contact information reasonably requested by the Collateral Agent with respect to each depository, the name in which the account is held and the complete account number therefor. Each Grantor is the sole entitlement holder of each such Securities Account on <u>Schedule</u> <u>II</u>, and such Grantor has not consented to, and is not otherwise aware of any Person (other than the Collateral Agent, the Term Agent and the Second Lien Agent) having "control" (within the meanings of Sections 8-106 and 9-106 of the UCC) over, or any other interest in, any such Securities Account or any securities or other property credited 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;&nbsp;&nbsp;&nbsp;&nbsp;(ii) <u>Schedule</u> <u>II</u> hereto (as such schedule may be amended or supplemented from time to time in accordance with the terms hereof), sets forth under the heading "<u>Deposit Accounts</u>", all of the Deposit Accounts (other than Excluded Accounts) in which each Grantor has an interest, and such Schedule correctly identifies the name, address and any other relevant contact information reasonably requested by the Collateral Agent with respect to each depository, the name in which the account is held, a description of the purpose of the account, and the complete account number therefor. Each Grantor is the sole account holder of each such Deposit Account on Schedule II, and such Grantor has not consented to, and is not otherwise aware of, any Person (other than the Collateral Agent, the Term Agent and the Second Lien Agent) having either sole dominion and control (within the meaning of common law) or "control" (within the meaning of Section 9-104 of the UCC) over, or any other interest in, any such Deposit Account or any money or other property deposited therein.

&nbsp;&nbsp;&nbsp;&nbsp;&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) Unless the ABL/Term Intercreditor Agreement provides for "control" to be vested in the Term Representative Agent as bailee or as agent for perfection on behalf of the Collateral Agent, each Grantor has taken all actions necessary, including those specified in <u>Sections</u> <u>4.04(b)</u>, to: (a) establish the Collateral Agent's "control" (within the meanings of Sections 8-106 and 9-106 of the UCC) over any portion of the Investment Related Property constituting Certificated Securities, Uncertificated Securities, Securities Accounts or Security Entitlements (other than Excluded Assets); and (b) establish the Collateral Agent's "control" (within the meaning of Section 9-104 of the UCC) over all Deposit Accounts (other than Excluded Accounts).

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(e) *<u>Delivery and control with respect to Securities Accounts, Security Entitlements, and Deposit Accounts</u>.* With respect to any Investment Related Property consisting of Securities Accounts (other than Excluded Accounts) or Security Entitlements over which the Term Agent has been granted "control," it shall cause the securities intermediary maintaining such Securities Account or Security Entitlement to enter into a Securities Account Control Agreement pursuant to which it shall, subject to the ABL/Term Intercreditor Agreement, agree to comply with the Collateral Agent's "entitlement orders" without further consent by such Grantor and the

------

Collateral Agent shall have "control" (within the meaning of Section 8.106 of the UCC) over such Securities Accounts or Security Entitlements. With respect to any Investment Related Property that is a "<u>Deposit Account</u>" (other than Excluded Accounts) over which the Term Agent has been granted control, it shall cause the depositary institution maintaining such account to enter into a Deposit Account Control Agreement, pursuant to which the Collateral Agent shall, subject to the ABL/Term Intercreditor Agreement, have "control" (within the meaning of Section 9-104 of the UCC) over such Deposit Account. Each Grantor shall have entered into (and shall not hereafter establish or maintain any Deposit Account or Securities Account (other than Excluded Accounts) unless such Grantor enters into) such Control Agreement with respect to: (i) any Securities Accounts (other than Excluded Accounts), Security Entitlements or Deposit Accounts (other than Excluded Accounts) that exist on the Closing Date, within 60 days (or such longer period as approved by the Collateral Agent) following the Closing Date and (ii) any Securities Accounts (other than Excluded Accounts), Security Entitlements or Deposit Accounts (other than Excluded Accounts) that are created or acquired after the Closing Date, within 60 days (or such longer period as approved by the Collateral Agent) following the deposit or transfer of any such assets, whether constituting moneys or investments, into any Securities Accounts or Deposit Accounts. The Collateral Agent hereby agrees that upon exercising its rights under any such Control Agreement with respect to any Securities Accounts or Security Entitlements, it shall not liquidate any assets therein unless and until an Event of Default has occurred. Notwithstanding anything herein to the contrary, no additional Control Agreements in favor of the Collateral Agent shall be required hereunder as to any Deposit Account, Securities Account or Security Entitlement if (x) the Collateral Agent shall succeed to the rights of the Term Representative Agent pursuant to the ABL/Term Intercreditor Agreement or (y) the applicable depositary institution or securities intermediary does not recognize multiple secured parties under its control agreement policies and procedures.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(f) *<u>Covenants and Agreements with respect to Investment Related Property Generally</u>*. Each Grantor hereby covenants and agrees that:

&nbsp;&nbsp;&nbsp;&nbsp;&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) Except as provided in the next sentence, in the event such Grantor receives any dividends, interest or distributions on any Investment Related Property, or any securities or other property upon the merger, consolidation, liquidation or dissolution of any issuer of any Investment Related Property, then (a) such dividends, interest or distributions and securities or other property shall be included in the definition of Collateral without further action and (b) such Grantor shall immediately take all steps, if any, necessary or advisable to ensure the validity, perfection, priority and, if applicable, control of the Collateral Agent over such Investment Related Property (including, without limitation, delivery thereof to the Collateral Agent or the Term Representative Agent as required pursuant to the ABL/Term Intercreditor Agreement), and pending any such action such Grantor shall be deemed to hold such dividends, interest, distributions, securities or other property in trust for the benefit of the Collateral Agent and all of the same shall be segregated from all other property of such Grantor and promptly, to the extent such Investment Related Property includes cash Proceeds (not later than the next Business Day) deposit same into a Dominion Account. Notwithstanding the foregoing, so long as no Default or Event of Default shall have occurred and be continuing, the Collateral Agent authorizes each Grantor to retain all ordinary cash dividends and distributions paid in the normal course of the business of the issuer and consistent with the past practice of the issuer and all scheduled payments of interest.

------

&nbsp;&nbsp;&nbsp;&nbsp;&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) During the continuance of an Event of Default (other than with respect to any distributions permitted pursuant to <u>Section</u> <u>7.11</u> of the Credit Agreement), (a) the Collateral Agent (unless the ABL/Term Intercreditor Agreement requires otherwise) shall have the right, at any time in its discretion and without notice to the Grantor, to (x) transfer to or to register any Pledged Stock or any Investment Related Property in its name or in the name of its nominees and (y) exchange any certificate or instrument representing or evidencing any Pledged Stock or any Investment Related Property for certificates or instruments of smaller or larger denominations and (b) (x) all rights of each Grantor to receive the dividends, interest, distributions, cash, instruments and other payments and distributions which it would otherwise be authorized to receive and retain pursuant to <u>Section</u> <u>4.04(1)(i)</u> shall cease, and all such rights shall thereupon become vested in the Collateral Agent, which shall thereupon have the sole right to receive and hold as Collateral such dividends, interest, distributions, cash, instruments and other payments and distributions and (y) all dividends, interest, distributions, cash, instruments and other payments and distributions which are received by any Grantor contrary to the provisions of paragraph (i) of this <u>Section</u> <u>4.04(f)</u> shall be received in trust for the benefit of the Collateral Agent, shall be segregated from other property or funds of such Grantor and shall be forthwith delivered, in the same form as so received, to the Collateral Agent or its nominee or custodian to hold as Collateral (unless the ABL/Term Intercreditor Agreement requires delivery thereof to the Term Representative Agent).

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(g) *<u>Delivery and Control of Certificates, Instruments and Uncertificated Securities Constituting Investment Related Property</u>.* With respect to any Investment Related Property that is represented by a certificate or that is an "instrument" (other than any Investment Related Property credited to a Securities Account), it shall cause such certificate or instrument to be delivered to the Collateral Agent (or, if required by the ABL/Term Intercreditor Agreement, to the Term Representative Agent) and indorsed in blank by an "effective indorsement" (as defined in Section 8-107 of the UCC), regardless of whether such certificate constitutes a "certificated security" for purposes of the UCC. All Collateral delivered hereunder shall be accompanied by any required transfer tax stamps. With respect to any Investment Related Property that is an "uncertificated security" for purposes of the UCC (other than any "uncertificated securities" credited to a Securities Account) with a fair market value in excess of $250,000, it shall use commercially reasonable efforts to cause the issuer of such uncertificated security to execute a Securities Account Control Agreement with respect to thereto. Each Grantor shall have taken such actions respect to: (i) any Investment Related Property that is represented by a certificate or that is an "instrument" (other than any Investment Related Property credited to a Securities Account) that exist on the Closing Date, as of the Closing Date and (ii) any Investment Related Property that is represented by a certificate or that is an "instrument" (other than any Investment Related Property credited to a Securities Account) that are created or acquired after the Closing Date, within 30 days (or such longer period as approved by the Collateral Agent) following the acquisition thereof <u>provided</u>, <u>however</u>, that no Grantor shall be required to take any of the foregoing actions if the value of such Investment Related Property in respect to which it and the other Grantors have not taken such action, does not exceed $2,000,000 per item.

------

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(h) *<u>Voting and Distributions wit/i respect to Investment Related Property</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;&nbsp;&nbsp;&nbsp;&nbsp;(i) So long as no Event of 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;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(A) except as otherwise provided under the covenants and agreements relating to Investment Related Property in this Agreement or the Credit Agreement, each Grantor shall be entitled to exercise or refrain from exercising any and all voting and other consensual rights pertaining to the Investment Related Property or any part thereof for any purpose not inconsistent with the terms of this Agreement or the Credit Agreement; 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;(B) the Collateral Agent shall promptly execute and deliver (or cause to be executed and delivered) to each Grantor all proxies, and other instruments as such Grantor may from time to time reasonably request for the purpose of enabling such Grantor to exercise the voting and other consensual rights when and to the extent which it is entitled to exercise pursuant to <u>clause</u> (<u>A)</u> 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;&nbsp;&nbsp;&nbsp;&nbsp;(ii) Upon the occurrence and during the continuation of an Event of 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;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(A) Upon notice to Holdings by the Collateral Agent, at the request of or with the consent of, the Required Lenders (<u>provided</u> that if an Event of Default specified under <u>Section</u> <u>8.01(f)</u> or <u>(g)</u> of the Credit Agreement shall occur, no such notice shall be required), all rights of each Grantor to exercise or refrain from exercising the voting and other consensual rights which it would otherwise be entitled to exercise pursuant hereto shall cease, and all such rights shall thereupon become vested in the Collateral Agent (or the Term Representative Agent, as applicable, as provided in the ABL/Term Intercreditor Agreement) who shall thereupon have the sole right to exercise such voting and other consensual rights (and any right of conversion, exchange and subscription and any other right, privilege or option pertaining to the Investment Related Property) as if it were the absolute owner thereof (including the right to exchange at its discretion any Investment Related Property upon the merger, amalgamation, consolidation, reorganization, recapitalization or other fundamental change in the corporate or equivalent structure of any issuer of Investment Related Property, the right to deposit and deliver any Investment Related Property with any committee, depositary, transfer agent, registrar or other designated agency upon such terms and conditions as the Collateral Agent (or the Term Representative Agent, as applicable, as provided in the ABL/Term Intercreditor Agreement) may determine), all without liability except to account for property actually received by it; <u>provided</u>, <u>however</u>, that the Collateral Agent shall have no duty to any Grantor to exercise any such right, privilege or option and shall not be responsible for any failure to do so or delay in so doing; 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;(B) in order to permit the Collateral Agent to exercise the voting and other consensual rights which it may be entitled to exercise pursuant hereto and to receive all dividends and other distributions which it may be entitled to receive hereunder: (1) each Grantor shall promptly execute and deliver (or cause to be executed and delivered) to the Collateral Agent all proxies, dividend payment orders and other instruments as the Collateral Agent may from time to time reasonably request and (2) each Grantor acknowledges that the Collateral Agent may utilize the power of attorney set forth in <u>Section</u> <u>6.01</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;&nbsp;&nbsp;&nbsp;&nbsp;(iii) Each Grantor hereby expressly irrevocably authorizes and instructs, without any further instructions from such Grantor, each issuer of any Investment Related Property pledged hereunder by such Grantor (i) to comply with any instruction received by such issuer from the Collateral Agent (which the Collateral Agent hereby agrees shall not be given unless an Event of Default has occurred and is continuing and such instruction is given by the Collateral Agent at the request or, or with the consent, of the Required Lenders) without consultation with or instruction from such Grantor and each Grantor agrees that such issuer shall be fully protected from liabilities to such Grantor in so complying and (ii) upon the occurrence and during the continuance of an Event of Default, to pay any dividend or make any other payment with respect to the Investment Related Property directly to the Collateral Agent (or the Term Representative Agent, as applicable, as provided in the ABL/Term Intercreditor Agreement).

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(i) *<u>Consent with respect to Jointly Owned Investment Related Property</u>*. To the extent that more than one Grantor has rights in any Investment Related Property, such Grantor consents to the grant by each other Grantor that has rights in such Investment Related Property of a security interest therein to the Collateral Agent and, without limiting the foregoing, consents to the transfer of any Pledged Stock representing partnership or membership interests to the Collateral Agent or its nominee upon the occurrence and during the continuance of an Event of Default and to the substitution of the Collateral Agent or its nominee as a partner in any partnership or as a member in any limited liability company with all the rights and powers related thereto.

**Section 4.05 <u>Letter-of-Credit Rights</u>**.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a) Each Grantor hereby represents and warrants that: (i) all letters of credit to which such Grantor has rights is listed in <u>Section</u> <u>4(e)</u> to the Perfection Certificate; and (ii) it has obtained the consent of each issuer of any letter of credit constituting Collateral to the assignment of the proceeds of the letter of credit to the Collateral Agent.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b) If any Letter-of-Credit Rights are hereafter acquired by any Grantor, the applicable Grantor will deliver or cause to be delivered to the Collateral Agent a fully executed consent with respect thereto in a form that is reasonably acceptable to the Collateral Agent.

------

**Section 4.06 <u>Intellectual Property</u>**.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a) *<u>Representations and Warranties with respect to Intellectual Property</u>.<u> </u>*Except as disclosed in <u>Schedule</u> <u>5.16</u> of the Credit Agreement (as such schedule may be amended or supplemented from time to time in accordance with the terms hereof), each Grantor hereby represents and warrants that:

&nbsp;&nbsp;&nbsp;&nbsp;&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) <u>Schedule</u> <u>5.16</u> of the Credit Agreement (as such schedule may be amended or supplemented from time to tune in accordance with the terms hereof) sets forth a true and complete list as of the Effective Date of the following Intellectual Property each Grantor owns, licenses or otherwise has the right to use: (x) Intellectual Property that is registered or subject to applications for registration and (y) Internet Domain Names, separately identifying that owned and licensed to such Grantor and including for each of the foregoing items (1) the owner, (2) the title, (3) the jurisdiction in which such item has been registered or otherwise arises or in which an application for registration has been filed, (4) as applicable, the registration or application number and registration or application date and (5) any IP Licenses or other rights (including franchises) granted by such Grantor with respect 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;&nbsp;&nbsp;&nbsp;&nbsp;(ii) Each Grantor owns, or is licensed to use, all Intellectual Property necessary to conduct its business as currently conducted except for such Intellectual Property the failure of which to own or license would not reasonably be expected to have, either individually or in the aggregate, a Material Adverse Effect. To the knowledge of each Grantor, (a) the conduct and operations of the businesses of each Grantor does not infringe, misappropriate, dilute, violate or otherwise impair any Intellectual Property owned by any other Person and (b) no other Person has contested any right, title or interest of any Grantor in, or relating to, any Intellectual Property, other than, in each case, as cannot reasonably be expected to affect the Loan Documents and the transactions contemplated therein and would not, in the aggregate, 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;&nbsp;&nbsp;&nbsp;&nbsp;(iii) No holding, decision or judgment has been rendered by any Governmental Authority which would directly limit, cancel or question the validity of, or such Grantor's rights in, any Intellectual Property owned by such Grantor or, to Grantor's knowledge, licensed to such Grantor the result of which would reasonably be expected to cause 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;&nbsp;&nbsp;&nbsp;&nbsp;(iv) No action or proceeding is pending, or, to the knowledge of such Grantor, threatened, on the date hereof (x) seeking to limit, cancel or question the validity of any Intellectual Property owned by such Grantor or such Grantor's ownership interest therein, and (y) which, if adversely determined would have a material adverse effect on the value of any Intellectual Property, the result of which would 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;&nbsp;&nbsp;&nbsp;&nbsp;(v) It is the sole and exclusive owner of the entire right, title, and interest in and to all material Intellectual Property listed on <u>Schedule</u> <u>5.16</u> of the Credit Agreement as owned by each Grantor (as such schedule may be amended or supplemented from time to time in accordance with the terms hereof), except for rights in material Intellectual Property granted pursuant to an IP License, and Grantor owns or has the valid right to use all other material Intellectual Property used in or reasonably necessary to conduct its business free and clear of all Liens, except for Permitted Liens.

------

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b) *<u>Covenants and Agreements with respect to Intellectual Property</u>*. Each Grantor hereby covenants and agrees 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;&nbsp;&nbsp;&nbsp;&nbsp;(i) Each Grantor (either itself or through licensees) will, for each Patent, not do any act, or omit to do any act, whereby any Patent which is material to the conduct of such Guarantor's business may become invalidated or dedicated to the public, and, to the extent consistent with past practices, shall continue to mark any products covered by a Patent with the relevant patent number or indication that a Patent is pending as required by the patent laws.

&nbsp;&nbsp;&nbsp;&nbsp;&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) Each Grantor (either itself or, if permitted by law, through its licensees or its sublicensees) will, for each Trademark material to the conduct of such Grantor's business, (i) maintain such Trademark in fill force free from any claim of abandonment or invalidity from non-use, material alteration, naked licensing or genericide, (ii) maintain the quality of products and services offered under such Trademark in a manner substantially consistent with or better than the quality of such products and services as of the date hereof, (iii) display such Trademark with proper notice, including notice of federal registration to the extent permitted by applicable law, (iv) not knowingly use or knowingly permit the use of such Trademark in violation of any third party rights, (v) not permit any assignment in gross of such Trademark and (vi) subject to the terms of the Credit Agreement, allow the Collateral Agent and its designees the right to inspect such Grantor's premises and to examine and observe such Grantor's books, records and operations, including, without limitation, its quality control processes, upon reasonable notice and at reasonable times.

&nbsp;&nbsp;&nbsp;&nbsp;&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) Each Grantor (either itself or through licensees) will, for each work covered by a Copyright material to the conduct of its business, continue to publish, reproduce, display, adopt and distribute the work with appropriate copyright notice.

&nbsp;&nbsp;&nbsp;&nbsp;&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) Each Grantor shall take all reasonable steps in the United States Patent and Trademark Office and the United States Copyright Office, any state registry or any foreign counterpart of the foregoing, including the payment of applicable fees, to maintain and pursue any application, and to maintain each registration of the Trademarks, Patents and Copyrights owned by any Grantor and which are now or shall become included in the Collateral except for those items of Intellectual Property that are no longer in use and have negligible value or such Intellectual Property is no longer beneficial to the business of such Grantor in the commercially reasonable judgment of such Grantor.

&nbsp;&nbsp;&nbsp;&nbsp;&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) Such Grantor shall, together with the delivery of each Compliance Certificate, report to the Collateral Agent any of the following to the extent applicable: (A) the filing by such Grantor or on its behalf of any application to register any Intellectual Property, owned by such Grantor in whole or in part, with the United States Patent and Trademark Office and the United States Copyright Office; (B) the registration of any Intellectual Property owned by such Grantor in whole or in part by any such office; (C) the acquisition by such Grantor of any Intellectual Property; or (D) any new Contractual Obligation granting a material IP License from or to any Grantor. Concurrently therewith, such Grantor shall deliver to the Collateral Agent (x) a modified Schedule III hereto to reflect the applicable modified information and (y) signed counterparts of a Trademark Security Agreement, Patent Security Agreement and/or Copyright Security Agreement, as applicable, together with all supplements to the schedules thereto solely with respect to any United States federally registered Intellectual Property. Notwithstanding anything herein to the contrary, no Grantor shall take any action to perfect any security interest in any part of the Collateral under the laws of any jurisdiction outside of the United States of America.

------

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(vi) If any rights to any material Patent, Trademark or Copyright are believed infringed, misappropriated or diluted by a third party in any material respect, such Grantor shall (A) notify the Collateral Agent promptly after it learns thereof, (B) cooperate with the Collateral Agent to identify actions that are reasonably appropriate under the circumstances to protect such Patent, Trademark or Copyright, and (C) at Collateral Agent's reasonable request, unless such Grantor shall reasonably determine that such Patent, Trademark or Copyright is of negligible economic value to it, take those actions to protect such Patent, Trademark or Copyright. Including (to the extent requested) suing for infringement, misappropriation or dilution. If any material IP License is believed breached in any material respect by any party other than a Grantor, such Grantor shall (A) notify the Collateral Agent promptly after it learns thereof, (B) cooperate with the Collateral Agent to identify actions that are reasonably appropriate under the circumstances to protect such IP License, and (C) at Collateral Agent's reasonable request, unless such Grantor shall reasonably determine that such IP License is of negligible economic value to it, take those actions to protect the Grantor's rights under such IP License, including (to the extent requested) suing for breach.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(vii) Other than abandonment in the ordinary course of Intellectual Property, which, in the reasonable good faith determination of a Grantor, is not material to the conduct of the business of such Grantor, such Grantor shall promptly notify the Collateral Agent if it knows or has reason to know that any U.S. Patent, Trademark or Copyright necessary to or used in such Grantor's business may become abandoned or becomes dedicated to the public, or of any adverse determination or development (including, without limitation, the institution of, or any such determination or development in, any proceeding in the United States Patent and Trademark Office, the United States Copyright Office or any court, but excluding any non-final office actions issued in the ordinary course) regarding such Grantor's ownership of any Patent, Trademark or Copyright necessary to or used in such Grantor's business or its right to register the same or to keep, use or maintain the same.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(viii) It shall use commercially reasonable efforts to avoid the inclusion in any IP Licenses or any other Contractual Obligations of provisions that would impair or prevent the creation of a security interest in, or the collateral assignment of, such Grantor's rights and interests under such license or in any Intellectual Property acquired under such license.

**Section 4.07 <u>Commercial Tort Claims</u>**.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a) No Grantor has a Commercial Tort Claim except as shown on <u>Schedule</u> <u>IV</u> (as such Schedule may be amended from time to time to reflect permitted changes with respect to Commercial Tort Claims since the date of the last disclosure; <u>provided</u> that any such amendment to <u>Schedule</u> <u>IV</u> shall only be effective as of the day of such amendment and such amendment shall not affect any incorrect disclosure or omission on <u>Schedule</u> <u>IV</u> (or any Default or Event of Default resulting therefrom) prior to any such amendment).

------

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b) In the event any Commercial Tort Claim arises or otherwise becomes known after the date hereof, the applicable Grantor will deliver to the Collateral Agent a supplement to <u>Schedule</u> <u>IV</u> hereto describing such Commercial Tort Claim and expressly subjecting such Commercial Tort Claim, all judgments and/or settlements with respect thereto and all Proceeds thereof to the security interests granted hereunder.

**Section 4.08 <u>Government Contracts</u>**. Except as set forth in <u>Schedule</u> <u>V</u> hereto, as of the Closing Date, no Grantor is a parry to any contract or agreement with any Governmental Authority and no Grantor's Accounts are subject to the Assignment of Claims Act of 1949, as amended, or any similar state or local law other than agreements relating to sales of Inventory to school districts, state universities and federal military entities (as to which no government contract number has been issued in connection with the relevant procurement contract).

**Section 4.09 <u>Bonding</u>**. Except as set forth in Schedule VI and custom bonds in the Ordinary Course of Business, as of the Closing Date, no Grantor is a party to or bound by any surety bond agreement, indemnification agreement therefor or bonding requirement with respect to products or services sold by it.

**ARTICLE V** 

**FURTHER ASSURANCES AND ADDITIONAL GRANTORS** 

**Section 5.01 <u>Further Assurances</u>**.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a) Each Grantor agrees that from time to time, and at the expense of such Grantor. It shall promptly authenticate, execute and deliver all further instruments and documents, and take all further actions, that may be reasonably necessary or desirable, or that the Collateral Agent may reasonably request (other than, unless an Event of Default has occurred and is continuing, any Excluded Perfection Actions), in order to create and/or maintain the validity, perfection or priority of and protect any security interest granted or purported to be granted hereby or to enable the Collateral Agent to exercise and enforce its rights and remedies hereunder with respect to any Collateral. Without limiting the generality of the foregoing, each Grantor 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;&nbsp;&nbsp;&nbsp;&nbsp;(i) file such financing or continuation statements, or amendments thereto, and execute and deliver such other agreements, instruments, endorsements, powers of attorney or notices, as may be necessary or desirable, or as the Collateral Agent may reasonably request, in order to perfect and preserve the security interests granted or purported to be granted 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;&nbsp;&nbsp;&nbsp;&nbsp;(ii) take all actions necessary to ensure the recordation of appropriate evidence of the Liens and security interest granted hereunder in Intellectual Property with any intellectual property registry in which said Intellectual Property is registered or in which an application for registration is pending including, without limitation, the United States Patent and Trademark Office and the United States Copyright Office;

------

&nbsp;&nbsp;&nbsp;&nbsp;&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) at the Collateral Agent's reasonable request and to the extent commercially reasonable, appear in and defend any action or proceeding that may materially or adversely affect such Grantor's title to or the Collateral Agent's security interest in all or any part of the Collateral;

&nbsp;&nbsp;&nbsp;&nbsp;&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) furnish to the Collateral Agent from time to time such certificates, notices, statements and schedules further identifying and describing the Collateral and such other documents in connection with the Collateral as the Collateral Agent may reasonably request. All in reasonable detail and in form and substance reasonably satisfactory to the Collateral Agent; 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;(v) maintain the security interest in the Collateral granted hereunder as a valid and perfected (subject to Excluded Perfection Actions) Lien in favor of the Collateral Agent subject to no other Lien other than, to the extent subject to the Intercreditor Agreements, the Permitted Liens in favor of the Term Agent and the Second Lien Agent, and other Permitted Liens and senior in priority to all other Liens other than, to the extent subject to the Intercreditor Agreements, the Permitted Liens in favor of the Term Agent and the Second Lien Agent and other Permitted Liens permitted to be senior to the Liens of the Collateral Agent in such Collateral.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b) Each Grantor hereby authorizes the Collateral Agent, if an Event of Default shall occur and be continuing, to take all steps it deems reasonably necessary to maintain and preserve the Collateral, consistent with the Grantor's obligations to do so hereunder, including, the making of additional filings, the payment of maintenance fees and the defense of challenges to the Grantor's title or validity, all at the Grantor's expense, and hereby ratifies any such actions of the Collateral Agent heretofore taken.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c) Each Grantor hereby authorizes, at the Grantor's expense, the filing of and ratifies any prior filing of any financing statements or continuation statements, and amendments to financing statements or any similar document, in any jurisdictions and with any filing offices as the Collateral Agent may determine, in its sole discretion, are necessary, advisable or prudent to perfect or to maintain the perfection of the security interest granted to the Collateral Agent herein. Such financing statements may describe the Collateral in the same manner as described herein or may contain an indication or description of collateral that describes such property in any other manner as the Collateral Agent may determine, in its sole discretion, is necessary, advisable or prudent to ensure the perfection of the security interest in the Collateral granted to the Collateral Agent herein, including, without limitation, describing such property as "all assets" or "all personal property, whether now owned or hereafter acquired," or words of similar meaning. Each Grantor shall furnish to the Collateral Agent from time to time statements and schedules further identifying and describing the Collateral and such other reports in connection with the Collateral as the Collateral Agent may reasonably request, all in reasonable detail.

**Section 5.02 <u>Additional Grantors</u>**. From time to time subsequent to the date hereof, additional Persons may become parties hereto as additional Grantors (each, an "<u>Additional Grantor</u>") by executing an instrument of accession or joinder in the form of "<u>Accession Agreement</u>" attached as <u>Exhibit</u> <u>J</u> the Credit Agreement. Concurrently with the execution and delivery of such instrument, such Additional Grantor shall take all such actions and deliver to the

------

Collateral Agent all such documents and agreements as such Additional Grantor would have been required to deliver to the Collateral Agent on or prior to the date of this Agreement had such Additional Grantor been a party hereto on the date of this Agreement, including, among other things, supplements to <u>Schedule</u> <u>I</u>, <u>II</u>**,** <u>III</u>, <u>IV</u>, <u>V</u> and <u>VI</u> hereto. Upon delivery of any such instrument of accession or joinder to the Collateral Agent, notice of which is hereby waived by Grantors, each Additional Grantor shall be a Grantor and shall be as fully a party hereto as if Additional Grantor were an original signatory hereto. Each Grantor expressly agrees that its obligations arising hereunder shall not be affected or diminished by the addition or release of any other Grantor hereunder, nor by any election of Collateral Agent not to cause any subsidiary of any Grantor to become an Additional Grantor hereunder. This Agreement shall be fully effective as to any Grantor that is or becomes a party hereto regardless of whether any other Person becomes or fails to become or ceases to be a Grantor hereunder.

**ARTICLE VI** 

**AGENT APPOINTED ATTORNEY-IN-FACT** 

**Section 6.01 <u>Power of Attorney</u>**. Each Grantor hereby irrevocably constitutes and appoints the Collateral Agent (and all Persons designated by the Collateral Agent) as such Grantor's true and lawful attorney (and agent-in-fact) for the purposes provided herein and such power, being coupled with an interest, is irrevocable until the Finance Obligations are paid in full and until there is no commitment by any Secured Party to make further loans, incur obligations or otherwise give value. The Collateral Agent, or the Collateral Agent's designee, may at any time and from time to time, without notice and in either its or a Grantor's name, but at the sole cost and expense of the Grantors:

&nbsp;&nbsp;&nbsp;&nbsp;&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) take any and all appropriate action and execute any and all documents and instruments which may be necessary or desirable to carry out 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;&nbsp;&nbsp;&nbsp;&nbsp;(ii) endorse one or more Grantors' names on any Payment Item or other Proceeds of Collateral (including Proceeds of insurance) that come into the Collateral Agent's possession or control;

&nbsp;&nbsp;&nbsp;&nbsp;&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) prepare, sign and file for recordation in any Intellectual Property registry appropriate evidence of the Lien and security interest granted herein in the Intellectual Property in the name of such Grantor as assignor or pledgor;

&nbsp;&nbsp;&nbsp;&nbsp;&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) if an Event of Default shall occur and be continuing, take or cause to be taken all actions reasonably necessary to perform or comply or cause performance or compliance with the terms of any Loan Document, including, without limitation, to pay or discharge taxes or Liens (other than Permitted Liens) levied or placed upon or threatened against the Collateral, the legality or validity thereof and the amounts necessary to discharge the same to be determined by the Collateral Agent in its reasonable discretion, and any such payments made by the Collateral Agent to become Finance Obligations of such Grantor under the Credit Agreement, due and payable in accordance with <u>Section</u> <u>8.02(e)</u> below, and execute any and all documents and instruments which may be necessary or desirable to carry out the terms of this Agreement; 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;(v) during an Event of Default: (i) notify any Account Debtors (including obligors with regards to payment due or to become due in respect of Intellectual Property) of the assignment of their Accounts, demand and enforce payment of Accounts by legal proceedings or otherwise and generally exercise any rights and remedies with respect to Accounts; (ii) settle, adjust, modify, compromise, discharge or release any Accounts or other Collateral, or any legal proceedings brought to collect Accounts or Collateral; (iii) sell or assign any Accounts and other Collateral upon such terms, for such amounts and at such times as the Collateral Agent deems advisable; (iv) collect, liquidate and receive balances in Deposit Accounts or investment accounts, and take control, in any manner, of Proceeds of Collateral; (v) prepare, file and sign a Grantor's name to a proof of claim or other document in a bankruptcy of an Account Debtor, or to any notice, assignment or satisfaction of Lien or similar document; (vi) receive, open and dispose of mail addressed to a Grantor, and notify postal authorities to deliver any such mail to an address designated by the Collateral Agent; (vii) endorse any Chattel Paper, Document, Instrument, bill of lading or other document or agreement relating to any Accounts, Inventory or other Collateral; (viii) use a Grantor's stationery and sign its name to verifications of Accounts and notices to Account Debtors; (ix) use information contained in any data processing, electronic or information systems relating to Collateral; (x) make and adjust claims under insurance policies; (xi) take any action as may be necessary or appropriate to obtain payment under any letter of credit, banker's acceptance or other instrument for which a Grantor is a beneficiary; and (xii) take all other actions as Collateral Agent deems reasonably appropriate to fulfill any Grantor's obligations under the Loan Documents.

**ARTICLE VII** 

**REMEDIES** 

**Section 7.01 <u>Generally</u>**.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a) If any Event of Default shall have occurred and be continuing, and in each case, subject to the Intercreditor Agreements, the Collateral Agent may exercise in respect of the Collateral, in addition to all other rights and remedies provided for herein or otherwise available to it at law or in equity, all the rights and remedies of a secured party under the UCC (whether or not the UCC applies to the affected Collateral) to collect, enforce or satisfy any Finance Obligations then owing, whether by acceleration or otherwise, and also may separately, successively or simultaneously exercise any other rights or remedies afforded under any agreement, by law, at equity or otherwise, including the rights and remedies of a secured party under the UCC. Such rights and remedies include the rights to:

&nbsp;&nbsp;&nbsp;&nbsp;&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) take possession of any Collateral;

&nbsp;&nbsp;&nbsp;&nbsp;&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) require a Grantor to assemble Collateral, at such Grantor's expense, and make it available to the Collateral Agent at a place designated by the Collateral 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;(iii) subject to the terms of any applicable Collateral Access Agreement, enter any premises where Collateral is located and store Collateral on such premises until sold (and if the premises are owned or leased by a Grantor, such Grantor agrees not to charge for such storage);

------

&nbsp;&nbsp;&nbsp;&nbsp;&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) sell or otherwise dispose of any Collateral in its then condition, or after any further manufacturing or processing thereof, at public or private sale, with such notice as may be required by applicable Requirement of Law, in lots or in bulk, at such locations, all as the Collateral Agent, in its discretion, deems advisable; 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;(v) if it so elects, seek the appointment of a receiver or keeper to take possession of any Collateral and to enforce any of the Collateral Agent's remedies (for the benefit of the Secured Parties), with respect to such appointment without prior notice to the extent permitted by applicable Requirement of Law.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b) The Collateral Agent or any Secured Party may be the purchaser of any or all of the Collateral at any public or private (to the extent permitted by applicable Requirement of Law) sale in accordance with the UCC, and the Collateral Agent, as agent for and representative of the Secured Parties, shall be entitled, for the purpose of bidding and making settlement or payment of the purchase price for all or any portion of the Collateral sold at any such sale made in accordance with the UCC, to use and apply any of the Finance Obligations as a credit on account of the purchase price for any Collateral payable by the Collateral Agent at such sale. The Collateral Agent shall have the right to conduct such sales on any Grantor's premises, without charge, and such sales may be adjourned from time to time in accordance with applicable Requirement of Law. Each purchaser at any such sale shall hold the property sold absolutely free from any claim or right on the part of any Grantor, and each Grantor hereby waives (to the extent permitted by applicable Requirement of Law) all rights of redemption, stay and/or appraisal which it now has or may at any time in the future have under any rule of law or statute now existing or hereafter enacted. Each Grantor agrees that, to the extent notice of sale shall be required by law, ten days notice to such Grantor of the time and place of any public sale or the time after which any private sale is to be made shall constitute reasonable notification. The Collateral Agent shall not be obligated to make any sale of Collateral regardless of notice of sale having been given. The Collateral Agent may adjourn any public or private sale from time to time by announcement at the time and place fixed therefor, and such sale may, without further notice, be made at the time and place to which it was so adjourned. Each Grantor hereby waives (to the extent permitted by applicable Requirement of Law) any claims against the Collateral Agent arising by reason of the fact that the price at which any Collateral may have been sold at such a private sale was less than the price which might have been obtained at a public sale, even if the Collateral Agent accepts the first offer received and does not offer such Collateral to more than one offeree. If the Proceeds of any sale or other disposition of the Collateral are insufficient to pay all the Finance Obligations, each Grantor shall be liable for the deficiency and the reasonable and documented fees of counsel employed by the Collateral Agent to collect such deficiency. Each Grantor further agrees that a breach of any of the covenants contained in this Section will cause irreparable injury to the Collateral Agent, that the Collateral Agent has no adequate remedy at law in respect of such breach and, as a consequence, that each and every covenant contained in this Section shall be specifically enforceable against such Grantor, and such Grantor hereby waives (to the extent permitted by applicable Requirement of Law) and agrees not to assert any defenses against an action for specific performance of such covenants except for a defense that no default has occurred giving rise to the Finance Obligations becoming due and payable prior to their stated magnifies. Nothing in this Section shall in any way alter the rights of the Collateral Agent hereunder.

------

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c) The Collateral Agent may sell the Collateral without giving any warranties as to the Collateral. The Collateral Agent may specifically disclaim or modify any warranties of title or the like. This procedure will not be considered to adversely affect the commercial reasonableness of any sale of the Collateral.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(d) The Collateral Agent shall have no obligation to marshal any of the Collateral.

**Section 7.02 <u>Application of Proceeds</u>**. Except as expressly provided elsewhere in this Agreement, all Proceeds received by the Collateral Agent in respect of any sale, any collection from, or other realization upon all or any part of the Collateral shall be applied in the order of priority set forth in Section 8.03 of the Credit Agreement and in accordance with the Intercreditor Agreements.

**Section 7.03 <u>Sales on Credit</u>**. If the Collateral Agent sells any of the Collateral upon credit, the Grantor will be credited only with payments actually made by the purchaser thereof and received by the Collateral Agent and applied to indebtedness of such purchaser. In the event such purchaser fails to pay for the Collateral, the Collateral Agent may resell the Collateral, and the Grantor shall be credited with Proceeds of the sale in accordance with this <u>Section</u> <u>7.03</u>.

**Section 7.04 <u>Investment Related Property</u>**. Each Grantor recognizes that, by reason of certain prohibitions contained in the Securities Act of 1933 (the "<u>Securities Act</u>") and applicable State securities laws, the Collateral Agent may be compelled, with respect to any sale of all or any part of the Investment Related Property conducted without prior registration or qualification of such Investment Related Property under the Securities Act and/or such State securities laws, to limit purchasers to those who will agree, among other things, to acquire the Investment Related Property for their own account, for investment and not with a view to the distribution or resale thereof. Each Grantor acknowledges that any such private sale may be at prices and on terms less favorable than those obtainable through a public sale without such restrictions (including a public offering made pursuant to a registration statement under the Securities Act) and, notwithstanding such circumstances, each Grantor agrees that any such private sale shall be deemed to have been made in a commercially reasonable manner and that the Collateral Agent shall have no obligation to engage in public sales and no obligation to delay the sale of any Investment Related Property for the period of time necessary to permit the issuer thereof to register it for a form of public sale requiring registration under the Securities Act or under applicable State securities laws, even if such issuer would, or should, agree to so register it. If the Collateral Agent determines to exercise its right to sell any or all of the Investment Related Property, upon written request, each Grantor shall and shall cause each issuer thereof from time to time to famish to the Collateral Agent all such information as the Collateral Agent may request in order to determine the number and nature of interest, shares or other instruments included in the Investment Related Property which may be sold by the Collateral Agent in exempt transactions under the Securities Act and the rules and regulations of the Securities and Exchange Commission thereunder, as the same are from time to time in effect. If, in the opinion of the Collateral Agent, it is necessary or advisable to sell any portion of the Collateral consisting of Investment Related

------

Property by registering such Investment Related Property under the Securities Act, each relevant Grantor shall cause each issuer of such Investment Related Property to do or cause to be done all acts as may be, in the opinion of the Collateral Agent, necessary or advisable to register such Investment Related Property or that portion thereof to be sold under the Securities Act, all as directed by the Collateral Agent in conformity with the Securities Act and the rules and regulations of the Securities and Exchange Commission applicable thereto and in compliance with the securities or "<u>Blue Sky</u>" laws of any jurisdiction that the Collateral Agent shall designate.

**Section 7.05 <u>Intellectual Property</u>**.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a) Anything contained herein to the contrary notwithstanding, upon the occurrence and during the continuation of an Event of 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;&nbsp;&nbsp;&nbsp;&nbsp;(i) the Collateral Agent shall have the right (but not the obligation) to bring suit or otherwise commence any action or proceeding in the name of any Grantor, the Collateral Agent or otherwise, in the Collateral Agent's sole discretion, to enforce any Intellectual Property which is included in the Collateral, in which event, the Grantors shall, at the reasonable request of the Collateral Agent, do any and all lawful acts and execute any and all documents reasonably required by the Collateral Agent in aid of such enforcement, and the Grantors shall promptly, upon demand, reimburse and indemnify the Collateral Agent as provided in <u>Section</u> <u>8.02</u> hereof in connection with the exercise of its rights under this Section, and, to the extent that the Collateral Agent shall elect not to bring suit to enforce any Intellectual Property as provided in this Section, each Grantor agrees, at the request of the Collateral Agent, to take all reasonable measures, whether by action, suit, proceeding or otherwise, to prevent the infringement of any Intellectual Property necessary or beneficial to the business of such Grantor by others, and for that purpose, agrees to diligently maintain any action, suit or proceeding against any Person so infringing as shall be necessary to prevent such infringement;

&nbsp;&nbsp;&nbsp;&nbsp;&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) upon written demand from the Collateral Agent, each Grantor shall assign, convey or otherwise transfer to the Collateral Agent, or such Collateral Agent's designee, all of such Grantor's right, title and interest in and to the Intellectual Property included in the Collateral, and shall execute and deliver to the Collateral Agent such documents as are reasonably necessary to effectuate and record such assignment, conveyance, or transfer of, or other evidence of foreclosure upon, such Intellectual Property;

&nbsp;&nbsp;&nbsp;&nbsp;&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) in the event of any assignment, conveyance or other transfer of any of the Trademarks included in the Collateral, the goodwill symbolized by any such Trademarks shall be included in such sale or transfer, and such Grantor shall supply to the Collateral Agent or its designee such Grantor's manufacturing, advertising, and distribution know-how, and copies of records embodying such know-how, relating to products and services theretofore sold under such Trademarks;

&nbsp;&nbsp;&nbsp;&nbsp;&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) each Grantor agrees that an assignment, conveyance or transfer of any Intellectual Property included in the Collateral shall be applied to reduce the Finance Obligations outstanding only to the extent that the Collateral Agent (or any Secured Party) receives Cash Proceeds in respect of such assignment, conveyance, or other transfer of the Intellectual Property; 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;(v) within five Business Days after written notice from the Collateral Agent, each Grantor shall make available to the Collateral Agent, to the extent within such Grantor's power and authority, such personnel in such Grantor's employ on the date of receipt of such notice, as the Collateral Agent may reasonably designate, by name, title or by job responsibility, to permit such Grantor, the Collateral Agent or its designees, directly or indirectly, to produce, advertise, and sell the products and services sold or delivered by such Grantor under Intellectual Property included in the Collateral on the Collateral Agent's behalf and to be compensated by the Collateral Agent at such Grantor's expense) consistent with the salary and benefit structure applicable to each, as of the date of such Event of Default.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b) If (i) an Event of Default shall have occurred and, by reason of cure, waiver, modification, amendment or otherwise, no longer be continuing, (ii) no other Event of Default shall have occurred and be continuing, (iii) an assignment or other transfer to the Collateral Agent of any rights, title and interests in and to the Intellectual Property shall have been previously made and shall have become absolute and effective and (iv) the Finance Obligations shall not have become immediately due and payable, upon the written request of any Grantor, the Collateral Agent shall promptly execute and deliver to such Grantor, at such Grantor's sole cost and expense, such assignments or other transfer as may be necessary to reassign to such Grantor any such rights, title and interests as may have been assigned to the Collateral Agent as aforesaid, subject to any disposition thereof (including a lease or license) that may have been made by the Collateral Agent in accordance with the Loan Documents; <u>provided</u> that, after giving effect to such reassignment, the Collateral Agent's security interest granted pursuant hereto, as well as all other rights and remedies of the Collateral Agent granted hereunder, shall 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;(c) The Collateral Agent shall be granted an irrevocable, non-exclusive license or other right to use, license or sub-license (without payment of royalty or other compensation to any Person) any or all Intellectual Property of the Grantors, computer hardware and software, trade secrets, brochures, customer lists, promotional and advertising materials, labels, packaging materials and other property (with respect to Intellectual Property licensed to the Grantors, to the extent permitted by the applicable license agreements), in advertising for sale, marketing, selling, collecting, completing manufacture of, or otherwise exercising any rights or remedies following the occurrence of an Event of Default with respect to, any Collateral. Each Grantor's rights and interests under Intellectual Property shall inure to the Collateral Agent's benefit; <u>provided</u>, <u>however</u>, that the license granted in the preceding sentence (x) shall be subject to those exclusive licenses of Intellectual Property granted by the Grantors in effect on the date hereof and those granted by any Grantor hereafter (other than any exclusive license granted in breach of this Agreement or the Credit Agreement), to the extent conflicting, (y) may be exercised, at the option of the Collateral Agent, only upon the occurrence and during the continuation of an Event of Default, <u>provided</u> that any license, sublicense or other transaction entered into by the Collateral Agent in accordance herewith shall be binding upon the Grantors notwithstanding any subsequent cure of an Event of Default, and (z) applies to the use of the Trademarks in a manner that is not reasonably likely to result in the abandonment of the Trademarks due to insufficient quality control. The foregoing license grant to the Collateral Agent is in addition to, and not in limitation of, Agent's rights under the Power of Attorney granted under <u>Article</u> <u>VI</u>.

------

**Section 7.06 <u>Direct Obligation</u>**. Neither the Collateral Agent nor any other Secured Party shall be required to make any demand upon, or pursue or exhaust any right or remedy against, any Grantor or any other Person with respect to the payment of the Finance Obligations or to pursue or exhaust any right or remedy with respect to any Collateral therefor or any direct or indirect guaranty thereof.

**Section 7.07 <u>Commercially Reasonable</u>**. To the extent that applicable Requirements of Law impose duties on the Collateral Agent to exercise remedies in a commercially reasonable manner, each Grantor acknowledges and agrees that it is not commercially unreasonable for the Collateral Agent to do 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;&nbsp;&nbsp;&nbsp;&nbsp;(i) fail to incur significant costs, expenses or other liabilities reasonably deemed as such by the Collateral Agent to prepare any Collateral for disposition or otherwise to complete raw material or work in process into finished goods or other finished products for disposition;

&nbsp;&nbsp;&nbsp;&nbsp;&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) fail to obtain authorization or other consents from any Governmental Authority for access to any Collateral to sell or for the collection or sale of any Collateral, or, if not required by other Requirements of Law, fail to obtain authorization from any Governmental Authority or other consents for the collection or disposition of any Collateral;

&nbsp;&nbsp;&nbsp;&nbsp;&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) fail to exercise remedies against Account Debtors or other Persons obligated on any Collateral or to remove Liens on any Collateral or to remove any adverse claims against any Collateral;

&nbsp;&nbsp;&nbsp;&nbsp;&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) advertise dispositions of any Collateral through publications or media of general circulation, whether or not such Collateral is of a specialized nature or to contact other Persons, whether or not in the same business as any Grantor, for expressions of interest in acquiring any such Collateral;

&nbsp;&nbsp;&nbsp;&nbsp;&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) exercise collection remedies against Account Debtors and other Persons obligated on any Collateral, directly or through the use of collection agencies or other collection specialists, hire one or more professional auctioneers to assist in the disposition of any Collateral, whether or not such Collateral is of a specialized nature or, to the extent deemed appropriate by the Collateral Agent, obtain the services of other brokers, investment bankers, consultants and other professionals to assist the Collateral Agent in the collection or disposition of any Collateral, or utilize internet sites that provide for the auction of assets of the types included in the Collateral or that have the reasonable capacity of doing so, or that match buyers and sellers of assets to dispose of any Collateral;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(vi) dispose of assets in wholesale rather than retail markets;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(vii) disclaim disposition warranties, such as title, possession or quiet enjoyment; 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;(viii) purchase insurance or credit enhancements to insure the Collateral Agent against risks of loss, collection or disposition of any Collateral or to provide to the Collateral Agent a guaranteed return from the collection or disposition of any Collateral.

Each Grantor acknowledges that the purpose of this <u>Section</u> <u>7.07</u> is to provide a non-exhaustive list of actions or omissions that are not commercially unreasonable when exercising remedies against any Collateral and that other actions or omissions by the Collateral Agent shall not be deemed commercially unreasonable solely on account of not being indicated in this <u>Section</u> <u>7.07</u>. Without limitation upon the foregoing, nothing contained in this <u>Section</u> <u>7.07</u> shall be construed to grant any rights to any Grantor or to impose any duties on the Collateral Agent that would not have been granted or imposed by this Agreement or by applicable Requirements of Law in the absence of this <u>Section</u> <u>7.07</u>. Without limiting the foregoing, the Collateral Agent shall not be liable or responsible for any loss or damage to any of the Collateral, or for any diminution in the value thereof, by reason of the act or omission of any warehouseman, carrier, forwarding agency, consignee or other agent or bailee selected by the Collateral Agent in good faith.

**ARTICLE VIII** 

**THE COLLATERAL AGENT** 

**Section 8.01 <u>The Collateral Agent</u>**. The Collateral Agent has been appointed to act as collateral agent hereunder by each Secured Party either pursuant to <u>Article</u> <u>IX</u> of the Credit Agreement or by their acceptance of the benefits hereof, and the Collateral Agent shall be entitled to the rights and benefits of the Collateral Agent as set forth in <u>Article</u> <u>IX</u> of the Credit Agreement as if the provisions of <u>Article</u> <u>IX</u> were filly set forth herein. The Collateral Agent shall be obligated, and shall have the right hereunder, to make demands, to give notices, to exercise or refrain from exercising any rights, and to take or refrain from taking any action (including, without limitation, the release or substitution of Collateral), solely in accordance with this Agreement and the Credit Agreement. In furtherance of the foregoing provisions of this Section, each Secured Party, by its acceptance of the benefits hereof, agrees that it shall have no right individually to realize upon any of the Collateral hereunder, it being understood and agreed by such Secured Party that all rights and remedies hereunder may be exercised solely by the Collateral Agent for the benefit of each Secured Party in accordance with the terms of this Section. The Collateral Agent may resign pursuant to <u>Section</u> <u>9.06</u> of the Credit Agreement. Upon the acceptance of any appointment as Collateral Agent under <u>Section</u> <u>9.06</u> of the Credit Agreement by a successor Collateral Agent, the retiring or removed Collateral Agent shall promptly (i) transfer to such successor Collateral Agent all sums, Securities and other items of Collateral held hereunder, together with all records and other documents necessary or appropriate in connection with the performance of the duties of the successor Collateral Agent under this Agreement, and (ii) execute (if applicable) and deliver to such successor Collateral Agent such amendments to financing statements, and take such other actions, as may be necessary or appropriate in connection with the assignment to such successor Collateral Agent of the security interests created hereunder, whereupon such retiring or removed Collateral Agent shall be discharged from its duties and obligations under this Agreement. After any retiring or removed Collateral Agent's resignation or removal hereunder and under the Credit Agreement as the Collateral Agent, the provisions of this Agreement shall inure to its benefit as to any actions taken or omitted to be taken by it under this Agreement while it was the Collateral Agent hereunder.

------

**Section 8.02 <u>Compensation and Expenses of the Collateral Agent; Indemnification</u>**.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a) *<u>Expenses</u>.* The Grantors, jointly and severally, agree (i) to pay or reimburse the Collateral Agent for all reasonable and documented out-of-pocket expenses incurred by the Collateral Agent and its Affiliates (including the reasonable fees, charges and disbursements of counsel for the Collateral Agent) in connection with the preparation, negotiation, execution, delivery and administration of this Agreement and the other Loan Documents or any amendments, modifications or waivers (including any proposed amendments, modifications or waivers) of the provisions hereof or thereof (whether or not the transactions contemplated hereby or thereby shall be consummated), (ii) to pay or reimburse the Collateral Agent for all taxes which the Collateral Agent may be required to pay by reason of the security interests granted in the Collateral (including any applicable transfer taxes) or to free any of the Collateral from the lien thereof in accordance with the terms of this Agreement and (iii) all reasonable and documented out-of-pocket expenses incurred by the Collateral Agent (including the fees, charges and disbursements of any counsel for the Collateral Agent), and shall pay all reasonable and documented fees and time charges for attorneys who may be employees of the Collateral Agent, in connection with the enforcement or protection of its rights (A) in connection with this Agreement and the other Loan Documents, including its rights under this <u>Section</u> <u>8.02</u>, or (B) in connection with the Loans made under the Credit Agreement, including all such reasonable and documented out-of-pocket expenses uncured during any workout, restructuring or negotiations in respect of such Loans; <u>provided</u> that the Grantors shall not be required to reimburse the legal fees and expenses of more than one outside counsel (in addition to up to one local counsel in each applicable local jurisdiction) for all Persons indemnified under this <u>clause</u> (<u>a)</u> unless, in the reasonable opinion of such indemnified Persons seeking reimbursement of such legal fees and expenses under this <u>clause (a)</u>, representation of all such indemnified Persons would be inappropriate due to the existence of an actual or potential conflict of interest in which case the Grantors shall only be required to reimburse the reasonable and documented out-of-pocket legal fees and expenses of no more than such minimum number of additional outside counsel for the indemnified persons as is necessary to avoid any actual or potential conflict of interest.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b) *<u>Protection of Collateral</u>.* The Grantors shall reimburse the Collateral Agent for the reasonable costs incurred by it with respect to actions taken in accordance with <u>Section</u> <u>5.01(b</u>), such reimbursement to be made in accordance with <u>Section</u> <u>8.02(e)</u> below. Subject to any limitations set forth in this Agreement or the Credit Agreement, all reasonable insurance expenses and all reasonable expenses of protecting, storing, warehousing, appraising, handling, maintaining and shipping the Collateral, any and all excise, property, sales and use taxes imposed by any state, federal or local authority on any of the Collateral, or in respect of periodic appraisals and inspections of the Collateral, or in respect of the sale or other disposition thereof shall be borne and paid by the Grantor. All sums so paid or incurred by the Collateral Agent for any of the foregoing and any and all other sums for which any Grantor may become liable hereunder and all costs and expenses (including attorneys' fees, legal expenses and court costs) reasonably incurred by the Collateral Agent in enforcing or protecting the security interests or any of their rights or remedies under, and in accordance with, this Agreement, shall, together with interest thereon until paid at the rate applicable to interest under the Loan Documents be additional Finance Obligations hereunder.

------

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c) *<u>Indemnification</u>.* The Grantors, jointly and severally, shall indemnify the Collateral Agent (and any sub-agent thereof) and each Related Party of any of the foregoing Persons (each such Person being called an "<u>Indemnitee</u>") against, and hold each Indemnitee harmless from, any and all actual losses, claims, damages, liabilities and related expenses (including the reasonable fees, out-of-pocket charges and disbursements of any outside counsel for any Indemnitee), incurred by any Indemnitee or asserted against any Indemnitee by any third party or by any Grantor arising out of, in connection with, or as a result of (i) the execution or delivery of this Agreement, any other Loan Document or any agreement or instrument contemplated hereby or thereby, the performance by the parties hereto of their respective obligations hereunder or thereunder or the consummation of the transactions contemplated hereby or thereby or the administration of this Agreement and the other Loan Documents, (ii) any actual or alleged presence or release of Hazardous Materials on or from any property owned or operated by any Grantor or any of its Subsidiaries, or any liability under Environmental Laws related in any way to any Grantor or any of its Subsidiaries, or (iv) any actual or prospective claim, litigation, investigation or proceeding brought by a third party or by any Grantor or any of the Grantors' directors, shareholders or creditors, and regardless of whether any Indemnitee is a party thereto; <u>provided</u> that such indemnity shall not, as to any Indemnitee be available to the extent that such losses, claims, damages, liabilities or related expenses are determined by a court of competent jurisdiction by final and non-appealable judgment to have resulted from the gross negligence or willful misconduct of such Indemnitee; and <u>provided</u> <u>further</u> that the Grantors shall not be required to reimburse the legal fees and expenses of more than one outside counsel (in addition to any reasonably necessary special counsel and up to one local counsel in each applicable local jurisdiction) for all Indemnitees unless, in the reasonable opinion of such indemnified Persons seeking indemnity under this <u>subsection</u> <u>(c)</u>, representation of all such Indemnitees would be inappropriate due to the existence of an actual or potential conflict of interest, in which case the Grantors shall only be required to reimburse the invoiced out-of-pocket fees and expenses of no more than such minimum number of additional outside counsel for the Indemnitees as is necessary to avoid any actual or potential conflict of interest.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(d) *<u>Waiver of Consequential Damage</u>.* To the fullest extent permitted by applicable Requirements of Law, the Grantors shall not assert, and hereby waive, and acknowledges that no other Person shall have, any claim against any Indemnitee, on any theory of liability, for special, indirect, consequential or punitive damages (as opposed to direct or actual damages) arising out of in connection with, or as a result of, this Agreement, any other Loan Document or any agreement or instrument contemplated hereby, the transactions contemplated hereby or thereby, any Loan or the use of the proceeds thereof. No Indemnitee referred to in <u>subsection</u> (<u>c)</u> above shall be liable for any damages arising from the use by unintended recipients of any information or other materials distributed by it through telecommunications, electronic or other information transmission systems in connection with this Agreement or the other Loan Documents or the transactions contemplated hereby or thereby other than for direct or actual damages resulting from the gross negligence or willful misconduct of such Indemnitee as determined by a final and nonappealable judgment of a court of competent jurisdiction.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(e) *<u>Payments</u>.* All amounts due under this <u>Section</u> <u>8.02</u> shall be payable not later than 15 Business Days after written demand therefor, including a reasonable detail of such amount to be paid.

------

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(f) *<u>Survival</u>.* The agreements in this <u>Section</u> <u>8.02</u> shall survive the resignation of the Collateral Agent and the repayment, satisfaction or discharge of all the other ABL Credit Obligations.

**ARTICLE IX** 

**CONTINUING SECURITY INTEREST; TRANSFER OF FINANCE OBLIGATIONS** 

**Section 9.01 <u>Continuing Security Interest; Transfer of Finance Obligations</u>**. This Agreement shall create a continuing security interest in the Collateral and shall remain in full force and effect until the payment in full of all Finance Obligations (other than (x) unasserted contingent indemnification obligations not due and payable and (y) obligations and liabilities under Secured Hedge Agreements as to which arrangements satisfactory to the applicable Hedge Bank shall have been made), be binding upon each Grantor, its successors and assigns, and inure, together with the rights and remedies of the Collateral Agent hereunder, to the benefit of the Collateral Agent and its successors, transferees and assigns. Without limiting the generality of the foregoing, but subject to the terms of the Loan Documents, each Secured Party may assign or otherwise transfer any Finance Obligations held by it to any other Person, and such other Person shall thereupon become vested with all the benefits in respect thereof granted to each Secured Party herein or otherwise. Upon the payment in full of all Finance Obligations (other than (x) unasserted contingent indemnification obligations not due and payable and (y) obligations and liabilities under Secured Hedge Agreements as to which arrangements satisfactory to the applicable Hedge Bank shall have been made), the security interest granted hereby shall terminate hereunder and all rights to the Collateral shall revert and be deemed reassigned to Grantors. Upon any such termination, the Collateral Agent shall, at the Grantors' request and expense, execute and deliver to Grantors such documents as Grantors shall reasonably request to evidence such termination reversions and/or reassignment, without recourse, representation, or warranty of any kind.

**ARTICLE X** 

**STANDARD OF CARE; COLLATERAL AGENT MAY PERFORM** 

**Section 10.01 <u>Standard of Care; Collateral Agent May Perform</u>**. The powers conferred on the Collateral Agent hereunder are solely to protect its interest in the Collateral and the interests of the Secured Parties and shall not impose any duty upon it to exercise any such powers. Except for the exercise of reasonable care in the custody of any Collateral in its possession and the accounting for moneys actually received by it hereunder, the Collateral Agent shall have no duty as to any Collateral or as to the taking of any necessary steps to preserve rights against prior parties or any other rights pertaining to any Collateral. The Collateral Agent shall be deemed to have exercised reasonable care in the custody and preservation of Collateral in its possession if such Collateral is accorded treatment substantially equal to that which the Collateral Agent accords its own property. Neither the Collateral Agent nor any of its directors, officers, employees or agents shall be liable for failure to demand, collect or realize upon all or any part of the Collateral or for any delay in doing so or shall be under any obligation to sell or otherwise dispose of any Collateral upon the request of any Grantor or otherwise. If any Grantor fails to perform any agreement contained herein, during an Event of Default, the Collateral Agent may itself perform, or cause performance of, such agreement, and the expenses of the Collateral Agent incurred in connection therewith shall be payable by each Grantor in accordance with <u>Section</u> <u>8.02</u>.

------

**ARTICLE XI** 

**MISCELLANEOUS** 

**Section 11.01 <u>Notices</u>**. Unless otherwise specifically provided herein, any notice or other communication herein required or permitted to be given to a Grantor or Agent, shall be in writing and shall be sent to such Person's address or facsimile number as set forth in <u>Schedule</u> <u>10.02</u> to the Credit Agreement (or, in the case of a Person who becomes a Lender subsequent to the date hereof, at the address or facsimile number shown on its Assignment and Acceptance or, in the case of a Person who becomes an Additional Grantor subsequent to the date hereof, at the address or facsimile number shown on the corresponding joinder agreement), or at such other address or facsimile number as a party may hereafter specify by notice in accordance with <u>Section</u> <u>10.02</u> of the Credit Agreement. Each such notice or other communication shall be effective only if given in accordance with <u>Section</u> <u>10.02</u> of the Credit Agreement. Electronic mail and inter net websites may be used only as permitted by <u>Section</u> <u>10.02</u> of the Credit Agreement.

**Section 11.02 <u>Amendments</u>**. Any amendment, modification, termination or waiver of any provision of this Agreement, or consent to any departure by any Grantor therefrom, is subject to the restrictions set forth in <u>Section</u> <u>10.01</u> of the Credit Agreement, provided, however, that schedules to this Agreement may be supplemented to the extent required under or permitted by this Agreement pursuant to a notice sent by the applicable Grantor to the Collateral Agent, and such schedules shall be deemed so amended and no consent of any other party shall be required. Except as expressly provided herein, no amendment, modification, termination, or consent, the effect of which would release all or substantially all of the Collateral, shall in any event be effective unless such release is in accordance with <u>Section</u> <u>10.01</u> of the Credit Agreement.

**Section 11.03 <u>Release</u>**. Upon any sale, lease, transfer or other disposition of the Collateral by any Grantor which the Parent Borrower certifies in writing to the Collateral Agent is permitted by the terms of the Credit Agreement, such Collateral shall automatically be released from this Agreement and the Collateral Agent will, at such Grantor's expense, execute and deliver to such Grantor such documents as such Grantor shall reasonably request to evidence the release of such Collateral from the security interest granted hereby.

**Section 11.04 <u>Cumulative Rights</u>**. All agreements, warranties, guaranties, indemnities and other undertakings of the Grantors hereunder and under the other Loan Documents are cumulative and not in derogation of each other. The rights and remedies of the Collateral Agent and the Secured Parties are cumulative may be exercised at any time and from time to time, or concurrently or in any order, and are not exclusive of any other rights or remedies available by agreement, by law, at equity or otherwise. All such rights and remedies shall continue in full force and effect until payment in full or discharge of all Finance Obligations.

**Section 11.05 <u>Waivers</u>**. No waiver or course of dealing shall be established by (i) the failure or delay of the Collateral Agent or any Secured Party to require strict performance by the Grantors with any terms hereof or of any of the other Loan Documents, or to exercise any rights or remedies with respect to Collateral or otherwise; (ii) the making of any Loan during a Default. Event of Default or other failure to satisfy any conditions precedent; or (iii) acceptance by the Collateral Agent or any Secured Party of any payment or performance by any Grantor hereunder or under any other Loan Documents in a manner other than that specified therein.

------

**Section 11.06 <u>Reinstatement</u>**. Each Grantor agrees that, if the Proceeds, or any part thereof, of any Collateral paid to any Secured Party are subsequently invalidated, declared to be fraudulent or preferential, set aside, or required (including pursuant to any settlement entered into by the Collateral Agent or such Secured Party in its discretion) to be repaid to a Grantor, a trustee, receiver or any other Person, the Finance Obligation originally intended to be satisfied, and all Liens and other Collateral securing such Finance Obligation, including all rights and remedies relating thereto, shall be revived and continued in full force and effect as if such payment had not been made. If, prior to any of the foregoing, (i) any Lien or other Collateral securing the Finance Obligations shall have been released or terminated by virtue of the foregoing or (ii) any provision of the Guaranty shall have been terminated, cancelled or surrendered, such Lien, other Collateral or provision shall be reinstated in full force and effect and such prior release, termination, cancellation or surrender shall not diminish, release, discharge, impair or otherwise affect the obligations of any Grantor in respect of any Lien or other Collateral securing such obligation or the amount of such payment; <u>provided</u> that, notwithstanding the foregoing, this provision shall have no force and effect with respect to Finance Obligations that survive the payment in full of the ABL Credit Obligations.

**Section 11.07 <u>Independent Obligations</u>**. The obligations of each Grantor hereunder are independent of and separate from the Finance Obligations of each other Grantor. If any Finance Obligation is not paid when due, or upon any Event of Default, the Collateral Agent may, at its sole election, proceed directly and at once, without notice, against any Grantor and any Collateral, to collect and recover the full amount of any Finance Obligation then due, without first proceeding against any other Grantor or any other Collateral and without first joining any other Grantor in any proceeding.

**Section 11.08 <u>Successors and Assigns</u>**. This Agreement shall be binding upon and inure to the benefit of the Grantors, the Collateral Agent, the Secured Parties and their respective successors and assigns, except that (i) no Grantor shall have the right to assign its rights or delegate its obligations hereunder or under any other Collateral Document; and (ii) any assignment by a Lender must be made in compliance with Section 10.06 of the Credit Agreement. Any authorization or consent of a Secured Party shall be conclusive and binding on any subsequent transferee or assignee of such Secured Party.

**Section 11.09 <u>Independence of Covenants</u>**. All covenants hereunder shall be given independent effect so that if a particular action or condition is not permitted by any of such covenants, the fact that it would be permitted by an exception to, or would otherwise be within the limitations of. Another covenant shall not avoid the occurrence of a Default or an Event of Default if such action is taken or condition exists.

**Section 11.10 <u>Survival of Representations, Warranties and Agreements</u>**. All representations, warranties and agreements made herein shall survive the execution and delivery hereof.

**Section 11.11 <u>Marshalling</u>**. None of the Collateral Agent or any other Secured Parties shall be under any obligation to marshal any assets in favor of any Grantor or any other Person or against or in payment of any or all of the Finance Obligations.

------

**Section 11.12 <u>Severability</u>**. If any provision of this Agreement is held to be illegal, invalid or unenforceable, (i) the legality, validity and enforceability of the remaining provisions of this Agreement shall not be affected or impaired thereby and (ii) the parties shall endeavor in good faith negotiations to replace the illegal, invalid or unenforceable provisions with valid provisions the economic effect of which comes as close as possible to that of the illegal, invalid or unenforceable provisions. The invalidity of a provision in a particular jurisdiction shall not invalidate or render unenforceable such provision in any other jurisdiction.

**Section 11.13 <u>Governing Law; Jurisdiction Etc.</u>**

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a) *<u>Governing Law</u>.* THIS AGREEMENT AND THE RIGHTS AND OBLIGATIONS OF THE PARTIES HEREUNDER SHALL BE GOVERNED BY AND CONSTRUED AND INTERPRETED IN ACCORDANCE WITH THE INTERNAL LAWS OF THE STATE OF NEW YORK (INCLUDING, WITHOUT LIMITATION, SECTION 5-1401 OF THE GENERAL OBLIGATIONS LAW OF THE STATE OF NEW YORK); <u>PROVIDED</u>, <u>HOWEVER</u>, THAT IF THE LAWS OF ANY JURISDICTION OTHER THAN NEW YORK SHALL GOVERN IN REGARD TO THE VALIDITY, PERFECTION OR EFFECT OF PERFECTION OF ANY LIEN OR IN REGARD TO PROCEDURAL MATTERS AFFECTING ENFORCEMENT OF ANY LIENS IN COLLATERAL. SUCH LAWS OF SUCH OTHER JURISDICTIONS SHALL CONTINUE TO APPLY TO THAT EXTENT.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b) *<u>Submission to Jurisdiction</u>.* EACH OF THE PARTIES HERETO IRREVOCABLY AND UNCONDITIONALLY SUBMITS, FOR ITSELF AND ITS PROPERTY, TO THE EXCLUSIVE JURISDICTION OF THE COURTS OF THE STATE OF NEW YORK SITTING IN NEW YORK CITY IN THE BOROUGH OF MANHATTAN AND OF THE UNITED STATES DISTRICT COURT OF THE SOUTHERN DISTRICT OF NEW YORK, AND ANY APPELLATE COURT FROM ANY THEREOF, IN ANY ACTION OR PROCEEDING ARISING OUT OF OR RELATING TO THIS AGREEMENT, OR FOR RECOGNITION OR ENFORCEMENT OF ANY JUDGMENT, AND EACH OF THE PARTIES HERETO IRREVOCABLY AND UNCONDITIONALLY AGREES THAT ALL CLAIMS IN RESPECT OF ANY SUCH ACTION OR PROCEEDING MAY BE HEARD AND DETERMINED IN SUCH NEW YORK STATE COURT OR, TO THE FULLEST EXTENT PERMITTED BY APPLICABLE 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. EACH PARTY HERETO AGREES THAT THE ADMINISTRATIVE AGENT AND THE COLLATERAL AGENT RETAIN THE RIGHT TO SERVE PROCESS IN ANY OTHER MANNER PERMITTED BY LAW OR TO BRING PROCEEDINGS AGAINST ANY GRANTOR IN THE COURTS OF ANY OTHER JURISDICTION IN CONNECTION WITH THE EXERCISE OF ANY RIGHTS HEREUNDER OR THE ENFORCEMENT OF ANY JUDGMENT.

------

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c) *<u>Waiver of Venue</u>.* EACH GRANTOR 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 IN ANY COURT REFERRED TO IN <u>PARAGRAPH (B)</u> OF THIS <u>SECTION 11.13</u>. 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.

**Section 11.14 <u>Waiver of Jury Trial</u>**. EACH PARTY HERETO HEREBY IRREVOCABLY 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 OR THE TRANSACTIONS CONTEMPLATED HEREBY OR THEREBY (WHETHER BASED ON CONTRACT, TORT OR ANY OTHER THEORY), EACH PARTY HERETO (A) CERTIFIES THAT NO REPRESENTATIVE, AGENT OR ATTORNEY OF ANY OTHER PERSON HAS REPRESENTED, EXPRESSLY OR OTHERWISE, THAT SUCH OTHER PERSON WOULD NOT, IN THE EVENT OF LITIGATION, SEEK TO ENFORCE THE FOREGOING WAIVER AND (B) ACKNOWLEDGES THAT IT AND THE OTHER PARTIES HERETO HAVE BEEN INDUCED TO ENTER INTO THIS AGREEMENT AND THE OTHER LOAN DOCUMENTS BY, AMONG OTHER THINGS, THE MUTUAL WAIVERS AND CERTIFICATIONS IN THIS <u>SECTION 11.14.</u>

**Section 11.15 <u>Subordination</u>**.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a) Each Grantor executing this Agreement covenants and agrees that the payment of all indebtedness, principal, interest (including interest which accrues after the commencement of any case or proceeding in bankruptcy, or for the reorganization of any Grantor) owing by any other Grantor to such Grantor, including any royalty or licensing fees (collectively, the "<u>Intercompany Obligations</u>"), is subordinated, to the extent and in the manner provided in this <u>Section</u> <u>11.15</u>, to the prior payment in full of all Finance Obligations (other than (x) contingent indemnification obligations as to which no claim has been asserted and (y) obligations and liabilities under Secured Hedge Agreements as to which arrangements satisfactory to the applicable Hedge Bank shall have been made) and that the subordination is for the benefit of the Collateral Agent and the other Secured Parties, and the Collateral Agent may enforce such provisions directly.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b) Each Grantor executing this Agreement hereby (i) authorizes the Collateral Agent to demand specific performance of the terms of this <u>Section</u> <u>11.15</u>, whether or not any other Grantor shall have complied with any of the provisions hereof applicable to it, at any time when such Grantor shall have failed to comply with any provisions of this <u>Section</u> <u>11.15</u> which are applicable to it and (ii) irrevocably waives (to the maximum extent permitted by Requirements of Law) any defense based on the adequacy of a remedy at law, which might be asserted as a bar to such remedy of specific performance.

**Section 11.16 <u>Counterparts</u>**. This Agreement may be executed in counterparts (and by different parties hereto in different counterparts), each of which shall constitute an original, but all of which when taken together shall constitute a single contract.

------

**Section 11.17 <u>Effectiveness</u>**. This Agreement shall become effective with respect to each Grantor when the Collateral Agent shall receive counterparts hereof executed by itself and such Grantor.

**Section 11.18 <u>Entire Agreement</u>**. This Agreement and the other Loan Documents constitute the entire agreement and understanding among the parties hereto and supersede any and all prior agreements and understandings, oral or written, and any contemporaneous oral agreements and understandings relating to the subject matter hereof and thereof.

**Section 11.19 <u>Intercreditor</u> <u>Agreements</u>**. Notwithstanding any provision contained herein, this Agreement, the Liens created hereby and the rights, remedies, duties and obligations provided for herein are subject in all respects to the provisions of the Intercreditor Agreements. In the event of any conflict or inconsistency between the provisions of this Agreement and any Intercreditor Agreement, the provisions of the applicable Intercreditor Agreement shall control.

[Signature pages follow]

------

IN WITNESS WHEREOF, each Grantor and the Collateral Agent have caused this Agreement to be duly executed and delivered by their respective officers thereunto duly authorized as of the date first written above.

---

| | |
|:---|:---|
| PIANISSIMO ACQUISITION CORP. | PIANISSIMO ACQUISITION CORP. |
| By: | /s/ Lisa Chun |
|  | Name: Lisa Chun |
|  | Title: Vice President |

---

---

| | |
|:---|:---|
| PIANISSIMO HOLDINGS CORP. | PIANISSIMO HOLDINGS CORP. |
| By: | /s/ Michael Waldorf |
|  | Name: Michael Waldorf |
|  | Title: President |

---

---

| | |
|:---|:---|
| STEINWAY MUSICAL INSTRUMENTS, INC. | STEINWAY MUSICAL INSTRUMENTS, INC. |
| By: | /s/ Dennis M. Hanson |
|  | Name: Dennis M. Hanson |
|  | Title: Executive Vice President |

---

---

| | |
|:---|:---|
| STEINWAY, INC. | STEINWAY, INC. |
| By: | /s/ Dennis M. Hanson |
|  | Name: Dennis M. Hanson |
|  | Title: Executive Vice President |

---

[*Signature Page to Pledge and Security Agreement (ABL)*]

------

---

| | |
|:---|:---|
| CONN-SELMER, INC. | CONN-SELMER, INC. |
| By: | /s/ Dennis M. Hanson |
|  | Name: Dennis M. Hanson |
|  | Title: Executive Vice President |

---

[*Signature Page to Pledge and Security Agreement (ABL)*]

------

---

| |
|:---|
| ARKIVMUSIC, LLC |
| By: STEINWAY MUSICAL INSTRUMENTS, INC., as the Sole Member |

---

---

| | |
|:---|:---|
|  By: | /s/ Dennis M. Hanson |
|  | Name: Dennis M. Hanson |
|  | Title: Executive Vice President |

---

---

| | |
|:---|:---|
| THE O.S. KELLY COMPANY | THE O.S. KELLY COMPANY |
| By: | /s/ Dennis M. Hanson |
|  | Name: Dennis M. Hanson |
|  | Title: Executive Vice President |

---

[*Signature Page to Pledge and Security Agreement (ABL)*]

------

---

| | |
|:---|:---|
| BANK OF AMERICA, N.A., as Collateral Agent | BANK OF AMERICA, N.A., as Collateral Agent |
| By: | /s/ Nicole Caneswi |
|  | Name: Nicole Caneswi |
|  | Title: Senior Vice President |
| Notice Address: | Notice Address: |
| Bank of America, N.A.  | Bank of America, N.A.  |
| 225 Franklin Street | 225 Franklin Street |
| Boston, MA 02110 | Boston, MA 02110 |
| Attention: Christopher O'Halloran | Attention: Christopher O'Halloran |
| Telephone: [\*\*\*] | Telephone: [\*\*\*] |
| Facsimile: [\*\*\*] | Facsimile: [\*\*\*] |
| Email: [\*\*\*]  | Email: [\*\*\*]  |
| with a copy to: | with a copy to: |
| Fried Frank Harris Shriver & Jacobson, LLP | Fried Frank Harris Shriver & Jacobson, LLP |
| One New York Plaza | One New York Plaza |
| New York, NY 10004 | New York, NY 10004 |
| Attn: Emil Buchman | Attn: Emil Buchman |
| Telephone: [\*\*\*] | Telephone: [\*\*\*] |
| Email: [\*\*\*] | Email: [\*\*\*] |

---

[*Signature Page to Pledge and Security Agreement (ABL)*]

## Exhibit 10.13

**Exhibit 10.13** 

**FIRST AMENDMENT** 

**TO ABL CREDIT AGREEMENT** 

**FIRST AMENDMENT**, dated as of October 31, 2017 (this "<u>First Amendment</u>"), to the Credit Agreement (as defined below), is entered into between Steinway Musical Instruments, Inc., a Delaware corporation (the "<u>Parent Borrower</u>"), Steinway, Inc., a Delaware corporation ("<u>Steinway</u>"), Conn-Selmer, Inc., a Delaware corporation ("<u>Conn</u><u>-Selmer</u>" and, together with the Parent Borrower and Steinway, each a "<u>Borrower</u>" and, collectively and jointly and severally, the "<u>Borrowers</u>"), Pianissimo Holdings Corp., a Delaware corporation ("<u>Holdings</u>"), each Lender party hereto and the Administrative Agent (as defined below) and amends the ABL Credit Agreement dated as of September 19, 2013 (the "<u>Credit Agreement</u>"; the Credit Agreement as amended by this First Amendment and as further amended, restated, modified and supplemented from time to time, the "<u>Amended Credit Agreement</u>"), among the Borrowers, the other Persons party thereto that are designated as "Loan Party", each Lender from time to time party thereto, Bank of America, N.A., as Administrative Agent (in such capacity, the "<u>Administrative Agent</u>"), L/C Issuer and Swing Line Lender and Deutsche Bank Securities Inc., as Syndication Agent. Capitalized terms used and not otherwise defined herein shall have the meanings assigned to such terms in the Amended Credit Agreement.

WHEREAS, in accordance with Section 10.1 of the Credit Agreement, the Borrowers have requested that the Lenders agree to amend certain provisions of the Credit Agreement, and each of the Lenders signatory hereto have agreed, subject to the terms and conditions set forth herein, to amend certain provisions of the Credit Agreement as herein provided.

NOW, THEREFORE, in consideration of the promises contained herein and for other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the parties hereto, intending to be legally bound hereby, agree as follows:

Section 1. **<u>Amendments to the Credit Agreement</u>**.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a) Section 1.01 of the Credit Agreement is hereby amended by inserting the following definitions in the appropriate alphabetical order:

"<u>Bail</u><u>-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</u><u>-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>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 County 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>EU Bail</u><u>-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>First Amendment</u>" means that certain First Amendment, dated as of October 31, 2017, among the Borrowers, Holdings, the Administrative Agent and the Lenders party thereto.

"<u>First Amendment Effective Date</u>" means October 31, 2017.

"<u>Write</u><u>-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.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b) The definition of "Base Rate" in Section 1.01 of the Credit Agreement is hereby amended and restated in its entirety to read as follows:

"<u>Base Rate</u>" means, for any day, a rate per annum equal to the highest of (i) the Prime Rate for such day, (ii) the sum of 0.50% plus the Federal Funds Rate for such day and (iii) the Eurodollar Rate for a one-month Interest Period (determined by reference to <u>clause (ii)</u> of the definition thereof) plus 1.00%; and if Base Rate shall be less than zero, such rate shall be deemed zero for purposes of this Agreement.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c) The definition of "Covenant Triggering Event" in Section 1.01 of the Credit Agreement is hereby amended and restated in its entirety to read as follows:

"<u>Covenant Triggering Event</u>" shall occur at any time that (i) an Event of Default has occurred and is continuing or (ii) Availability is less than 17.5% of the Revolving Facility Commitment.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(d) The definition of "Defaulting Lender" in Section 1.01 of the Credit Agreement is hereby amended by (i) deleting the word "or" and inserting a comma immediately after clause (iv)(B) thereof and (ii) inserting the following after clause (iv)(C) thereof:

or (D) become the subject of a Bail-in Action

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(e) The first proviso in clause (ii) of the definition of "Eurodollar Rate" in Section 1.01 of the Credit Agreement is hereby amended and restated in its entirety to read as follows:

------

<u>provided</u> that (x) to the extent a comparable or successor rate is approved by the Administrative Agent in connection herewith, the approved rate shall be applied to the applicable Interest Period in a manner consistent with market practice and (y) if the Eurodollar Rate shall be less than zero, such rate shall be deemed zero for purposes of this Agreement;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(f) The definition of "Revolving Facility Maturity Date" in Section 1.01 of the Credit Agreement is hereby amended and restated in its entirety to read as follows:

"<u>Revolving Facility Maturity Date</u>" means April 30, 2019 and any later maturity date applicable to any Incremental Commitments or any Incremental Loans, in each case, as extended in accordance with this Agreement from time to time; <u>provided</u>, <u>however</u>, that if such date is not a Business Day, the Revolving Facility Maturity Date shall be the next preceding Business Day.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(g) Subclause (A) of the first proviso in Section 2.09(d) of the Credit Agreement is hereby amended and restated in its entirety to read as follows:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(A) two Field Survey and Audit and collateral inspections during any Fiscal Year, and

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(h) Subclause (A) of the last sentence in Section 2.09(d) of the Credit Agreement is hereby amended and restated in its entirety to read as follows:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(A) three Field Survey and Audit and collateral inspections during any Fiscal Year, and

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(i) The final sentence of subclause (v) of Section 2.15(a) of the Credit Agreement is hereby amended and restated in its entirety to read as follows:

Subject to <u>Section</u> <u>10.23</u>, no reallocation hereunder shall constitute a waiver or release of any claim of any party hereunder against a Defaulting Lender arising from that Lender having become a Defaulting Lender, including any claim of a Non-Defaulting Lender as a result of such Non-Defaulting Lender's increased exposure following such reallocation.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(j) The first proviso in Section 6.09(a) of the Credit Agreement is hereby amended and restated in its entirety to read as follows:

<u>provided</u>, that excluding any such visits and inspections during the continuation of an Event of Default, (x) only the Administrative Agent on behalf of the Lenders may exercise rights of the Administrative Agent and the Lenders under this <u>Section</u> <u>6.09(a)</u>, and the Administrative Agent shall not exercise such rights more often than two times during any calendar year and (y) other than pursuant to <u>Section</u> <u>6.19</u>, inventory appraisals may only be performed during an Inspection Trigger Period

------

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(k) Article VI of the Credit Agreement is hereby amended by adding a new Section 6.19 at the end thereof to read as follows:

**<u>Section</u> <u>6.19 First Amendment Appraisal</u>**. The Parent Borrower will, as promptly as practicable, and in any event within 90 days after the First Amendment Effective Date (or such later date as may be agreed by the Required Lenders in their sole discretion), cause an appraisal to be completed over all Inventory. The Borrowers shall be obligated, jointly and severally, to reimburse the Administrative Agent for this appraisal to be conducted in connection with the First Amendment and such appraisal shall not be counted against the limitation on appraisals set forth in <u>Section</u> <u>2.09(d)</u>.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(l) Subclause (ii) of Section 7.19 of the Credit Agreement is hereby amended and restated in its entirety to read as follows:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(ii) each Measurement Period ending on the last day of any Fiscal Quarter while such Covenant Triggering Event is continuing and until the Fiscal Quarter during which no Default or Event of Default shall have existed and Availability shall have first exceeded 17.5% of the Revolving Facility Commitment, in each case, at all times during a period of 30 consecutive days

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(m) Article X of the Credit Agreement is hereby amended by adding a new Section 10.23 at the end thereof to read as follows:

**<u>Section</u> <u>10.23 Acknowledgement and Consent to Bail</u><u>-In of EEA Financial</u>**<u> </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 Lender that is an EEA Financial Institution arising under any Loan Document, to the extent such liability is unsecured, 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;(a) 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 Lender that is an EEA Financial Institution; and

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b) 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;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(i) 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;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(ii) a conversion of all, or a portion of, such liability into shares or other instruments of ownership in such EEA Financial Institution, its parent undertaking, 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;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(iii) 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 2. **<u>Effectiveness</u>**. This First Amendment shall become effective on the date (the "<u>First Amendment Effective Date</u>") on which the following conditions precedent are satisfied (or waived):

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a) <u>Execution and Delivery of this First Amendment</u>. The Administrative Agent shall have received counterparts of (i) this First Amendment duly executed by the Borrowers, Holdings, the Administrative Agent and the Lenders and (ii) that certain Acknowledgment and Agreement, dated as of First Amendment Effective Date, duly executed by the Subsidiary Guarantors party thereto.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b) <u>Payment of Fees</u>. All fees required to be paid and costs and expenses, in each case, due to the Administrative Agent and its affiliates and the Lenders under Section 10.04 of the Credit Agreement shall have been paid (including (i) the fees referred to in that certain Fee Letter dated as of First Amendment Effective Date, between the Parent Borrower and the Administrative Agent and (ii) invoiced fees, charges and disbursements of Fried, Frank, Harris, Shriver & Jacobson LLP ("<u>Fried Frank</u>"), described in <u>Section</u> <u>8</u> of this First Amendment.

Section 3. **<u>Deliverables</u>**. The Parent Borrower will, on the date (the "<u>First Amendment Delivery Date</u>") that is 3 Business Days after the First Amendment Effective Date (or such later date as may be agreed by the Required Lenders in their sole discretion), deliver to the Administrative Agent the following, each of which shall be originals or pursuant to electronic transmission (followed promptly by originals) unless otherwise specified, each properly executed by a Responsible Officer of the signing Loan Party, each dated the First Amendment Delivery Date (or, in the case of certificates of governmental officials, a recent date before the First Amendment Delivery Date) and each in form and substance 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;(a) a certificate as to the good standing (to the extent such concept or a similar concept exists under the laws of each applicable jurisdiction) of each Loan Party in the jurisdiction of incorporation, formation or organization of such Loan Party as of a recent date;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b) a certificate of the Secretary or Assistant Secretary or similar officer of each Loan Party dated the First Amendment Delivery Date and certifying:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(1) that either (1) attached thereto is a true, correct and complete copy of the certificate or articles of incorporation, certificate of formation or articles of association (to the extent such concept or a similar concept exists under the laws of each applicable jurisdiction), including all amendments thereto, of such Loan Party, which continues to be in full force and effect and has not been rescinded, amended, repealed or otherwise modified since the First Amendment Effective Date or (2) such Loan Party's certificate or articles of incorporation, certificate of formation or articles of association (to the extent such concept or a similar concept exists under the laws of each applicable jurisdiction), which was previously delivered to the Administrative Agent, continues to be in full force and effect and has not been rescinded, amended, repealed or otherwise modified since such delivery date;

------

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(2) that either (1) attached thereto is a true, correct and complete copy of the by-laws (or limited liability company agreement or other equivalent governing documents) of such Loan Party which were at the time of adoption of the resolutions described in (C) below and are on and as of the First Amendment Delivery Date in full force and effect and has not been rescinded, amended, repealed or otherwise modified since the First Amendment Effective Date or (2) such Loan Party's by-laws (or limited liability company agreement or other equivalent governing documents) which were previously delivered to the Administrative Agent continues to be in full force and effect and has not been rescinded, amended, repealed or otherwise modified since such delivery date;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(3) that attached thereto is a true and complete copy of resolutions duly adopted by the board of directors or managers (or equivalent governing body) of such Loan Party (or its managing general partner or managing member) authorizing and/or ratifying the execution, delivery and performance of the First Amendment Documents (as defined in <u>Section</u> <u>4</u>) to which such Loan Party is a party, and that such resolutions have not been modified, rescinded or amended and are in full force and effect on the First Amendment Delivery Date; and

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(4) as to the incumbency and specimen signature of each officer, manager, or other representative executing any First Amendment Document or any other document delivered in connection herewith on behalf of such Loan Party;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c) (i) a certificate of another officer or manager as to the incumbency and specimen signature of the Secretary or Assistant Secretary or similar officer or manager executing the certificate pursuant to clause (v) above (which may, for the avoidance of doubt, be included as a part of such certificate delivered pursuant to clause (v) above) or (ii) or a certification from a Responsible Officer of such Loan Party that the Secretary or Assistant Secretary or similar officer listed on the incumbency certificate delivered as a part of the Secretary's or Assistant Secretary's certificate of such Loan Party previously delivered to the Administrative Agent prior to the First Amendment Delivery Date are and continue to be authorized to act on behalf of such Loan Party in connection with the First Amendment and the other Loan Documents to which such Loan Party is a party;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(d) a favorable written opinion of Paul, Weiss, Rifkind, Wharton & Garrison LLP, special counsel to the Loan Parties, (A) dated the First Amendment Delivery Date, (B) addressed to the Administrative Agent and the Lenders and (C) in form and substance reasonably satisfactory to the Administrative Agent and covering such matters as the Administrative Agent shall reasonably request;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(e) a certificate signed by a Responsible Officer of the Parent Borrower certifying that, after giving effect to this First Amendment:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(1) the representations and warranties set forth in <u>Section</u> <u>4</u> of this First Amendment and any other the Loan Document were (as of the First Amendment Effective Date) and are (as of the First Amendment Delivery Date) true and correct in all material respects as of such date, as applicable, with the same effect as though made on and as of such date, except to the extent such representations and warranties expressly relate to an earlier date (in which case such representations and warranties shall be true and correct in all material respects as of such earlier date); and

------

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(2) no Event of Default or Default has occurred and is continuing.

Section 4. **<u>Representations and Warranties</u>**. In order to induce the Administrative Agent and the Lenders to enter into this First Amendment, each Borrower represents and warrants, as of the First Amendment Effective Date, that: (a) each Loan Party party hereto or thereto has all requisite power and authority to enter into the First Amendment and the other Loan Documents required to be delivered hereunder (collectively, the "<u>First Amendment Documents</u>") to which it is a party and to carry out the transactions contemplated thereby; (b) the execution, delivery and performance of each of the First Amendment Documents have been duly authorized by all necessary action on the part of each Loan Party that is a party thereto and, to the extent applicable, on the part of the respective shareholders, members or other equity security holders of each Loan Party; (c) the execution, delivery and performance by the Loan Parties of the First Amendment Documents to which they are parties and the consummation of the transactions contemplated thereby do not and shall not require any registration with, consent or approval of, or notice to, or other action to, with or by, any Governmental Authority (other than any filings or reports required under the securities laws) except as otherwise set forth in the First Amendment Documents and except for filings and recordings with respect to the Collateral to be made, or otherwise delivered to the Collateral Agent for filing and/or recordation; (d) each First Amendment Document has been duly executed and delivered by each Loan Party that is a party thereto and is the legally valid and binding obligation of such Loan Party, enforceable against such Loan Party in accordance with its respective terms, except as may be limited by bankruptcy, insolvency, reorganization, moratorium or similar laws of general applicability relating to or limiting creditors' rights or by equitable principles relating to enforceability; and (e) no Default or Event of Default has occurred and is continuing or would result from the First Amendment.

Section 5. **<u>Counterparts</u>**. This First Amendment may be executed in any number of counterparts and by different parties hereto on separate counterparts, each of which when so executed and delivered shall be deemed to be an original, but all of which when taken together shall constitute a single instrument. Delivery of an executed counterpart of a signature page of this First Amendment by facsimile or any other electronic transmission shall be effective as delivery of a manually executed counterpart hereof.

Section 6. **<u>Governing Law; Jurisdiction, Etc</u>**.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a) *<u>Governing Law</u>.* THIS FIRST AMENDMENT AND THE OTHER FIRST AMENDMENT DOCUMENTS AND THE RIGHTS AND OBLIGATIONS OF THE PARTIES HEREUNDER AND THEREUNDER SHALL BE GOVERNED BY AND CONSTRUED AND INTERPRETED IN ACCORDANCE WITH THE INTERNAL LAWS OF THE STATE OF NEW YORK (INCLUDING, WITHOUT LIMITATION, SECTION 5-1401 OF THE GENERAL OBLIGATIONS LAW OF THE STATE OF NEW YORK); <u>PROVIDED</u>, <u>HOWEVER</u>, THAT IF THE LAWS OF ANY JURISDICTION OTHER THAN NEW YORK SHALL GOVERN IN REGARD TO THE VALIDITY, PERFECTION OR EFFECT OF PERFECTION OF ANY LIEN OR IN REGARD TO PROCEDURAL MATTERS AFFECTING ENFORCEMENT OF ANY LIENS IN COLLATERAL, SUCH LAWS OF SUCH OTHER JURISDICTIONS SHALL CONTINUE TO APPLY TO THAT EXTENT.

------

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b) *<u>Submission to Jurisdiction</u>.* HOLDINGS, THE BORROWERS, EACH OTHER LOAN PARTY, THE ADMINISTRATIVE AGENT AND EACH LENDER PARTY HERETO IRREVOCABLY AND UNCONDITIONALLY SUBMITS, FOR ITSELF AND ITS PROPERTY, TO THE EXCLUSIVE JURISDICTION OF THE COURTS OF THE STATE OF NEW YORK SITTING IN NEW YORK CITY IN THE BOROUGH OF MANHATTAN AND OF THE UNITED STATES DISTRICT COURT OF THE SOUTHERN DISTRICT OF NEW YORK, AND ANY APPELLATE COURT FROM ANY THEREOF, IN ANY ACTION OR PROCEEDING ARISING OUT OF OR RELATING TO THIS FIRST AMENDMENT OR ANY FIRST AMENDMENT DOCUMENT, OR FOR RECOGNITION OR ENFORCEMENT OF ANY JUDGMENT, AND EACH OF THE PARTIES HERETO IRREVOCABLY AND UNCONDITIONALLY AGREES THAT ALL CLAIMS IN RESPECT OF ANY SUCH ACTION OR PROCEEDING MAY BE HEARD AND DETERMINED IN SUCH NEW YORK STATE COURT OR, TO THE FULLEST EXTENT PERMITTED BY APPLICABLE 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. EACH PARTY HERETO AGREES THAT THE AGENTS, JOINT LEAD ARRANGERS AND LENDERS RETAIN THE RIGHT TO SERVE PROCESS IN ANY OTHER MANNER PERMITTED BY LAW OR TO BRING PROCEEDINGS AGAINST ANY LOAN PARTY IN THE COURTS OF ANY OTHER JURISDICTION IN CONNECTION WITH THE EXERCISE OF ANY RIGHTS HEREUNDER OR UNDER ANY COLLATERAL DOCUMENT OR ANY OTHER LOAN DOCUMENT OR THE ENFORCEMENT OF ANY JUDGMENT.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c) *<u>Waiver of Venue</u>.* THE BORROWERS AND EACH OTHER LOAN PARTY PARTY HERETO 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 FIRST AMENDMENT OR ANY FIRST AMENDMENT 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;(d) *<u>Service of Process</u>.* EACH PARTY HERETO IRREVOCABLY CONSENTS TO SERVICE OF PROCESS IN THE MANNER PROVIDED FOR NOTICES IN <u>SECTION</u> <u>10.02</u> OF THE CREDIT AGREEMENT. NOTHING IN THIS FIRST AMENDMENT OR ANY OTHER FIRST AMENDMENT DOCUMENT WILL AFFECT THE RIGHT OF ANY PARTY HERETO TO SERVE PROCESS IN ANY OTHER MANNER PERMITTED BY APPLICABLE LAW.

Section 7. **<u>Waiver of Jury Trial</u>**. EACH PARTY HERETO HEREBY IRREVOCABLY 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 FIRST AMENDMENT OR ANY OTHER FIRST AMENDMENT 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, AGENT OR ATTORNEY OF ANY OTHER PERSON HAS REPRESENTED, EXPRESSLY OR OTHERWISE, THAT SUCH OTHER PERSON WOULD NOT, IN THE EVENT OF LITIGATION, SEEK TO ENFORCE THE FOREGOING WAIVER AND (B) ACKNOWLEDGES THAT IT AND THE OTHER PARTIES HERETO HAVE BEEN INDUCED TO ENTER INTO THIS FIRST AMENDMENT BY, AMONG OTHER THINGS, THE MUTUAL WAIVERS AND CERTIFICATIONS IN THIS SECTION

Section 8. **<u>Fees and Expenses</u>**. The Parent Borrower agrees to pay all reasonable and documented out-of-pocket expenses incurred by the Administrative Agent and its affiliates (including the reasonable and invoiced fees, charges and disbursements of Fried Frank, as counsel for the Administrative Agent) in connection with the preparation, negotiation, execution, delivery, administration and enforcement of this First Amendment and the other documents and instruments referred to herein or contemplated hereby, whether incurred prior to, on or after the First Amendment Effective Date.

Section 9. **<u>Loan Document Pursuant to Credit Agreement</u>**. This First Amendment is a Loan Document executed pursuant to the Credit Agreement and shall be construed, administered and applied in accordance with all of the terms and provisions of the Credit Agreement (and, following the effectiveness hereof, the Amended Credit Agreement).

Section 10. **<u>Taxes</u>**. For purposes of determining withholding Taxes imposed under the Foreign Account Tax Compliance Act (FATCA), from and after the effective date of the First Amendment, the Borrowers and the Administrative Agent shall treat (and the Lenders hereby authorize the Administrative Agent to treat) the Amended Credit Agreement as not qualifying as a "grandfathered obligation" within the meaning of Treasury Regulation Section 1.1471-2(b)(2)(i).

Section 11. **<u>Release</u>**. Effective on the date hereof, each Loan Party hereby waives, releases, remises and forever discharges the Administrative Agent and each Lender party hereto, each of their respective Affiliates, and each of their respective successors in title, officers, directors, employees, agents and professionals of each of the foregoing (collectively, the "<u>Releasees</u>") from any and all claims, offsets, defenses and counterclaims, causes of actions, demands, suits, costs, expenses and damages, whether arising in law, at equity or otherwise, whether known or unknown, existing on or prior to the date hereof, in each case, except to the extent arising from the gross negligence or willful misconduct of any Releasee, such waiver and release being with full knowledge and understanding of the circumstances and effect thereof and after having consulted legal counsel with respect thereto.

Section 12. **<u>Headings</u>**. The headings of this First Amendment are for purposes of reference only and shall not limit or otherwise affect the meaning hereof.

------

Section 13. **<u>Effect of Amendment</u>**. Except as expressly set forth herein, this First Amendment shall not alter, modify, amend or in any way affect any of the terms, conditions, obligations, covenants or agreements contained in the Credit Agreement or any other provision of the Credit Agreement or any other Loan Document. Each and every term, condition, obligation, covenant and agreement contained in the Credit Agreement or any other Loan Document is hereby ratified and re-affirmed in all respects and shall continue in full force and effect and nothing herein can or may be construed as a novation thereof.

[*Remainder of Page Intentionally Left Blank*]

------

IN WITNESS WHEREOF, the parties hereto have caused this First Amendment to be duly executed by their respective authorized officers as of the day and year first above written.

---

| | |
|:---|:---|
| STEINWAY MUSICAL INSTRUMENTS, INC., as Parent Borrower | STEINWAY MUSICAL INSTRUMENTS, INC., as Parent Borrower |
| By: | /s/ Benjamin Steiner |
|  | Name: Benjamin Steiner |
|  | Title: CFO, COO |

---

---

| | |
|:---|:---|
| STEINWAY, INC., as Borrower | STEINWAY, INC., as Borrower |
| By: | /s/ Benjamin Steiner |
|  | Name: Benjamin Steiner |
|  | Title: CFO, Treasurer |

---

---

| | |
|:---|:---|
| CONN-SELMER, INC., as Borrower | CONN-SELMER, INC., as Borrower |
| By: | /s/ Benjamin Steiner |
|  | Name: Benjamin Steiner |
|  | Title: Treasurer |

---

---

| | |
|:---|:---|
| PIANISSIMO HOLDINGS CORP., as Holdings | PIANISSIMO HOLDINGS CORP., as Holdings |
| By: | /s/ Michael Waldorf |
|  | Name: Michael Waldorf |
|  | Title: Authorized Signatory |

---

[Amendment to Credit Agreement]

------

---

| | |
|:---|:---|
| BANK OF AMERICA, N.A., as Administrative Agent | BANK OF AMERICA, N.A., as Administrative Agent |
| By: | /s/ William Wilson |
|  | Name: William Wilson |
|  | Title: Senior Vice President |

---

[Amendment to Credit Agreement]

------

---

| | |
|:---|:---|
| BANK OF AMERICA, N.A., as Lender | BANK OF AMERICA, N.A., as Lender |
| By: | /s/ William Wilson |
|  | Name: William Wilson |
|  | Title: Senior Vice President |

---

[Amendment to Credit Agreement]

------

---

| | |
|:---|:---|
| DEUTSCHE BANK AG NEW YORK BRANCH, as Lender | DEUTSCHE BANK AG NEW YORK BRANCH, as Lender |
| By: | /s/ Anca Trifan |
|  | Name: Anca Trifan |
|  | Title: Managing Director |

---

---

| | |
|:---|:---|
| By: | /s/ Marcus Tarkington |
|  | Name: Marcus Tarkington |
|  | Title: Director |

---

[Amendment to Credit Agreement]

## Exhibit 10.14

**Exhibit 10.14** 

**SECOND AMENDMENT** 

**TO ABL CREDIT AGREEMENT** 

**SECOND AMENDMENT**, dated as of February 16, 2018 (this "<u>Second Amendment</u>"), to the Credit Agreement (as defined below), is entered into among STEINWAY MUSICAL INSTRUMENTS, INC., a Delaware corporation (the "<u>Parent Borrower</u>"). STEINWAY. INC., a Delaware corporation ("<u>Steinway</u>"), CONN-SELMER. INC., a Delaware corporation ("<u>Conn-Selmer</u>" and, together with the Parent Borrower and Steinway, each a "<u>Borrower</u>" and, collectively and jointly and severally, the "<u>Borrowers</u>"), Pianissimo Holdings Corp., a Delaware corporation ("<u>Holdings</u>"), The O.S. Kelly Company, an Ohio corporation ("<u>O.S. Kelly</u>"), each Lender party hereto and the Administrative Agent (as defined below) and amends the ABL Credit Agreement dated as of September 19, 2013 (the "<u>Credit Agreement</u>"; the Credit Agreement as amended by that certain First Amendment, dated as of October 31, 2017, this Second Amendment and as further amended, restated, modified and supplemented from time to time, the "<u>Amended Credit Agreement</u>"), among Holdings, the Borrowers, each Lender from time to time party thereto, Bank of America, N.A., as Administrative Agent (in such capacity, the "<u>Administrative Agent</u>"), L/C Issuer and Swing Line Lender and Deutsche Bank Securities Inc., as Syndication Agent. Capitalized terms used and not otherwise defined herein shall have the meanings assigned to such terms in the Amended Credit Agreement.

WHEREAS, Holdings, the Borrowers, O.S. Kelly, the Administrative Agent, the Term Administrative Agent and the other parties party thereto have previously entered into that certain Intercreditor Agreement dated as of September 19, 2013 (as amended by the Reaffirmation of and Amendment No. 1 to Intercreditor Agreement dated as of May 23, 2014, the "<u>Original Intercreditor Agreement</u>");

WHEREAS, in accordance with Section 10.1 of the Credit Agreement, the Borrowers have requested that the Lenders agree to amend certain provisions of the Credit Agreement, and each of the Lenders signatory hereto have agreed, subject to the terms and conditions set forth herein, to (i) amend certain provisions of the Credit Agreement as herein provided and (ii) amend the terms of the Original Intercreditor Agreement as set forth in that certain Reaffirmation of and Amendment No. 2 to Intercreditor Agreement attached as <u>Exhibit</u> <u>B</u> hereto (the "<u>Intercreditor Amendment</u>");

NOW, THEREFORE, in consideration of the promises contained herein and for other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the parties hereto, intending to be legally bound hereby, agree as follows:

SECTION 1. **<u>Amendments to the Credit Agreement</u>**. On and after the Second Amendment Effective Date (as defined below):

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a) the Credit Agreement shall be amended to delete the stricken text (indicated textually in the same manner as the following example: stricken text) and to add the double-underlined text (indicated textually in the same manner as the following example: <u>double-underlined text</u>) as set forth in the pages of the Credit Agreement attached hereto as <u>Exhibit</u> <u>A</u>;

------

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b) the applicable schedules to the Credit Agreement shall be amended in their entirety as set forth in the corresponding numbered schedules in <u>Exhibit</u> <u>A-1</u> attached hereto; and

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c) Exhibit D to the Credit Agreement shall be amended in its entirety as set forth in <u>Exhibit</u> <u>A-2</u> attached hereto.

SECTION 2. **<u>Effectiveness</u>**. This Second Amendment shall become effective on the date (the "<u>Second Amendment Effective Date</u>") on which the following conditions precedent are satisfied (or waived):

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a) <u>Execution and Delivery of this Second Amendment</u>. The Administrative Agent shall have received counterparts of this Second Amendment duly executed by the Borrowers, Holdings, O.S. Kelly, the Administrative Agent and the Lenders.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b) <u>Payment of Fees</u>. All fees required to be paid and costs and expenses, in each case, due to the Administrative Agent and its affiliates and the Lenders under Section 10.04 of the Credit Agreement shall have been paid (including (i) the fees referred to in that certain Fee Letter dated as of February 5, 2018, between the Parent Borrower and the Administrative Agent, (ii) the fees referred to in that certain Closing Fee Letter dated as of the date hereof, between the Parent Borrower and the Administrative Agent and (iii) invoiced fees, charges and disbursements of Fried, Frank, Harris, Shriver & Jacobson LLP ("<u>Fried Frank</u>"), described in <u>Section</u> <u>10</u> of this Second Amendment.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c) <u>Amended and Restated Term Credit Agreement</u>. On or prior to the Second Amendment Effective Date, Holdings and the Borrowers shall have entered into the Amended and Restated Term Credit Agreement on terms and conditions reasonably satisfactory to the Administrative Agent and the Administrative Agent shall have received true and correct copies, certified as such by an appropriate officer of the Borrowers of the Term Loan Documents as in effect on the Second Amendment Effective Date (each of which shall be 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;(d) <u>Intercreditor Amendment</u>. The Intercreditor Amendment shall have been duly executed and delivered by each party thereto and shall remain 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;(e) <u>Patriot Act</u>. The Administrative Agent and the Lenders (to the extent reasonably requested in writing at least ten days prior to the Second Amendment Effective Date) shall have received, at least three Business Days prior to the Second Amendment Effective Date, all documentation and other information that the Administrative Agent reasonably determines to be required by Governmental Authorities under applicable "know your customer" and anti-money-laundering rules and regulations, including the Patriot Act.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(f) <u>Outstandings</u>. On the Second Amendment Effective Date, the total Outstanding Amount shall not exceed $55,000,000.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(g) Each of the conditions precedent set forth in Section 4.02 of the Amended Credit Agreement shall have been satisfied.

------

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(h) <u>Deliverables</u>. The Parent Borrower will, on the Second Amendment Effective Date, deliver to the Administrative Agent the following, each of which shall be originals or pursuant to electronic transmission (followed promptly by originals) unless otherwise specified, each properly executed by a Responsible Officer of the signing Loan Party, each dated the Second Amendment Effective Date (or, in the case of certificates of governmental officials, a recent date before the Second Amendment Effective Date) and each in form and substance 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;&nbsp;&nbsp;&nbsp;&nbsp;(i) a certificate as to the good standing (to the extent such concept or a similar concept exists under the laws of each applicable jurisdiction) of each Loan Party in the jurisdiction of incorporation, formation or organization of such Loan Party as of a recent 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;(ii) a certificate of the Secretary or Assistant Secretary or similar officer of each Loan Party dated the Second Amendment Effective Date and certifying:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&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) that either (1) attached thereto is a true, correct and complete copy of the certificate or articles of incorporation, certificate of formation or articles of association (to the extent such concept or a similar concept exists under the laws of each applicable jurisdiction), including all amendments thereto, of such Loan Party, or (2) such Loan Party's certificate or articles of incorporation, certificate of formation or articles of association (to the extent such concept or a similar concept exists under the laws of each applicable jurisdiction), which was previously delivered to the Administrative Agent, continues to be in full force and effect and has not been rescinded, amended, repealed or otherwise modified since such delivery 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;(B) that either (1) attached thereto is a trite, correct and complete copy of the by-laws (or limited liability company agreement or other equivalent governing documents) of such Loan Party which were at the time of adoption of the resolutions described in (C) below and are in full force and effect or (2) such Loan Party's by-laws (or limited liability company agreement or other equivalent governing documents) which were previously delivered to the Administrative Agent continues to be in full force and effect and has not been rescinded, amended, repealed or otherwise modified since such delivery 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;(C) that attached thereto is a true and complete copy of resolutions duly adopted by the board of directors or managers (or equivalent governing body) of such Loan Party (or its managing general partner or managing member) authorizing and/or ratifying the execution, delivery and performance of the Second Amendment Documents (as defined in <u>Section</u> <u>3</u>) to which such Loan Party is a party, and that such resolutions have not been modified, rescinded or amended and are in full force and effect on the Second Amendment Effective Date; 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) as to the incumbency and specimen signature of each officer, manager, or other representative executing any Second Amendment Document or any other document delivered in connection herewith on behalf of such 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;&nbsp;&nbsp;&nbsp;&nbsp;(iii) (A) a certificate of another officer or manager as to the incumbency and specimen signature of the Secretary or Assistant Secretary or similar officer or manager executing the certificate pursuant to clause (ii) above (which may, for the avoidance of doubt, be included as a part of such certificate delivered pursuant to clause (ii) above) or (B) or a certification from a Responsible Officer of such Loan Party that the Secretary or Assistant Secretary or similar officer listed on the incumbency certificate delivered as a part of the Secretary's or Assistant Secretary's certificate of such Loan Party previously delivered to the Administrative Agent prior to the Second Amendment Effective Date are and continue to be authorized to act on behalf of such Loan Party in connection with this Second Amendment and the other Loan Documents to which such Loan Party is a 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;&nbsp;&nbsp;&nbsp;&nbsp;(iv) a Perfection Certificate from each Loan Party, dated as of the Second 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;&nbsp;&nbsp;&nbsp;&nbsp;(v) a favorable written opinion from special Ohio counsel to O.S. Kelly, (A) dated the Second Amendment Effective Date, (B) addressed to the Administrative Agent and the Lenders and (C) in form and substance reasonably satisfactory to the Administrative Agent and covering such matters as the Administrative Agent shall reasonably request;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(vi) a favorable written opinion of Paul, Weiss, Rifkind, Wharton & Garrison LLP, special counsel to the Loan Parties, (A) dated the Second Amendment Effective Date, (B) addressed to the Administrative Agent and the Lenders and (C) in form and substance reasonably satisfactory to the Administrative Agent and covering such matters as the Administrative Agent shall reasonably request;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(vii) a certificate from the chief financial officer of the Parent Borrower addressed to the Administrative Agent and the Lenders, reasonably satisfactory in form and substance to the Administrative Agent and substantially in form and substance of <u>Exhibit</u> <u>G</u> to the Amended Credit Agreement, demonstrating the financial condition and Solvency of Holdings, the Parent Borrower and their Subsidiaries on a consolidated basis after giving effect the incurrence of all Loans to occur on the Second Amendment Effective Date and all other elements of the Transaction to occur on the Second Amendment Effective Date and the incurrence of all Indebtedness related thereto, and to the extent reasonably requested by the Administrative Agent, together with copies of additional valuations, appraisals and similar reports prepared by or on behalf of Holdings or any of its Subsidiaries or the Sponsor in connection with the Transaction;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(viii) with respect to each of the Mortgaged Properties, on or before a date at least 15 days prior to the Second Amendment Effective Date, a completed standard "life of loan" flood hazard determination form, and if the area in which the buildings and other improvements (as described in the applicable Mortgage) are located is designated a Special Flood Hazard Area, (A) on or before a date at least five days prior to the Second

------

Amendment Effective Date, a notification to the Borrower and documentation evidencing the Borrower's receipt of such notice (e.g., countersigned notice, return receipt of certified U.S. Mail, or overnight delivery), and (B) on or before the Second Amendment Effective Date, evidence of Flood Insurance with respect to such buildings and other improvements located in a Special Flood Hazard Area, as reasonably acceptable to Administrative Agent and each Lender; 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;(ix) a certificate signed by a Responsible Officer of the Parent Borrower certifying that, after giving effect to this Second 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;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(A) the representations and warranties set forth in <u>Section</u> <u>3</u> of this Second Amendment and any other Loan Document were (as of the Second Amendment Effective Date) and are (as of the Second Amendment Effective Date) true and correct in all material respects as of such date, as applicable, with the same effect as though made on and as of such date, except to the extent such representations and warranties expressly relate to an earlier date (in which case such representations and warranties shall be true and correct in all material respects as of such earlier date); 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;(B) no Event of Default or Default has occurred and is continuing.

SECTION 3. **<u>Representations and Warranties</u>**. In order to induce the Administrative Agent and the Lenders to enter into this Second Amendment, each Borrower represents and warrants, as of the Second Amendment Effective Date, that: (a) each Loan Party party hereto or thereto has all requisite power and authority to enter into the Second Amendment and the other Loan Documents required to be delivered hereunder (collectively, the "<u>Second Amendment Documents</u>") to which it is a party and to carry out the transactions contemplated thereby; (b) the execution, delivery and performance of each of the Second Amendment Documents have been duly authorized by all necessary action on the part of each Loan Party that is a party thereto and, to the extent applicable, on the part of the respective shareholders, members or other equity security holders of each Loan Party; (c) the execution, delivery and performance by the Loan Parties of the Second Amendment Documents to which they are parties and the consummation of the transactions contemplated thereby do not and shall not require any registration with, consent or approval of, or notice to, or other action to, with or by, any Governmental Authority (other than any filings or reports required under the securities laws) except as otherwise set forth in the Second Amendment Documents and except for filings and recordings with respect to the Collateral to be made, or otherwise delivered to the Collateral Agent for filing and/or recordation; (d) each Second Amendment Document has been duly executed and delivered by each Loan Party that is a party thereto and is the legally valid and binding obligation of such Loan Party, enforceable against such Loan Party in accordance with its respective terms, except as may be limited by bankruptcy, insolvency, reorganization, moratorium or similar laws of general applicability relating to or limiting creditors' rights or by equitable principles relating to enforceability; and (e) no Default or Event of Default has occurred and is continuing or would result from the Second Amendment.

SECTION 4. **<u>Consent to Intercreditor Amendment</u>**. Each party hereto hereby consents to the terms and provisions of the Intercreditor Amendment and the execution and delivery of the Intercreditor Amendment by Holdings, the Borrowers, O.S. Kelly and the Administrative Agent.

------

SECTION 5. **<u>Reaffirmation</u>**. Each of the Loan Parties hereby confirms that each Loan Document to which it is a party or otherwise bound and all Collateral encumbered thereby will continue to guarantee or secure, as the case may be, to the fullest extent possible in accordance with the Loan Documents, the payment and performance of all "Finance Obligations" under each of the Loan Documents to which it is a party (in each case as such terms are defined in the applicable Loan Document). Each of the Loan Parties acknowledges and agrees that (i) any of the Loan Documents to which it is a party or is otherwise bound shall continue in full force and effect and that all of its obligations thereunder shall be valid, enforceable, ratified and confirmed in all respects and shall not be impaired or limited by the execution or effectiveness of this Second Amendment or the modification of the Credit Agreement and (ii) all security interests created under any of the Collateral Documents shall continue in full force and effect pursuant to the terms of such Collateral Document.

SECTION 6. **<u>No Novation</u>**. Neither this Second Amendment nor the effectiveness of the Amended Credit Agreement shall extinguish the Finance Obligations for the payment of money outstanding under the Credit Agreement (except as otherwise expressly provided herein) or discharge or release the Lien or priority of any Loan Document or any other security therefor or any guarantee thereof, and the liens and security interests in favor of the Collateral Agent for the benefit of the Secured Parties securing payment of the Finance Obligations are in all respects continuing and in full force and effect with respect to all Finance Obligations. Nothing herein contained shall be construed as a substitution or novation, or a payment and reborrowing, or a termination, of the Finance Obligations outstanding under the Credit Agreement or instruments guaranteeing or seeming the same (except as otherwise expressly provided herein), which shall remain in full force and effect, except as modified hereby or by instruments executed concurrently herewith. Nothing expressed or implied in this Second Amendment, the Amended Credit Agreement or any other document contemplated hereby or thereby shall be construed as a release or other discharge of the Borrowers under the Credit Agreement or of the Borrowers or any other Loan Party under any other Loan Document from any of its obligations and liabilities thereunder, and such obligations are in all respects continuing with only the terms being modified as provided in this Second Amendment and in the Amended Credit Agreement (except as otherwise expressly provided herein). The Credit Agreement and each of the other Loan Documents shall remain in full force and effect, until and except as modified hereby. This Second Amendment shall constitute a Loan Document for all purposes of the Credit Agreement and the Amended Credit Agreement.

SECTION 7. **<u>Counterparts</u>**. This Second Amendment may be executed in any number of counterparts and by different parties hereto on separate counterparts, each of which when so executed and delivered shall be deemed to be an original, but all of which when taken together shall constitute a single instrument. Delivery of an executed counterpart of a signature page of this Second Amendment by facsimile or any other electronic transmission shall be effective as delivery of a manually executed counterpart hereof.

------

SECTION 8. **<u>Governing Law; Jurisdiction, Etc.</u>**

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a) *<u>Governing Law</u>.* THIS SECOND AMENDMENT AND THE OTHER SECOND AMENDMENT DOCUMENTS AND THE RIGHTS AND OBLIGATIONS OF THE PARTIES HEREUNDER AND THEREUNDER SHALL BE GOVERNED BY AND CONSTRUED AND INTERPRETED IN ACCORDANCE WITH THE INTERNAL LAWS OF THE STATE OF NEW YORK (INCLUDING, WITHOUT LIMITATION, SECTION 5-1401 OF THE GENERAL OBLIGATIONS LAW OF THE STATE OF NEW YORK); <u>PROVIDED</u>, <u>HOWEVER</u>, THAT IF THE LAWS OF ANY JURISDICTION OTHER THAN NEW YORK SHALL GOVERN IN REGARD TO THE VALIDITY, PERFECTION OR EFFECT OF PERFECTION OF ANY LIEN OR IN REGARD TO PROCEDURAL MATTERS AFFECTING ENFORCEMENT OF ANY LIENS IN COLLATERAL, SUCH LAWS OF SUCH OTHER JURISDICTIONS SHALL CONTINUE TO APPLY TO THAT EXTENT.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b) *<u>Submission to Jurisdiction</u>.* HOLDINGS, THE BORROWERS, EACH OTHER LOAN PARTY, THE ADMINISTRATIVE AGENT AND EACH LENDER PARTY HERETO IRREVOCABLY AND UNCONDITIONALLY SUBMITS, FOR ITSELF AND ITS PROPERTY, TO THE EXCLUSIVE JURISDICTION OF THE COURTS OF THE STATE OF NEW YORK SITTING IN NEW YORK CITY IN THE BOROUGH OF MANHATTAN AND OF THE UNITED STATES DISTRICT COURT OF THE SOUTHERN DISTRICT OF NEW YORK, AND ANY APPELLATE COURT FROM ANY THEREOF, IN ANY ACTION OR PROCEEDING ARISING OUT OF OR RELATING TO THIS SECOND AMENDMENT OR ANY SECOND AMENDMENT DOCUMENT, OR FOR RECOGNITION OR ENFORCEMENT OF ANY JUDGMENT, AND EACH OF THE PARTIES HERETO IRREVOCABLY AND UNCONDITIONALLY AGREES THAT ALL CLAIMS IN RESPECT OF ANY SUCH ACTION OR PROCEEDING MAY BE HEARD AND DETERMINED IN SUCH NEW YORK STATE COURT OR, TO THE FULLEST EXTENT PERMITTED BY APPLICABLE 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. EACH PARTY HERETO AGREES THAT THE AGENTS, JOINT LEAD ARRANGERS AND LENDERS RETAIN THE RIGHT TO SERVE PROCESS IN ANY OTHER MANNER PERMITTED BY LAW OR TO BRING PROCEEDINGS AGAINST ANY LOAN PARTY IN THE COURTS OF ANY OTHER JURISDICTION IN CONNECTION WITH THE EXERCISE OF ANY RIGHTS HEREUNDER OR UNDER ANY COLLATERAL DOCUMENT OR ANY OTHER LOAN DOCUMENT OR THE ENFORCEMENT OF ANY JUDGMENT.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c) *<u>Waiver of Venue</u>.* THE BORROWERS AND EACH OTHER LOAN PARTY PARTY HERETO 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 SECOND AMENDMENT OR ANY SECOND AMENDMENT 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;(d) *<u>Service of Process</u>.* EACH PARTY HERETO IRREVOCABLY CONSENTS TO SERVICE OF PROCESS IN THE MANNER PROVIDED FOR NOTICES IN <u>SECTION</u> <u>10.02</u> OF THE CREDIT AGREEMENT. NOTHING IN THIS SECOND AMENDMENT OR ANY OTHER SECOND AMENDMENT DOCUMENT WILL AFFECT THE RIGHT OF ANY PARTY HERETO TO SERVE PROCESS IN ANY OTHER MANNER PERMITTED BY APPLICABLE LAW.

SECTION 9. **<u>Waiver of Jury Trial</u>**. EACH PARTY HERETO HEREBY IRREVOCABLY 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 SECOND AMENDMENT OR ANY OTHER SECOND AMENDMENT 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, AGENT OR ATTORNEY OF ANY OTHER PERSON HAS REPRESENTED, EXPRESSLY OR OTHERWISE, THAT SUCH OTHER PERSON WOULD NOT, IN THE EVENT OF LITIGATION, SEEK TO ENFORCE THE FOREGOING WAIVER AND (B) ACKNOWLEDGES THAT IT AND THE OTHER PARTIES HERETO HAVE BEEN INDUCED TO ENTER INTO THIS SECOND AMENDMENT BY, AMONG OTHER THINGS, THE MUTUAL WAIVERS AND CERTIFICATIONS IN THIS SECTION.

SECTION 10. **<u>Fees and Expenses</u>**. The Parent Borrower agrees to pay all reasonable and documented out-of-pocket expenses incurred by the Administrative Agent and its affiliates (including the reasonable and invoiced fees, charges and disbursements of Fried Frank, as counsel for the Administrative Agent) in connection with the preparation, negotiation, execution, delivery, administration and enforcement of this Second Amendment and the other documents and instruments referred to herein or contemplated hereby, whether incurred prior to, on or after the Second Amendment Effective Date.

SECTION 11. **<u>Loan Document Pursuant to Credit Agreement</u>**. This Second Amendment is a Loan Document executed pursuant to the Credit Agreement and shall be construed, administered and applied in accordance with all of the terms and provisions of the Credit Agreement (and, following the effectiveness hereof, the Amended Credit Agreement).

SECTION 12. **<u>Taxes</u>**. For purposes of determining withholding Taxes imposed under the Foreign Account Tax Compliance Act (FATCA), from and after the effective date of this Second Amendment, the Borrowers and the Administrative Agent shall treat (and the Lenders hereby authorize the Administrative Agent to treat) the Loans and Letter of Credit Borrowings as not qualifying as "grandfathered obligations" within the meaning of Treasury Regulation Section 1.1471-2(b)(2)(i).

SECTION 13. **<u>Release</u>**. Effective on the date hereof, each Loan Party hereby waives, releases, remises and forever discharges the Administrative Agent and each Lender party hereto, each of their respective Affiliates, and each of their respective successors in title, officers,

------

directors, employees, agents and professionals of each of the foregoing (collectively, the "<u>Releasees</u>") from any and all claims, offsets, defenses and counterclaims, causes of actions, demands, suits, costs, expenses and damages, whether arising in law, at equity or otherwise, whether known or unknown, existing on or prior to the date hereof, in each case, except to the extent arising from the gross negligence or willful misconduct of any Releasee, such waiver and release being with full knowledge and understanding of the circumstances and effect thereof and after having consulted legal counsel with respect thereto.

SECTION 14. **<u>Headings</u>**. The headings of this Second Amendment are for purposes of reference only and shall not limit or otherwise affect the meaning hereof.

SECTION 15. **<u>Effect of Amendment</u>**. Except as expressly set forth herein, this Second Amendment shall not alter, modify, amend or in any way affect any of the terms, conditions, obligations, covenants or agreements contained in the Credit Agreement or any other provision of the Credit Agreement or any other Loan Document. Each and every term, condition, obligation, covenant and agreement contained in the Credit Agreement or any other Loan Document is hereby ratified and reaffirmed in all respects and shall continue in full force and effect and nothing herein can or may be construed as a novation thereof.

[*Remainder of Page Intentionally Left Blank*]

------

IN WITNESS WHEREOF, the parties hereto have caused this Second Amendment to be duly executed by their respective authorized officers as of the day and year first above written.

---

| | |
|:---|:---|
| STEINWAY MUSICAL INSTRUMENTS,<br> INC., as Parent Borrower | STEINWAY MUSICAL INSTRUMENTS,<br> INC., as Parent Borrower |
| By: | /s/ Ben Steiner |
|  | Name: Ben Steiner |
|  | Title: Executive Vice President, Chief Financial Officer, Chief Operating Officer & Treasurer |
| STEINWAY, INC.,<br> as Borrower | STEINWAY, INC.,<br> as Borrower |
| By: | /s/ Ben Steiner |
|  | Name: Ben Steiner |
|  | Title: Executive Vice President, Chief Financial Officer & Treasurer |
| CONN-SELMER, INC.,<br> as Borrower | CONN-SELMER, INC.,<br> as Borrower |
| By: | /s/ Ben Steiner |
|  | Name: Ben Steiner |
|  | Title: Executive Vice President & Treasurer |
| PIANISSIMO HOLDINGS CORP.,<br> as Holdings | PIANISSIMO HOLDINGS CORP.,<br> as Holdings |
| By: | /s/ Michael Waldorf |
|  | Name: Michael Waldorf |
|  | Title: President |
| THE O.S. KELLY COMPANY, as O.S.<br> Kelly | THE O.S. KELLY COMPANY, as O.S.<br> Kelly |
| By: | /s/ Ben Steiner |
|  | Name: Ben Steiner |
|  | Title: Executive Vice President, Chief Financial Officer, & Treasurer |

---

[Signature Page to Second Amendment to ABL Credit Agreement]

------

---

| | |
|:---|:---|
| BANK OF AMERICA, N.A.,<br> as Lender | BANK OF AMERICA, N.A.,<br> as Lender |
| By: | /s/ Galina Evelson |
|  | Name: Galina Evelson |
|  | Title: Vice President |

---

[Signature Page to Second Amendment to ABL Credit Agreement]

------

---

| | |
|:---|:---|
| DEUTSCHE BANK AG NEW YORK<br> BRANCH, as Lender | DEUTSCHE BANK AG NEW YORK<br> BRANCH, as Lender |
| By: | /s/ Frank Fazio |
|  | Name: Frank Fazio |
|  | Title: Managing Director |
| By: | /s/ Stephen R. Lapidus |
|  | Name: Stephen R. Lapidus |
|  | Title: Director |

---

[Signature Page to Second Amendment to ABL Credit Agreement]

------

**EXHIBIT A** 

------

**<u>EXECUTION VERSION</u>** 

**COMPOSITE COPY REFLECTING** 

**FIRST AMENDMENT <u>DATED AS OF OCTOBER 31. 2017 AND</u>** 

**<u>SECOND AMENDMENT DATED AS OF FEBRUARY 16. 2018</u>** 

$**75<u>110</u>,000,000 ABL CREDIT AGREEMENT** 

**dated as of September 19, 2013** 

**among** 

**PIANISSIMO ACQUISITION CORP. (to be merged with and into STEINWAY** 

**MUSICAL INSTRUMENTS, INC.),** 

**as Parent Borrower,** 

**STEINWAY, INC,** 

**CONN-SELMER, INC.,** 

**as Borrowers,** 

**PIANISSIMO HOLDINGS CORP.,** 

**THE LENDERS FROM TIME TO TIME PARTY HERETO,** 

**BANK OF AMERICA, N.A.,** 

**as Administrative Agent, Swing Line Lender and L/C Issuer,** 

**and** 

**DEUTSCHE BANK SECURITIES INC.,** 

**as Sole Syndication Agent** 

------

**BANK OF AMERICA, N.A.** 

**and** 

**DEUTSCHE BANK SECURITIES INC.,** 

**as Joint Lead Arrangers and Joint Book Managers** 

------

**TABLE OF CONTENTS** 

**<u>Page</u>**

---

| | | |
|:---|:---|:---|
| **ARTICLE I** | **ARTICLE I** | **ARTICLE I** |
| **DEFINITIONS AND ACCOUNTING TERMS** | **DEFINITIONS AND ACCOUNTING TERMS** | **DEFINITIONS AND ACCOUNTING TERMS** |
|  **Section 1.01** | **Defined Terms** | **6** |
|  **Section 1.02** | **Other Interpretative Provisions** | **58** |
|  **Section 1.03** | **Accounting Terms and Determinations** | **59** |
|  **Section 1.04** | **Rounding** | **60** |
|  **Section 1.05** | **Times of Day; Rates** | **60** |
|  **Section 1.06** | **Currency Equivalents Generally** | **60** |
|  **Section 1.07** | **Letter of Credit Amounts** | **60** |
| **ARTICLE II** | **ARTICLE II** | **ARTICLE II** |
| **THE COMMITMENTS AND LOANS** | **THE COMMITMENTS AND LOANS** | **THE COMMITMENTS AND LOANS** |
|  **Section 2.01** | **Commitments** | **61** |
|  **Section 2.02** | **Borrowings, Conversions and Continuations of Loans** | **61** |
|  **Section 2.03** | **Letters of Credit** | **64** |
|  **Section 2.04** | **Swing Line Loans** | **70** |
|  **Section 2.05** | **Prepayments** | **74** |
|  **Section 2.06** | **Scheduled Repayment of Loans** | **76** |
|  **Section 2.07** | **Termination and Reduction of Revolving Facility Commitments** | **76** |
|  **Section 2.08** | **Interest** | **77** |
|  **Section 2.09** | **Fees** | **77** |
|  **Section 2.10** | **Computation of Interest and Fees** | **79** |
|  **Section 2.11** | **Evidence of Debt** | **80** |
|  **Section 2.12** | **Payments Generally: Administrative Agent's Clawback** | **80** |
|  **Section 2.13** | **Sharing of Payments by Lenders** | **82** |
|  **Section 2.14** | **Incremental Loans** | **83** |
|  **Section 2.15** | **Defaulting Lenders** | **85** |
|  **Section 2.16** | **Cash Collateral** | **88** |
|  **Section 2.17** | **Agent Advances: Overadvances** | **89** |
|  **Section 2.18** | **Settlement** | **90** |
| **ARTICLE III** | **ARTICLE III** | **ARTICLE III** |
| **TAXES, YIELD PROTECTION AND ILLEGALITY** | **TAXES, YIELD PROTECTION AND ILLEGALITY** | **TAXES, YIELD PROTECTION AND ILLEGALITY** |
|  **Section 3.01** | **Taxes** | **92** |
|  **Section 3.02** | **Illegality** | **96** |
|  **Section 3.03** | **Inability to Determine Rates** | **96** |
|  **Section 3.04** | **Increased Costs** | **97** |
|  **Section 3.05** | **Compensation for Losses** | **99** |
|  **Section 3.06** | **Mitigation Obligations: Replacement of Lenders** | **99** |
|  **Section 3.07** | **LIBOR Amendment** | **100** |
|  **Section 3.08** | **Section 3.07 Survival** | **101** |

---

------

---

| | | |
|:---|:---|:---|
| **ARTICLE IV** | **ARTICLE IV** | **ARTICLE IV** |
| **CONDITIONS PRECEDENT** | **CONDITIONS PRECEDENT** | **CONDITIONS PRECEDENT** |
| **Section 4.01** | **Conditions to Original Closing Date Borrowing** | **101** |
| **Section 4.02** | **All Credit Events** | **108** |
| **Section 4.03** | **Amendment** | **108** |
| **ARTICLE V** | **ARTICLE V** | **ARTICLE V** |
| **REPRESENTATIONS AND WARRANTIES** | **REPRESENTATIONS AND WARRANTIES** | **REPRESENTATIONS AND WARRANTIES** |
| **Section 5.01** | **Corporate Existence and Power; Compliance with Laws** | **109** |
| **Section 5.02** | **Corporate Authorization; No Contravention** | **109** |
| **Section 5.03** | **Governmental Authorization** | **109** |
| **Section 5.04** | **Binding Effect** | **110** |
| **Section 5.05** | **Litigation** | **110** |
| **Section 5.06** | **No Default** | **111** |
| **Section 5.07** | **ERISA Compliance** | **111** |
| **Section 5.08** | **Use of Proceeds; Margin Regulations** | **111** |
| **Section 5.09** | **Ownership of Property: Liens** | **111** |
| **Section 5.10** | **Taxes** | **112** |
| **Section 5.11** | **Financial Condition** | **112** |
| **Section 5.12** | **Environmental Matters** | **113** |
| **Section 5.13** | **Regulated Entities** | **114** |
| **Section 5.14** | **Solvency** | **114** |
| **Section 5.15** | **Labor Relations** | **114** |
| **Section 5.16** | **Intellectual Property** | **114** |
| **Section 5.17** | **Brokers' Fees; Transaction Fees** | **115** |
| **Section 5.18** | **Insurance** | **115** |
| **Section 5.19** | **Ventures, Subsidiaries and Affiliates; Outstanding Stock** | **115** |
| **Section 5.20** | **Jurisdiction of Organization; Chief Executive Office** | **115** |
| **Section 5.21** | **Status of Steinway and Sons** | **116** |
| **Section 5.22** | **Full Disclosure** | **116** |
| **Section 5.23** | **Foreign Assets Control Regulations, Export Controls and Anti-Money Laundering** | **116** |
| **Section 5.24** | **Patriot Act** | **117** |
| **Section 5.25** | **No Restricted Payments** | **117** |
| **Section 5.26** | **Collateral Documents** | **117** |
| **ARTICLE VI** | **ARTICLE VI** | **ARTICLE VI** |
| **AFFIRMATIVE COVENANTS** | **AFFIRMATIVE COVENANTS** | **AFFIRMATIVE COVENANTS** |
| **Section 6.01** | **Financial Statements** | **119** |
| **Section 6.02** | **Certificates; Other Information** | **119** |
| **Section 6.03** | **Notices** | **122** |
| **Section 6.04** | **Preservation of Corporate Existence, Etc.** | **124** |
| **Section 6.05** | **Maintenance of Property** | **124** |
| **Section 6.06** | **Insurance** | **125** |

---

ii

------

---

| | | |
|:---|:---|:---|
| **Section 6.07** | **Payment of Obligations** | **126** |
| **Section 6.08** | **Compliance with Laws** | **126** |
| **Section 6.09** | **Inspection of Property and Books and Records; Quarterly Management Calls** | **126** |
| **Section 6.10** | **Use of Proceeds** | **127** |
| **Section 6.11** | **Collection of Accounts: Management of Collateral** | **127** |
| **Section 6.12** | **Landlord Agreements** | **130** |
| **Section 6.13** | **Further Assurances** | **130** |
| **Section 6.14** | **Environmental Matters** | **132** |
| **Section 6.15** | **Post-Closing Obligations** | **133** |
| **Section 6.16** | **Material Contracts** | **133** |
| **Section 6.17** | **Designation as Senior Debt** | **133** |
| **Section 6.18** | **Change in Collateral; Collateral Records; Account Documentation** | **133** |
| **Section 6.19** | **Mortgage Amendments** | **134** |
| **ARTICLE VII** | **ARTICLE VII** | **ARTICLE VII** |
| **NEGATIVE COVENANTS** | **NEGATIVE COVENANTS** | **NEGATIVE COVENANTS** |
| **Section 7.01** | **Limitation on Liens** | **135** |
| **Section 7.02** | **Disposition of Assets** | **137** |
| **Section 7.03** | **Consolidations and Mergers** | **138** |
| **Section 7.04** | **Acquisitions: Loans and Investments** | **138** |
| **Section 7.05** | **Limitation on Indebtedness** | **140** |
| **Section 7.06** | **Employee Loans and Transactions with Affiliates** | **142** |
| **Section 7.07** | **Management Fees and Compensation** | **142** |
| **Section 7.08** | **Use of Proceeds** | **143** |
| **Section 7.09** | **Reserved** | **143** |
| **Section 7.10** | **Reserved** | **144** |
| **Section 7.11** | **Restricted Payments** | **144** |
| **Section 7.12** | **Change in Business** | **145** |
| **Section 7.13** | **Reserved** | **146** |
| **Section 7.14** | **Changes in Accounting, Name or Jurisdiction of Organization** | **146** |
| **Section 7.15** | **Amendments to Related Agreements** | **146** |
| **Section 7.16** | **No Negative Pledges** | **147** |
| **Section 7.17** | **Sale-Leasebacks** | **147** |
| **Section 7.18** | **Amendment of Organization Documents** | **147** |
| **Section 7.19** | **Fixed Charge Coverage Ratio** | **148** |
| **ARTICLE VIII** | **ARTICLE VIII** | **ARTICLE VIII** |
| **DEFAULTS** | **DEFAULTS** | **DEFAULTS** |
| **Section 8.01** | **Events of Default** | **148** |
| **Section 8.02** | **Remedies upon Event of Default** | **151** |
| **Section 8.03** | **Application of Funds** | **152** |
| **Section 8.04** | **Equity Cure** | **153** |

---

iii

------

---

| | | |
|:---|:---|:---|
| **ARTICLE IX** | **ARTICLE IX** | **ARTICLE IX** |
| **AGENCY PROVISIONS** | **AGENCY PROVISIONS** | **AGENCY PROVISIONS** |
| **Section 9.01** | **Appointment and Authority** | **154** |
| **Section 9.02** | **Rights as a Lender** | **155** |
| **Section 9.03** | **Exculpatory Provisions** | **155** |
| **Section 9.04** | **Reliance by Administrative Agent** | **156** |
| **Section 9.05** | **Delegation of Duties** | **156** |
| **Section 9.06** | **Resignation of Administrative Agent** | **157** |
| **Section 9.07** | **Non-Reliance on Administrative Agent and Other Lenders** | **158** |
| **Section 9.08** | **No Other Duties, Etc.** | **158** |
| **Section 9.09** | **Administrative Agent May File Proofs of Claim** | **158** |
| **Section 9.10** | **Collateral and Guaranty Matters** | **159** |
| **Section 9.11** | **Secured Hedge Agreements and Secured Cash Management Agreements** | **160** |
| **Section 9.12** | **Certain Representations** | **160** |
| **ARTICLE X** | **ARTICLE X** | **ARTICLE X** |
| **MISCELLANEOUS** | **MISCELLANEOUS** | **MISCELLANEOUS** |
| **Section 10.01** | **Amendments, Etc.** | **162** |
| **Section 10.02** | **Notices: Effectiveness: Electronic Communication** | **165** |
| **Section 10.03** | **No Waiver: Cumulative Remedies: Enforcement** | **167** |
| **Section 10.04** | **Expenses: Indemnity: Damage Waiver** | **168** |
| **Section 10.05** | **Payments Set Aside** | **170** |
| **Section 10.06** | **Successors and Assigns** | **171** |
| **Section 10.07** | **Treatment of Certain Information: Confidentiality** | **176** |
| **Section 10.08** | **Right of Setoff** | **177** |
| **Section 10.09** | **Interest Rate Limitation** | **177** |
| **Section 10.10** | **Counterparts; Integration; Effectiveness** | **178** |
| **Section 10.11** | **Survival of Representations and Warranties** | **178** |
| **Section 10.12** | **Severability** | **178** |
| **Section 10.13** | **Replacement of Lenders** | **178** |
| **Section 10.14** | **Governing Law: Jurisdiction Etc.** | **179** |
| **Section 10.15** | **Waiver of Jury Trial** | **181** |
| **Section 10.16** | **No Advisory or Fiduciary Responsibility** | **181** |
| **Section 10.17** | **Electronic Execution of Assignments and Certain Other Documents** | **181** |
| **Section 10.18** | **Patriot Act Notice** | **182** |
| **Section 10.19** | **ABL/Term Intercreditor AgreementsAgreement** | **182** |
| **Section 10.20** | **Judgment Currency** | **183** |
| **Section 10.21** | **Field Audit and Examination Reports; Disclaimer by Lenders** | **183** |
| **Section 10.22** | **Additional Borrowers** | **184** |
| **Section 10.23** | **Acknowledgement and Consent to Bail-In of EEA Financial Institutions** | **184** |

---

iv

------

---

| | |
|:---|:---|
| **Schedules:** |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Schedule 2.01 | Commitments and Revolving Facility Percentage |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Schedule 2.03 | Existing Letters of Credit |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Schedule 5.05 | Litigation; Tax Matters |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Schedule 5.07 | ERISA |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Schedule 5.09 | Ownership of Property; Liens |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Schedule 5.10 | Taxes |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Schedule 5.11(a) | Historical Financial Statements |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Schedule 5.11(b) | Pro Forma Financial Statements |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Schedule 5.11(e) | Projections |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Schedule 5.12 | Environmental |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Schedule 5.15 | Labor Relations |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Schedule 5.16 | Intellectual Property |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Schedule 5.17 | Brokers' and Transaction Fees |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Schedule 5.18 | Insurance |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Schedule 5.19 | Ventures, Subsidiaries and Affiliates; Outstanding Stock |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Schedule 5.20 | Jurisdiction of Organization; Chief Executive Office |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Schedule 5.26(c) | Mortgaged Properties |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Schedule 6.10 | Prior Indebtedness |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Schedule 6.13 | Guarantors |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Schedule 6.15 | Post-Closing Obligations |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Schedule 7.01 | Liens |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Schedule 7.04 | Investments |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Schedule 7.05 | Continuing Indebtedness |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Schedule 7.06 | Transactions with Affiliates |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Schedule 7.09 | Contingent Obligations |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Schedule 10.02 | Administrative Agent's Office; Certain Addresses for Notices |
| **Exhibits**: |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Exhibit A-1 | Form of Committed Loan Notice |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Exhibit A-2 | Form of Swing Line Loan Notice |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Exhibit A-3 | Form of Prepayment Notice |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Exhibit B | Form of Note |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Exhibit C-l | Form of Assignment and Assumption |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Exhibit C-2 | Form of Administrative Questionnaire |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Exhibit D | Form of Compliance Certificate |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Exhibit E | Form of Guaranty |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Exhibit F-1 | Form of Pledge and Security Agreement |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Exhibit F-2 | Form of Perfection Certificate |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Exhibit G | Form of Solvency Certificate |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Exhibit H-l | Form of ABL/Term Intercreditor Agreement |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Exhibit H-2 | Form of Term Intercreditor Agreement |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Exhibit I | Form of Borrowing Base Certificate |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Exhibit J | Form of Loan Party Accession Agreement |

---

v

------

**ABL CREDIT AGREEMENT** 

ABL CREDIT AGREEMENT (this "<u>Agreement"</u>) dated as of September 19, 2013, by and among PIANISSIMO ACQUISITION CORP., a Delaware corporation ("AcquisitionCo" and initially the "Initial Borrower"), which upon consummation of the Closing Date Acquisition on the Closing Date will be merged with and into STEINWAY MUSICAL INSTRUMENTS, INC., a Delaware corporation (the "<u>Company"</u>, with the Company being the survivor of such merger and the "<u>Parent Borrower</u>" hereunder), STEINWAY, INC., a Delaware corporation ("<u>Steinway</u>"), CONN-SELMER, INC., a Delaware corporation ("<u>Conn-Selmer</u>" and, together with the Parent Borrower and Steinway, each a "<u>Borrower"</u> and, collectively and jointly and severally, the "<u>Borrowers</u>"), PIANISSIMO HOLDINGS CORP., a Delaware corporation ("<u>Holdings</u>"), the<u>each</u> other Persons<u>Person</u> party hereto that are<u>is</u> designated as <u>a</u> "Loan Party", each lender from time to time party hereto (collectively, the "<u>Lenders</u>" and individually each a "<u>Lender</u>"), BANK OF AMERICA, N.A., as Administrative Agent, L/C Issuer and Swing Line Lender and DEUTSCHE BANK SECURITIES INC., as Syndication Agent.

Pursuant to or in connection with the Merger Agreement (such term and each other capitalized term used but not defined in this introductory statement having the meaning assigned thereto in Article I). Holdings will cause AcquisitionCo to merge (the "<u>Closing Date Acquisition</u>") with and into the Company, with (i) the Company surviving as a Wholly-Owned Subsidiary of Holdings and (ii) the Company assuming by operation of law all of the obligations of AcquisitionCo under this Agreement and the other Loan Documents.

<u>Holdings and the Borrowers are party to the ABL</u> <u>Credit Agreement, dated as of September 19, 2013</u> <u>(as amended by First Amendment to ABL Credit Agreement, dated as of October 31, 2017, and as further amended, supplemented or otherwise modified from time to time prior to the date hereof, the "Existing Credit Agreement").</u>

As part of the financing contemplated by the Merger Agreement, Holdings and the Borrowers have requested the Lenders to provide an<u>amend the Existing Credit Agreement to increase</u> <u>the aggregate principal amount of</u> <u>the</u> asset-based revolving credit facility to the Borrowers on a joint and several basis in the aggregate principal amount of $75.000.000 for the purposes described herein. <u>from $75,000,000 to $110,000,000 and to make certain other modifications.</u> The Lenders are willing to make the requested credit facility available<u>have agreed to so amend the Existing Credit Agreement</u> on the terms and conditions set forth herein. Accordingly, in consideration of the mutual covenants and agreements herein contained, the parties hereto covenant and agree as follows:

**ARTICLE I** 

**DEFINITIONS AND ACCOUNTING TERMS** 

**Section 1.01 <u>Defined Terms</u>.** As used in this Agreement, the following terms have the meanings set forth below:

"<u>ABL Credit Obligations</u>" means, with respect to each Loan Party, without duplication:

------

&nbsp;&nbsp;&nbsp;&nbsp;&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) in the case of each Borrower, all principal of, premium, if any, and interest (including, without limitation, any interest which accrues after the commencement of any proceeding under any Debtor Relief Law with respect to such Borrower, whether or not allowed or allowable as a claim in any such proceeding) on, any Loan or L/C Obligation under, or any Note issued pursuant 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;&nbsp;&nbsp;&nbsp;&nbsp;(ii) Bank Product Debt;

&nbsp;&nbsp;&nbsp;&nbsp;&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) all fees, expenses, indemnification obligations and other amounts of whatever nature now or hereafter payable by such Loan Party (including, without limitation, any amounts which accrue after the commencement of any proceeding under any Debtor Relief Law with respect to such Loan Party, whether or not allowed or allowable as a claim in any such proceeding) pursuant 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;&nbsp;&nbsp;&nbsp;&nbsp;(iv) all expenses of the Agents as to which one or more of such Agents have a right to reimbursement by such Loan Party under <u>Section 10.04(a)</u> of this Agreement or under any other similar provision of any other Loan Document, including, without limitation, any and all sums advanced by the Collateral Agent to preserve the Collateral or preserve its security interests in the Collateral to the extent permitted under any Loan Document or applicable Requirements of 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;&nbsp;&nbsp;&nbsp;&nbsp;(v) all amounts paid by any Indemnitee as to which such Indemnitee has the right to reimbursement by such Loan Party under <u>Section 10.04(b)</u> of this Agreement or under any other similar provision of any other Loan Document; 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;(vi) in the case of Holdings and each Subsidiary Guarantor, all amounts now or hereafter payable by Holdings or such Subsidiary Guarantor and all other obligations or liabilities now existing or hereafter arising or incurred (including, without limitation, any amounts which accrue after the commencement of any proceeding under any Debtor Relief Law with respect to any Loan Party, whether or not allowed or allowable as a claim in any such proceeding) on the part of Holdings or such Subsidiary Guarantor pursuant to this Agreement, the Guaranties or any other Loan Document;

together in each case with all renewals, modifications, consolidations or extensions thereof.

"<u>ABL Credit Party</u>" means each Lender, each L/C Issuer, the Administrative Agent, each co-agent or sub-agent appointed by the Administrative Agent from time to time pursuant to this Agreement, the Collateral Agent and each Indemnitee, and "<u>ABL Credit Parties</u>" means any two or more of them, collectively.

"<u>ABL Priority Collateral</u>" has the meaning given to the term in the ABL/Term Intercreditor Agreement.

"<u>ABL/Term Intercreditor Agreement</u>" means the Intercreditor Agreement, substantially in the form of <u>Exhibit H-1</u> hereto, dated as of the date hereof<u>Original Closing Date,</u> among the Agent, the Term Administrative Agent, the Second Lien Agent, Holdings, the Borrowers, the Term Borrower and the other Loan Parties and Term Loan Parties party thereto, as the same may be amended, modified or supplemented from time to time.

------

"<u>Accession Agreement</u>" means a Loan Party Accession Agreement, substantially in the form of Exhibit J hereto, executed and delivered by each Person that becomes a Subsidiary Guarantor after the <u>Original</u> Closing Date in accordance with <u>Section 6.13</u>.

"<u>Accepting Lenders</u>" has the meaning specified in <u>Section 10.01</u>.

"<u>Account</u>" means, as at any date of determination, all "accounts" (as such term is defined in the UCC) of the Loan Parties, including, without limitation, the unpaid portion of the obligation of a customer of a Loan Party in respect of Inventory purchased by and shipped to such customer and/or the rendition of services by a Loan Party, as stated on the respective invoice of a Loan Party, net of any credits, rebates or offsets owed to such customer.

"<u>Account Debtor</u>" means each debtor, customer or obligor in any way obligated on or in connection with any Account.

"<u>Acquired Business</u>" means the Company and its subsidiaries acquired pursuant to the terms of the Merger Agreement.

"<u>Acquisition</u>" means any transaction or series of related transactions for the purpose of or resulting, directly or indirectly, in (a) the acquisition of all or substantially all of the assets of a Person (other than the acquisition of inventory from any Steinway dealer), or of any business or division of a Person, (b) the acquisition of in excess of fifty percent (50%) of the Stock and Stock Equivalents of any Person or otherwise causing any Person to become a Subsidiary of the Parent Borrower, or (c) a merger or consolidation or any other combination with another Person.

"<u>AcquisitionCo</u>" means Pianissimo Acquisition Corp.

"<u>Adjusted Eurodollar Rate</u>" means, for any Interest Period with respect to a Eurodollar Rate Loan, the quotient obtained (expressed as a decimal, carried out to four decimal places) by dividing (i) the applicable Eurodollar Rate for such Interest Period by (ii) 1.00 minus the Eurodollar Reserve Percentage.

"<u>Administrative Agent</u>" means Bank of America, N.A. in its capacity as administrative agent under any of the Loan Documents, or any successor administrative agent.

"<u>Administrative Agent's Office</u>" means the Administrative Agent's address and, as appropriate, account as set forth on <u>Schedule 10.02</u>, or such other address or account as the Administrative Agent may from time to time notify the Parent Borrower and the Lenders.

"<u>Administrative Questionnaire</u>" means an Administrative Questionnaire substantially in the form of <u>Exhibit C-2</u> or in any other form approved by the Administrative Agent.

------

"<u>Affiliate</u>" means, as to any Person, any other Person which, directly or indirectly, is in control of, is controlled by, or is under common control with, such Person. A Person shall be deemed to control another Person if the controlling Person possesses, directly or indirectly, the power to direct or cause the direction of the management and policies of the other Person, whether through the ownership of voting securities, by contract or otherwise. Without limitation, any Affiliated Party of a Person shall for the purposes of this Agreement, be deemed to control the other Person. Notwithstanding the foregoing, neither Agent nor any Lender shall be deemed an "Affiliate" of any Loan Party or of any Subsidiary of any Loan Party.

"<u>Affiliated Party</u>" means, as to any Person, any director, executive officer, beneficial owner of five percent (5%) or more of the Stock (either directly or through ownership of Stock Equivalents), general partner, investment advisor or investment manager, of a Person.

"<u>Agent</u>" means the Administrative Agent or the Collateral Agent and any successors and assigns in such capacity, and "<u>Agents</u>" means any two or more of them.

"<u>Agent Party</u>" has the meaning specified in <u>Section 10.02(c)</u>.

"<u>Agent Advances</u>" has the meaning assigned to such term in <u>Section 2.17(a)</u>.

"<u>Aggregate Commitments</u>" means at any time the Revolving Facility Commitments of all the Lenders.

"<u>Agreement</u>" means this ABL Credit Agreement, as amended <u>by the First Amendment and the Second Amendment, and as further amended</u>, amended and restated, supplemented or otherwise modified from time to time in accordance with the terms hereof.

"<u>Alternate Interest Period</u>" has the meaning specified in <u>Section 2.02(a)</u>.

"<u>Anti-Money Laundering Laws, Export Controls, and Economic Sanctions</u>" has the meaning specified in <u>Section 5.23</u>.

"<u>Applicable Rate</u>" means:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a) with respect to Revolving Facility Loans, Agent Advances and Overadvances, (i) for the period ending on the date that the third monthly Borrowing Base Certificate is delivered to the Collateral Agent after the <u>Original</u> Closing Date, 1.75% per annum, in the case of Eurodollar Rate Loans, and 0.75% per annum, in the case of Base Rate Loans, and (ii) thereafter, as of any date of determination, a percentage per annum equal to the rate set forth below opposite the then-applicable Average Quarterly Availability for the Fiscal Quarter immediately preceding the Fiscal Quarter in which the date of determination falls:

---

| | | | |
|:---|:---|:---|:---|
| Applicable Rate | Applicable Rate | Applicable Rate | Applicable Rate |
| Pricing Level | Average Quarterly Availability | Eurodollar Rate<br>Loans | Base Rate Loans |
|  I | Greater than or equal to 66% | 1.50% | 0.50% |

---

------

---

| | | | |
|:---|:---|:---|:---|
| Applicable Rate | Applicable Rate | Applicable Rate | Applicable Rate |
| Pricing Level | Average Quarterly Availability | Eurodollar Rate<br>Loans | Base Rate Loans |
|  II | Less than 66% but greater than or equal to 33% | 1.75% | 0.75% |
|  III | Less than 33% | 2.00% | 1.00% |

---

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b) With respect to Incremental Loans, as of and following the effective date of any Incremental Commitment, a percentage per annum as agreed upon among the Administrative Agent, the Parent Borrower and the applicable Incremental Lenders at the time such Incremental Commitments become effective.

For the avoidance of doubt, (a) Agent Advances and Overadvances shall bear interest as Base Rate Loans, and (b) changes in the Applicable Rate resulting from a change in the Average Quarterly Availability, as calculated in a Compliance Certificate delivered pursuant to <u>Section 6.02(b)</u>, for any Fiscal Quarter shall become effective as to all applicable Revolving Facility Loans and Letter of Credit Fees on the first day of the next Fiscal Quarter following delivery of such Compliance Certificate; <u>provided</u>, <u>however,</u> that if a Compliance Certificate is not delivered when required to be delivered in accordance with such <u>Section 6.02(b)</u>, then Pricing Level III shall apply from the first day of the next Fiscal Quarter following the date on which such Compliance Certificate was required to be delivered through the date on which such Compliance Certificate is delivered, after which the pricing level corresponding to the Average Quarterly Availability set forth in such Compliance Certificate shall apply. Notwithstanding the calculation of the Applicable Rate for any period as set forth above, if, as a result of any error in the calculation of the Average Quarterly Availability for any quarter or for any other reason, the Parent Borrower or the Required Lenders determine that (i) the Average Quarterly Availability as calculated for such quarter was inaccurate and (ii) a proper calculation of the Average Quarterly Availability for such quarter would have resulted in higher pricing for such period, each applicable Borrower shall immediately and retroactively be obligated to pay to the Administrative Agent for the account of the applicable Lenders or L/C Issuers, as the case may be, promptly on demand by the Administrative Agent (or, after the occurrence of an actual or deemed entry of an order for relief with respect to any Borrower under the Bankruptcy Code of the United States, automatically and without further action by the Administrative Agent, any Lender or any L/C Issuer), an amount equal to the excess of the amount of interest and fees that should have been paid for such period over the amount of interest and fees actually paid for such period. This paragraph shall not limit the rights of the Administrative Agent, any Lender or any L/C Issuer, as the case may be, under <u>Section 2.08(a)</u>, <u>2.04(c)</u> or <u>2.03(h)</u> or under <u>Article VIII</u>.

"<u>Appraisal</u>" means an appraisal of the Borrowers' Inventory conducted by appraisers selected by the Collateral Agent, including any such appraisal conducted as part of the initial Field Survey and Audit obtained by the Collateral Agent prior to the <u>Original</u> Closing Date and any such appraisal obtained by the Agents pursuant to <u>Section 6.09(a)</u>.

------

"<u>Approved Fund</u>" means any Fund that is administered or managed by (i) a Lender, (ii) an Affiliate of a Lender or (iii) an entity or an Affiliate of an entity that administers or manages a Lender.

"<u>Assignee Group</u>" means two or more Eligible Assignees that are Affiliates of one another or two or more Approved Funds managed by the same investment advisor.

"<u>Assignment and Assumption</u>" means an assignment and assumption entered into by a Lender and an Eligible Assignee (with the consent of any party whose consent is required by <u>Section 10.06(b)</u>), and accepted by the Administrative Agent, in substantially in the form of <u>Exhibit C-l</u> hereto or any other form approved by the Administrative Agent.

"<u>Audited Financial Statements</u>" means the audited consolidated balance sheets of the Company and its subsidiaries as of December 31, 2012, 2011 and 2010, and the related consolidated statements of operations and comprehensive income (loss), equity, and cash flows for the years ended December 31, 2012, 2011 and 2010, in each case, including the notes thereto, audited by KPMG LLP.

"<u>Availability</u>" means, at any time, (a) the Borrowing Base <u>minus</u> (b) the aggregate Outstanding Amounts under the Facility.

"<u>Availability Period</u>" shall mean the period from and including the <u>Original</u> Closing Date to but excluding the earlier of the Revolving Facility Maturity Date and the date of termination of the Revolving Facility Commitments.

"<u>Availability Reserve</u>" means the sum (without duplication) of (a) the Inventory Reserve; (b) the Rent and Charges Reserve; (c) the Bank Product Reserve; (d) all accrued Royalties, whether or not then due and payable by a Borrower or Subsidiary Guarantor; (e) the aggregate amount of liabilities secured by Liens upon Collateral that are senior to Agent's Liens (but imposition of any such reserve shall not waive an Event of Default arising therefrom); and (f) such additional reserves, in such amounts and with respect to such matters, as the Administrative Agent in its Credit Judgment may elect to impose from time to time.

"<u>Average Quarterly Availability</u>" means, for any Fiscal Quarter, an amount (expressed as a percentage) equal to the quotient of (A) the average daily Availability during such Fiscal Quarter <u>divided by</u> (B) the daily average Borrowing Base for such Fiscal Quarter.

"<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>Bank of America</u>" means Bank of America, N.A., and its successors.

------

"<u>Bank Product</u>" means any of the following products, services or facilities extended to any Borrower or Subsidiary by a Lender or any of its Affiliates: (a) services under any Cash Management Agreement; (b) products under Rate Contracts; (c) commercial credit card and merchant card services; and (d) leases and other banking products or services as may be requested by any Borrower or Subsidiary, other than Letters of Credit; <u>provided</u>, <u>however</u>, that for any of the foregoing to be included as a "Finance Obligation" for purposes of a distribution under Section 8.03, the applicable Secured Party and Loan Party must have previously provided written notice to the Administrative Agent of (i) the existence of such Bank Product, (ii) the maximum dollar amount of obligations arising thereunder to be included as a Bank Product Reserve ("<u>Bank Product Amount</u>"), and (iii) the methodology to be used by such parties in determining the Bank Product Debt owing from time to time. The Bank Product Amount may be changed from time to time upon written notice to the Administrative Agent by the applicable Secured Party and Loan Party. No Bank Product Amount may be established or increased at any time that a Default or Event of Default exists, or if a reserve in such amount would cause an Overadvance.

"<u>Bank Product Amount</u>" is defined in the definition of Bank Product.

"<u>Bank Product Debt</u>" means Indebtedness and other obligations of a Loan Party relating to Bank Products.

"<u>Bank Product Reserve</u>" means the aggregate amount of reserves established by the Administrative Agent from time to time in its discretion in respect of Bank Product Debt <u>(other than for Indebtedness and other obligations arising from Secured Hedge Agreements so long as Section 8.03 specifies that the payment of amounts owing under such Secured Hedge Agreements are to be made after the payment of all Finance Obligations constituting the Loans and L/C Obligations and amounts then owing under Secured Cash Management Agreements)</u>, which shall be at least equal to the sum of all Bank Product Amounts.

"<u>Bankruptcy Code</u>" means the Federal Bankruptcy Reform Act of 1978.

"<u>Base Rate</u>" means, for any day, a rate per annum equal to the highest of (i) the Prime Rate for such day, (ii) the sum of 0.50% plus the Federal Funds Rate for such day and (iii) the Eurodollar Rate for a one-month Interest Period (determined by reference to <u>clause (ii)</u> of the definition thereof) plus 1.00%; and if Base Rate shall be less than zero, such rate shall be deemed zero for purposes of this Agreement.

"<u>Base Rate Loan</u>" means a Loan that bears interest based on the Base Rate.

"<u>Benefit Plan</u>" means any employee benefit plan as defined in Section 3(3) of ERISA (whether governed by the laws of the United States or otherwise) to which any Loan Party incurs or otherwise has any obligation or liability, contingent or otherwise.

"<u>Borrower</u>" has the meaning specified in the introductory statement to this Agreement.

"<u>Borrower Materials</u>" has the meaning specified in <u>Section 6.02</u>.

------

"<u>Borrowing</u>" means the borrowing consisting of simultaneous Loans of the same Type and, in the case of Eurodollar Rate Loans, having the same Interest Period made by each of the Lenders.

"<u>Borrowing Base</u>" means, on any date of determination, an amount equal to the lesser of (a) the Aggregate Commitments; or (b) the sum of:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(i) up to 80% of the then Eligible Accounts of the Borrowers and Subsidiary Guarantors, other than Accounts
constituting Dealer Notes; plus

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(ii) up to the lesser of (A) 50% of the then Eligible Accounts of the Borrowers and Subsidiary Guarantors,
constituting Dealer Notes and (B) $5,000,000; plus

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(iii) up to the sum of (A) in the case of Steinway grand pianos, the sum of (1) 85% of the Current
Wholesale Value of all finished and near-finished pianos, (2) 75% of the Current Wholesale Value of Concert and Artist Bank Pianos, and (3) 70% of the Current Wholesale Value of all Factory Returns;
(B) in the case of Steinway upright pianos, the sum of (1) 65% of the Current Wholesale Value of all finished and near-finished pianos, and (2) 50% of the Current Wholesale Value of all Factory
Returns; (C) in the case of Boston and Essex grand pianos, the sum of (1) 65% of the Standard Cost Value of all finished pianos, and (2) 50% of the Standard Cost Value of all Factory Returns; and (D) in the case of Boston and
Essex upright pianos, the sum of (1) 50% of the Standard Cost Value of all finished pianos, and (2) 40% of the Standard Cost Value of all Factory Returns; plus

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(iv) up to 50% of the cost of the Eligible Inventory of Steinway constituting raw materials; plus

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(v) up to 65% of the cost of Eligible Inventory of the Borrowers and Subsidiary Guarantors (other than Steinway)
constituting finished goods; plus

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(vi) up to 25% of the cost of Eligible Inventory of the Borrowers and Subsidiary Guarantors (other than Steinway)
constituting raw materials; plus

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(vii) up to the lesser of (A) $7,500,000 and (B) 25% of the cost of Eligible Inventory of the Borrowers and
Subsidiary Guarantors <u>(other than Steinway)</u> constituting work-in-process; minus

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(viii) $5,000,000; and minus

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(ix) the Availability Reserve.

------

The Borrowing Base in effect at any time shall be the Borrowing Base as shown on the Borrowing Base Certificate and the reconciliation reports delivered by the Parent Borrower pursuant to <u>Section 6.2(j)</u> of this Agreement; <u>provided</u>, <u>however</u>, (i) that if Parent Borrower shall fail to deliver a Borrowing Base Certificate when required pursuant to <u>Section 6.02(j)</u>, the amounts calculated with respect to the Eligible Accounts and the Eligible Inventory shall be zero until such Borrowing Base Certificate is delivered and (ii) notwithstanding the foregoing, for a 60-day period commencing on the Closing Date (or such shorter period ending on the date as the Parent Borrower may elect after delivery of a field examination which is satisfactory in form to the Administrative Agent), the Borrowing Base shall be equal to the greater of (a) $20,000,000 and (b) the amount shown on the most recent borrowing base certificate delivered under the Existing Credit Agreement prior to the Closing Date minus $5,000,000.

For the avoidance of doubt, none of the assets being acquired in an Acquisition nor the assets of the Person whose Equity Interests are being acquired in an Acquisition (other than with respect to the Transactions) shall be included in any calculation of the Borrowing Base (whether or not such assets meet the eligibility criteria hereunder) until such time as a Field Survey and Audit of the assets and/or Person(s) being acquired with results reasonably acceptable to the Administrative Agent has been completed; it being agreed that the Administrative Agent shall use commercially reasonable efforts to commence a Field Survey and Audit promptly following the Parent Borrower's request therefor which may be requested prior to consummation of such Acquisition.

"<u>Borrowing Base Certificate</u>" means a certificate signed by a Responsible Officer of the Parent Borrower and setting forth the calculation of the Borrowing Base in compliance with <u>Section 6.02(j)</u>, substantially in the form of <u>Exhibit I</u>.

"<u>Boston Pianos</u>" means pianos designed by Steinway, manufactured by an OEM and marketed under the Boston piano line.

"<u>Business Day</u>" means any day other than a Saturday, Sunday or other day on which commercial banks are authorized to close under the Requirements of Law of, or are in fact closed in, the state where the Administrative Agent's Office is located, except that if such day relates to any Eurodollar Rate Loan, such day shall be a day that is also a London Banking Day.

"<u>Capital Lease</u>" means, with respect to any Person, any lease of, or other arrangement conveying the right to use, any Property by such Person as lessee that has been or should be accounted for as a capital lease on a balance sheet of such Person prepared in accordance with GAAP.

"<u>Capital Lease Obligations</u>" means, at any time, with respect to any Capital Lease, any lease entered into as part of any sale leaseback transaction of any Person or any synthetic lease, the amount of all obligations of such Person that is (or that would be, if such synthetic lease or other lease were accounted for as a Capital Lease) capitalized on a balance sheet of such Person prepared in accordance with GAAP.

------

"<u>Cash Collateralize</u>" or "<u>Cash Collateralization</u>" means to deliver to the Administrative Agent an amount (whether in cash or in the form of a backstop letter of credit in form and substance reasonably satisfactory to, and issued by a U.S. commercial bank reasonably acceptable to, the Administrative Agent in its commercially reasonable discretion) equal to 105.0% of the sum of (a) the Maximum Undrawn Amount plus the aggregate amount of all unreimbursed payments and disbursements under each Letter of Credit which have not been converted to Revolving Facility Loans plus (b) the amount of unpaid Letter of Credit Fees then accrued.

"<u>Cash Dominion Period</u>" has the meaning specified in <u>Section 6.11(b)</u>.

"<u>Cash Equivalents</u>" means (a) any readily-marketable securities (i) issued by, or directly, unconditionally and fully guarantied or insured by the United States federal government or (ii) issued by any agency of the United States federal government the obligations of which are fully backed by the full faith and credit of the United States federal government, (b) any readily-marketable direct obligations issued by any other agency of the United States federal government, any state of the United States or any political subdivision of any such state or any public instrumentality thereof, in each case having a rating of at least "A-1" from S&P or at least "P-l" from Moody's, (c) any commercial paper rated at least "A-1" by S&P or "P-l" by Moody's and issued by any Person organized under the laws of any state of the United States, (d) any Dollar-denominated time deposit, insured certificate of deposit, overnight bank deposit or bankers' acceptance issued or accepted by (i) any Lender or (ii) any commercial bank that is (A) organized under the laws of the United States, any state thereof or the District of Columbia, (B) "adequately capitalized" (as defined in the regulations of its primary federal banking regulators) and (C) has Tier 1 capital (as defined in such regulations) in excess of $250,000,000 and (e) shares of any United States money market fund that (i) has substantially all of its assets invested continuously in the types of investments referred to in <u>clauses (a)</u>, <u>(b)</u>, <u>(c)</u> or <u>(d)</u> above with maturities as set forth in the proviso below, (ii) has net assets in excess of $500,000,000 and (iii) has obtained from either S&P or Moody's the highest rating obtainable for money market funds in the United States; provided, however, that the maturities of all obligations specified in any of <u>clauses (a)</u>, <u>(b)</u>, <u>(c)</u> or <u>(d)</u> above shall not exceed 365 days.

"<u>Cash Management Accounts</u>" means the bank deposit accounts or securities accounts of each Loan Party other than Excluded Accounts, which (i) shall be subject to one or more Cash Management Agreements and (ii) at the option of the applicable Loan Party, may be maintained at one or more Cash Management Banks.

"<u>Cash Management Agreement</u>" means any agreement to provide cash management services, including treasury, depository, overdraft, credit or debit card, electronic funds transfer and other cash management arrangements.

"<u>Cash Management Bank</u>" means any Person, that, at the time it enters into a Cash Management Agreement, is a Lender or an Affiliate of a Lender, in its capacity as a party to such Cash Management Agreement.

"<u>Cash Management Collections Accounts</u>" has the meaning specified in <u>Section 6.11(a)</u>.

------

"<u>Cash Management Obligations</u>" means, as applied to any Cash Management Bank, any direct or indirect liability, contingent or otherwise, of such Person under or in respect of a Cash Management Agreement.

"<u>Cash Management Triggering Event</u>" has the meaning specified in <u>Section 6.11(b)</u>.

"<u>Change in Law</u>" means the occurrence, after the date of this Agreement, of any of the following: (i) the adoption or taking effect of any law, rule, regulation or treaty; (ii) any change in any law, rule, regulation or treaty or in the administration, interpretation, implementation or application thereof by any Governmental Authority; or (iii) the making or issuance of any request, rule, guideline or directive (whether or not having the force of law) by any Governmental Authority; <u>provided</u> that notwithstanding anything herein to the contrary, (x) the Dodd-Frank Wall Street Reform and Consumer Protection Act (Pub.L. 111-203, H.R. 4173) and all requests, rules, guidelines or directives thereunder or issued in connection therewith and (y) all requests, rules, guidelines or directives promulgated by the Bank for International settlements<u>Settlements</u>, the Basel Committee on Banking Supervision (or any successor or similar authority) or the United States or foreign regulatory authorities, in each case pursuant to Basel III, shall in each case be deemed to be a "Change in Law", regardless of the date enacted, adopted or issued.

"<u>Change of Control</u>" means the occurrence of any of the following events:

&nbsp;&nbsp;&nbsp;&nbsp;&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) Permitted Holders at any time cease to own, on a fully diluted basis, at least fifty-one percent (51%) of the issued and outstanding Stock of Holdings owned by the Permitted Holders on the <u>Second Amendment</u> Effective Date (as the same may be adjusted for any combination, recapitalization or reclassification into a greater or smaller number of shares, interests or other unit of equity security) or, in any event, Stock representing voting control of Holdings;

&nbsp;&nbsp;&nbsp;&nbsp;&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) Holdings ceases to own, on a fully diluted basis, one hundred percent (100%) of the issued and outstanding Stock and Stock Equivalents of the Parent Borrower;

&nbsp;&nbsp;&nbsp;&nbsp;&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) the Parent Borrower ceases to have beneficial ownership (as defined in Rule 13d-3 under the Exchange Act), on a fully diluted basis, of one hundred percent (100%) of the Stock and Stock Equivalents of each other Borrower, in each instance in clauses (i), (ii) and (iii), free and clear of all Liens, rights, options, warrants or other similar agreements or understandings, other than Liens in favor of the Administrative Agent, for the benefit of the Secured Parties, Liens in favor of the Term Agent pursuant to the Term Finance Documents and Liens in favor of the Second Lien Agent pursuant to the Second Lien Loan Documents <u>(except as a result of any merger, consolidation, conveyance or transfer permitted under Section 7.03(a) hereof)</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;(iv) a "Change of Control" (as defined in any Term Loan Document or Second Lien Loan Document) shall occur.

------

"<u>Closing</u> Date" means the first date on or after the Effective Date when all the conditions precedent in <u>Section 4.01</u> are satisfied or waived in accordance with Section 10.01.<u>Fee</u> <u>Letter" means the Fee Letter dated as of February 16, 2018 among the Parent Borrower and Bank of America. N.A. and Merrill Lynch, Pierce, Fenner & Smith Incorporated.</u>

"<u>Closing Date Acquisition</u>" has the meaning specified in the introductory statement to this Agreement.<u>means the merger of AcquisitionCo</u> <u>with and into the Company, with (i) the Company surviving as a Wholly-Owned Subsidiary of Holdings and (ii) the Company assuming by operation of law all of the obligations of AcquisitionCo under this Agreement and the other Loan Documents.</u>

"<u>Code</u>" means the Internal Revenue Code of 1986.

"<u>Collateral</u>" means all of the "Collateral" referred to in the Collateral Documents and all of the other property and assets that are or are required under the terms hereof or of the Collateral Documents to be subject to Liens in favor of the Collateral Agent for the benefit of the Secured Parties.

"<u>Collateral Access Agreement</u>" means a landlord waiver, bailee letter or acknowledgment agreement of any lessor, warehouseman, processor, consignee, mortgagee or other Person (other than any Loan Party) in possession of, having a Lien upon, or having rights or interests in the equipment or inventory (or any books or records relating thereto) of any Loan Party, in each case in the form attached as an exhibit to the Pledge and Security Agreement or otherwise in form and substance reasonably satisfactory to the Collateral Agent.

"<u>Collateral Agent</u>" means Bank of America, in its capacity as collateral agent for the Secured Parties under the Collateral Documents, and its successor or successors in such capacity.

"<u>Collateral Documents</u>" means, collectively, the Pledge and Security Agreement, the Depositary Bank Agreements, each Mortgage, any additional pledges, security agreements, patent, trademark or copyright filings or mortgages that create or purport to create a Lien in favor of the Collateral Agent for the benefit of the Secured Parties and any instruments of assignment, control agreements, lockbox letters or other instruments or agreements executed pursuant to the foregoing.

"<u>Collections</u>" means all cash, checks, notes, instruments, and other items of payment (including insurance proceeds, proceeds of cash sales, rental proceeds, and tax refunds).

"<u>Commitment Fee</u>" has the meaning specified in <u>Section 2.09(a)</u>.

"<u>Committed Loan Notice</u>" means a notice of (i) a Borrowing, (ii) a conversion of Loans from one Type to the other or (iii) a continuation of Eurodollar Rate Loans, pursuant to <u>Section 2.02(a)</u>, which, if in writing, shall be substantially in the form of <u>Exhibit A-1</u> <u>or such other form as may be approved by the Administrative Agent (including any form on an electronic platform or electronic transmission system as shall be approved by the Administrative Agent), appropriately completed and signed by a Responsible Officer of the Parent Borrower.</u>

"<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>Company</u>" means Steinway Musical Instruments, Inc.

"<u>Compliance Certificate</u>" has the meaning specified in <u>Section 6.02(b)</u>.

"<u>Computer Hardware</u>" means all computer and other electronic data processing hardware of a Loan Party, whether now or hereafter owned, licensed or leased by such Loan Party, including, without limitation, all integrated computer systems, central processing units, memory units, display terminals, printers, features, computer elements, card readers, tape drives, hard and soft disk drives, cables, electrical supply hardware, generators, power equalizers, accessories, peripheral devices and other related computer hardware, all documentation, flowcharts, logic diagrams, manuals, specifications, training materials, charts and pseudo codes associated with any of the foregoing and all options, warranties, services contracts, program services, test rights, maintenance rights, support rights, renewal rights and indemnifications relating to any of the foregoing.

"<u>Concert and Artist Bank Pianos</u>" means all pianos held by Steinway or a Steinway dealer, including without limitation, those located at a performance venue, which are available for use by performers.

"<u>Conn-Selmer</u>" has the meaning specified in the introductory statement to this Agreement.

"<u>Conn-Selmer Dealer Notes</u>" means notes made by Conn-Selmer dealers in favor of Conn-Selmer or any Subsidiary thereof, that evidence indebtedness owing by such dealers to Conn-Selmer or such Subsidiary for extensions of credit made by Conn-Selmer or such Subsidiary to dealers to acquire Conn-Selmer's musical instruments in an amount not to exceed $3,000,000 in the aggregate for all such note installments with a due date more than one year after the date of issuance.

"<u>Consolidated Capital Expenditures</u>" means, with respect to any Person, for any period, the aggregate amount incurred that would, in accordance with GAAP, be classified as capital expenditures on the consolidated balance sheet of such Person and its Subsidiaries for such period.

"<u>Consolidated Cash Interest Expense</u>" means, with respect to Holdings and its Subsidiaries, gross interest expense for such period paid or required to be paid in cash (including all commissions, discounts, fees and other charges in connection with letters of credit and similar instruments, but excluding (i) commitment fees and other upfront fees payable in connection with the Related Transactions, (ii) net of amounts paid or payable and/or received or receivable under permitted Rate Contracts in respect of interest rates, (iii) the amortized amount of debt discount and debt issuance costs, (iv) interest paid or payable by the issuance of payment-in-kind notes and (v) other non-cash interest) minus interest income for such period.

"<u>Consolidated EBITDA</u>" means the net income (or loss) for the applicable period of measurement of Holdings and its Subsidiaries on a consolidated basis determined in accordance with GAAP,

------

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(A) but excluding: (a) the income (or loss) of any Person in which any other Person (other than the Parent Borrower or any of its Wholly-Owned Subsidiaries) has an ownership interest, except to the extent that any such income has been actually received in cash by a Loan Party or a Subsidiary during such period; (b) the income (or loss) of any Person accrued prior to the date it becomes a Subsidiary of Holdings or is merged into or consolidated with Holdings or any of its Subsidiaries or that Person's assets are acquired by Holdings or any of its Subsidiaries; (c) the proceeds of any life insurance policy; (d) the impact of any foreign currency valuation or settlement adjustments; (e) non-cash gains or losses from the sale, exchange, transfer or other disposition of Property or assets not in the Ordinary Course of Business of Holdings and its Subsidiaries, and related tax effects in accordance with GAAP; (f) any other extraordinary, unusual or non-recurring gains or losses of Holdings or its Subsidiaries and related tax effects in accordance with GAAP; and (g) gains or losses (whether or not realized) with respect to obligations under Term Secured Hedge Agreements and Secured Hedge Agreements,

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(B) <u>plus</u>, without duplication and to the extent reflected as a charge in the statement of such net income for such period: (a) all amounts deducted in calculating net income (or loss) for depreciation or amortization for such period; (b) gross interest expense (less interest income) deducted in calculating net income (or loss) for such period; (c) all accrued taxes on or measured by income to the extent deducted in calculating net income (or loss) for such period; (d) all non-cash losses or expenses (or minus non-cash income or gain) included or deducted in calculating net income (or loss) for such period, including, without limitation, (i) non-cash compensation expense, (ii) non-cash charges arising from the conversion of last-in, first-out accounting to first-in, first-out accounting, (iii) write-offs and write-downs (other than in respect of Accounts or Inventory), (iv) gains or losses from early extinguishment of debt or other infrequent and unusual items and (v) non-cash pension expense; (e) fees and expenses incurred in connection with the closing of the Related Transactions incurred within the succeeding one year period following the Closing Date to the extent deducted in calculating net income (or loss) for such period; (f) all proceeds of business interruption insurance to the extent not already included in determining net income (or loss) for such period; (g) losses from retail locations incurred during the first 12 months following the acquisition or opening of such location in an aggregate amount not to exceed the greater of (x) $2,000,000 and (y) 5.0% of Consolidated EBITDA for such period; (h)(i) one-time costs associated with the development and opening of replacement locations for Steinway Hall New York in an aggregate amount not to exceed $8,000,000 and (ii) costs associated with the development and opening of other new retail locations; (i) any reduction in net income arising from any purchase accounting adjustments arising as a result of the Related Transaction or any Permitted Acquisition to the extent deducted in calculating net income (or loss) for such period; (j) upfront fees and expenses payable in connection with the issuance of any Stock or Stock Equivalents permitted hereunder, any Permitted Acquisition or the incurrence of debt permitted hereunder (in each case whether or not consummated) to the extent deducted in calculating net income (or loss) for such period; (k) consulting and director fees paid to directors, board consultant's fees, salaries and bonuses payable to directors and reimbursement of actual out-of-pocket expenses incurred in connection with attending board of director meetings, in each case, to the extent permitted under <u>Section 7.07</u>; (l) reimbursement of reasonable out-of-pocket costs and expenses to Sponsor to the extent permitted under <u>Section 7.07</u>; (m) one-time expenses related to (i) any management changes and reductions in work force, including, without limitation, severance and related outplacement service fees, search fees, related hiring costs and relocation costs, (ii) cash expenses and charges relating to restructuring of the Loan Parties' operations,

------

transition costs and corporate offsets, (iii) one-time cash expenses and charges arising from other restructuring activities and (iv) consulting fees paid to third party non-Affiliates in connection with marketing, sales and related initiatives, including, without limitation, any consulting fees associated with the assessment or implementation of such activities, in an aggregate amount for this clause (m) not to exceed 15% of Consolidated EBITDA for such period (before giving effect to such addback and the pro forma effect pursuant to clause (e) of the definition of "pro forma basis"); and (n) any expenses and charges of a type set forth in the Adjusted EBITDA Reconciliation contained in the Company's Lender Presentation dated September 4, 2013<u>February 6, 2018 delivered to prospective lenders under the Term Credit Agreement</u>,

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(C) <u>plus</u>, with respect to Targets owned by the Holdings or any of its Subsidiaries for which the Administrative Agent has received financial statements pursuant to <u>Section 6.01(b)</u> for less than twelve months, the Consolidated EBITDA calculated on a pro forma basis and allocated to each month prior to the acquisition thereof included in the trailing twelve month period for which Consolidated EBITDA is being calculated, and

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(D) <u>minus</u>, with respect to any Disposition by Holdings or any of its Subsidiaries consummated within the period in question, Consolidated EBITDA attributable to Holdings, the Subsidiary or profit center which is the subject of such Disposition from the beginning of such period until the date of consummation of such Disposition.

For purposes of calculating Consolidated EBITDA as of any date of measurement ending on or before June 30, 2014, Consolidated EBITDA for: (a) the calendar quarter ending December, 31, 2012 shall be deemed to equal $18,400,000, (b) the calendar quarter ending March, 31, 2013 shall be deemed to equal $9,600,000, (c) the calendar quarter ending June, 30, 2013 shall be deemed to equal $14,600,000 and (d) the calendar months ending July 31, 2013, August 31, 2013 and September 30, 2013 shall be calculated in a manner consistent with the calculation of Consolidated EBITDA for the preceding periods.

"<u>Consolidated Total Debt</u>" of Holdings and its Subsidiaries means, as of any date of determination, the aggregate principal amount of all Indebtedness of Holdings and its Subsidiaries (other than Indebtedness in respect of any undrawn acceptance, letter of credit or similar facilities, hedging obligations, surety bonds, permitted earn-outs or non-compete payments).

"<u>Consolidating</u>" means, with respect to balance sheets, statements of income, operations, shareholders' equity and cash flows, that such financial statements present consolidating information with regard to each of the piano and band business divisions and the consolidating financial statements of Holdings and its Subsidiaries.

"Contingent Obligation" means, as to any Person, any direct or indirect liability- contingent or otherwise, of that Person: (i) with respect to any Indebtedness, lease, dividend or other obligation of another Person if the primary purpose or intent of the Person incurring such liability, or the primary effect thereof, is to provide assurance to the obligee of such liability that such liability will be paid or discharged, or that any agreements relating thereto will be complied with, or that the holders of such liability will be protected (in whole or in part) against loss with respect thereto; (ii) with respect to any letter of credit issued for the account of that Person

------

or as to which that Person is otherwise liable for reimbursement of drawings; (iii) under any Rate Contracts; (iv) to make take-or-pay or similar payments if required regardless of nonperformance by any other party or parties to an agreement; or (v) for the obligations of another Person through any agreement to purchase, repurchase or otherwise acquire such obligation or any Property constituting security therefor, to provide funds for the payment or discharge of such obligation or to maintain the solvency, financial condition or any balance sheet item or level of income of another Person. The amount of any Contingent Obligation shall be equal to the amount of the obligation so guaranteed or otherwise supported or, if not a fixed and determined amount, the maximum amount so guaranteed or supported.

"<u>Contractual Obligation</u>" means, as to any Person, any provision of any security (whether in the nature of Stock, Stock Equivalents or otherwise) issued by such Person or of any agreement, undertaking, contract, indenture, mortgage, deed of trust or other instrument, document or agreement (other than a Loan Document) to which such Person is a party or by which it or any of its Property is bound or to which any of its Property is subject.

"<u>Controlled Account</u>" means each Deposit Account that is subject to a Deposit Account Control Agreement in form and substance satisfactory to the Administrative Agent and the L/C Issuer.

"<u>Copyrights</u>" means all rights, title and interests (and all related IP Ancillary Rights) arising under any Requirement of Law in or relating to copyrights and all mask work, database and design rights, whether or not registered or published, all registrations and recordations thereof and all applications in connection therewith.

"<u>Covenant Triggering Event</u>" shall occur at any time that (i) an Event of Default has occurred and is continuing or (ii) Availability is less than 17.5<u>.0</u>% of the Revolving Facility Commitment.

"<u>Credit Event</u>" has the meaning specified in <u>Article IV</u>.

"<u>Credit Judgment</u>" means the Administrative Agent's credit judgment exercised in good faith, based upon its consideration of any factor that it believes (a) could adversely affect the quantity, quality, mix or value of Collateral (including any Requirement of Law that may inhibit collection of an Account), the enforceability or priority of Collateral Agent's Liens, or the amount that Agents and Lenders could receive in liquidation of any Collateral; (b) suggests that any collateral report or financial information delivered by any Loan Party is incomplete, inaccurate or misleading in any material respect; (c) materially increases the likelihood of any proceeding under Debtor Relief Law involving a Loan Party; or (d) creates or could result in a Default or Event of Default. In exercising such judgment with respect to (a) through (d) hereof, Administrative Agent may consider any factors that could increase the credit risk of lending to Borrowers on the security of the Collateral (other than such factors that are attributable to general economic conditions).

"<u>Current Wholesale Value</u>" means, for any piano at any time, the wholesale price of such piano as published in good faith by Holdings or its Subsidiaries at such time, or if such price is not so published, the wholesale price of such piano as reasonably determined by the Administrative Agent.

------

"<u>Dealer Notes</u>" means, collectively, the Conn-Selmer Dealer Notes and the Steinway Dealer Notes.

"<u>Debtor Relief Laws</u>" means the Bankruptcy Code and all other liquidation, conservatorship, bankruptcy, assignment for the benefit of creditors, moratorium, rearrangement, receivership, insolvency, reorganization, or similar debtor relief laws of the United States or other applicable jurisdictions from time to time in effect and affecting the rights of creditors generally.

"<u>Default</u>" means any event or condition that constitutes an Event of Default or that, with the giving of any notice, the passage of time, or both, would be an Event of Default.

"<u>Default Rate</u>" means an interest rate equal to (A) the Base Rate plus (B) the Applicable Rate, if any, applicable to Base Rate Loans plus (C) 2.00% per annum; <u>provided</u>, <u>however</u>, that with respect to a Eurodollar Rate Loan, the Default Rate shall be an interest rate equal to the interest rate (including any Applicable Rate) otherwise applicable to such Loan plus 2.00% per annum.

"<u>Defaulting Lender</u>" means, subject to <u>Section 2.15(b)</u>, any Lender that, as determined by the Administrative Agent, (i) has failed to perform any of its funding obligations hereunder, including in respect of its Loans, L/C Obligations or Swing Line Loans, within three Business Days of the date required to be funded by it hereunder, (ii) has notified the Parent Borrower, the Administrative Agent, an L/C Issuer or the Swing Line Lender that it does not intend to comply with its funding obligations or has made a public statement to that effect with respect to its funding obligations hereunder or under other agreements generally in which it commits to extend credit, (iii) has failed, within three Business Days after request by the Administrative Agent or the Parent Borrower, to confirm in a manner satisfactory to the Administrative Agent or the Parent Borrower that it will comply with its funding obligations or (iv) has, or has a direct or indirect parent company that has, (A) become the subject of a proceeding under any Debtor Relief Law, (B) had a receiver, conservator, trustee, administrator, assignee for the benefit of creditors or similar Person charged with reorganization or liquidation of its business or a custodian appointed for it, (C) taken any action in furtherance of, or indicated its consent to, approval of or acquiescence in any such proceeding or appointment or (D) become the subject of a Bail-in Action; <u>provided</u> that a Lender shall not be a Defaulting Lender solely by virtue of the ownership or acquisition of any equity interest in that Lender or any direct or indirect parent company thereof by a Governmental Authority.

"<u>Deposit Account</u>" means a "<u>deposit account</u>" (as defined in the UCC) and also means and includes all demand, time, savings, passbook or similar accounts maintained by a Loan Party with a bank or other financial institution, whether or not evidenced by an instrument, all cash and other funds held therein and all passbooks related thereto and all certificates and instruments, if any, from time to time representing, evidencing or deposited into such deposit accounts.

"<u>Depositary Bank Agreement</u>" means an agreement among a Loan Party, a bank or other depositary institution and the Collateral Agent, in form and substance reasonably satisfactory to the Collateral Agent.

------

"<u>Disposition</u>" means (i) the sale, lease, conveyance or other disposition of Property, other than sales or other dispositions expressly permitted under <u>Section 7.02(a)</u>, <u>7.02(c)</u>, <u>7.02(d)</u> and <u>7.02(j)</u> and (ii) the sale or transfer by the Parent Borrower or any Subsidiary of the Parent Borrower of any Stock or Stock Equivalent issued by any Subsidiary of the Parent Borrower and held by such transfer Person.

"<u>Disqualified Stock</u>" means any Stock that, by its terms (or by the terms of any security into which it is convertible or for which it is exchangeable in each case, at the option of the holder of the Stock), or upon the happening of any event, matures or is mandatorily redeemable, pursuant to a sinking fund obligation or otherwise, or is redeemable at the option of the holder thereof, in whole or in part, in each case at any time on or prior to the date that is 91 days after the Revolving Facility Maturity Date. Notwithstanding the preceding sentence, any Stock that would constitute Disqualified Stock solely because the holders of the Stock have the right to require the issuer to repurchase such Stock upon the occurrence of a change of control or an asset sale will not constitute Disqualified Stock if the terms of such Stock provide that the issuer may not repurchase or redeem any such Stock pursuant to such provisions unless such repurchase or redemption complies with <u>Section 7.11</u>. The amount of Disqualified Stock deemed to be outstanding at any time for purposes of this Agreement will be the maximum amount that Holdings and its Subsidiaries may become obligated to pay upon the maturity of, or pursuant to any mandatory redemption provisions of, such Disqualified Stock, exclusive of accrued dividends.

"<u>Dollars</u>", "<u>dollars</u>" and "<u>$</u>" means lawful money of the United States.

"<u>Domestic Subsidiary</u>" means, with respect to any Person, a Subsidiary of such Person that is incorporated or otherwise organized under the laws of the United States, any state thereof or the District of Columbia.

"<u>Drawing Date</u>" has the meaning specified in <u>Section 2.03(d)(ii)</u>.

"<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.

"Effective Date" means the date this Agreement becomes effective in accordance with <u>Section 10.10.</u>

------

"<u>Electronic Transmission</u>" means each document, instruction, authorization, file, information and any other communication transmitted, posted or otherwise made or communicated by e-mail or E-Fax, or otherwise to or from a Platform or other equivalent service.

"<u>Eligible Accounts</u>" means all Accounts of a Borrower or Subsidiary Guarantor, arising in the ordinary course of business, evidencing the sale of goods and services by such Borrower or Subsidiary Guarantor and which the Administrative Agent, in its Credit Judgment, shall deem to be an Eligible Account, based upon such considerations as the Administrative Agent may from time to time deem appropriate. Without in any way limiting the foregoing, (i) in general, unless otherwise determined by the Administrative Agent as aforesaid, an Account shall not constitute an Eligible Account unless it is subject to a perfected, first priority Lien in favor of the Administrative Agent for the ratable benefit of the Lenders, is free and clear of all Liens other than Permitted Liens and is evidenced by an invoice or other document satisfactory to the Administrative Agent, and (ii) no Account of an Account Debtor shall be an Eligible Account if:

&nbsp;&nbsp;&nbsp;&nbsp;&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) such Account arises out of a sale made by a Borrower or Subsidiary Guarantor to an Affiliate of such Borrower or Subsidiary Guarantor or to a Person controlled by an Affiliate of such Borrower or Subsidiary Guarantor or such Account Debtor is such Borrower's or Subsidiary Guarantor's creditor or supplier;

&nbsp;&nbsp;&nbsp;&nbsp;&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) more than 60 days have elapsed from the due date of such Account;

&nbsp;&nbsp;&nbsp;&nbsp;&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) i) with respect to Accounts of a Borrower or Subsidiary Guarantor other than Conn Selmer, more than ninety days have elapsed from the invoice date of each such Account, and (ii) solely with respect to Accounts of Conn-Selmer, more than three hundred and five days have elapsed from the invoice date of each such Account;

&nbsp;&nbsp;&nbsp;&nbsp;&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) 50% or more of the aggregate account balance of Accounts due from such Account Debtor is more than 60 days past 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;&nbsp;&nbsp;&nbsp;&nbsp;(v) any covenant, representation or warranty contained in this Agreement or any Loan Documents with respect to such Account has been breached in a material manner;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(vi) the Administrative Agent is not and continues not to be satisfied with the credit standing of such Account Debtor, or the Administrative Agent otherwise believes, in its Credit Judgment, that collection of such Account is insecure or that such Account may not be paid by reason of such Account Debtor's financial inability to pay (and in the absence of an Event of Default which is continuing, at Borrowers' request therefor, Agent agrees to advise Borrowers of the reasons for its making any such judgment);

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(vii) such Account Debtor has asserted any dispute, offset or counterclaim against the related Borrower or Subsidiary Guarantor, such Account or any other Account due from such Account Debtor to such Borrower or Subsidiary Guarantor, or such Account is or could reasonably be expected to become subject to any offset, deduction, defense, dispute, or counterclaim, or is contingent in any respect or for any reason, but only to the extent of the amount in dispute;

------

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(viii) such Account Debtor resides outside the continental United States, Alaska, Hawaii, the U.S. Virgin Islands and/or Puerto Rico, unless the sale is covered by a letter of credit or credit insurance in form and substance acceptable to the Agent in its Credit Judgment, or unless such Account (in U.S. Dollars) is due from an entity located in Canada or a territory 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;&nbsp;&nbsp;&nbsp;&nbsp;(ix) the sale to such Account Debtor is on a bill-and-hold, guaranteed sale, sale-and-return, sale on approval, consignment or any other repurchase or return basis or is evidenced by chattel paper;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(x) such Account Debtor is the United States of America, any state or any department, agency or instrumentality of any of them, unless the related Borrower or Subsidiary Guarantor assigns its right to payment of such Account to the Agent for the ratable benefit of the Lenders pursuant to the Federal Assignment of Claims Act of 1940, as amended, or has otherwise complied with all other applicable statutes or ordinances;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(xi) any of the following events occur or conditions exist with respect to the goods giving rise to such Account: (i) if such goods have not been shipped to such Account Debtor, or (ii) if so shipped, have subsequently not been delivered to such Account Debtor, or (iii) if so delivered, have not been accepted by such Account Debtor, or (iv) if such Account otherwise does not represent a final sale, or (v) such goods have been repossessed;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(xii) the amount of all Accounts of such Account Debtor exceeds any credit limit determined by the Administrative Agent, in its Credit Judgment, to the extent that the amount of such Account exceeds such limit;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(xiii) such Account Debtor has commenced or has had commenced against it a case under any federal, state or other bankruptcy or insolvency laws, as now constituted or hereafter amended, or made an assignment for the benefit of creditors, or if a decree or order for relief has been entered by a court having jurisdiction in the premises in respect of such Account Debtor in an involuntary case under any state or federal bankruptcy laws, as now constituted or hereafter amended, or if any other petition or other application for relief under any state or federal bankruptcy law has been filed against such Account Debtor, or if such Account Debtor has failed, suspended business, ceased to be solvent, called a meeting of its creditors (in order to discuss financial insolvency or lack of liquidity), or consented to or suffered a receiver, trustee, liquidator or custodian to be appointed for it or for all or a significant portion of its assets or affairs;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(xiv) the related Borrower or Subsidiary Guarantor has made any agreement with such Account Debtor for any deduction therefrom, except for discounts or allowances made in the ordinary course of business for prompt payment, all of which discounts or allowances shall be reflected in the calculation of the face value of each respective invoice related thereto; 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;(xv) such Account is not payable to the related Borrower or Subsidiary Guarantor;

------

notwithstanding the foregoing, Eligible Accounts may include in addition to any Account of any Borrower or Subsidiary Guarantor constituting an Eligible Account hereunder, Dealer Notes pledged to the Administrative Agent, satisfactory to the Administrative Agent in its Credit Judgment, and otherwise qualifying as Eligible Accounts hereunder having an aggregate outstanding principal amount at any time of up to $20,000,000, that mature up to two years from the execution thereof. Notwithstanding anything to the contrary herein, the Steinway Dealer Notes shall not constitute Eligible Accounts until such time that such notes are deemed Eligible Accounts by the Administrative Agent, in its Credit Judgment. The Administrative Agent shall require that the Steinway Dealer Notes, among other things, be subject to a field examination and audit (and such examination and audit be reasonably acceptable to the Required Lenders) in order to determine whether such notes shall be considered Eligible Accounts.

"<u>Eligible Assignee</u>" means any Person that meets the requirements to be an assignee under <u>Section 10.06(b)(iii)</u> and <u>(v)</u> (subject to such consents, if any, as may be required under <u>Section 10.06(b)(iii)</u>).

"<u>Eligible Inventory</u>" means all Inventory of a Borrower or Subsidiary Guarantor consisting of (i) Boston Pianos, Essex Pianos, Steinway Pianos, Factory Returns, Concert and Artist Bank Pianos, near-finished pianos, and raw materials of Steinway, and (ii) raw materials, work-in-process and finished goods of any Borrower or Subsidiary Guarantor, in each case which is in good and saleable condition and located at such Borrower's or Subsidiary Guarantor's places of business or at the Collateral locations described on <u>Schedule</u> I to the Pledge and Security Agreement (except when in transit to or from such locations) and which is not, in the Administrative Agent's Credit Judgment, obsolete, damaged, slow-moving or unmerchantable, and which the Administrative Agent, in its Credit Judgment, shall deem Eligible Inventory, based upon such considerations as the Administrative Agent may from time to time deem appropriate. In general, unless otherwise determined by the Administrative Agent as referenced above, Inventory shall not constitute Eligible Inventory if it is on consignment to any consignee and unless it is subject to a perfected, first priority Lien in favor of the Administrative Agent for the ratable benefit of the Lenders, is free and clear of all Liens other than Permitted Encumbrances<u>Liens</u> and conforms to all standards imposed by any Governmental Authority, division or department thereof which has regulatory authority over such goods or the use or sale thereof<u>.</u>

<u>"Employee Benefit Plan" means any of (a) an "employee benefit plan" (as defined in ERISA) that is subject to Title I of ERISA, (b) a "plan" as defined in Section 4975 of the Code or (c) any Person whose assets include (for purposes of ERISA Section 31421 or otherwise for purposes of Title I of ERISA or Section 4975 of the Code) the assets of any such "employee benefit plan" or "plan".</u>

"<u>Environmental Laws</u>" means all Requirements of Law and Permits imposing liability or standards of conduct for or relating to the regulation and protection of human health, safety, the workplace, the environment and natural resources, and including public notification requirements and environmental transfer of ownership, notification or approval statutes.

------

"<u>Environmental Liabilities</u>" means all Liabilities (including costs of Remedial Actions, natural resource damages and costs and expenses of investigation and feasibility studies, including the cost of environmental consultants and the cost of attorney's fees) that may be imposed on, incurred by or asserted against any Loan Party or any Subsidiary of any Loan Party as a result of, or related to, any claim, suit, action, investigation, proceeding or demand by any Person, whether based in contract, tort, implied or express warranty, strict liability, criminal or civil statute or common law or otherwise, arising under any Environmental Law or in connection with any environmental, health or safety condition or with any Release and resulting from the ownership, lease, sublease or other operation or occupation of property by any Loan Party or any Subsidiary of any Loan Party, whether on, prior or after the date hereof.

"<u>Equity Contribution</u>" has the meaning specified in <u>Section 4.01(f)</u>.

"<u>Equity Issuance</u>" means (i) any sale or issuance by Holdings or any of its Subsidiaries to any Person other than Holdings or a Subsidiary of Holdings of any Stock or any Stock Equivalents (other than Disqualified Stock) and (ii) the receipt by Holdings or any of its Subsidiaries of any cash capital contributions, whether or not paid in connection with any issuance of Stock of Holdings or any of its Subsidiaries, from any Person other than Holdings or a Subsidiary of Holdings.

"<u>ERISA</u>" means the Employee Retirement Income Security Act of 1974<u>, as amended, and the rules and regulations promulgated thereunder</u>.

"<u>ERISA Affiliate</u>" means, collectively, any Loan Party and any Person under common control or treated as a single employer with, any Loan Party, within the meaning of Section 414(b), (c), (m) or (o) of the Code.

"<u>ERISA Event</u>" means any of the following: (a) a reportable event described in Section 4043(c) of ERISA (or, unless the 30-day notice requirement has been duly waived under the applicable regulations, Section 4043(c) of ERISA) with respect to a Title IV Plan; (b) the withdrawal of any ERISA Affiliate from a Title IV Plan subject to Section 4063 of ERISA during a plan year in which it was a substantial employer, as defined in Section 4001(a)(2) of ERISA; (c) the complete or partial withdrawal of any ERISA Affiliate from any Multiemployer Plan; (d) with respect to any Multiemployer Plan, the filing of a notice of reorganization, insolvency or termination (or treatment of a plan amendment as termination) under Section 4041A of ERISA; (e) the filing of a notice of intent to terminate a Title IV Plan (or treatment of a plan amendment as termination) under Section 4041(c) of ERISA; (f) the institution of proceedings to terminate a Title IV Plan or Multiemployer Plan by the PBGC; (g) the failure to make any required contribution to any Title IV Plan or Multiemployer Plan when due; (h) the imposition of a Lien under Section 412 or 430(k) of the Code or Section 303 or 4068 of ERISA on any property (or rights to property, whether real or personal) of any ERISA Affiliate; (i) the failure of a Benefit Plan or any trust thereunder intended to qualify for tax exempt status under Section 401 or 501 of the Code or other Requirements of Law to qualify thereunder; (j) a Title IV plan is in "at risk" status within the meaning of Code Section 430(i) or Section 303 of ERISA; (k) a Multiemployer Plan is in "endangered status" or "critical status" within the meaning of Section 432(b) of the Code or Section 305 of ERISA; and (1) any other event or condition that would reasonably be expected to constitute grounds under Section 4042 of ERISA for the termination of, or the appointment of a trustee to administer, any Title IV Plan or Multiemployer Plan or for the imposition of any material liability upon any ERISA Affiliate under Title IV of ERISA other than for PBGC premiums due but not delinquent.

------

"<u>Essex Pianos</u>" means pianos designed by Steinway, manufactured by an OEM and marketed under the Essex piano line all of which are finished goods or Factory Returns.

"<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 Rate</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;&nbsp;&nbsp;&nbsp;&nbsp;(i) for any Interest Period with respect to a Eurodollar Rate Loan, the rate per annum equal to the London Interbank Offered Rate ("<u>LIBOR</u>"), or a comparable or successor rate, which rate is approved by the Administrative Agent, as published on the applicable Reuters screen page (or such other commercially available source providing such quotations as may be designated by the Administrative Agent from time to time), at approximately 11:00 a.m., London time, two Business Days prior to the commencement of such Interest Period, for Dollar deposits (for delivery on the first day of such Interest Period) with a term equivalent to such Interest Period; 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;(ii) for any interest calculation with respect to a Base Rate Loan on any date, the rate per annum equal to LIBOR, at approximately 11:00 a.m., London time determined two Business Days prior to such date for Dollar deposits with a term of one month commencing on the date of determination; <u>provided</u> that (x) to the extent a comparable or successor rate is approved by the Administrative Agent in connection herewith, the approved rate shall be applied to the applicable Interest Period in a manner consistent with market practice and (y) if the Eurodollar Rate shall be less than zero, such rate shall be deemed zero for purposes of this Agreement; <u>provided</u>, <u>further</u> that to the extent such market practice is not administratively feasible for the Administrative Agent, such approved rate shall be applied to the applicable Interest Period as otherwise reasonably determined by the Administrative Agent.

"<u>Eurodollar Rate Loan</u>" means at any date a Loan which bears interest at a rate based on <u>clause (i)</u> of the definition of "Eurodollar Rate".

"<u>Eurodollar Reserve Percentage</u>" means for any day during any Interest Period, the reserve percentage (expressed as a decimal, carried out to four decimal places) in effect on such day, whether or not applicable to any Lender, under regulations issued from time to time by the Federal Reserve Board for determining the maximum reserve requirement (including any emergency, supplemental or other marginal reserve requirement) with respect to Eurocurrency funding (currently referred to "Eurocurrency liabilities"). The Adjusted Eurodollar Rate for each outstanding Eurodollar Rate Loan shall be adjusted automatically on and as of the effective date of any change in the Eurodollar Reserve Percentage.

"<u>Event of Default</u>" has the meaning specified in <u>Section 8.01</u>.

"<u>Event of Loss</u>" means, with respect to any Property, any of the following: (i) any loss, destruction or damage of such Property; or (ii) any actual condemnation, seizure or taking, by exercise of the power of eminent domain or otherwise, of such Property, or confiscation of such Property or the requisition of the use of such Property.

------

"<u>Exchange Act</u>" means the Securities Exchange Act of 1934, as amended, and the rules and regulations promulgated thereunder.

"<u>Excluded Accounts</u>" means (i) Deposit Accounts used solely for funding payroll or segregating payroll taxes or segregating 401k contribution or contributions to an employee stock purchase plan and other health and benefit plans, (ii) Deposit Accounts or securities accounts, amounts on deposit or value of the securities held in which the seven-day average balance does not exceed $2,000,000 in the aggregate at any one time, (iii) zero balance disbursement accounts, (iv) deposit or securities accounts located outside the United States, (v) subject to the ABL/Term Intercreditor Agreement, the Term Priority Collateral Asset Disposition Account (as defined in the ABL/Term Intercreditor Agreement), and (vi) Deposit Accounts or securities accounts maintained in connection with pledges of cash or cash equivalents permitted under <u>Section 7.01(e)</u>.

"<u>Excluded Domestic Holdco</u>" means a Domestic Subsidiary substantially all of the assets of which consist of Stock of one or more Excluded Domestic Holdcos or Foreign Subsidiaries.

"<u>Excluded Domestic Subsidiary</u>" means any Domestic Subsidiary that is (a) a Subsidiary of a Foreign Subsidiary, (b) an Excluded Domestic Holdco or (c) an indirect Domestic Subsidiary of an Excluded Domestic Holdco.

"<u>Excluded Subsidiary</u>" means any Subsidiary of Holdings (a) for which the joining in, or becoming a party to, a Guaranty (i) would be prohibited by applicable law or regulation existing as of the <u>Original</u> Closing Date or on the date that such Subsidiary was acquired by a Loan Party (so long as such prohibition is not incurred in contemplation of such acquisition), (ii) would require governmental (including regulatory) consent, approval, license or authorization or (iii) would result in material adverse tax consequences as reasonably determined by the Parent Borrower, (b) that is an Excluded Domestic Subsidiary, (c) that is a Non-Material Subsidiary, (d) to the extent the burden or cost of obtaining a Guaranty outweighs the benefit afforded to the Lenders thereby, as reasonably determined by the Administrative Agent and the Parent Borrower and (e) Steinway and Sons.

"<u>Excluded Swap Obligation</u>" means, with respect to any Loan Party, any Swap Obligation if, and to the extent that, all or a portion of the Guaranty of such Loan Party of, or the grant by such Loan Party of a security interest to secure, such Swap Obligation (or any Guaranty 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 Loan Party's failure for any reason to constitute an "eligible contract participant" as defined in the Commodity Exchange Act (determined after giving effect to Section 2.10 of the Guaranty and other "keepwell, support or other agreement" for the benefit of such Loan Party and any and all guarantees of such Loan Party's Swap Obligations by other Loan Parties) at the time the Guaranty of such Loan Party, or a grant by such Loan Party of a security interest, becomes effective with respect to such Swap Obligation. If a Swap Obligation arises under a master agreement governing more than one swap, such exclusion shall apply only to the portion of such Swap Obligation that is attributable to swaps for which such Guaranty or security interest is or becomes excluded in accordance with the first sentence of this definition.

------

"<u>Excluded Taxes</u>" means, with respect to the Administrative Agent, any Lender, any L/C Issuer or any other recipient of any payment to be made by or on account of any obligation of the Borrowers hereunder, (i) taxes imposed on or measured by its overall net income (however denominated), and franchise taxes imposed on it (in lieu of net income taxes), by the jurisdiction (or any political subdivision thereof) under the laws of which such recipient is organized or in which its principal office is located or, in the case of any Lender, in which its Lending Office is located, (ii) any branch profits taxes imposed by the United States or any similar tax imposed by any other jurisdiction in which any Borrower is located, (iii) any backup withholding tax that is required by the Code to be withheld from amounts payable to a Lender that has failed to comply with <u>clause (A)</u> of <u>Section 3.01(e)(ii)</u>, (iv) in the case of a Foreign Lender (other than an assignee pursuant to a request by the Parent Borrower under <u>Section 10.13)</u>, any United States withholding tax that is (A) required to be imposed on amounts payable to such Foreign Lender pursuant to the Requirements of Law in force at the time such Foreign Lender becomes a party hereto (or designates a new Lending Office) or (B) is attributable to such Foreign Lender's failure or inability (other than as a result of a Change in Law) to comply with <u>clause (B)</u> of <u>Section 3.01(e)(ii)</u>, except to the extent that such Foreign Lender (or its assignor, if any) was entitled, at the time of designation of a new Lending Office (or assignment), to receive additional amounts from the Borrowers with respect to such withholding tax pursuant to <u>Section 3.01(a)</u> and (v) any United States withholding tax that is imposed as a result of such recipient's failure to comply with the requirements to establish an exemption from such withholding tax pursuant to FATCA.

"<u>Existing Credit Agreement</u>" means the $100,000,000 Loan and Security Agreement, dated as of October 15, 2010 (as amended, modified or supplemented to the Closing Date) among Conn-Selmer, Steinway, the lenders party thereto, Bank of America, N.A., as administrative agent, and the other parties thereto.<u>has the meaning set forth in the recitals hereto.</u>

"<u>Existing Letters of Credit</u>" means the letters of credit issued before the <u>Original</u> Closing Date and described by date of issuance, letter of credit number, undrawn amount, name of beneficiary and date of expiry on <u>Schedule 2.03</u> hereto, and "<u>Existing Letter of Credit</u>" means any one of them.

"<u>E-Fax</u>" means any system used to receive or transmit faxes electronically.

"<u>Facility</u>" means at any time, the aggregate amount of the Revolving Facility Commitments at such time, which as of the Closing<u>Second Amendment Effective</u> Date is $75<u>110</u><u>,</u>000,000, and any Incremental Commitments or Incremental Loans.

"<u>Factory Returns</u>" means pianos bearing the Steinway, Steinway and Sons, Essex or Boston name brands that have been returned to Steinway and are in near-new, good and merchantable condition.

"<u>FASB ASC</u>" means the Accounting Standards Codification of the Financial Accounting Standards Board.

"<u>FATCA</u>" means Sections 1471 through 1474 of the Code as of the date of this Agreement (or any amended or successor provisions that are substantively similar and not materially more onerous to comply with), any regulations thereunder or official interpretations thereof and any agreements entered into pursuant to Section 1471(b)(1) of the Code <u>and any fiscal or regulatory legislation, rules or practices adopted pursuant to any intergovernmental agreement, treaty or convention among Governmental Authorities and implementing such Sections of the Code</u>.

------

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

"<u>Federal Reserve Board</u>" means the Board of Governors of the Federal Reserve System, or any entity succeeding to any of its principal functions.

"<u>Fee Letter</u>" means the Fee Letter dated as of August 14<u>February 5</u>, 2013<u>8</u> among Holdings and<u>the Parent Borrower,</u> Bank of America, N.A., <u>and</u> Merrill Lynch, Pierce, Fenner & Smith Incorporated, Deutsche Bank AG New York Branch and Deutsche Bank Securities Inc.

"<u>FEMA</u>" means the Federal Emergency Management Agency, a component of the U.S. Department of Homeland Security that administers the National Flood Insurance Program.

"<u>First Amendment</u>" means that certain First Amendment, dated as of October 31, 2017, among the Borrowers, Holdings, the Administrative Agent and the Lenders party thereto.

"<u>First Amendment Effective Date</u>" means October 31, 2017.

"<u>Field Survey and Audit</u>" means a field survey and audit of the Loan Parties and an appraisal of the Collateral performed by auditors, examiners and/or appraisers selected by any Agent, at the sole cost and expense of the Borrowers.

"<u>Finance Document</u>" means (i) each Loan Document, (ii) each Secured Hedge Agreement and (iii) each Secured Cash Management Agreement, and "<u>Finance Documents</u>" means all of them, collectively.

"<u>Finance Obligations</u>" means, at any date, (i) all ABL Credit Obligations, (ii) all Cash Management Obligations then owing under any Secured Cash Management Agreement to a Cash Management Bank and (iii) all Swap Obligations (other than Excluded Swap Obligations) of a Loan Party permitted hereunder then owing under any Secured Hedge Agreement to any Hedge Bank and all costs and expenses incurred in connection with enforcement and collection of the obligations described in this clause (ii), including the fees, charges and disbursement of counsel (it being understood, for avoidance of doubt, that obligations of a Loan Party of or owed to (i) Bank of America or its affiliates or (ii) a Person that is both a Term Finance Party and a Lender at the time such Rate Contract or Cash Management Agreement was entered into by such Loan Party shall be considered Finance Obligations); <u>provided</u> that the Finance Obligations shall exclude any Excluded Swap Obligation.

------

"<u>Fiscal Quarter</u>" means any of the quarterly accounting periods of the Loan Parties, ending on March 31, June 30, September 30 and December 31 of each year.

"<u>Fiscal Year</u>" means any of the annual accounting periods of the Loan Parties ending on December 31 of each year.

"<u>Fixed Charge Coverage Ratio</u>" means, with respect to any Person for any period, the ratio of (a) Consolidated EBITDA of such Person and its Subsidiaries for such period minus the sum of (i) Consolidated Capital Expenditures paid or payable in cash by such Person and its Subsidiaries during such period (except those financed with borrowed money other than under the Facility) plus (ii) income taxes paid or payable by such Person and its Subsidiaries in cash during such period, to (b) the sum of (i) all scheduled payments of principal of Funded Debt and Capital Lease Obligations paid or payable in cash during such period, plus (ii) Consolidated Cash Interest Expense of such Person and its Subsidiaries paid or payable in cash during such period, plus (iii) dividends or distributions paid or payable in cash by such Person or any of its Subsidiaries, in respect of the Equity Interests of such Person or any of its Subsidiaries (other than (A) dividends or distributions paid by a Loan Party to any other Loan Party and (B) dividends paid in connection with any recapitalization of the Parent Borrower or any of its Subsidiaries, but only to the extent not financed with proceeds of Loans) during such period.

Notwithstanding the foregoing, for purposes of determining the Fixed Charge Coverage Ratio as of or for the periods ended September 30, 2013, December 31, 2013 and March 31, 2014, the fixed charges will be deemed to be equal to, for the Fiscal Quarter ended (i) March 31, 2013, $5,467,075, (ii) June 30, 2013, $5,459,888, and (iii) September 30, 2013, $5,452,718, as each such amount may be adjusted by an amount described in clause (b)(iii) of this definition and paid during the period after the <u>Original</u> Closing Date and on or before September 30, 2013.<sup>1</sup>

"<u>Flood Insurance</u>" means, for any Real Estate located in a Special Flood Hazard Area, federal Flood Insurance or private insurance reasonably satisfactory to the Administrative Agent, in either case, that (a) meets the requirements set forth by FEMA in its Mandatory Purchase of Flood Insurance Guidelines, (b) shall include a deductible not to exceed $50,000 and (c) shall have a coverage amount equal to the lesser of (i) the "replacement cost value" of the buildings and any personal property Collateral located on the Real Estate as determined under the National Flood Insurance Program or (ii) the maximum policy limits set under the National Flood Insurance Program.

------

<sup>1</sup> Fixed charge amounts to be provided. 

------

"<u>Foreign Lender</u>" means any Lender or L/C Issuer which, for U.S. federal tax purposes (i) is regarded as a separate entity and is not a "United States person" within the meaning of Section 7701(a)(30) of the Code or (ii) is disregarded as separate from an entity that is not a "United States person" within the meaning of Section 7701(a)(30) of the Code.

"<u>Foreign Subsidiary</u>" means, with respect to any Person, a Subsidiary of such Person that is not a Domestic Subsidiary.

"<u>Fronting Exposure</u>" means, at any time there is a Defaulting Lender, (i) with respect to any L/C Issuer, such Defaulting Lender's Revolving Facility Percentage of the outstanding L/C Obligations arising in respect of Letters of Credit issued by such L/C Issuer other than L/C Obligations as to which such Defaulting Lender's participation obligation has been reallocated to other Lenders or Cash Collateralized in accordance with the terms hereof, and (ii) with respect to the Swing Line Lender, such Defaulting Lender's Revolving Facility Percentage of Swing Line Loans other than Swing Line Loans as to which such Defaulting Lender's participation obligation has been reallocated to other Lenders in accordance with the terms hereof.

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

"<u>Funded Debt</u>" means all Indebtedness of Holdings and its Subsidiaries for borrowed money that matures more than one year from the date of its creation or matures within one year from such date that is renewable or extendable, at the option of such Person, to a date more than one year from such date or arises under a revolving credit or similar agreement that obligates the lender or lenders to extend credit during a period of more than one year from such date, including Indebtedness in respect of the Loans.

"<u>GAAP</u>" means generally accepted accounting principles in the United States, as in effect from time to time, set forth in the opinions and pronouncements of the Accounting Principles Board and the American Institute of Certified Public Accountants, in the statements and pronouncements of the Financial Accounting Standards Board (or agencies with similar functions and comparable stature and authority within the accounting profession) that are applicable to the circumstances as of the date of determination. Subject to <u>Section 1.03</u>, all references to "GAAP" shall be to GAAP applied consistently with the principles used in the preparation of the financial statements described in <u>Section 5.11(a)</u>.

"<u>Governmental Authority</u>" means any nation or government, any state or other political subdivision thereof, any central bank (or similar monetary or regulatory authority) thereof, any entity exercising executive, legislative, judicial, regulatory or administrative functions of or pertaining to government, and any corporation or other entity owned or controlled, through stock or capital ownership or otherwise, by any of the foregoing.

------

"<u>Guarantee</u>" means, with respect to any Person, without duplication, any obligation (other than endorsements in the ordinary course of business of negotiable instruments for deposit or collection) guaranteeing, intended to guarantee, or having the economic effect of guaranteeing, any Indebtedness of any other Person in any manner, whether direct or indirect, and including, without limitation, any obligation, whether or not contingent, (i) to purchase any such Indebtedness or any property constituting security therefor, (ii) to advance or provide funds or other support for the payment or purchase of such Indebtedness or to maintain working capital, solvency or other balance sheet condition of such other Person (including, without limitation, maintenance agreements, comfort letters, take or pay arrangements, put agreements or similar agreements or arrangements) for the benefit of the holder of Indebtedness of such other Person, (iii) to lease or purchase property, securities or services primarily for the purpose of assuring the owner of such Indebtedness of the ability of the primary obligor to make payments on such Indebtedness or (iv) to otherwise assure or hold harmless the owner of such Indebtedness against loss in respect thereof. The amount of any Guarantee hereunder shall (subject to any limitations set forth therein) be deemed to be an amount equal to the outstanding principal amount (or maximum principal amount, if larger) of the Indebtedness in respect of which such Guarantee is made.

"<u>Guarantors</u>" means, (i) collectively, Holdings, the Subsidiaries of the Borrowers listed on <u>Schedule 6.13</u> and each other Subsidiary of any Borrower that shall be required to execute and deliver an Accession Agreement or other guaranty or guaranty supplement pursuant to <u>Section 6.13</u> and (ii) with respect to (A) Finance Obligations owing by any Loan Party or any Subsidiary of a Loan Party (other than the Borrowers) under any Secured Hedge Agreement and (B) the payment and performance by each Specified Loan Party of its obligations under its Guaranty with respect to all obligations under Secured Hedge Agreements, the Borrowers.

"<u>Guaranty</u>" means, collectively, the Guaranty made by Holdings and the Subsidiary Guarantors in favor of the Secured Parties, substantially in the form of <u>Exhibit E</u>, together with each other guaranty and guaranty supplement delivered pursuant to <u>Section 6.13</u>.

"<u>Hazardous Materials</u>" means any substance, material or waste that is classified, regulated or otherwise characterized under any Environmental Law as hazardous, toxic, a contaminant or a pollutant or by other words of similar meaning or regulatory effect, including petroleum or any fraction thereof, asbestos, polychlorinated biphenyls and radioactive substances.

"<u>Hedge Bank</u>" means any Person that, at the time it enters into a Rate Contract required or permitted under <u>Article VI</u> or <u>VII</u>, is a Lender or an Affiliate of a Lender, in its capacity as a party to such Rate Contract.

"<u>Holdings</u>" means Pianissimo Holdings Corp., a Delaware corporation, and its successors.

"<u>Impacted Loans</u>" has the meaning specified in <u>Section 3.03(a)</u>.

"<u>Incremental Commitment</u>" has the meaning specified in <u>Section 2.14(a)</u>.

"<u>Incremental Commitments Amendment</u>" has the meaning specified in <u>Section 2.14(d)</u>.

"<u>Incremental Commitments Effective Date</u>" has the meaning specified in <u>Section 2.14(e)</u>.

------

"<u>Incremental Lender</u>" has the meaning specified in <u>Section 2.14(c)</u>.

"<u>Incremental Loans</u>" has the meaning specified in <u>Section 2.14(a)</u>.

"<u>Indebtedness</u>" means, as to any Person at a particular time, without duplication: (a) all indebtedness for borrowed money; (b) all obligations issued, undertaken or assumed as the deferred purchase price of Property or services (other than trade payables entered into in the Ordinary Course of Business); (c) the face amount of all letters of credit issued for the account of such Person and without duplication, all drafts drawn thereunder and all reimbursement or payment obligations with respect to letters of credit, surety bonds and other similar instruments issued by such Person; (d) all obligations evidenced by notes, bonds, debentures or similar instruments, including obligations so evidenced incurred in connection with the acquisition of Property, assets or businesses; (e) all indebtedness created or arising under any conditional sale or other title retention agreement, or incurred as financing, in either case with respect to Property acquired by such Person (even though the rights and remedies of the seller or lender under such agreement in the event of default are limited to repossession or sale of such Property); (f) all Capital Lease Obligations; (g) the principal balance outstanding under any synthetic lease, off-balance sheet loan or similar off balance sheet financing product; (h) all obligations of such Person, whether or not contingent, to purchase, redeem, retire, defease or otherwise acquire for value any of its own Stock or Stock Equivalents (or any Stock or Stock Equivalent of a direct or indirect parent entity thereof) prior to the date that is at least 180 days after the Revolving Facility Maturity Date, valued at, in the case of redeemable preferred Stock, the greater of the voluntary liquidation preference and the involuntary liquidation preference of such Stock plus accrued and unpaid dividends, excluding any Stock or Stock Equivalents held by officers, directors and employees required to be repurchased upon termination of employment; (i) all indebtedness referred to in <u>clauses (a)</u> through <u>(h)</u> above secured by (or for which the holder of such Indebtedness has an existing right, contingent or otherwise, to be secured by) any Lien upon or in Property (including accounts and contracts rights) owned by such Person, even though such Person has not assumed or become liable for the payment of such indebtedness; and (j) all Contingent Obligations described in clause (a) of the definition thereof in respect of indebtedness or obligations of others of the kinds referred to<u>Guarantees by such Person of Indebtedness described</u> in <u>clauses (a)</u> through <u>(i)</u> above.

"<u>Indemnified Taxes</u>" means Taxes, other than Excluded Taxes.

"<u>Indemnitees</u>" has the meaning specified in <u>Section 10.04(b)</u>.

"<u>Information</u>" has the meaning specified in <u>Section 10.07</u>.

"Initial Borrower" has the meaning specified in the preamble hereto.

"<u>Inspection Triggering Event</u>" means (i) a Default or Event of Default has occurred and is continuing or (ii) Availability is less than 35.0% of the Revolving Facility Commitment for five consecutive Business Days.

------

"<u>Inspection Trigger Period</u>" means the period commencing on the day that a Inspection Triggering Event has occurred and is continuing until, during the preceding 30 day consecutive period, no Default or Event of Default has existed and Availability is greater than 35.0% of the Revolving Facility Commitment.

"<u>Intellectual Property</u>" means all rights, title and interests in or relating to intellectual property and industrial property arising under any Requirement of Law and all IP Ancillary Rights relating thereto, including all Copyrights, Patents, Software, Trademarks, Internet Domain Names, Trade Secrets and IP Licenses.

"<u>Intercompany Note</u>" has the meaning specified in <u>Section 7.04(b)</u>.

"<u>Intercreditor Agreements</u>" means, collectively, the ABL/Term Intercreditor Agreement and the<u>any</u> Term Intercreditor Agreement.

"<u>Interest Payment Date</u>" means, (i) as to any Eurodollar Rate Loan, the last day of each Interest Period applicable to such Loan and the Revolving Facility Maturity Date; <u>provided</u>, <u>however</u>, that if any Interest Period for a Eurodollar Rate Loan exceeds three months, the respective dates that fall every three months after the beginning of such Interest Period shall also be Interest Payment Dates; and (ii) as to any Base Rate Loan or Swing Line Loan, the last Business Day of each March, June, September and December<u>first calendar day of January, April, July and October</u> and the Revolving Facility Maturity Date.

"<u>Interest Period</u>" means, as to each Eurodollar Rate Loan, the period commencing on the date such Eurodollar Rate Loan is disbursed or converted to or continued as a Eurodollar Rate Loan and ending on the date one, three or six months or, to the extent available to, and agreed to by, all Lenders, twelve months thereafter (in each case, subject to availability), as selected by the Parent Borrower in its Committed Loan Notice or such other period that is twelve months or less requested by the Parent Borrower and consented to by all the Lenders; <u>provided</u> that:

&nbsp;&nbsp;&nbsp;&nbsp;&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) any Interest Period which would otherwise end on a day which is not a Business Day shall, subject to <u>clause (iii)</u> below, be extended to the next succeeding Business Day unless such Business Day falls in another calendar month, in which case such Interest Period shall end on the next preceding Business Day;

&nbsp;&nbsp;&nbsp;&nbsp;&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) any Interest Period which begins on the last Business Day of a calendar month (or on a day for which there is no numerically corresponding day in the calendar month at the end of such Interest Period) shall end on the last Business Day of a calendar month; 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;(iii) no Interest Period shall extend beyond the Revolving Facility Maturity Date.

"<u>Internet Domain Name</u>" means all right, title and interest (and all related IP Ancillary Rights) arising under any Requirement of Law in or relating to internet domain names.

------

"<u>Inventory</u>" means all of the "inventory" (as such term is defined in the UCC) of the Loan Parties, including, but not limited to, all merchandise, raw materials, parts, supplies, work in process and finished goods intended for sale, together with all the containers, packing, packaging, shipping and similar materials related thereto, and including such inventory as is temporarily out of a Loan Party's custody or possession, including inventory on the premises of others and items in transit.

"<u>Inventory Reserve</u>" means reserves established by the Administrative Agent to reflect factors that may negatively impact the Value of Inventory, including change in salability, obsolescence, seasonality, theft, shrinkage, imbalance, change in composition or mix, markdowns and vendor chargebacks.

"<u>IP Ancillary Rights</u>" means, with respect to any other Intellectual Property, as applicable, all foreign counterparts to, and all divisionals, reversions, continuations, continuations-in-part, reissues, reexaminations, renewals and extensions of, such Intellectual Property and all income, royalties, proceeds and Liabilities at any time due or payable or asserted under or with respect to any of the foregoing or otherwise with respect to such Intellectual Property, including all rights to sue or recover at law or in equity for any past, present or future infringement, misappropriation, dilution, violation or other impairment thereof, and, in each case, all rights to obtain any other IP Ancillary Right.

"<u>IP License</u>" means all Contractual Obligations (and all related IP Ancillary Rights), whether written or oral, granting any right, title and interest in or relating to any Intellectual Property.

"<u>IRS</u>" means the Internal Revenue Service of the United States and any successor thereto.

"<u>ISP98 Rules</u>" has the meaning specified in <u>Section 2.03(b)(ii)</u>.

"<u>Issuer Document</u>" means with respect to any Letter of Credit, the Letter of Credit Application, and any other document, agreement and instrument entered into by the applicable L/C Issuer and the applicable Borrower (or any Subsidiary) or in favor of the L/C Issuer and relating to such Letter of Credit.

"<u>Joint Lead Arrangers</u>" means Bank of America, N.A. or its designated affiliate and Deutsche Bank Securities Inc. or its designated affiliate, in their capacities as joint lead arrangers and joint book running managers.

"<u>L/C Credit Extension</u>" means, with respect to any Letter of Credit, the issuance thereof or extension of the expiry date thereof, or the increase of the amount thereof.

"<u>L/C Issuer</u>" means Bank of America or such other Lender as designated by the Administrative Agent to the Parent Borrower and reasonably acceptable to the Parent Borrower from time to time.

"<u>L/C Issuer Fees</u>" has the meaning specified in <u>Section 2.03(i)</u>.

------

"<u>L/C Obligations</u>" means, as at any date of determination, the aggregate amount available to be drawn under all outstanding Letters of Credit plus the aggregate of all Unreimbursed Amounts, including all Letter of Credit Borrowings. For purposes of computing the amount available to be drawn under any Letter of Credit, the amount of such Letter of Credit shall be determined in accordance with <u>Section 1.06</u>. For all purposes of this Agreement, if on any date of determination a Letter of Credit has expired by its terms but any amount may still be drawn thereunder by reason of the operation of Rule 3.14 of the ISP98 Rules, such Letter of Credit shall be deemed to be "outstanding" in the amount so remaining available to be drawn.

"<u>Lender</u>" means each bank or other lending institution listed on <u>Schedule 2.01</u>, each Eligible Assignee that becomes a Lender pursuant to <u>Section 10.06(b)</u>, each Incremental Lender, and their respective successors and shall include, as the context may require, the Swing Line Lender in such capacity.

"<u>Lending Office</u>" means with respect to any Lender and for each Type of Loan, the "Lending Office" of such Lender (or of an Affiliate of such Lender) designated for such Type of Loan in such Lender's Administrative Questionnaire or in any applicable Assignment and Assumption pursuant to which such Lender became a Lender hereunder or such other office of such Lender (or of an Affiliate of such Lender) as such Lender may from time to time specify to the Administrative Agent and the Parent Borrower as the office by which its Loans of such Type are to be made and maintained.

"<u>Letter of Credit</u>" has the meaning specified in <u>Section 2.03(a)</u>, and shall include the Existing Letters of Credit.

"<u>Letter of Credit Application</u>" has the meaning specified in <u>Section 2.03(b)(i)</u>.

"<u>Letter of Credit Borrowing</u>" has the meaning specified in <u>Section 2.03(d)(iv)</u>.

"<u>Letter of Credit Expiration Date</u>" means the day that is seven days prior to the Revolving Facility Maturity Date then in effect (or, if such day is not a Business Day, the next preceding Business Day).

"<u>Letter of Credit Fee</u>" has the meaning specified in <u>Section 2.09(b)</u>.

"<u>Letter of Credit Sublimit</u>" means an amount equal to $15,000,000. The Letter of Credit Sublimit is part of, and not in addition to, the Facility.

"<u>Liabilities</u>" means all claims, actions, suits, judgments, damages, losses, liability, obligations, responsibilities, fines, penalties, sanctions, costs, fees, Taxes, commissions, charges, disbursements and expenses (including, without limitation, those incurred upon any appeal or in connection with the preparation for and/or response to any subpoena or request for document production relating thereto), in each case of any kind or nature (including interest accrued thereon or as a result thereto and fees, charges and disbursements of financial, legal and other advisors and consultants), whether joint or several, whether or not indirect, contingent, consequential, actual, punitive, treble or otherwise.

"<u>LIBOR</u>" has the meaning specified in the definition of "Eurodollar Rate".

------

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

<u>"LIBOR Successor Rate" has the meaning specified in Section 3.07.</u>

<u>"LIBOR Successor Rate Conforming Changes" means, with respect to any proposed LIBOR Successor Rate, any conforming changes to the definition of Base Rate, Interest Period, timing and frequency of determining rates and making payments of interest and other administrative matters as may be appropriate, in the discretion of the Administrative Agent, to reflect the adoption of such LIBOR Successor Rate and to permit the administration thereof by the Administrative Agent in a manner substantially consistent with market practice tor, if the Administrative Agent determines that adoption of any portion of such market practice is not administratively feasible or that no market practice for the administration of such LIBOR Successor Rate exists, in such other manner of administration as the Administrative Agent determines in consultation with the Borrowers).</u>

"<u>Loan</u>" means an extension of credit by a Lender to the Borrowers under <u>Article II</u> in the form of a Revolving Facility Loan, an Incremental Loan or a Swing Line Loan.

"<u>Loan Documents</u>" means, collectively, this Agreement, <u>the first Amendment, the Second Amendment,</u> the Letters of Credit, the Notes, the Guaranties, the Collateral Documents, the ABL/Term Intercreditor Agreement, each Perfection Certificate, each Accession Agreement<u>, the Fee Letter</u> and the <u>Closing</u> Fee Letter.

"<u>Loan Modification Agreement</u>" has the meaning specified in <u>Section 10,01</u>.

"<u>Loan Modification Offer</u>" has the meaning specified in <u>Section 10.01</u>.

"<u>Loan Party</u>" means each of Holdings, the Borrowers, and each Subsidiary Guarantor, and "<u>Loan Parties</u>" means any combination of the foregoing.

"<u>London Banking Day</u>" means any day on which dealings in Dollar deposits are conducted by and between banks in the London interbank eurodollar market.

"<u>Margin Stock</u>" means "margin stock" as such term is defined in Regulation T, U or X of the federal Reserve Board.

------

"<u>Material Adverse Effect</u>" means (a) a material adverse change in, or a material adverse effect upon, the operations, business, Properties, condition (financial or otherwise) of any Loan Party or the Loan Parties and the Subsidiaries taken as a whole; (b) a material impairment of the ability of any Loan Party, any Subsidiary of any Loan Party or any other Person (other than the Agents or Lenders) to perform in any material respect its obligations under any Loan Document; or (c) a material adverse effect upon (i) the legality, validity, binding effect or enforceability of any Loan Document, or (ii) the perfection or priority of any Lien granted to the Lenders or to the Collateral Agent for the benefit of the Secured Parties under any of the Collateral Documents.

"<u>Material Contract</u>" means, with respect to any Person, any Contractual Obligation of such Person that would reasonably be expected to result in a Material Adverse Effect.

"<u>Material Environmental Liabilities</u>" means Environmental Liabilities exceeding $3,000,000 in the aggregate.

"<u>Maximum Rate</u>" has the meaning specified in <u>Section 10.09</u>.

"<u>Merger Agreement</u>" means the Agreement and Plan of Merger, dated as of August 14, 2013, by and among Holdings, AcquisitionCo and the Company.

"<u>Maximum Face Amount</u>" means, with respect to any outstanding Letter of Credit, the face amount of such Letter of Credit including all automatic increases provided for in such Letter of Credit, whether or not such automatic increase has become effective.

"<u>Maximum Undrawn Amount</u>" means, with respect to any outstanding Letter of Credit, the amount of such Letter of Credit that is or may become available to be drawn, including all automatic increases provided for in such Letter of Credit, but only to the extent that any such automatic increase has become effective.

"<u>Measurement Period</u>" means, at any date of determination, the four consecutive Fiscal Quarters of Holdings ending on, or most recently preceding, such date.

"<u>Minimum Collateral Amount</u>" means, at any time, (i) with respect to Cash Collateral consisting of cash or deposit account balances provided to reduce or eliminate Fronting Exposure during the existence of a Defaulting Lender, an amount equal to 105% of the Fronting Exposure of an L/C Issuer with respect to Letters of Credit issued and outstanding at such time, (ii) with respect to Cash Collateral consisting of cash or deposit account balances provided in accordance with the provisions of <u>Section 2.16(a)(i)</u>, <u>(a)(ii)</u> or <u>(a)(iii)</u>, an amount equal to 105% of the Outstanding Amount of all L/C Obligations, and (iii) otherwise, an amount determined by the Administrative Agent and the applicable L/C Issuer in their sole discretion.

"<u>MNPI</u>" means material non-public information <u>(or, if Holdings is not at the time a public reporting company, material information of a type that would not reasonably be expected to be publicly available if Holdings were a public reporting company)</u>.

"<u>Moody's</u>" means Moody's Investors Service, Inc., a Delaware corporation, and any successor thereto.

------

"<u>Mortgage</u>" means any deed of trust, leasehold deed of trust, mortgage, leasehold mortgage, deed to secure debt, leasehold deed to secure debt or other document creating a Lien on Real Estate or any interest in Real Estate<u>, in each case in favor of the Collateral Agent</u>.

"<u>Mortgage Policies</u>" has the meaning specified in <u>Section 6.13(a)</u>.

"<u>Mortgaged Properties</u>" means the Properties of the Loan Parties described in <u>Schedule 5.26(c)</u> hereto.

"<u>Multiemployer Plan</u>" means any multiemployer plan, as defined in Section 3(37) or 4001(a)(3) of ERISA, as to which any ERISA Affiliate incurs or otherwise has any obligation or liability, contingent or otherwise.

"<u>Net Issuance Proceeds</u>" means, in respect of any issuance of equity or incurrence of Indebtedness, cash proceeds (including cash proceeds as and when received in respect of non-cash proceeds received or receivable in connection with such issuance), net of underwriting discounts and reasonable out-of-pocket costs and expenses paid or incurred in connection therewith in favor of any Person not an Affiliate of the Parent Borrower.

"<u>Net Proceeds</u>" means proceeds in cash, checks or other cash equivalent financial instruments (including Cash Equivalents) as and when received by the Person making a Disposition, as well as insurance proceeds and condemnation and similar awards received on account of an Event of Loss, net of: (a) in the event of a Disposition (i) the direct costs relating to such Disposition excluding amounts payable to the Borrowers or any Affiliate of the Borrowers, (ii) Taxes paid or reasonably estimated to be payable, directly or indirectly, as a result thereof or any transactions occurring or deemed to occur to effectuate a payment under this Agreement and (iii) amounts required to be applied to repay principal, interest and prepayment premiums and penalties on Indebtedness secured by a Lien on the asset which is the subject of such Disposition and (b) in the event of an Event of Loss, (i) all money actually applied to repair or reconstruct the damaged Property or Property affected by the condemnation or taking, (ii) all of the costs and expenses reasonably incurred in connection with the collection of such proceeds, award or other payments, and (iii) any amounts retained by or paid to parties having superior rights to such proceeds, awards or other payments.

"<u>Non-Material Subsidiary</u>" means any Subsidiary that is not a Loan Party whose assets (at fair market value) do not exceed $500,000 and in which the net investment of Holdings and its Subsidiaries is less than $500,000.

------

"<u>Note</u>" means a promissory note, substantially in the form of <u>Exhibit B</u>, evidencing the obligation of the Borrowers to repay outstanding Loans made by a Lender, as such note may be amended, modified or supplemented from time to time.

"<u>Not Otherwise Applied</u>" means, with reference to any amount Net Issuance Proceeds of any Qualifying Equity Issuance, that such amount (directly or indirectly) was not (and is not concurrently being) used for any purpose referred to in <u>clause (ii)</u> of the definition of "Qualifying Equity Issuance" or otherwise applied in determining the permissibility of a transaction under the Loan Documents where such permissibility was (or may have been) contingent on receipt of such amount or utilization of such amount for a specified purpose.

"<u>NYCIDA</u>" means the New York City Industrial Development Agency.

"<u>OEM</u>" means an original equipment manufacturer.

"<u>OFAC</u>" has the meaning specified in <u>Section 5.23</u>.

"<u>Ordinary Course of Business</u>" means, in respect of any transaction involving any Loan Party or any Subsidiary of any Loan Party, the ordinary course of such Person's business, as conducted by any such Person in accordance with past practice (including any business that is a reasonable extension, development or expansion of the foregoing or is reasonably related, complementary, ancillary or incidental to any such business) and undertaken by such Person in good faith and not for purposes of evading any covenant or restriction in any Loan Document.

"<u>Organization Documents</u>" means, (a) for any corporation, the certificate or articles of incorporation, the bylaws, any certificate of determination or instrument relating to the rights of preferred shareholders of such corporation, any shareholder rights agreement, (b) for any partnership, the partnership agreement and, if applicable, certificate of limited partnership, (c) for any limited liability company, the operating agreement and articles or certificate of formation or (d) any other document setting forth the manner of election or duties of the officers, directors, managers or other similar persons, or the designation, amount or relative rights, limitations and preference of the Stock of a Person.

<u>"Original Closing Date" means September 19, 2013.</u>

"<u>Original Currency</u>" has the meaning specified in <u>Section 10.20</u>.

"<u>Other Taxes</u>" means all present or future stamp or documentary taxes or any other excise or property taxes, charges or similar levies arising from any payment made hereunder or under any other Loan Document or from the execution, delivery or enforcement of, or otherwise with respect to, this Agreement or any other Loan Document.

"<u>Outstanding Amount</u>" means (i) with respect to Revolving Facility Loans and Swing Line Loans on any date, the aggregate outstanding principal amount thereof after giving effect to any borrowings and prepayments or repayments of Revolving Facility Loans, and Swing Line Loans, as the case may be, occurring on such date; and (ii) with respect to any L/C Obligations on any date, the amount of such L/C Obligations on such date after giving effect to any L/C Credit Extension occurring on such date and any other changes in the aggregate amount of the L/C Obligations as of such date, including as a result of any reimbursements by the Borrowers of Unreimbursed Amounts or any reductions in the maximum amount available for drawing under Letters of Credit taking effect on such date.

------

"<u>Overadvance</u>" has the meaning specified in <u>Section 2.17(b)</u>.

"<u>Parent Borrower</u>" has the meaning specified in the preamble hereto, and its successor or successors in its capacity as the borrowing agent and attorney-in-fact for the Borrowers.

"<u>Participant</u>" has the meaning specified in <u>Section 10.06(d)</u>.

"<u>Participant Register</u>" has the meaning specified in <u>Section 10.06(d)</u>.

"<u>Patents</u>" means all rights, title and interests (and all related IP Ancillary Rights) arising under any Requirement of Law in or relating to letters patent and applications therefor.

"<u>Participation Commitment</u>" means each Lender's obligation to buy a participation of the Letters of Credit issued hereunder.

"<u>Participation Revolving Loan</u>" has the meaning specified in <u>Section 2.03(d)(v)</u>.

"<u>Patriot Act</u>" means the Uniting and Strengthening America by Providing Appropriate Tools Required to Intercept and Obstruct Terrorism Act of 2001 (Title III of Pub. L. 107-56 (signed into Law October 26, 2001)).

"<u>PBGC</u>" means the United States Pension Benefit Guaranty Corporation or any successor thereto.

"<u>Perfection Certificate</u>" means with respect to any Loan Party a certificate, substantially in the form of <u>Exhibit F-2</u> to this Agreement, completed and supplemented with the schedules and attachments contemplated thereby to the reasonable satisfaction of the Collateral Agent and duly executed by the president and/or chief executive officer or the chief financial officer of such Loan Party.

"<u>Permit</u>" means, with respect to any Person, any permit, approval, authorization, license, registration, certificate, concession, grant, franchise, variance or permission from, and any other Contractual Obligations with, any Governmental Authority, in each case whether or not having the force of law and 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>Permitted Acquisition</u>" means any Acquisition by (i) a Loan Party (other than Holdings) or a Subsidiary of a Loan Party of all or substantially all of the assets of a Target, or any line of business, unit or division of a Target or (ii) a Loan Party (other than Holdings) of 100%<u>or a Subsidiary of a Loan Party of all or substantially all</u> of the Stock and Stock Equivalents of a Target <u>not previously held by the Borrower and its Subsidiaries</u> (except for directors' and foreign national qualifying shares in accordance with Requirements of Law) to the extent that each of the following conditions shall have been satisfied:

------

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a) to the extent the Acquisition will be financed in whole or in part with the proceeds of any Loan, the conditions set forth in <u>Section 4.02</u> shall have been satisfied;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b) the Parent Borrower shall have furnished to the Administrative Agent and the Lenders at least ten Business Days prior to<u>to the extent required by Section 6.13, any person acquired in the Acquisition, if acquired by the Borrower or a Loan Party, shall be merged into the Borrower or a Loan Party or become upon</u> the consummation of such Acquisition (1) an executed term sheet and/or commitment letter (setting forth in reasonable detail the terms and conditions of such Acquisition) and, at the request of the Administrative Agent, such other information and documents that the Administrative Agent may request, including, without limitation, executed counterparts of the respective agreements, documents or instruments pursuant to which such Acquisition is to be consummated (including, without limitation, any related management, non compete, employment, option or other material agreements), any schedules to such agreements, documents or instruments and all other material ancillary agreements, instruments and documents to be executed or delivered in connection therewith, (2) pro forma financial statements of the Parent Borrower and its Subsidiaries after giving effect to the consummation of such Acquisition, (3) copies of such other agreements, instruments and other documents (including, without limitation, the Loan Documents required by Section 6.13) as the Administrative Agent reasonably shall request;<u>acquisition a Loan Party;</u>

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c) the Parent Borrower and its Subsidiaries (including any new Subsidiary) shall execute and deliver the agreements, instruments and other documents required by Section 6.13 and the Administrative Agent shall have received, for the benefit of the Secured Parties, a collateral assignment of the seller's representations, warranties and indemnities to the Parent Borrower or any of its Subsidiaries under the acquisition documents;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<u>(c)</u> (d) such Acquisition shall not be hostile and shall have been approved by the board of directors (or other similar governing body) and/or the stockholders or other equity holders of the Target;(e) no Default or Event of Default shall then exist or would exist after giving effect thereto; and

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<u>(d)</u> (f) the Permitted Transaction Conditions are satisfied at the time of such Permitted Acquisition.

"<u>Permitted Amendments</u>" has the meaning specified in <u>Section 10.01</u>.

"<u>Permitted Holders</u>" means (a) Sponsor and its Affiliates, and (b) any investment funds or accounts advised or managed by any of the foregoing (but not including, however, any of their respective portfolio companies).

"<u>Permitted Liens</u>" has the meaning specified in <u>Section 7.01</u>.

"<u>Permitted Refinancing</u>" means Indebtedness constituting a refinancing or extension of<u>issued in exchange for, or the net proceeds of which are used to extend, refinance, renew, replace, defease or refund</u> Indebtedness permitted under <u>subsection 7.05(c)</u> or <u>(d)</u> that (a) has an aggregate outstanding principal amount not greater than the aggregate principal amount of the Indebtedness being refinanced or extended, plus any premium or similar amount required to be paid, and fees and expenses, including in the form of original issue discount, incurred, in

------

connection with any of the foregoing, (b) has a Weighted Average Life to Maturity (measured as of the date of such refinancing or extension) and maturity no shorter than that of the Indebtedness being refinanced or extended, (c) is not entered into as part of a sale leaseback transaction, (d) is not secured by a Lien on any assets other than the collateral securing the Indebtedness being refinanced or extended, (e) the obligors of which are the same as the obligors of the Indebtedness being refinanced or extended and (f) is otherwise on terms no less favorable to the Loan Parties, taken as a whole, than those of the Indebtedness being refinanced or extended.

"<u>Permitted Transaction Conditions</u>" means the following conditions:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a) a) with respect (x) to a Permitted Acquisition and any Investment made pursuant to <u>Section 7.04(l)</u> or (y) a Restricted Payment described in clause (iii) of the definition thereof and made pursuant to <u>Section 7.11(f)</u> and, in each case, after giving effect to such Permitted Acquisition or Restricted Payment: (i) <u>(I) with respect to a Permitted Acquisition or any Investment made pursuant to Section 7.04(l), no Event of Default under clause (a), (f) or (g) of Section 8.01 shall then exist or would exist after giving effect thereto; provided that, with respect to a proposed Acquisition pursuant to an executed acquisition agreement, at the option of the Borrower, the determination of whether such an Event of Default shall exist shall be made solely at the time of the execution of the acquisition agreement related to such Permitted Acquisition and (II) with respect to a Restricted Payment described in clause (iii) of the definition thereof and made pursuant to Section 7.11(f),</u> no Default or Event of Default has occurred or is continuing or will result from any such Permitted Acquisition or Restricted Payment; (ii) the Fixed Charge Coverage Ratio (calculated on the pro forma basis) shall not be less than 1.00:1.00 for the Measurement Period ended immediately prior to the Fiscal Quarter in which such Permitted Acquisition or such Restricted Payment would occur and for which financial statements have been (or are required to be) delivered under <u>Section 6.01(a)</u> or <u>(b)</u>, as applicable; and (iii) at all times during the 30 calendar days immediately prior to such Permitted Acquisition or such Restricted Payment and on the date of such Permitted Acquisition or such Restricted Payment, Availability has not been less than 17.5% of the Revolving Facility Commitment; in each case under <u>clauses (i)</u>, <u>(ii)</u> and <u>(iii)</u>, as certified by the Parent Borrower in writing to the Administrative Agent, with supporting calculations in reasonable detail; and

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b) b) with respect to a Restricted Payment described in clauses (i) and (ii) of the definition thereof and made pursuant to <u>Section 7.11(f)</u> and after giving effect to such Restricted Payment: (i) no Default or Event of Default has occurred or is continuing or will result from any such Restricted Payment; (ii) the Fixed Charge Coverage Ratio (calculated on the pro forma basis) shall not be less than 1.10:1.00 for the Measurement Period ended immediately prior to the Fiscal Quarter in which such Restricted Payment would occur and for which financial statements have been (or are required to be) delivered under <u>Section 6.01(a)</u> or <u>(b)</u>, as applicable; and (iii) at all times during the 30 calendar days immediately prior to such Restricted Payment and on the date of such Restricted Payment, Availability has not been less than 22.5% of the Revolving Facility Commitment; in each case under clauses (i), (ii) and (iii), as certified by the Parent Borrower in writing to the Administrative Agent, with supporting calculations in reasonable detail.

------

"<u>Person</u>" means any individual, partnership, corporation (including a business trust and a public benefit corporation), joint stock company, estate, association, firm, enterprise, trust, limited liability company, unincorporated association, joint venture and any other entity or Governmental Authority.

"<u>Platform</u>" has the meaning specified in <u>Section 6.02</u>.

"<u>Pledge and Security Agreement</u>" means the ABL Pledge and Security Agreement, substantially in the form of <u>Exhibit F-1</u> hereto, dated as of the date hereof among Holdings, the Borrowers, the Subsidiary Guarantors and the Collateral Agent, as the same may be amended, modified or supplemented from time to time.

"<u>Pledged Collateral</u>" means, collectively, the "Pledged Debt", "Pledged Equity Interests", "Pledged EEC Interests", "Pledged Partnership Interests", "Pledged Stock" and "Pledged Trust Interests", all as defined in the Pledge and Security Agreement.

"<u>Prepayment Notice</u>" means a notice of prepayment of Loans pursuant to <u>Section 2.05(c)</u>, which, if in writing, shall be substantially in the form of <u>Exhibit A-3</u>.

"<u>Prime Rate</u>" means, for any day, the rate of interest in effect for such day as publicly announced from time to time by Bank of America as its "prime rate". The "prime rate" is a rate set by Bank of America based upon various factors including Bank of America's costs and desired return, general economic conditions and other factors, and is used as a reference point for pricing some loans, which may be priced at, above or below such announced rate. Any change in such rate announced by Bank of America shall take effect at the opening of business on the day specified in the public announcement of such change.

"Prior Indebtedness" means the Indebtedness and obligations specified in Schedule 6.10 hereto.

"<u>pro forma basis</u>" means, with respect to compliance with any test or covenant hereunder, compliance with such covenant or test after giving effect to (a) the Closing Date Aequisition<u>Related Transactions</u>, (b) any Permitted Acquisition (to the extent not subsequently Disposed of during such period), (c) the borrowing of any Incremental Loans, (d) any sales or other Dispositions expressly permitted under <u>Section 7.02(b)</u>, <u>7.02(d)</u>, <u>7.02(f)</u>, <u>7.02(g)</u>, <u>7.02(h)</u> or <u>7.02(i)</u> or (e) any restructuring of the business of the Parent Borrower or any of its Subsidiaries that the Parent Borrower or any of its Subsidiaries has made and/or has determined to made during the applicable period or subsequent to such application period and on or prior to or simultaneously with the date of calculation of Consolidated EBITDA and which are expected to have a continuing impact and are factually supportable and quantifiable and which are reasonably expected to be realized within the succeeding 1 year period following such relevant transaction (as defined below), including cost savings resulting from head count reduction, closure of facilities and similar operational and other cost savings, which adjustments the Parent Borrower determines are reasonable as set forth in a certificate of a Responsible Officer of the Parent Borrower (the foregoing (a) through (e), together with any transaction related thereto or in connection therewith, the "relevant transactions"), as if the relative relevant transaction consummated or occurred during the applicable period had been consummated and occurred at the beginning of such period;

------

 <u>provided</u> that (i) the effect on any test or covenant from the aggregate amount of the adjustments under clause (e) of this definition and clause (B)(m) of the definition of "Consolidated EBITDA" shall not exceed, for any four consecutive fiscal quarter period, 15% of Consolidated EBITDA for such period (before giving effect to the addback under clause (B)(l) of the definition of "Consolidated EBITDA" and the pro forma effect under this clause (e)) and (ii) on and after the date that is one year after any such relevant transaction, such pro forma calculations shall not give effect to any such cost savings to the extent the steps necessary for realization were not taken during such 1 year period.

"<u>Property</u>" means any interest in any kind of property or asset, whether real, personal or mixed, and whether tangible or intangible.

<u>"PTE" means a prohibited transaction class exemption issued by the U.S. Department of Labor, as any such exemption may be amended from time to time.</u>

"<u>Public Lender</u>" has the meaning specified in <u>Section 6.02</u>.

"<u>Qualifying Equity Issuance</u>" means any Equity Issuance, the Net Issuance Proceeds of which are contributed promptly to the common equity of the Parent Borrower if: (i) after giving effect thereto, no Change of Control shall have occurred; and (ii) the Net Issuance Proceeds thereof shall be used (without duplication and only to the extent Not Otherwise Applied (as defined in the Term Credit Agreement)) only to (A) make (x) Consolidated Capital Expenditures, (y) Permitted Acquisitions and other Investments and (z) Restricted Payments and (D) repay Indebtedness of the Parent Borrower and its Subsidiaries.

"<u>Rate Contracts</u>" means swap agreements (as such term is defined in Section 101 of the Bankruptcy Code) and any other agreements or arrangements designed to provide protection against fluctuations in interest, currency exchange rates or commodities prices.

"<u>Real Estate</u>" means any real estate owned, leased, subleased or otherwise operated or occupied by any Loan Party or any Subsidiary of any Loan Party.

"<u>Register</u>" has the meaning specified in <u>Section 10.06(c)</u>.

"<u>Reimbursement Obligations</u>" has the meaning specified in <u>Section 2.03(d)(ii)</u>.

"<u>Related Agreements</u>" means the Merger Agreement, the Term Finance Documents, the Second Lien Loan Documents and the Structure Memorandum.

"<u>Related Parties</u>" means, with respect to any Person, such Person's Affiliates and the partners, directors, officers, employees, agents, trustees and advisors of such Person and of such Person's Affiliates.

"<u>Related Transactions</u>" means the transactions contemplated by the Related Agreements and includes, without limitation, the Closing Date Acquisition.

------

"<u>Releases</u>" means any release, threatened release, spill, emission, leaking, pumping, pouring, emitting, emptying, escape, injection, deposit, disposal, discharge, dispersal, dumping, leaching or migration of Hazardous Material into or through the environment.

"<u>Remedial Action</u>" means all actions required to (a) clean up, remove, treat or in any other way address any Hazardous Material in the indoor or outdoor environment, (b) prevent or minimize any Release so that a Hazardous Material does not migrate or endanger or threaten to endanger public health or welfare or the indoor or outdoor environment or (c) perform pre remedial studies and investigations and post-remedial monitoring and care with respect to any Hazardous Material.

"<u>Rent and Charges Reserve</u>" means the aggregate of (a) all past due rent and other amounts owing by a Loan Party to any landlord, warehouseman, processor, repairman, mechanic, shipper, freight forwarder, broker or other Person who possesses any Collateral or could assert a Lien on any Collateral; and (b) a reserve equal to three months rent and other charges that could be payable to any such Person, unless it has executed a Collateral Access Agreement.

"<u>Report</u>" has the meaning specified in <u>Section 10.21</u>.

"<u>Request for Credit Extension</u>" means (i) with respect to a Borrowing, conversion or continuation of Loans, a Committed Loan Notice, (ii) with respect to an L/C Credit Extension, a Letter of Credit Application and (iii) with respect to a Swing Line Loan, a Swing Line Loan Notice.

"<u>Required Lenders</u>" means, as of any date of determination, Lenders having (i) Loans outstanding, (ii) L/C Obligations outstanding (with the aggregate amount of each Lender's risk participation and funded participation in funded L/C Obligations being deemed "held" by such Lender), and (iii) Revolving Facility Commitments, that, taken together, represent more than 50% of the sum of all (A) Loans outstanding, (B) L/C Obligations outstanding, and (C) Revolving Facility Commitments at such time. The Loans of any Defaulting Lender shall be disregarded in determining Required Lenders at any time. If there is more than one Lender under this Agreement (other than Defaulting Lenders and Affiliates of such Lender), the Required Lenders must include at least two unaffiliated Lenders.

"<u>Requirement of Law</u>" means, with respect to any Person, the common law and any federal, state, local, foreign, multinational or international laws, statutes, codes, treaties, standards, rules and regulations, guidelines, ordinances, orders, judgments, writs, injunctions, decrees (including administrative or judicial precedents or authorities) and the interpretation or administration thereof by, and other determinations, directives, requirements or requests of, any Governmental Authority, in each case whether or not having the force of law and that are applicable to or binding upon such Person or any of its Property or to which such Person or any of its Property is subject. For the avoidance of doubt, the term "Requirement of Law" shall include FATCA and any intergovernmental agreements with respect thereto between the United States and another jurisdiction.

------

"<u>Responsible Officer</u>" means the chief executive officer or the president of the Parent Borrower, or any other officer having substantially the same authority and responsibility or otherwise satisfactory to the Administrative Agent; or, with respect to compliance with financial covenants or delivery of financial information, the chief financial officer, chief accounting officer, the treasurer or controller of the Parent Borrower, <u>any other officer or employee of the applicable Loan Party designated in or pursuant to an agreement between the applicable Loan Party and the Administrative Agent,</u> or any other officer having substantially the same authority and responsibility or otherwise satisfactory to the Administrative Agent.

"<u>Restricted Payment</u>" has the meaning specified in <u>Section 7.11</u>.

"<u>Revolving Facility Borrowing</u>" means a Borrowing comprised of Revolving Facility Loans.

"<u>Revolving Facility Commitment</u>" means, with respect to each Revolving Facility Lender, the commitment of such Revolving Facility Lender to make Revolving Facility Loans pursuant to <u>Section 2.01</u>, expressed as an amount representing the maximum aggregate permitted amount of such Revolving Facility Lender's Revolving Facility Credit Exposure hereunder, as such commitment may be (i) reduced from time to time pursuant to <u>Section 2.07</u>, (ii) reduced or increased from time to time pursuant to assignments by or to such Lender under <u>Section 10.06</u>, and (iii) increased as provided under <u>Section 2.14</u>. The initial amount of each Lender's Revolving Facility Commitment is set forth on <u>Schedule 2.01</u>, or in the Assignment and Acceptance or Incremental Assumption Agreement pursuant to which such Lender shall have assumed its Revolving Facility Commitment (or Incremental Revolving Facility Commitment), as applicable. The aggregate amount of the Lenders' Revolving Facility Commitments on the Closing<u>Second Amendment Effective</u> Date is $75<u>110</u>,000,000.

"<u>Revolving Facility Credit Exposure</u>" means, at any time, the sum of (a) the aggregate principal amount of the Revolving Facility Loans outstanding at such time, and (b) the aggregate principal amount of L/C Obligations and Swing Line Loans outstanding at such time. The Revolving Facility Credit Exposure of any Revolving Facility Lender at any time shall be the product of (x) such Revolving Facility Lender's Revolving Facility Percentage and (y) the aggregate Revolving Facility Credit Exposure of all Revolving Facility Lenders, collectively, at such time.

"<u>Revolving Facility Lender</u>" means a Lender (including an Incremental Revolving Facility Lender) with a Revolving Facility Commitment or with outstanding Revolving Facility Loans.

"<u>Revolving Facility Loan</u>" means a Loan made by a Revolving Facility Lender pursuant to <u>Section 2.01</u>.

"<u>Revolving Facility Maturity Date</u>" means April 30<u>February 16</u>, 2019<u>23</u> and any later maturity date applicable to any Incremental Commitments or any Incremental Loans, in each case, as extended in accordance with this Agreement from time to time; <u>provided</u>, <u>however</u>, that if such date is not a Business Day, the Revolving Facility Maturity Date shall be the next preceding Business Day.

------

"<u>Revolving Facility Percentage</u>" means, with respect to any Lender, the percentage (carried out to the ninth decimal place) of such Lender's obligation to make Revolving Facility Loans represented by (i) on or prior to the <u>Original</u> Closing Date, such Lender's Revolving Facility Commitment at such time and (ii) thereafter, the principal amount of such Lender's Loans at such time, in each case subject to adjustment as provided in <u>Section 2.05</u>, <u>2.07</u>, <u>2.14</u>, <u>2.15</u> or <u>2.16</u>. The initial Revolving Facility Percentage of each Lender is set forth opposite the name of such Lender on <u>Schedule 2.01</u> or in the Assignment and Assumption pursuant to which such Lender becomes a party hereto, as applicable. If the Revolving Facility Commitments have terminated or expired, the Revolving Facility Percentage shall be determined based upon the Revolving Facility Commitments most recently in effect, giving effect to any subsequent assignments pursuant to <u>Section 10.06</u>.

"<u>Royalties</u>" means all royalties, fees, expense reimbursement and other amounts payable by a Borrower under a License.

"<u>S&P</u>" means Standard & Poor's Financial Services LLC, a subsidiary of The McGraw Hill Companies, Inc. and any successor thereto.

<u>"Scheduled Unavailability Date" has the meaning specified in Section 3.07.</u>

"<u>SDN List</u>" has the meaning specified in <u>Section 5.23</u>.

"<u>SEC</u>" means the Securities and Exchange Commission, or any Governmental Authority succeeding to any of its principal functions.

<u>"Second Amendment" means that certain Second Amendment, dated as of February 16, 2018, among the Loan Parties, the Administrative Agent and the Lenders party thereto.</u>

<u>"Second Amendment Effective Date" means February 16, 2018.</u>

"<u>Second Currency</u>" has the meaning specified in <u>Section 10.20</u>.

"<u>Second Lien</u> <u>Agent</u><u>Documents</u> " means Bank of America, N.A., in its capacity as agent under the Second Lien Credit Agreement.

"<u>Second Lien Credit Agreement</u>" means the Second Lien Credit Agreement, dated as of September 19, 2013, by and among the Term Loan Parties, the Second Lien Agent and the Second Lien Lenders.

"<u>Second Lien Indebtedness</u>" means the Indebtedness of the Loan Parties owing to the Second Lien Agent and the Second Lien Lenders under the Second Lien Credit Agreement, which Indebtedness is on terms and conditions reasonably acceptable to the Collateral Agent.

"<u>Second Lien Lenders</u>" means the lenders from time to time party to the Second Lien Credit Agreement. "<u>Second Lien Loan Documents</u>" means the Second Lien Credit Agreement and the other Loan Documents (as defined in the Second Lien Credit Agreement) and each of the other<u>the</u> agreements, documents and instruments providing for or evidencing any other Second Lien Indebtedness, and any other document or instrument executed or delivered at any time in connection with any Second Lien Indebtedness, including any intercreditor, accession or joinder agreement among holders of Second Lien Indebtedness, to the extent such are effective at the relevant time.

------

"<u>Second Lien</u> <u>Obligations</u>" has the meaning given to the term "<u>Indebtedness" means the Indebtedness of the Loan Parties incurred under any New Second Lien Facility (as defined in the</u> Term Credit Obligations" in the Second Lien Credit Agreement<u>), which Indebtedness is on terms and conditions consistent with the Intercreditor Agreements</u>.

"<u>Second Lien Secured Parties</u>" has the meaning given to the term "Secured Parties" in the Second Lien Credit Agreement.

"<u>Secured Cash Management Agreement</u>" means any Cash Management Agreement that is entered into by and between any Loan Party and any Cash Management Bank.

"<u>Secured Hedge Agreement</u>" means any Rate Contract required or permitted under <u>Article VI</u> or <u>VII</u> that is entered into by and between any Loan Party and any Hedge Bank.

"<u>Secured Parties</u>" means, collectively, the ABL Credit Parties, the Hedge Banks, the Cash Management Banks, the providers of Bank Debt and the other Persons the Finance Obligations owing to which are or are purported to be secured by the Collateral under the terms of the Collateral Documents.

"<u>Securities Act</u>" means the Securities Act of 1933, as amended, and the rules and regulations promulgated thereunder.

"<u>Settlement Date</u>" has the meaning specified in <u>Section 2.18(a)</u>.

"<u>Software</u>" means all "software" (as defined in the UCC), and also means and includes all software programs, whether now or hereafter owned, licensed or leased by a Loan Party, designed for use on Computer Hardware, including, without limitation, all operating system software, utilities and application programs in whatever form and whether or not embedded in goods, all source code and object code in magnetic tape, disk or hard copy format or any other listings whatsoever, all firmware associated with any of the foregoing all documentation, flowcharts, logic diagrams, manuals, specifications, training materials, charts and pseudo codes associated with any of the foregoing, and all options, warranties, services contracts, program services, test rights, maintenance rights, support rights, renewal rights and indemnifications relating to any of the foregoing.

"<u>Solvent</u>" and "<u>Solvency</u>" mean, with respect to any Person on any date of determination, that on such date (a) the fair value of the assets of such Person and its subsidiaries, on a consolidated basis, at fair valuation, exceeds their debts and liabilities, subordinated, contingent, unliquidated, or otherwise, (b) the present fair saleable value of the property of such Person and its subsidiaries, on a consolidated basis, is greater than the amount that will be required to pay the total amount, on a consolidated basis, of their debts and other liabilities, subordinated, contingent, unliquidated, or otherwise, (c) such Person and its subsidiaries, on a consolidated basis, are able to pay their debts and liabilities, subordinated, contingent or otherwise, on a consolidated

------

basis, as such liabilities become absolute and matured and (d) such Person and its subsidiaries, on a consolidated basis, do not have unreasonably small capital with which to conduct the business in which they are engaged as such business is conducted as of such date and as such business is proposed to be conducted following such date. The amount of any contingent liability at any time shall be computed as the amount that would reasonably be expected to become an actual and matured liability.

"<u>Special Flood Hazard Area</u>" means an area that FEMA's current flood maps indicate has at least a one percent chance of a flood equal to or exceeding the base flood elevation (a 100-year flood) in any given year<u>an area identified by FEMA (or any successor agency) as a special flood hazard area with respect to which flood insurance has been made available under</u> <u>the National Flood Insurance Program.</u>

"<u>Specified Equity Contribution</u>" has the meaning specified in <u>Section 8.04</u>.

<u>"Specified German Mortgage Debt" means any Indebtedness that is secured by real property and related assets located in Germany.</u>

"<u>Specified Loan Party</u>" means any Loan Party that is not an "eligible contract participant" under the Commodity Exchange Act (determined prior to giving effect to Section 2.10 of the Guaranty).

"<u>Specified Representations</u>" means the representations and warranties set forth in <u>Sections 5.01, 5.02, 5.04, 5.05</u> (with respect to the absence of litigation seeking to enjoin or restrain the execution, delivery or performance of this Agreement, any other Loan Document or any Related Agreement, or directing that the transactions provided for herein or therein not be consummated only), <u>5.08</u>, <u>5.12</u>, <u>5.13</u>, <u>5.14</u>, <u>5.23</u>, <u>5.24</u> and <u>5.26.</u>

"<u>Sponsor</u>" means Paulson & Co. Inc.

"<u>Spot Rate</u>" has the meaning specified in <u>Section 1.06</u>.

"<u>Standard Cost Value</u>" means the standard invoice cost paid by any Borrower or Subsidiary Guarantor to an OEM for a Boston Piano and/or an Essex Piano, excluding (a) inventory revaluation, if any, and (b) freight and delivery charges.

"<u>Standstill Period</u>" has the meaning specified in <u>Section 8.04</u>.

"<u>Steinway</u>" has the meaning specified in the preamble hereto.

"<u>Steinway and Sons</u>" means Steinway and Sons, a New York corporation (including any division, branch or other unit thereof).

"<u>Steinway Dealer Loans</u>" means loans made by Steinway to Steinway dealers for startup costs or for other purposes (other than those of the type evidenced by the Steinway Dealer Notes).

------

"<u>Steinway Dealer Notes</u>" means notes made by Steinway dealers in favor of Steinway, that evidence the indebtedness owing by such dealer to Steinway, for extensions of credit made by Steinway to dealers in an amount not to exceed $7,500,000 in the aggregate at any time outstanding for all such Steinway dealers, to acquire Steinway's pianos and other musical instruments.

"<u>Steinway Pianos</u>" means all finished and near-finished Steinway pianos, which term shall exclude Factory Returns, Concert and Artist Bank Pianos, Boston Pianos and Essex Pianos.

"<u>Stock</u>" means all shares of capital stock (whether denominated as common stock or preferred stock), equity interests, beneficial, partnership or membership interests, joint venture interests, participations or other ownership or profit interests in or equivalents (regardless of how designated) of or in a Person (other than an individual), whether voting or non-voting.

"<u>Stock Equivalents</u>" means all securities convertible into or exchangeable for Stock or any other Stock Equivalent and all warrants, options or other rights to purchase, subscribe for or otherwise acquire any Stock or any other Stock Equivalent, whether or not presently convertible, exchangeable or exercisable.

"<u>Structure Memorandum</u>" means that certain structuring memorandum delivered to the Administrative Agent and the Lenders.

"<u>Subordinated Indebtedness</u>" means any Indebtedness of any Loan Party or any Subsidiary of any Loan Party which is subordinated to the Finance Obligations as to right and time of payment and as to other rights and remedies thereunder and having such other terms as are, in each case, reasonably satisfactory to the Administrative Agent.

"<u>Subsidiary</u>" of a Person means any corporation, association, limited liability company, partnership, joint venture or other business entity of which more than fifty percent (50%) of the voting Stock (in the case of Persons other than corporations), is owned or controlled directly or indirectly by the Person, or one or more of the Subsidiaries of the Person, or a combination thereof. Unless otherwise specified, all references herein to a "Subsidiary" or to "Subsidiaries" shall refer to a Subsidiary or Subsidiaries of Holdings.

"<u>Subsidiary Guarantor</u>" means each Domestic Subsidiary (other than Excluded Subsidiaries) of the Parent Borrower on the <u>Original</u> Closing Date and each Domestic Subsidiary (other than Excluded Subsidiaries) of the Parent Borrower that becomes a party to any Guaranty after the <u>Original</u> Closing Date by execution of an Accession Agreement, and "<u>Subsidiary Guarantors</u>" means any two or more of them. Notwithstanding the foregoing, the Facility will be Guaranteed by each person which is a guarantor under the Term Guaranty or a guarantor of the Second Lien Obligations<u>Indebtedness</u>.

"<u>Swap Obligations</u>" means with respect to any Loan Party any obligation to pay or perform under any agreement, contract or transaction that constitutes a "swap" within the meaning of section 1a(47) of the Commodity Exchange Act.

------

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

"<u>Swing Line Loan</u>" has the meaning specified in <u>Section 2.04(a)</u>.

"<u>Swing Line Loan Notice</u>" means a notice of a Swing Line Borrowing pursuant to <u>Section 2.04(b)</u>, which, if in writing, shall be substantially in the form of <u>Exhibit A-2</u> <u>or such other form as approved by the Administrative Agent (including any form on an electronic platform or electronic transmission system as shall be approve by the Administrative Agent), appropriately completed and signed by a Responsible Officer of the Borrower</u>.

"<u>Swing Line Sublimit</u>" means an amount equal to $7,500,000. The Swing Line Sublimit is part of, and not in addition to, the Facility.

"<u>Syndication Agent</u>" means Deutsche Bank Securities Inc., in its capacity as syndication agent.

"<u>Target</u>" means any other Person or business unit or asset group of any other Person acquired or proposed to be acquired in an Acquisition.

"<u>Taxes</u>" means all present or future taxes, levies, imposts, duties, deductions, withholdings (including backup withholding), assessments, fees or other charges imposed by any Governmental Authority, including any interest, additions to tax or penalties applicable thereto.

"<u>Tax Affiliate</u>" means (a) the Parent Borrower and its Subsidiaries, (b) each other Loan Party and (c) any Affiliate of the Parent Borrower with which the Parent Borrower files or is eligible to file consolidated, combined or unitary Tax returns.

"<u>Tax Return</u>" has the meaning specified in <u>Section 5.10</u>.

"<u>Term Administrative Agent</u>" means Bank of America, N.A., in its capacity as agent for the "Secured Parties" under (and as defined in) the Term Credit Agreement, and its successors and assigns in such capacity.

"<u>Term Agent</u>" means the Term Administrative Agent or the Term Collateral Agent and any successor and assigned in such capacity, and "<u>Term Agents</u>" means any two or more of them.

"<u>Term Borrower</u>" means the Parent Borrower in its capacity as the borrower under the Term Credit Agreement.

------

"<u>Term Collateral Agent</u>" means Bank of America, N.A., in its capacity as collateral agent for the benefit of the Term Finance Parties, and its successor or successors in such capacity.

"<u>Term Collateral Documents</u>" means the "Collateral Documents" (as defined in the Term Credit Agreement) and any other agreement, document or instrument pursuant to which a Lien is granted securing any Term Finance Obligations or under which rights or remedies with respect to such Liens are governed.

"<u>Term Credit Agreement</u>" means the <u>Amended and Restated</u> First Lien Credit Agreement dated as of September<u>February</u> 19<u>6</u>, 2013<u>8</u> among the Term Borrower, Holdings, the banks and other lending institutions party thereto from time to time, the Term Administrative Agent and the other agents named therein, as amended, modified or supplemented from time to time in accordance with the provisions thereof and of this Agreement.

"<u>Term Credit Obligations</u>" means, with respect to each Term Loan Party, without duplication:

&nbsp;&nbsp;&nbsp;&nbsp;&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) in the case of the Term Borrower, all principal of and interest on any Loan, or any Note issued pursuant to, and as defined in, the Term Credit Agreement or any other Term 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;&nbsp;&nbsp;&nbsp;&nbsp;(ii) all fees, expenses, indemnification obligations and other amounts of whatever nature now or hereafter payable by such Term Loan Party pursuant to the Term Credit Agreement or any other Term 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;&nbsp;&nbsp;&nbsp;&nbsp;(iii) all expenses of the Term Administrative Agent, any syndication agents, any documentation agents or the Term Collateral as to which one or more of such Persons have a right to reimbursement by such Term Loan Party pursuant to the Term Credit Agreement or any other Term 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;&nbsp;&nbsp;&nbsp;&nbsp;(iv) all amounts paid by any Indemnitee (as defined in the Term Credit Agreement) as to which such Indemnitee has the right to reimbursement by such Term Loan Party under the Term Credit Agreement or under any other Term Loan Document; 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;(v) in the case of Holdings, and each Term Subsidiary Guarantor, all amounts now or hereafter payable by Holdings or such Term Subsidiary Guarantor under its guaranty of all obligations of the Term Borrower under the Term Credit Agreement and any other Term Loan Document;

together in each case with all renewals, modifications, consolidations or extensions thereof.

"<u>Term Finance Document</u>" means (i) each Term Loan Document and (ii) each Term Secured Hedge Agreement, and "<u>Term Finance Documents</u>" means all of them, collectively.

"<u>Term Finance Obligations</u>" means all obligations outstanding under (i) the Term Credit Agreement and the other Term Loan Documents (including all Term Credit Obligations) and (ii) any Term Secured Hedge Agreement (it being understood, for avoidance of doubt, that Swap Obligations of a Loan Party of or owed to a Person that is both an ABL Credit Party and a Term Lender at the time such Rate Contract was entered into by such Loan Party shall be considered Finance Obligations).

------

"<u>Term Finance Party</u>" means each Term Lender, the Term Administrative Agent, each co-agent or sub-agent appointed by the Term Administrative Agent from time to time pursuant to the Term Credit Agreement, the Term Collateral Agent and each Indemnitee (as defined in the Term Credit Agreement) and their respective successors and assigns, and "<u>Term Finance Parties</u>" means any two or more of them, collectively.

"<u>Term Guaranty</u>" means the Guaranty (as defined in the Term Credit Agreement) made by Holdings, and the Term Subsidiary Guarantors in favor of the Term Secured Parties, together with each other guaranty and guaranty supplement delivered in accordance with the terms thereof.

"<u>Term Hedge Bank</u>" means any Person that, at the time it enters into a Rate Contract required or permitted under the Term Credit Agreement, is a Term Lender or an Affiliate of a Term Lender, in its capacity as a party to such Rate Contract.

"<u>Term Intercreditor Agreement</u>" means the Intercreditor Agreement, substantially in the form of <u>Exhibit I-2</u> hereto, dated as of the date hereof<u>Original Closing Date,</u> among the Term Agent, the Second Lien Agent, Holdings, the Borrowers and the Term Loan Parties party thereto, as the same<u>or such other intercreditor agreement in a form reasonably acceptable to the Agent and the Borrower, in each case, as such document</u> may be amended, modified or<u>restated,</u> supplemented <u>or otherwise modified</u> from time to time.

"<u>Term Lenders</u>" means the "Lenders" under and as defined in the Term Credit Agreement, in their respective capacities as such under, and as defined in, the Term Credit Agreement, and their respective successors and assigns.

"<u>Term Loan Documents</u>" means the Term Credit Agreement and the other Loan Documents (as defined in the Term Credit Agreement) and each of the other agreements, documents and instruments providing for or evidencing any other Term Credit Obligation, and any other document or instrument executed or delivered at any time in connection with any Term Credit Obligations, including any intercreditor, accession or joinder agreement among holders of Term Credit Obligations, to the extent such are effective at the relevant time.

"<u>Term Loan Party</u>" means Holdings, the Term Borrower and each Term Subsidiary Guarantor, and "<u>Term Loan Parties</u>" means all of them, collectively.

"<u>Term Loans</u>" has the meaning given to the term "Loans" in the Term Credit Agreement.

"<u>Term Priority Collateral</u>" means all Collateral other than ABL Priority Collateral.

"<u>Term Secured Hedge Agreement</u>" means any Rate Contract required or permitted under the Term Credit Agreement that is entered into by and between any Term Loan Party and any Term Hedge Bank.

------

"<u>Term Secured Parties</u>" has the meaning given to the term "Secured Parties" in the Term Credit Agreement.

"<u>Term Subsidiary Guarantor</u>" means at any time, each Subsidiary of Holdings which is a guarantor of the Term Finance Obligations pursuant to the Term Guaranties or any other Term Loan Document.

"<u>Threshold Amount</u>" means $1<u>2</u>0,000,000.

"<u>Title IV Plan</u>" means a pension plan subject to Title IV of ERISA or Sections 412 and 430 of the Code or Section 302 of ERISA, other than a Multiemployer Plan, to which any ERISA Affiliate incurs or otherwise has any obligation or liability, contingent or otherwise.

"<u>Total Outstandings</u>" means the aggregate Outstanding Amount of all Loans and L/C Obligations.

"<u>Trade Secrets</u>" means all right, title and interest (and all related IP Ancillary Rights) arising under any Requirement of Law in or relating to trade secrets.

"<u>Trademark</u>" means all rights, title and interests (and all related IP Ancillary Rights) arising under any Requirement of Law in or relating to trademarks, trade names, corporate names, company names, business names, fictitious business names, trade styles, service marks, logos and other source or business identifiers and, in each case, all goodwill associated therewith, all registrations and recordations thereof and all applications in connection therewith.

"<u>Transaction</u>" means the events contemplated by this Agreement and the other Loan Documents and the Related Agreements.

"<u>Type</u>" means, with respect to a Loan, its character as a Base Rate Loan, a Eurodollar Rate Loan or a Swing Line Loan.

"<u>UCC</u>" means the Uniform Commercial Code of any applicable jurisdiction and, if the applicable jurisdiction shall not have any Uniform Commercial Code, the Uniform Commercial Code as in effect from time to time in the State of New York.

"<u>United States</u>" and "<u>U.S.</u>" mean the United States of America.

"<u>Unreimbursed Amount</u>" has the meaning specified in <u>Section 2.03(c)(i)</u>.

"<u>Value</u>" means (a) for Inventory, its value determined on the basis of the lower of cost or market, calculated on a first-in, first-out basis, and excluding any portion of cost attributable to intercompany profit among the Loan Parties and their Affiliates; and (b) for an Account, its face amount, net of any returns, rebates, discounts (calculated on the shortest terms), credits, allowances or Taxes (including sales, excise or other taxes) that have been or could be claimed by the applicable Account Debtor or any other Person.

------

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

"<u>Wholly-Owned Subsidiary</u>" means, with respect to any Person at any date, any Subsidiary of such Person all of the Stock and Stock Equivalents of which (except directors' qualifying shares and foreign national qualifying shares in connection with Requirements of Law) are at the time directly or indirectly owned by such Person.

"<u>Working Capital</u>" means at any date, Consolidated Current Assets of Holdings and its Subsidiaries at such date minus Consolidated Current Liabilities of Holdings and its Subsidiaries at such date, excluding any deferred assets and liabilities and purchase accounting adjustments.

"<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>Other Interpretative Provisions</u>**. With reference to this Agreement and each other Loan Document, unless otherwise specified herein or in such other Loan Document:

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

------

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b) In the computation of periods of time from a specified date to a later specified date, the word "<u>from</u>" means "<u>from and including</u>," the words "to" and "<u>until</u>" each mean "<u>to but excluding</u>," and the word "<u>through</u><u>"</u> means "<u>to and including</u>."

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

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(d) References to a "Person and its Subsidiaries" or to a "Person or any Subsidiary" (or words of similar import) means to Holdings and its Subsidiaries, unless otherwise specified.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(e) Any reference to "knowledge" of any Loan Party shall mean the knowledge of one or more of such Loan Party's Responsible Officers after reasonable investigation and inquiry with their direct reports.

**Section 1.03** <u>**Accounting Terms and Determinations**.</u> 

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a) <u>*Generally*</u>. All accounting terms not specifically or completely defined herein shall be construed in conformity with, and all financial data (including financial ratios and other financial calculations) required to be submitted pursuant to this Agreement shall be prepared in conformity with, GAAP applied on a consistent basis, as in effect from time to time, applied in a manner consistent with that used in preparing the Audited Financial Statements (or, from and after delivery thereof to the Administrative Agent), except as otherwise specifically prescribed herein. Notwithstanding the foregoing, for purposes of determining compliance with any covenant (including the computation of any financial covenant) contained herein, Indebtedness of the Borrowers and their Subsidiaries shall be deemed to be carried at 100% of the outstanding principal amount thereof, and the effects of FASB ASC 825 and FASB ASC 470-20 on financial liabilities shall be disregarded.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b) <u>*Changes in GAAP*</u>. If at any time any change in GAAP or in the application thereof would affect the computation of any financial ratio or requirement set forth in any Loan Document, and either the Parent Borrower or the Required Lenders shall so request, the Administrative Agent, the Lenders and the Parent Borrower shall negotiate in good faith to amend such ratio or requirement to preserve the original intent thereof in light of such change in GAAP (subject to the approval of the Required Lenders); <u>provided</u> that, until so amended, (i) such ratio or requirement shall continue to be computed in accordance with GAAP prior to such change therein and (ii) the Parent Borrower shall provide to the Administrative Agent and the Lenders financial statements and any other documents required under this Agreement or as reasonably requested hereunder setting forth a reconciliation between calculations of such ratio or requirement made before and after giving effect to such change in GAAP. Without limiting the foregoing, leases shall continue to be classified (including, without limitation, for affirmative and negative covenant purposes) and accounted for on a basis consistent with that reflected in the Audited Financial Statements for all purposes of this Agreement, notwithstanding any change in GAAP relating thereto, unless the parties hereto shall enter into a mutually acceptable amendment addressing such changes, as provided for above.

------

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c) <u>*Computation of Certain Financial Covenants*</u>. Unless otherwise specified herein, all defined financial terms (and all other definitions used to determine such terms) shall be to those determined and computed in respect of Holdings and its Subsidiaries.

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

**Section 1.05 <u>Times of Day; Rates</u>**. Unless otherwise specified, all references herein to times of day shall be references to Eastern time (daylight or standard, as applicable). The Administrative Agent does not warrant, nor accept responsibility, nor shall the Administrative Agent have any liability with respect to the administration, submission or any other matter related to the rates in the definition of "Eurodollar Rate" or with respect to any comparable or successor rate thereto.

**Section 1.06 <u>Currency Equivalents Generally</u>**. Any amount specified in this Agreement (other than in <u>Articles II</u>, <u>IX</u> and <u>X</u>) or any of the other Loan Documents to be in Dollars shall also include the equivalent of such amount in any currency other than Dollars, such equivalent amount thereof in the applicable currency to be determined by the Administrative Agent at such time on the basis of the Spot Rate (as defined below) for the purchase of such currency with Dollars. For purposes of this <u>Section 1.06</u>, the "<u>Spot Rate</u>" for a currency means the rate determined by the Administrative Agent to be the rate quoted by the Person acting in such capacity as the spot rate for the purchase by such Person of such currency with another currency through its principal foreign exchange trading office at approximately 11:00 a.m. on the date two Business Days prior to the date of such determination; provided that the Administrative Agent may obtain such spot rate from another financial institution designated by the Administrative Agent if the Person acting in such capacity does not have as of the date of determination a spot buying rate for any such currency.

**Section 1.07 <u>Letter of Credit Amounts</u>.** Unless otherwise specified herein, the amount of a Letter of Credit at any time shall be deemed to be the Dollar stated amount of such Letter of Credit at such time; <u>provided</u>, <u>however</u>, that with respect to any Letter of Credit that, by its terms or the terms of any Issuer Document related thereto, provides for one or more automatic increases in the stated amount thereof, the amount of such Letter of Credit shall be deemed to be the Dollar 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 such time.

------

**ARTICLE II** 

**THE COMMITMENTS AND LOANS** 

**Section 2.01 <u>Commitments</u>**. Subject to the terms and conditions set forth herein, each Revolving Facility Lender severally agrees to make Revolving Facility Loans to the applicable Borrower from time to time on any Business Day during the Availability Period in an aggregate principal amount not to exceed at any time outstanding the amount of such Lender's Revolving Facility Commitment; provided, however, that after giving effect to any Revolving Facility Borrowing, (i) the Revolving Facility Credit Exposure shall not exceed the Revolving Facility Commitments, (ii) the Revolving Facility Credit Exposure of any Revolving Facility Lender shall not exceed such Lender's Revolving Facility Commitment and (iii) the Revolving Facility Credit Exposure shall not exceed the Borrowing Base. Within the limits of each Lender's Revolving Facility Commitment, and subject to the other terms and conditions hereof, the Borrowers may borrow under this <u>Section 2.01</u>, prepay under <u>Section 2.05</u> and reborrow under this <u>Section 2.01</u>. Revolving Facility Loans may be Base Rate Loans or Eurodollar Rate Loans as further provided herein.

**Section 2.02** <u>**Borrowings, Conversions and Continuations of Loans**.</u>

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a) Each Borrowing, each conversion of Loans from one Type to the other, and each continuation of Eurodollar Rate Loans shall be made upon the Parent Borrower's irrevocable notice to the Administrative Agent, which may be given by <u>(A)</u> telephone or e-mail. <u>, or (B) a Committed Loan Notice; provided that any telephonic notice must be confirmed immediately</u> <u>by delivery to the Administrative Agent of a</u> <u>Committed Loan Notice.</u> Each such notice<u>Committed Loan Notice</u> must be received by the Administrative Agent not later than 11:00 a.m. (i) three Business Days prior to the requested date of any Borrowing of, conversion to or continuation of Eurodollar Rate Loans or of any conversion of Eurodollar Rate Loans to Base Rate Loans, and (ii) on the requested date of any Borrowing of Base Rate Loans; <u>provided</u>, <u>however</u>, that if the Parent Borrower wishes to request Eurodollar Rate Loans having an Interest Period other than one, two, three or six (but not more than twelve) months in duration as provided in the definition of "Interest Period" (an "<u>Alternate Interest Period</u>"), the applicable notice must be received by the Administrative Agent not later than 11:00 a.m. four Business Days prior to the requested date of such Borrowing, conversion or continuation, whereupon the Administrative Agent shall give prompt notice to the Lenders of such request and determine whether the requested Interest Period is acceptable to all of them. Not later than 11:00 a.m., three Business Days before the requested date of such Borrowing, conversion or continuation, the Administrative Agent shall notify the Parent Borrower (which notice may be by telephone) whether or not the requested Alternate Interest Period has been consented to by all the Lenders. Each telephonic or e-mail notice by the Parent Borrower pursuant to this <u>Section 2.02(a)</u> must be confirmed promptly by delivery to the Administrative Agent of a written Committed Loan Notice, <u>shall be</u> appropriately completed and signed by a Responsible Officer of the Parent Borrower or any other Person designated by a Responsible Officer of the Parent Borrower in writing to the Administrative Agent; <u>provided</u> that such designation shall be accompanied by (i) a complete copy of resolutions duly adopted by the board of directors (or other similar governing body) of the Parent Borrower authorizing the applicable Responsible Officer to delegate his or her authority to submit such Committed Loan Notice and (ii) a certificate of such Responsible Officer as to the incumbency and specimen signature of the Person so designated. Each Borrowing of, conversion to or continuation of

------

Eurodollar Rate Loans shall be in a principal amount of $5,000,000 or a whole multiple of $1,000,000 in excess thereof. Each Borrowing of or conversion to Base Rate Loans shall be in a principal amount of $500,000 or a whole multiple of $100,000 in excess thereof. Each Committed Loan Notice (whether telephonic or written) shall specify (i) whether the Parent Borrower (or any other Borrower) is requesting a Borrowing, a conversion of Loans from one Type to the other, or a continuation of Eurodollar Rate Loans, (ii) the requested date of the Borrowing, conversion or continuation, as the case may be (which shall be a Business Day), (iii) the principal amount of Loans to be borrowed, converted or continued, (iv) the Type of Loans to be borrowed or to which existing Loans are to be converted, (v) the aggregate amount of all Loans to be outstanding (after giving effect to the requested Borrowing), (vi) if applicable, the duration of the Interest Period with respect thereto and (vii) the location and number of the applicable Borrower's account to which such funds are due to be distributed. If the Parent Borrower fails to specify a Type of Loan in a Committed Loan Notice or if the Parent Borrower fails to give a timely notice requesting a conversion or continuation, then the applicable Loans shall be made as, or converted to, Base Rate Loans. Any such automatic conversion to Base Rate Loans shall be effective as of the last day of the Interest Period then in effect with respect to the applicable Eurodollar Rate Loans. If the Parent Borrower requests a Borrowing of, conversion to, or continuation of Eurodollar Rate Loans in any such Committed Loan Notice, but fails to specify an Interest Period, it will be deemed to have specified an Interest Period of one month. Notwithstanding anything to the contrary herein, a Swing Line Loan may not be converted to a Eurodollar Rate Loan<u>.</u>

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b) Following receipt of a Committed Loan Notice, the Administrative Agent shall promptly notify each Lender of the amount of its Revolving Facility Percentage of the applicable Loans, and if no timely notice of a conversion or continuation is provided by the Parent Borrower, the Administrative Agent shall notify each Lender of the details of any automatic conversion to Base Rate Loans described in <u>Section 2.02(a)</u>. In the case of a Borrowing, each Lender shall make the amount of its Loan available to the Administrative Agent in immediately available funds at the Administrative Agent's Office not later than 1:00 p.m. on the Business Day specified in the applicable Committed Loan Notice. Upon satisfaction or waiver of the applicable conditions set forth in <u>Section 4.01</u> with respect to a Borrowing on the <u>Original</u> Closing Date, the Administrative Agent shall make all funds so received available to the Parent Borrower in like funds as received by the Administrative Agent either by (i) crediting the account of the Parent Borrower on the books of Bank of America with the amount of such funds or (ii) wire transfer of such funds, in each case in accordance with instructions provided to (and reasonably acceptable to) the Administrative Agent by the Parent Borrower; <u>provided</u> that Base Rate Loans made to finance reimbursement in respect of Letters of Credit shall be remitted by the Administrative Agent to the applicable L/C Issuer.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c) Except as otherwise provided herein, a Eurodollar Rate Loan may be continued or converted only on the last day of an Interest Period for such Eurodollar Rate Loan. During the existence of a Default, no Loans may be requested as, converted to or continued as Eurodollar Rate Loans without the consent of the Required Lenders with respect to Eurodollar Rate Loans at any one time.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(d) The Administrative Agent shall promptly notify the Parent Borrower and the Lenders of the interest rate applicable to any Interest Period for Eurodollar Rate Loans upon determination of such interest rate. At any time that Base Rate Loans are outstanding, the Administrative Agent shall notify the Parent Borrower and the Lenders of any change in Bank of America's prime rate used in determining the Base Rate promptly following the public announcement of such change.

------

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(e) After giving effect to all Borrowings, all conversions of Loans from one Type to the other, and all continuations of Loans as the same Type, there shall not be more than five Interest Periods in effect.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(f) Each Borrower hereby irrevocably appoints the Parent Borrower as the borrowing agent and attorney-in-fact for the Borrowers, which appointment shall remain in full force and effect unless and until the Administrative Agent shall have received prior written notice signed by all of the Borrowers that such appointment has been revoked and that another Borrower has been appointed Parent Borrower. Each Borrower hereby irrevocably appoints and authorizes the Parent Borrower (i) to provide to the Administrative Agent and receive from the Administrative Agent all notices with respect to Loans obtained for the benefit of any Borrower and all other notices and instructions under this Agreement and the other Loan Documents and (ii) to take such action as the Parent Borrower deems appropriate on its behalf to obtain Loans and to exercise such other powers as are reasonably incidental thereto to carry out the purposes of this Agreement. It is understood that the handling of the Collateral of the Borrowers in a combined fashion, as more fully set forth herein and in the Collateral Documents, is done solely as an accommodation to the Borrowers in order to utilize the collective borrowing powers of the Borrowers in the most efficient and economical manner and at their request, and that neither the Agents nor the Lenders shall incur liability to the Borrowers as a result hereof. Each of the Borrowers expects to derive benefit, directly or indirectly, from the handling of the Collateral in a combined fashion since the successful operation of each Borrower is dependent on the continued successful performance of the integrated group.

Each Borrower hereby accepts joint and several liability hereunder and under the other Loan Documents in consideration of the financial accommodations to be provided by the Agents and the Lenders under this Agreement and the other Loan Documents, for the mutual benefit, directly and indirectly, of each of the Borrowers and in consideration of the undertakings of the other Borrowers to accept joint and several liability for the Finance Obligations. Each of the Borrowers, jointly and severally, hereby irrevocably and unconditionally accepts, not merely as a surety but also as a co-debtor, joint and several liability with the other Borrowers, with respect to the payment and performance of all of the Finance Obligations (including, without limitation, any Finance Obligations arising under this <u>Section 2.02(f)</u>), it being the intention of the parties hereto that all of the Finance Obligations shall be the joint and several obligations of each of the Borrowers without preferences or distinction among them. If and to the extent that any of the Borrowers shall fail to make any payment with respect to any of the Finance Obligations as and when due or to perform any of the Finance Obligations in accordance with the terms thereof, then in each such event, the other Borrowers will jointly and severally make such payment with respect to, or perform, such Finance Obligation. Subject to the terms and conditions hereof, the Finance Obligations of each of the Borrowers under the provisions of this <u>Section 2.02(f)</u> constitute the absolute and unconditional, full recourse Finance Obligations of each of the Borrowers, enforceable against each such Person to the full extent of its properties and assets, irrespective of the validity, regularity or enforceability of this Agreement, the other Loan Documents or any other circumstances whatsoever.

------

**Section 2.03** <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;(a) <u>*Letters of Credit*</u>. Subject to the terms and conditions hereof, the Administrative Agent shall issue or cause the issuance of standby and/or trade letters of credit (collectively, "<u>Letters of Credit</u>") for the account of the Borrowers. The Maximum Undrawn Amount of all outstanding Letters of Credit shall not exceed in the aggregate at any time the Letter of Credit Sublimit. All disbursements or payments related to Letters of Credit shall be deemed to be Revolving Facility Loans and shall bear interest at the applicable Revolving Facility Loans in accordance with <u>Section 2.08</u>. Letters of Credit that have not been drawn upon shall not bear interest.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b) <u>*Issuance of 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;&nbsp;&nbsp;&nbsp;&nbsp;(i) Subject to the terms hereof, the Parent Borrower may request the Administrative Agent to issue or cause the issuance of a Letter of Credit by delivering to the Administrative Agent, at the Administrative Agent's Office, prior to 10:00 a.m. (New York time), at least three Business Days prior to the proposed date of issuance, the Administrative Agent's form of letter of credit application (the "<u>Letter of Credit Application</u>") completed to the reasonable satisfaction of the Administrative Agent and such other certificates, documents and other papers and information as the Administrative Agent may reasonably request.

&nbsp;&nbsp;&nbsp;&nbsp;&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) Each Letter of Credit shall, among other things, (i) provide for the payment of sight drafts, other written demands for payment, or acceptances of drafts when presented for honor thereunder in accordance with the terms thereof and when accompanied by the documents described therein and (ii) have an expiry date not later than twelve months after such Letter of Credit's date of issuance (subject to automatic renewals) and in no event later than the date that is fifteen days prior to the Revolving Facility Maturity Date. Each standby Letter of Credit shall be subject either to the Uniform Customs and Practice for Documentary Credits (1993 Revision), International Chamber of Commerce Publication No. 600, and any amendments or revision thereof adhered to by the Issuer ("<u>UCP 600</u>") or the International Standby Practices (ISP98-International Chamber of Commerce Publication Number 590) ("<u>ISP98 Rules</u>"), as determined by the Administrative Agent, and each trade Letter of Credit shall be subject to UCP 600.

&nbsp;&nbsp;&nbsp;&nbsp;&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) The Administrative Agent shall use its reasonable efforts to notify the Collateral Agent and the Lenders of the request by the Borrowers for a Letter of Credit hereunder.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c) *<u>Requirements for Issuance of Letters of Credit</u>*. The Parent Borrower shall authorize and direct the L/C Issuer to name one or more Borrowers as the "Applicant" or "Account Party" of each Letter of Credit. If the Administrative Agent is not the L/C Issuer of any Letter of Credit, the Parent Borrower shall authorize and direct the L/C Issuer to deliver to the Administrative Agent all instruments, documents, and other writings and property received by the L/C Issuer pursuant to such Letter of Credit and to accept and rely upon the Administrative Agent's instructions and agreements with respect to all matters arising in connection with such Letter of Credit or the application therefor.

------

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(d) <u>*Disbursements, Reimbursement*.</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;&nbsp;&nbsp;&nbsp;&nbsp;(i) Immediately upon the issuance of each Letter of Credit, each Lender shall be deemed to, and hereby irrevocably and unconditionally agrees to, purchase from the Administrative Agent a participation in such Letter of Credit and each drawing thereunder in an amount equal to such Lender's pro rata of the Maximum Face Amount of such Letter of Credit and the amount of such drawing, respectively.

&nbsp;&nbsp;&nbsp;&nbsp;&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) In the event of any request for a drawing under a Letter of Credit by the beneficiary or transferee thereof, the Administrative Agent will promptly notify the Parent Borrower. Provided that the Parent Borrower shall have received such notice by 1:00 pm (New York time), the Borrowers shall reimburse (such obligation to reimburse the Administrative Agent or any Lender together with any interest thereon pursuant to <u>Section 2.08</u> shall sometimes be referred to as a "<u>Reimbursement Obligation</u>") the Administrative Agent on behalf of the L/C Issuer and the Lenders prior to 1:00 p.m. (New York time) on such date that an amount is paid by the Administrative Agent on behalf of the L/C Issuer and the Lenders under any Letter of Credit (each such date, a "<u>Drawing Date</u>") in an amount equal to the amount so paid by the Administrative Agent. In the event the Borrowers fail to reimburse the Administrative Agent for the full amount of any drawing under any Letter of Credit by 1:00 p.m. (New York time) on the Drawing Date, the Administrative Agent will promptly notify each Lender thereof, and the Borrowers shall be deemed to have requested that a Revolving Facility Loan that is a Base Rate Loan be made by the Lenders to be disbursed on the Drawing Date in respect of such Letter of Credit pursuant to <u>Section 2.01</u> and subject to <u>Article IV</u>. Any notice given by the Administrative Agent pursuant to this <u>Section 2.03(d)(ii)</u> may be oral if immediately confirmed in writing; <u>provided</u> that the lack of such an immediate confirmation shall not affect the conclusiveness or binding effect of such notice.

&nbsp;&nbsp;&nbsp;&nbsp;&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) Each Lender shall upon any notice pursuant to <u>Section 2.03(d)(ii)</u> make available to the Administrative Agent an amount in immediately available funds equal to its pro rata share of the amount of the drawing, whereupon the participating Lenders shall (subject to <u>Section 2.03(d)(iv))</u> each be deemed to have made a Loan that is a Base Rate Loan to the Borrowers in that amount. If any Lender so notified fails to make available to the Administrative Agent the amount of such Lender's pro rata share of such amount by no later than 2:00 p.m. (New York time) on the Drawing Date, then interest shall accrue on such Lender's obligation to make such payment, from the Drawing Date to the date on which such Lender makes such payment (i) at a rate per annum equal to the Federal Funds Rate during the first three days following the Drawing Date and (ii) at a rate per annum equal to the interest rate on Loans that are Base Rate Loans on and after the fourth day following the Drawing Date. The Administrative Agent will promptly give notice of the occurrence of the Drawing Date, but failure of the Administrative Agent to give any such notice on the Drawing Date or in sufficient time to enable any Lender to effect such payment on such date shall not relieve such Lender from its obligation under this <u>Section 2.03(d)(iii)</u>, provided that such Lender shall not be obligated to pay interest as provided in <u>clauses (i)</u> and <u>(ii)</u> until and commencing from the date of receipt of notice from the Administrative Agent of a drawing. Each Lender's payment to the Administrative Agent pursuant to this <u>Section 2.03(d)(iii)</u> shall be deemed to be a payment in respect of its participation in such Letter of Credit Borrowing and shall constitute a "<u>Participation Revolving Loan</u>" from such Lender in satisfaction of its Participation Commitment under this <u>Section 2.03(d)</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;&nbsp;&nbsp;&nbsp;&nbsp;(iv) With respect to any unreimbursed drawing that is not converted into a Loan to the Borrowers in whole or in part as contemplated by <u>Section 2.03(d)(ii)</u>, because of the Borrowers' failure to satisfy the conditions set forth in <u>Section 4.02</u> (other than any notice requirements) or for any other reason, the Borrowers shall be deemed to have incurred from the Administrative Agent a borrowing (each a "<u>Letter of Credit Borrowing</u>") in the amount of such drawing. Such Letter of Credit Borrowing shall be due and payable on demand (together with interest) and shall bear interest at the rate per annum equal to the interest rate on Loans that are Base Rate 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;&nbsp;&nbsp;&nbsp;&nbsp;(v) Each Lender's Participation Commitment shall continue until the last to occur of any of the following events: (i) the Administrative Agent ceases to be obligated to issue or cause to be issued Letters of Credit hereunder; (ii) no Letter of Credit issued or created hereunder remains outstanding and uncanceled and (iii) all Persons (other than the Borrowers) have been fully reimbursed for all payments made under or relating to Letters of Credit.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(e) <u>*Repayment of Participation Revolving 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;&nbsp;&nbsp;&nbsp;&nbsp;(i) Upon (and only upon) receipt by the Administrative Agent for its account of immediately available funds from the Borrowers (i) in reimbursement of any payment made by the Administrative Agent under the Letter of Credit with respect to which any Lender has made a Participation Revolving Loan to the Administrative Agent or (ii) in payment of interest on such a payment made by the Administrative Agent under such a Letter of Credit, the Administrative Agent will pay to each Lender, in the same funds as those received by the Administrative Agent, the amount of such Lender's pro rata share of such funds, except the Administrative Agent shall retain the amount of the pro rata share of such funds of any Lender that did not make a Participation Revolving Loan in respect of such payment 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;(ii) If the Administrative Agent is required at any time to return to the Borrowers, or to a trustee, receiver, liquidator, custodian, or any official in any proceeding under any Debtor Relief Law, any portion of the payments made by the Borrowers to the Administrative Agent pursuant to <u>Section 2.03(e)(i)</u> in reimbursement of a payment made under a Letter of Credit or interest or fee thereon, each Lender shall, on demand of the Administrative Agent, forthwith return to the Administrative Agent the amount of its pro rata share of any amounts so returned by the Administrative Agent plus interest at the Federal Funds Rate.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(f) <u>*Documentation*</u>. The Borrowers agree to be bound by the terms of each Letter of Credit Application and by the L/C Issuer's interpretations of each Letter of Credit issued for the Borrowers' account and by the L/C Issuer's written regulations and customary practices relating to letters of credit, though the L/C Issuer's interpretations may be different from the Borrowers' own. In the event of a conflict between any Letter of Credit Application and this Agreement, this

------

Agreement shall govern. It is understood and agreed that, except in the case of gross negligence or willful misconduct (as determined by a court of competent jurisdiction in a final nonappealable judgment), the Administrative Agent shall not be liable for any error, negligence and/or mistakes, whether of omission or commission, in following any Borrower's instructions or those contained in any Letter of Credit or any modification, amendment or supplement thereto.

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

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(h) <u>*Nature of Participation and Reimbursement Obligations*</u>. Each Lender's obligation in accordance with this Agreement to make the Loans or Participation Revolving Loans as a result of a drawing under a Letter of Credit, and the obligations of the Borrowers to reimburse the Administrative Agent upon a draw under a Letter of Credit, shall be absolute, unconditional and irrevocable, and shall be performed strictly in accordance with the terms of this <u>Section 2.03</u> under all circumstances, including the following circumstances:

&nbsp;&nbsp;&nbsp;&nbsp;&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) any set-off, counterclaim, recoupment, defense or other right which such Lender may have against the Administrative Agent, the Borrowers or any other Person for any reason 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;&nbsp;&nbsp;&nbsp;&nbsp;(ii) the failure of the Borrowers or any other Person to comply, in connection with a Letter of Credit Borrowing, with the conditions set forth in this Agreement for the making of a Loan, it being acknowledged that such conditions are not required for the making of a Letter of Credit Borrowing and the obligation of the Lenders to make Participation Revolving Loans under <u>Section 2.03(d)</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;&nbsp;&nbsp;&nbsp;&nbsp;(iii) any lack of validity or enforceability of any 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;&nbsp;&nbsp;&nbsp;&nbsp;(iv) any claim of breach of warranty that might be made by any Borrower or any Lender against the beneficiary of a Letter of Credit, or the existence of any claim, set-off, recoupment, counterclaim, crossclaim, defense or other right which any Borrower or any Lender may have at any time against a beneficiary, any successor beneficiary or any transferee of any Letter of Credit or the proceeds thereof (or any Person for whom any such transferee may be acting), the Administrative Agent or any Lender or any other Person, whether in connection with this Agreement, such Letter of Credit, the transactions contemplated herein or any unrelated transactions (including any underlying transactions between the Borrowers or any other party and the beneficiary for which any Letter of Credit was procured);

------

&nbsp;&nbsp;&nbsp;&nbsp;&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) the lack of power or authority of any signatory of (or any defect in or forgery of any signature or endorsement on) or the form of or lack of validity, sufficiency, accuracy, enforceability or genuineness of any draft, demand, instrument, certificate or other document presented under or in connection with any Letter of Credit, or any fraud or alleged fraud in connection with any Letter of Credit, or the transport of any property or provisions of services relating to a Letter of Credit, in each case even if the Administrative Agent or any of the Administrative Agent's Affiliates has been notified 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;&nbsp;&nbsp;&nbsp;&nbsp;(vi) except as provided in <u>Section 2.03(g)</u>, any payment by the Administrative Agent under any Letter of Credit against presentation of a demand, draft or certificate or other document which does not comply with the terms of such Letter of Credit;

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

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

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(ix) any Material Adverse Effect on any Borrower or any Guarantor;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(x) any breach of this Agreement or any Loan Document by any party 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;&nbsp;&nbsp;&nbsp;&nbsp;(xi) the occurrence or continuance of a proceeding under any Debtor Relief Law with respect to any Borrower or any Guarantor;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(xii) the fact that a Default or Event of 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;&nbsp;&nbsp;&nbsp;&nbsp;(xiii) the fact that the Revolving Facility Maturity Date shall have expired or this Agreement or the Finance Obligations hereunder shall have been terminated; 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;(xiv) any other circumstance or happening whatsoever, whether or not similar to any of the foregoing.

Nothing contained in this <u>Section 2.03(h)</u> shall be deemed to relieve the Administrative Agent or the L/C Issuer from any claim by the Borrowers for the gross negligence or willful misconduct of the Administrative Agent or the L/C Issuer, respectively, in respect of honoring or failing to honor any drawing under any Letter of Credit or otherwise in respect of any Letter of Credit, but any such claim may not be used as a defense to the reimbursement obligation for any such drawing.

------

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(i)*<u>Indemnity</u>*. In addition to amounts payable as provided in <u>Section 10.04</u>. the Borrowers hereby agree to protect, indemnify, pay and save harmless the Administrative Agent and the L/C Issuer from and against any and all claims, demands, liabilities, damages, taxes, (except for the imposition or any change in rate of any Taxes for which such Person is indemnified pursuant to <u>Article III</u> or the imposition or any change in the rate of, any Taxes specifically excluded under <u>Article III)</u>, penalties, interest, judgments, losses, costs, charges and expenses (including reasonable fees, expenses and disbursements of outside counsel and allocated costs of internal counsel) which the Administrative Agent or any of the Administrative Agent's Affiliates may incur or be subject to as a consequence, direct or indirect, of the issuance of any Letter of Credit, other than as a result of (a) the gross negligence or willful misconduct of the Administrative Agent or the L/C Issuer (as determined by a court of competent jurisdiction in a final nonappealable judgment) or (b) the wrongful dishonor by the Administrative Agent, the L/C Issuer, or any of the Administrative Agent's or L/C Issuer's Affiliates of a proper demand for payment made under any Letter of Credit, except if such dishonor resulted from any act or omission, whether rightful or wrongful, of any present or future de jure or de facto Governmental Authority (all such acts or omissions herein called "<u>Governmental Acts</u>"). The obligations of the Borrowers under this <u>Section 2.03(i)</u> shall survive the termination of this Agreement and the payment of the Loans and all other amounts payable hereunder.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(j) <u>*Liability for Acts and Omissions*.</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;&nbsp;&nbsp;&nbsp;&nbsp;(i) As between the Borrowers and the Agents and the Lenders, the Borrowers assume all risks of the acts and omissions of, or misuse of the Letters of Credit by, the respective beneficiaries of such Letters of Credit. In furtherance and not in limitation of the foregoing, the Agents and the Lenders shall not be responsible for: (i) the form, validity, sufficiency, accuracy, genuineness or legal effect of any document submitted by any party in connection with the application for an issuance of any such Letter of Credit, even if it should in fact prove to be in any or all respects invalid, insufficient, inaccurate, fraudulent or forged (even if the Administrative Agent shall have been notified thereof); (ii) the validity or sufficiency of any instrument transferring or assigning or purporting to transfer or assign any such Letter of Credit or the rights or benefits thereunder or proceeds thereof, in whole or in part, which may prove to be invalid or ineffective for any reason; (iii) the failure of the beneficiary of any such Letter of Credit, or any other party to which such Letter of Credit may be transferred, to comply fully with any conditions required in order to draw upon such Letter of Credit or any other claim of the Borrowers against any beneficiary of such Letter of Credit, or any such transferee, or any dispute between or among Borrowers and any beneficiary of any Letter of Credit or any such transferee; (iv) errors, omissions, interruptions or delays in transmission or delivery of any messages, by mail, cable, telegraph, telex or otherwise, whether or not they be in cipher; (v) errors in interpretation of technical terms; (vi) any loss or delay in the transmission or otherwise of any document required in order to make a drawing under any such Letter of Credit or of the proceeds thereof; (vii) the misapplication by the beneficiary of any such Letter of Credit of the proceeds of any drawing under such Letter of Credit; or (viii) any consequences arising from causes beyond the control of the Administrative Agent, including any Governmental Acts, and none of the above shall affect or impair, or prevent the vesting of, any of the Administrative Agent's rights or powers hereunder. Nothing in the preceding sentence shall relieve the Administrative Agent from liability for the

------

Administrative Agent's gross negligence or willful misconduct (as determined by a court of competent jurisdiction in a final nonappealable judgment) in connection with actions or omissions described in such <u>clauses (i)</u> through <u>(viii)</u> of such sentence. In no event shall the Administrative Agent or the Administrative Agent's Affiliates be liable to the Borrowers for any indirect, consequential, incidental, punitive, exemplary or special damages or expenses (including without limitation attorneys' fees), or for any damages resulting from any change in the value of any property relating to a Letter of Credit.

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

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

**Section 2.04 <u>Swing Line Loans</u>**.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a)*<u>The Swing Line</u>*. Subject to the terms and conditions set forth herein, the Swing Line Lender, in reliance upon the agreements of the other Lenders set forth in this <u>Section 2.04</u>, may in its sole discretion make loans (each such loan, a "<u>Swing Line Loan</u>") to one or more Borrowers from time to time on any Business Day during the Availability Period in an aggregate amount not to exceed at any time outstanding the amount of the Swing Line Sublimit, notwithstanding the fact that such Swing Line Loans, when aggregated with the Revolving Facility

------

Percentage of the Outstanding Amount of Revolving Facility Loans and L/C Obligations of the Lender acting as Swing Line Lender, may exceed the amount of such Lender's Revolving Facility Commitment; <u>provided</u>, <u>however</u>, that (x) after giving effect to any Swing Line Loan, (i) the Revolving Facility Credit Exposure shall not exceed the lesser of (I) Revolving Facility Commitments and (II) the Borrowing Base (ii) the Revolving Facility Credit Exposure of any Lender shall not exceed such Lender's Revolving Facility Commitment, (y) the Borrowers shall not use the proceeds of any Swing Line Loan to refinance any outstanding Swing Line Loan and (z) the Swing Line Lender shall not be under any obligation to make any Swing Line Loan if it shall determine (which determination shall be conclusive and binding absent manifest error) that is has, or by such Credit Extension may have, Fronting Exposure. Within the foregoing limits, and subject to the other terms and conditions hereof, the Borrowers may borrow under this <u>Section 2.04</u>, prepay under <u>Section 2.05,</u> and reborrow under this <u>Section 2.04</u>. Each Swing Line Loan shall bear interest only at a rate based on the Base Rate. Immediately upon the making of a Swing Line Loan, each Revolving Facility Lender shall be deemed to, and hereby irrevocably and unconditionally agrees to, purchase from the Swing Line Lender a risk participation in such Swing Line Loan in an amount equal to the product of such Revolving Facility Lender's applicable Revolving Facility Percentage times the amount of such Swing Line Loan.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b)*<u>Borrowing Procedures</u>*. Each Swing Line Borrowing shall be made upon the Parent Borrower's irrevocable notice to the Swing Line Lender and the Administrative Agent, which may be given by telephone. Each such notice<u>(A) telephone or (B) by a Swing Line Loan Notice; provided that any</u> <u>telephonic notice must be confirmed promptly by delivery to the Administrative Agent of a</u> <u>Swing Line Loan Notice. Each such Swing Line Loan Notice</u> must be received by the Swing Line Lender and the Administrative Agent not later than 1:00 p.m. on the requested borrowing date, and shall specify (i) the amount to be borrowed, which shall be a minimum of $500,000 and whole multiples of $100,000 in excess thereof, and (ii) the requested borrowing date, which shall be a Business Day. Each such telephonic notice must be confirmed promptly by delivery to the Swing Line Lender and the Administrative Agent of a written Swing Line Loan Notice, appropriately completed and signed by a Responsible Officer of the Parent Borrower. Promptly after receipt by the Swing Line Lender of any telephonic Swing Line Loan Notice, the Swing Line Lender will confirm with the Administrative Agent (by telephone or in writing) that the Administrative Agent has also received such Swing Line Loan Notice and, if not, the Swing Line Lender will notify the Administrative Agent (by telephone or in writing) of the contents thereof. Unless the Swing Line Lender has received notice (by telephone or in writing) from the Administrative Agent (including at the request of any Revolving Facility Lender) prior to 2:00 p.m. on the date of the proposed Swing Line Borrowing (A) directing the Swing Line Lender not to make such Swing Line Loan as a result of the limitations set forth in the proviso to the first sentence of <u>Section 2.04(a),</u> or (B) that one or more of the applicable conditions specified in <u>Article IV</u> is not then satisfied, then, subject to the terms and conditions hereof, the Swing Line Lender will, not later than 3:00 p.m. on the borrowing date specified in such Swing Line Loan Notice, make the amount of its Swing Line Loan available to the Parent Borrower, including at its office by crediting the account of the Parent Borrower on the books of the Swing Line Lender in immediately available funds.

------

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c) <u>*Refinancing of Swing Line 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;&nbsp;&nbsp;&nbsp;&nbsp;(i) The Swing Line Lender at any time in its sole discretion may request, on behalf of the Borrowers (each of which hereby irrevocably authorizes the Swing Line Lender to so request on its behalf), that each Revolving Facility Lender make a Base Rate Loan in an amount equal to such Lender's applicable Revolving Facility Percentage of the amount of Swing Line Loans then outstanding. Such request shall be made in writing (which written request shall be deemed to be a Committed Loan Notice for purposes hereof) and in accordance with the requirements of <u>Section 2.02,</u> without regard to the minimum and multiples specified therein for the principal amount of Base Rate Loans, but subject to the unutilized portion of the Facility and the conditions set forth in <u>Section 4.02</u>. The Swing Line Lender shall furnish the Parent Borrower with a copy of the applicable Committed Loan Notice promptly after delivering such notice to the Administrative Agent. Each Revolving Facility Lender shall make an amount equal to its applicable Revolving Facility Percentage of the amount specified in such Committed Loan Notice available to the Administrative Agent in immediately available funds (and the Administrative Agent may apply Cash Collateral available with respect to the applicable Swing Line Loan) for the account of the Swing Line Lender at the Administrative Agent's Office not later than 1:00 p.m. on the day specified in such Committed Loan Notice, whereupon, subject to <u>Section 2.04(c)(ii),</u> each Revolving Facility Lender that so makes funds available shall be deemed to have made a Base Rate Loan to the Parent Borrower in such amount. The Administrative Agent shall remit the funds so received to the Swing Line 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;&nbsp;&nbsp;&nbsp;&nbsp;(ii) If for any reason any Swing Line Loan cannot be refinanced by such a Revolving Facility Borrowing in accordance with <u>Section 2.04(c)(i)</u>, the request for Base Rate Loans submitted by the Swing Line Lender as set forth herein shall be deemed to be a request by the Swing Line Lender that each of the Revolving Facility Lenders fund its risk participation in the relevant Swing Line Loan and each Revolving Facility Lender's payment to the Administrative Agent for the account of the Swing Line Lender pursuant to <u>Section 2.04(c)(i)</u> shall be deemed payment in respect 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;&nbsp;&nbsp;&nbsp;&nbsp;(iii) If any Revolving Facility Lender fails to make available to the Administrative Agent for the account of the Swing Line Lender any amount required to be paid by such Lender pursuant to the foregoing provisions of this <u>Section 2.04(c)</u> by the time specified in <u>Section 2.04(c)(i)</u>, the Swing Line Lender shall be entitled to recover from such Lender (acting through the Administrative Agent), on demand, such amount with interest thereon for the period from the date such payment is required to the date on which such payment is immediately available to the Swing Line Lender at a rate per annum equal to the greater of the Federal Funds Rate and a rate determined by the Swing Line Lender in accordance with banking industry rules on interbank compensation, plus any administrative, processing or similar fees customarily charged by the Swing Line Lender in connection with the foregoing. If such Lender pays such amount (with interest and fees as aforesaid), the amount so paid shall constitute such Lender's Revolving Facility Loans included in the relevant Borrowing or funded participation in the relevant Swing Line Loan, as the case may be. A certificate of the Swing Line Lender submitted to any Lender (through the Administrative Agent) with respect to any amounts owing under this <u>clause (iii)</u> 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;&nbsp;&nbsp;&nbsp;&nbsp;(iv) Each Revolving Facility Lender's obligation to make Revolving Facility Loans or to purchase and fund risk participations in Swing Line Loans pursuant to this <u>Section 2.04(c)</u> shall be absolute and unconditional and shall not be affected by any circumstance, including (A) any setoff, counterclaim, recoupment, defense or other right which such Lender may have against the Swing Line Lender, any Borrower or any other Person for any reason whatsoever, (B) the occurrence or continuance of a Default or (C) any other occurrence, event or condition, whether or not similar to any of the foregoing; <u>provided</u>, <u>however,</u> that each Revolving Facility Lender's obligation to make Revolving Facility Loans pursuant to this <u>Section 2.04(c)</u> is subject to the conditions set forth in <u>Section 4.02</u>.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(d) <u>*Repayment of Participations*.</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;&nbsp;&nbsp;&nbsp;&nbsp;(i) At any time after any Revolving Facility Lender has purchased and funded a risk participation in a Swing Line Loan, if the Swing Line Lender receives any payment on account of such Swing Line Loan, the Swing Line Lender will distribute to such Revolving Facility Lender its applicable Revolving Facility Percentage thereof in the same funds as those received by the Swing Line 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;&nbsp;&nbsp;&nbsp;&nbsp;(ii) If any payment received by the Swing Line Lender in respect of principal or interest on any Swing Line Loan is required to be returned by the Swing Line Lender under any of the circumstances described in <u>Section 10.05</u> (including pursuant to any settlement entered into by the Swing Line Lender in its discretion), each Revolving Facility Lender shall pay to the Swing Line Lender its applicable Revolving Facility Percentage thereof on demand of the Administrative Agent, plus interest thereon from the date of such demand to the date such amount is returned, at a rate per annum equal to the Federal Funds Rate. The Administrative Agent will make such demand upon the request of the Swing Line Lender. The obligations of the Lenders under this clause shall survive the payment in full of the ABL Credit Obligations and the termination of this Agreement.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(e) <u>*Interest for Account of Swing Line Lender*</u>. The Swing Line Lender shall be responsible for invoicing the Parent Borrower for interest on the Swing Line Loans. Until each Revolving Facility Lender funds its Base Rate Loan or risk participation pursuant to this <u>Section 2.04</u> to refinance such Revolving Facility Lender's applicable Revolving Facility Percentage of any Swing Line Loan, interest in respect of such applicable Revolving Facility Percentage shall be solely for the account of the Swing Line Lender.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(f) <u>*Payments Directly to Swing Line Lender*</u>. The Borrowers shall make all payments of principal and interest in respect of the Swing Line Loans directly to the Swing Line Lender.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(g) <u>*Defaulting Lenders*</u>. Notwithstanding anything to the contrary contained in this <u>Section 2.04</u>, the Swing Line Lender shall not be obligated to make any Swing Line Loan at a time when any Revolving Facility Lender is a Defaulting Lender, unless the Swing Line Lender has entered into arrangements satisfactory to it to eliminate its risk with respect to any Defaulting Lender's risk participations in, and all other obligations in respect of, Swing Line Loans, including by cash collateralizing such Defaulting Lender's applicable Revolving Facility Percentage of all Swing Line Loans outstanding or to be outstanding hereunder.

------

**Section 2.05 <u>Prepayments</u>**.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a)*<u>Optional</u>*. Subject to the last sentence of this <u>Section 2.05(a)</u>, the Borrowers may at any time or from time to time voluntarily prepay Loans in whole or in part without premium or penalty; <u>provided</u> that: (A) any prepayment of Eurodollar Rate Loans shall be in a principal amount of $1,000,000 or a whole multiple of $500,000 in excess thereof; (B) any prepayment of Base Rate Loans shall be in a principal amount of $500,000 or a whole multiple of $100,000 in excess thereof or, in each case, if less, the entire principal amount thereof then outstanding; and (C) any prepayment of Eurodollar Rate Loans shall be accompanied by all accrued interest on the amount prepaid, together with any additional amounts required by <u>Section 2.03(d)</u> and by <u>Section 3.05</u>. Each prepayment of the outstanding Loans pursuant to this <u>Section 2.05(a)</u> shall be paid to the Lenders in accordance with their respective Revolving Facility Percentages.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b) <u>*Mandatory*.</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;&nbsp;&nbsp;&nbsp;&nbsp;(i) <u>*Revolving Facility Credit Exposure*</u>. Except as otherwise provided in <u>Section 2.17</u>, the Borrowers shall immediately prepay the Loans at any time when the Revolving Facility Credit Exposure exceeds the lesser of (A) the total Revolving Facility Commitments and (B) the Borrowing Base, to the full extent of any such excess. If at any time after the Borrowers have complied with the first sentence of this <u>Section 2.05(b)</u>, the aggregate L/C Obligations are greater than the then current Borrowing Base, the Borrowers shall provide Cash Collateral in respect of such excess to the Administrative Agent, which Cash Collateral shall be deposited in a bank account subject to a Cash Management Agreement in favor of the Collateral Agent and, provided that no Default or Event of Default shall have occurred and be continuing, returned to the Borrowers at such time as the aggregate L/C Obligations plus the aggregate principal amount of all outstanding Loans no longer exceeds the then current Borrowing Base (as updated by the weekly reports to the Borrowing Base Certificate described in <u>Section 6.01(j)</u>, when applicable) as 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;(ii) <u>*Dispositions; Events of Loss*</u>. Subject to the ABL/Term Intercreditor Agreement, if a Loan Party or any Subsidiary of a Loan Party shall, during a Cash Dominion Period:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&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) make or agree to make a Disposition of ABL Priority Collateral not 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;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(B) or suffer an Event of Loss in respect of the ABL Priority Collateral

and the aggregate amount of the Net Proceeds received by the Loan Parties and their Subsidiaries in connection with such Disposition or Event of Loss and all other such Dispositions and Events of Loss occurring during the Fiscal Year exceeds $2,500,000, then (A) the Parent Borrower shall promptly notify the Administrative Agent of such proposed Disposition or Event of Loss (including the amount of the estimated Net Proceeds to be received by a Loan Party and/or such

------

Subsidiary in respect thereof) and (B) within two Business Days after receipt by a Loan Party and/or such Subsidiary of the Net Proceeds of such Disposition or Event of Loss, the Parent Borrower shall deliver, or cause to be delivered, such excess Net Proceeds to the Administrative Agent for distribution to the Lenders as a prepayment of the Loans without reducing the Revolving Facility Commitment.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c) <u>*Application to the Revolving Facility*</u>. Each prepayment of Loans pursuant to the foregoing provisions of this <u>Section 2.05</u> shall be applied <u>first</u>, ratably to pay accrued and unpaid interest in respect of the outstanding L/C Borrowings and the outstanding Swing Line Loans, Overadvances and Agent Advances then being prepaid, <u>second,</u> ratably to prepay the principal of any outstanding Unreimbursed Amounts and any outstanding Swing Line Loans, Overadvances and Agent Advances, if any, <u>third</u>, ratably to the outstanding Revolving Facility Loans (other than Overadvances and Agent Advances), and, <u>fourth</u>, to Cash Collateralize the remaining L/C Obligations; in each case, without permanent reduction of the Revolving Facility Commitments, and the amount remaining, if any, after the prepayment in full of all Unreimbursed Amounts, Swing Line Loans and Revolving Facility Loans outstanding at such time and the Cash Collateralization of the remaining L/C Obligations in full may be retained by the Borrowers for use in the Ordinary Course of Business; <u>provided</u> that, upon the drawing of any Letter of Credit that has been Cash Collateralized, the funds held as Cash Collateral shall be applied (without any further action by or notice to or from any Borrower or any other Loan Party) to reimburse the applicable L/C Issuer or the applicable Lenders, as applicable.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(d) <u>*Prepayment Notices*</u>. Unless otherwise specified in this <u>Section 2.05</u>, each prepayment made pursuant to this <u>Section 2.05</u> shall be made upon notice by the Parent Borrower to the Administrative Agent, which may be given by telephone or e-mail (and if in writing shall be in the form of a Prepayment Notice appropriately completed and signed by a Responsible Officer of the Parent Borrower), which notice must be received by the Administrative Agent not later than 1:00 p.m. (x) three Business Days prior to any date of prepayment of Eurodollar Rate Loans and (y) on the date of prepayment of Base Rate Loans. Each such notice shall specify the date and amount of such prepayment and the Type(s) of Loans to be prepaid and, if Eurodollar Rate Loans are to be prepaid, the Interest Period(s) of such Loans. Each telephonic notice by the Parent Borrower pursuant to this <u>Section 2.05</u> must be confirmed promptly by delivery to the Administrative Agent of a written Prepayment Notice, appropriately completed and signed by a Responsible Officer of the Parent Borrower. The Administrative Agent will promptly notify each Lender of its receipt of each such notice, and of the amount of such Lender's ratable portion of such prepayment (based on such Lender's Revolving Facility Percentage). If such notice is given by the Parent Borrower, the Borrowers shall make such prepayment and the payment amount specified in such notice shall be due and payable on the date specified therein; it being understood and agreed that, if such notice is given in connection with the refinancing of the entire facility, such notice may be conditioned upon the effectiveness of Indebtedness the proceeds of which are being used to refinance the facility and such notice may be revoked if such condition is not satisfied. Any prepayment of Eurodollar Rate Loans under this <u>Section 2.05</u> shall be accompanied by all accrued interest on the amount prepaid, together with any additional amounts required pursuant to <u>Section 3.05</u>. Each such prepayment shall be paid to the Lenders in accordance with their respective Revolving Facility Percentage in the manner described in <u>Section 2.05(a)</u> or <u>(b)</u>, as applicable.

------

**Section 2.06 <u>Scheduled Repayment of Loans</u>**.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a) To the extent not previously paid, outstanding Loans shall be due and payable on the Revolving Facility Maturity Date.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b) The Borrowers shall jointly and severally repay each Swing Line Loan on the earlier to occur of (i) the date five Business Days after such Loan is made and (ii) the Revolving Facility Maturity Date.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c) Prior to any repayment of any Loans, the Parent Borrower shall select the Borrowing or Borrowings under the facility to be repaid and shall notify the Administrative Agent by telephone (confirmed by telecopy) of such selection not later than 1:00 p.m., (i) in the case of a Base Rate Borrowing, one Business Day before the scheduled date of such repayment and (ii) in the case of a Eurodollar Rate Borrowing, three Business Days before the scheduled date of such repayment. Each repayment of a Borrowing shall be applied to the Revolving Facility Loans included in the repaid Borrowing such that each Revolving Facility Lender receives its ratable share of such repayment (based upon the respective Revolving Facility Credit Exposures of the Revolving Facility Lenders at the time of such repayment). Repayments of Eurodollar Rate Borrowings shall be accompanied by accrued interest on the amount repaid, together with any additional amounts required pursuant to <u>Section 3.05</u>.

**Section 2.07 <u>Termination and Reduction of Revolving Facility Commitments</u>.**

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a) Unless previously terminated, the Revolving Facility Commitments shall terminate on the Revolving Facility Maturity Date.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b) The Borrowers may reduce the Revolving Facility Commitments to an amount (which may be zero) not less than the sum of (A) the aggregate unpaid principal amount of all Loans then outstanding, (B) the aggregate principal amount of all Loans not yet made as to which a Committed Loan Notice has been given by the Parent Borrower under <u>Section 2.02</u>, (C) the L/C Obligations at such time, (D) the stated amount of all Letters of Credit not yet issued as to which a request has been made and not withdrawn, (E) the Swing Line Obligations at such time and (F) $10,000,000, unless the total Revolving Facility Commitment is reduced to zero in accordance with the preceding <u>clauses (A)</u> through <u>(E)</u> hereof. Each such reduction (1) shall be in an amount which is an integral multiple of $1,000,000 (or by the full amount of the Revolving Facility Commitment in effect immediately prior to such reduction if such amount at that time is less than $1,000,000) and (2) shall be made by providing not less than five Business Days' prior written notice to the Administrative Agent, provided, that a notice of termination of the Revolving Facility Commitment may state that such notice is conditioned upon the effectiveness of other credit facilities, 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. Once reduced, the Revolving Facility Commitment may not be increased. Each such reduction of the Revolving Facility Commitment shall reduce the Revolving Facility Commitment of each Lender proportionately in accordance with its Revolving Facility Percentage thereof.

------

**Section 2.08 <u>Interest</u>.**

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a) <u>*Stated Interest*</u>. Subject to the provisions of <u>Section 2.08(b)</u>: (i) each Eurodollar Rate Loan shall bear interest on the outstanding principal amount thereof for each Interest Period at a rate per annum equal to the sum of (A) the Adjusted Eurodollar Rate for such Interest Period plus (B) the Applicable Rate; (ii) each Base Rate Loan shall bear interest on the outstanding principal amount thereof from the applicable borrowing date at a rate per annum equal to the sum of (A) the Base Rate plus (B) the Applicable Rate; and (iii) each Swing Line Loan shall bear interest on the outstanding principal amount thereof from the applicable borrowing date at a rate per annum equal to the sum of (A) the Base Rate plus (B) the Applicable Rate.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b) <u>*Default 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;&nbsp;&nbsp;&nbsp;&nbsp;(i) If any amount of principal of any Loan is not paid when due (after giving effect to any applicable grace periods), whether at stated maturity, by acceleration or otherwise, such overdue amount shall thereafter bear interest at a fluctuating interest rate per annum at all times equal to the Default Rate to the fullest extent permitted by applicable Requirements of 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;&nbsp;&nbsp;&nbsp;&nbsp;(ii) If any amount (other than principal of any Loan) payable by the Borrowers under any Loan Document is not paid when due (after giving effect to any applicable grace periods), whether at stated maturity, by acceleration or otherwise, then upon the request of the Required Lenders such overdue amount shall bear interest from the date when due at a fluctuating interest rate per annum at all times equal to the Default Rate to the fullest extent permitted by applicable Requirements of 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;&nbsp;&nbsp;&nbsp;&nbsp;(iii) During the existence of any Event of Default under <u>Section 8.01(f)</u>, the Borrowers shall pay interest on the principal amount of all outstanding ABL Credit Obligations at a fluctuating interest rate per annum at all times equal to the Default Rate to the fullest extent permitted by applicable Requirements of 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;&nbsp;&nbsp;&nbsp;&nbsp;(iv) Accrued and unpaid interest on past due amounts (including interest on past due interest) shall be due and payable upon demand.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c) <u>*Payments of Interest*</u>. Interest on each Loan shall be due and payable in arrears on each Interest Payment Date applicable thereto, upon termination of the Revolving Facility Commitments, on the Revolving Facility Maturity Date and at such other times as may be specified herein. Interest hereunder shall be due and payable in accordance with the terms hereof before and after judgment, and before and after the commencement of any proceeding under any Debtor Relief Law.

**Section 2.09 <u>Fees</u>.**

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a) Each of the Borrowers shall, jointly and severally, pay to the Administrative Agent for the account of each Revolving Facility Lender (other than Defaulting Lenders), in accordance with each such Lender's Revolving Facility Percentage, a commitment fee (the "<u>Commitment Fee</u>") equal to 0.375% per annum <u>multiplied by</u> the actual daily amount by which the Revolving Facility exceeds the sum of (i) the Outstanding Amount of Loans and (ii) the

------

Outstanding Amount of L/C Obligations, subject to adjustment as provided in <u>Section 2.15</u>; <u>provided</u>, <u>however</u>, that, from and after the date that the third monthly Borrowing Base Certificate is delivered to the Collateral Agent after the <u>Original</u> Closing Date, if the sum of (i) the Outstanding Amount of Loans and (ii) the Outstanding Amount of L/C Obligations is greater than or equal to 50.0% of the Facility, the Commitment Fee shall be reduced to 0.25% per annum <u>multiplied by</u> the actual daily amount by which the Facility exceeds the sum of (i) the Outstanding Amount of Loans and (ii) the Outstanding Amount of L/C Obligations, subject to adjustment as provided in <u>Section 2.15</u>. The Commitment Fee shall accrue at all times during the Availability Period, including at any time during which one or more of the conditions in <u>Article IV</u> is not met, and shall be due and payable quarterly in arrears on the last Business Day of each March, June, September and December<u>first calendar day of January, April, July and October</u>, commencing with the first such date to occur after the <u>Original</u> Closing Date, and on the last day of the Availability Period. The Commitment Fee shall be calculated quarterly in arrears. For the avoidance of doubt, Swing Line Loans shall not be counted towards the Outstanding Amount of Revolving Facility Loans for purposes of determining the Commitment Fee.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b) Each of the Borrowers shall, jointly and severally, pay (i) to the Administrative Agent, for the ratable benefit of the Lenders, a Letter of Credit fee (in addition to the charges, commissions, fees, and costs set forth in <u>clause (ii)</u> below) which shall accrue at a rate per annum equal to the Applicable Rate in effect at such time for Eurodollar Rate Loans, times the daily balance of the Maximum Undrawn Amount of the Letters of Credit, for the period from and excluding the date of issuance of same to and including the date of expiration or termination, such fees to be calculated on the basis of a 360-day year for the actual number of days elapsed and to be payable monthly in arrears on the first day of each month and on the Revolving Facility Maturity Date, and (ii) to the L/C Issuer, (A) a fronting fee of one eighth of one percent (0.125%) per annum multiplied times the Maximum Undrawn Amount of each Letter of Credit, which fee shall be payable monthly in arrears on the first day of each month and on the Revolving Facility Maturity Date, and (B) any and all customary administrative, issuance, amendment, payment and negotiation charges (as per the L/C Issuer's standard fee schedule) with respect to any Letters of Credit and all fees and expenses as agreed upon by the L/C Issuer and the Borrowers in connection with any Letter of Credit, including in connection with the opening, amendment or renewal of any such Letter of Credit and any acceptances created thereunder and shall reimburse the Administrative Agent for any and all fees and expenses, if any, paid by the Administrative Agent to the L/C Issuer, which charges and fees shall be payable on demand or as otherwise mutually agreed upon by the Administrative Agent and the Parent Borrower (all of the foregoing fees and charges in this <u>clause (b)</u>, collectively, the "<u>Letter of Credit Fees</u>"). Any such charge in effect at the time of a particular transaction shall be the charge for that transaction, notwithstanding any subsequent change in the L/C Issuer's prevailing charges for that type of transaction. All Letter of Credit Fees payable hereunder shall be deemed earned in full on the date when the same are due and payable hereunder and shall not be subject to rebate or pro-ration upon the termination of this Agreement for any reason.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c) Each of the Borrowers, jointly and severally, shall pay to the Joint Lead Arrangers and the Administrative Agent for their own respective accounts fees in the amounts and at the times specified in the Fee Letter. Such fees shall be fully earned when paid and shall not be refundable for any reason whatsoever.

------

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(d) Each of the Borrowers acknowledge that pursuant to <u>Section 6.09</u>, representatives of the Administrative Agent may visit any or all of the Loan Parties and/or conduct inspections, audits, physical counts, valuations, appraisals, environmental site assessments and/or examinations of any or all of the Loan Parties at any time and from time to time. The Borrowers shall, jointly and severally pay (i) $1,100 per day for any examiner that is an employee of an Agent or its Affiliates plus any third party examiner's out-of-pocket costs and reasonable expenses incurred in connection with all such visits, inspections, audits, physical counts, valuations, appraisals, environmental site assessments and/or examinations and (ii) the cost of all visits, inspections, audits, physical counts, valuations, appraisals, environmental site assessments and/or examinations conducted by each third party on behalf of the Administrative Agent and the Lenders (including any Field Survey and Audit); <u>provided</u>, <u>however</u>, that so long as no Default or Event of Default shall have occurred and be continuing, the Borrowers shall not be obligated to reimburse the Administrative Agent and the Lenders for more than (A) two Field Survey and Audit and collateral inspections during any Fiscal Year, and (B) one appraisal of all or any portion of the Collateral during any Fiscal Year, which, in the first Field Survey and Audit, shall be conducted within 60 days of the <u>Original</u> Closing Date; <u>provided</u>, <u>further</u>, that notwithstanding the foregoing, regardless of whether a Default or an Event of Default shall have occurred and be continuing (1) the Borrowers shall be obligated, jointly and severally, to reimburse the Administrative Agent for each Field Survey and Audit conducted by them in connection with (and with respect to the assets and/or entities acquired in) any Permitted Acquisition as contemplated by <u>Section 7.04</u>, and (2) any such Field Survey and Audit shall not be counted against the limitations set forth in the preceding <u>clauses (A)</u> and <u>(B)</u>. Notwithstanding the foregoing, (i) during an Inspection Trigger Period, the Borrowers shall not be obligated to reimburse the Administrative Agent for more than (A) three Field Survey and Audit and collateral inspections during any Fiscal Year, and (B) two appraisals of all or any portion of the Collateral and (ii) following the occurrence and during the continuance of a Default or Event of Default, such collateral audits, any Field Survey and Audit and inventory appraisals may be conducted at the Borrowers' expense as many times as the Administrative Agent may require.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(e) Each of the Borrowers, jointly and severally, shall pay to the Lenders such fees as shall have been separately agreed upon in writing in the amounts and at the times so specified<u>, including those fees set forth in the Closing Fee Letter</u>. Such fees shall be fully earned when paid and shall not be refundable for any reason whatsoever.

**Section 2.10 <u>Computation of Interest and Fees</u>**. All computations of interest for Base Rate Loans (including Base Rate Loans determined by reference to the Eurodollar Rate) shall, to the extent based upon the Prime Rate, be made on the basis of a year of 365 or 366 days, as the case may be, and actual days elapsed. All other computations of fees and interest shall be made on the basis of a 360-day year and actual days elapsed (which results in more fees or interest, as applicable, being paid than if computed on the basis of a 365-day year). Interest shall accrue on each Loan for the day on which the Loan is made, and shall not accrue on a Loan, or any portion thereof, for the day on which the Loan or such portion is paid, <u>provided</u> that any Loan that is repaid on the same day on which it is made shall, subject to <u>Section 2.12(a)</u>, bear interest for one day. Each determination by the Administrative Agent of an interest rate or fee hereunder shall be conclusive and binding for all purposes, absent manifest error.

------

**Section 2.11 <u>Evidence of Debt</u>**. The extension of Loans made by each Lender shall be evidenced by one or more accounts or records maintained by such Lender and by the Administrative Agent in the ordinary course of business. The accounts or records maintained by the Administrative Agent and each Lender shall be conclusive absent manifest error of the amount of the Loans made by the Lenders to the Borrowers and the interest and payments thereon. Any failure to so record or any error in doing so shall not, however, limit or otherwise affect the obligations of the Borrowers hereunder to pay any amount owing with respect to the ABL Credit Obligations. In the event of any conflict between the accounts and records maintained by any Lender and the accounts and records of the Administrative Agent in respect of such matters, the accounts and records of the Administrative Agent shall control in the absence of manifest error. Upon the request of any Lender made through the Administrative Agent, the Borrowers shall, jointly and severally, execute and deliver to such Lender (through the Administrative Agent) a Note, which shall evidence such Lender's Loans in addition to such accounts or records.

**Section 2.12 <u>Payments Generally; Administrative Agent's Clawback</u>.**

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a) <u>*General*</u>. All payments to be made by the Borrowers shall be made jointly and severally, and without condition or deduction for any counterclaim, defense, recoupment or setoff. Except as otherwise expressly provided for herein, all payments by the Borrowers hereunder shall be made to the Administrative Agent, for the account of the respective Lenders to which such payment is owed, at the Administrative Agent's Office in Dollars and in immediately available funds not later than 2:00 P.M. on the date specified herein, except payments to be made directly to the applicable L/C Issuer or the Swing Line Lender, as expressly provided herein. The Administrative Agent will promptly distribute to each Lender its Revolving Facility Percentage (or other applicable share as provided herein) of such payment in like funds as received by wire transfer to such Lender's Lending Office. All payments received by the Administrative Agent after 2:00 PM shall be deemed received on the next succeeding Business Day and any applicable interest or fee shall continue to accrue. If any payment to be made by the Borrowers shall come due on a day other than a Business Day, payment shall be made on the next following Business Day, and such extension of time shall be reflected in computing interest or fees, 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;(b) <u>*Funding and Payments; Presumptions*.</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;&nbsp;&nbsp;&nbsp;&nbsp;(i) <u>*Funding by Lenders; Presumption by Administrative Agent*</u>. Unless the Administrative Agent shall have received notice from a Lender prior to the proposed date of any Borrowing of Eurodollar Rate Loans (or, in the case of any Borrowing of Base Rate Loans, prior to 12:00 noon on the date of such 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 <u>Section 2.02</u> (or, in the case of a Borrowing of Base Rate Loans, that such Lender has made such share available in accordance with and at the time required by <u>Section 2.02)</u> 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 applicable Borrowing available to the Administrative Agent, then the applicable Lender and each of the Borrowers severally agree to pay to the Administrative Agent forthwith on demand such corresponding amount in immediately available funds 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 (A) in the case of a payment to be made by such Lender, the greater of the Federal Funds Rate and a rate determined by the Administrative Agent in accordance with banking industry rules on interbank compensation, plus any administrative, processing or similar fees customarily charged by the Administrative Agent in connection with the foregoing, and (B) in the case of a payment to be made by the Borrowers, the interest rate applicable to Base Rate Loans. If any Borrower and such Lender shall pay such interest to the Administrative Agent for the same or an overlapping period, the Administrative Agent shall promptly remit to such Borrower the amount of such interest paid by such Borrower for such period. If such Lender pays its share of the applicable Borrowing to the Administrative Agent, then the amount so paid shall constitute such Lender's Loan included in such Borrowing. Any payment by any Borrower shall be without prejudice to any claim any Borrower may have against a Lender that shall have failed to make such payment 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;&nbsp;&nbsp;&nbsp;&nbsp;(ii) <u>*Payments by the Borrowers; Presumptions by Administrative Agent*</u>. Unless the Administrative Agent shall have received notice from the Parent Borrower prior to the time at which any payment is due to the Administrative Agent for the account of the Lenders or the L/C Issuer 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 the amount due. In such event, if the Borrowers haves not in fact made such payment, then each of the Lenders severally agrees to repay to the Administrative Agent forthwith on demand the amount so distributed to such Lender, in immediately available funds with interest thereon, for each day from and including the date such amount is distributed to it to but excluding the date of payment to the Administrative Agent, at the greater of the Federal Funds Rate and a rate determined by the Administrative Agent in accordance with banking industry rules on interbank compensation.

A notice of the Administrative Agent to any Lender or the Parent Borrower with respect to any amount owing under this <u>subsection (b)</u> 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;(c) <u>*Failure to Satisfy Conditions Precedent*</u>. If any Lender makes available to the Administrative Agent funds for any Loan to be made by such Lender as provided in the foregoing provisions of this <u>Article II</u>, and such funds are not made available to the Borrowers by the Administrative Agent because the conditions to the Borrowings set forth in <u>Article IV</u> are not satisfied or waived in accordance with the terms hereof, the Administrative Agent shall return such funds (in like funds as received from such Lender) to such Lender without interest.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(d) <u>*Obligations of Lenders Several*</u>. The obligations of the Lenders hereunder to make Loans, to fund participations in Letters of Credit and Swing Line Loans and to make payments pursuant to <u>Section 10.04(c)</u> are several and not joint. The failure of any Lender to make any Loan or to make any payment under <u>Section 10.04(c)</u> on any date required hereunder shall not relieve any other Lender of its corresponding obligation to do so on such date, and no Lender shall be responsible for the failure of any other Lender to so make its Loan or to make its payment under <u>Section 10.04(c)</u>.

------

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(e) <u>*Funding Source*</u>. Nothing herein shall be deemed to obligate any Lender to obtain the funds for any Loan in any particular place or manner or to constitute a representation by any Lender that it has obtained or will obtain the funds for any Loan in any particular place or manner.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(f) <u>*Insufficient Funds*</u>. If at any time insufficient funds are received by and available to the Administrative Agent to pay fully all amounts of principal, unreimbursed L/C Obligations, interest and fees then due hereunder, such funds shall be applied (i) first, toward payment of interest and fees then due hereunder, ratably among the parties entitled thereto in accordance with the amounts of interest and fees then due to such parties, (ii) second, toward payment of principal of unreimbursed L/C Obligations then due from the Borrowers hereunder, ratably among the parties entitled thereto in accordance with the amounts of principal and unreimbursed L/C Obligations then due to such parties, and (iii) third, towards payment of principal of Loans then due hereunder, ratably among the parties entitled thereto in accordance with the amounts of principal then due to such parties.

**Section 2.13 <u>Sharing of Payments by Lenders</u>**. If any Lender shall, by exercising any right of setoff or counterclaim or otherwise, obtain payment in respect of (i) ABL Credit Obligations due and payable to such Lender hereunder and under the other Loan Documents at such time in excess of its ratable share (according to the proportion of (x) the amount of such ABL Credit Obligations due and payable to such Lender at such time to (y) the aggregate amount of the ABL Credit Obligations due and payable to all Lenders hereunder and under the other Loan Documents at such time) of payments on account of the ABL Credit Obligations due and payable to all Lenders hereunder and under the other Loan Documents at such time obtained by all the Lenders at such time or (ii) ABL Credit Obligations owing (but not due and payable) to such Lender hereunder and under the other Loan Documents at such time in excess of its ratable share (according to the proportion of (x) the amount of such ABL Credit Obligations owing (but not due and payable) to such Lender at such time to (y) the aggregate amount of the ABL Credit Obligations owing (but not due and payable) to all Lenders hereunder and under the other Loan Parties at such time) of payment on account of the ABL Credit Obligations owing (but not due and payable) to all Lenders hereunder and under the other Loan Documents at such time obtained by all of the Lenders at such time then the Lender receiving such greater proportion shall (A) notify the Administrative Agent of such fact, and (B) purchase (for cash at face value) participations in the Loans and subparticipations in L/C Obligations and Swing Line Loans of the other Lenders, or make such other adjustments as shall be equitable, so that the benefit of all such payments shall be shared by the Lenders ratably in accordance with the aggregate amount of ABL Credit Obligations then due and payable to the Lenders or owing (but not due and payable) to the Lenders, as the case may be, provided that:

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

------

&nbsp;&nbsp;&nbsp;&nbsp;&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) the provisions of this Section shall not be construed to apply to (A) any payment made by or on behalf of the Borrowers pursuant to and in accordance with the express terms of this Agreement (including the application of funds arising from the existence of a Defaulting Lender), (B) the application of Cash Collateral provided for in <u>Section 2.16,</u> or (C) any payment obtained by a Lender as consideration for the assignment of or sale of a participation in any of its Loans or subparticipations in L/C Obligations or Swing Line Loans to any assignee or participant, other than an assignment to any Borrower or any Subsidiary or Affiliate thereof not otherwise permitted by this Agreement (as to which the provisions of this Section shall apply).

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

**Section 2.14 <u>Incremental Loans</u>.**

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a)*<u>Requests for Incremental Loans</u>*. Upon notice by the Parent Borrower to the Administrative Agent (which Administrative Agent shall promptly notify the Lenders), at any time after the Closing<u>Second Amendment Effective</u> Date, the Borrowers may request one or more incremental Revolving Facility Commitments (each an "<u>Incremental Commitment</u>" and all of them, collectively, the "<u>Incremental Commitments</u>" and any such loans, "<u>Incremental Loans</u>"), each of which Incremental Commitment shall be in minimum increments of $1,000,000 and a minimum amount of $10,000,000; <u>provided</u> that after giving effect to any such addition, the aggregate amount of Incremental Commitments that have been added pursuant to this <u>Section 2.14</u> 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;(b) <u>*Ranking and Other Provisions*</u>. The Incremental Loans shall rank pari passu or junior in right of payment and in respect of lien priority as to the Collateral with the ABL Credit Obligations in respect of the outstanding Loans and otherwise have terms identical to the Revolving Facility Loans (other than with respect to any fees paid in connection with any Incremental Commitment or Incremental Loans and it being understood that the Borrowers, at their option, may increase the Applicable Rate and fees payable in respect of the Facility to be identical to those paid in connection with any Incremental Commitment or Incremental Loans).

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c) <u>*Notices; Lender Elections*</u>. Each notice from the Parent Borrower pursuant to this Section shall set forth the requested amount and proposed terms of the Incremental Commitments. At the time of the sending of such notice, the Parent Borrower (in consultation with the Administrative Agent) shall specify the time period within which each Lender is requested to respond (which shall in no event be less than ten Business Days from the date of delivery of such notice to the Lenders). Incremental Loans (or any portion thereof) may be made by any existing Lender or by any other bank or investing entity satisfactory to the Administrative Agent and each L/C Issuer (but in no case (i) by any Borrower or any Borrowers' Affiliates or Subsidiaries, (ii) by any Defaulting Lender or any of its Subsidiaries, (iii) by any Person who, upon becoming a Lender hereunder, would constitute any of the foregoing Persons described in <u>clause (ii)</u> or (iv) by any natural person) (each, except to the extent excluded pursuant to the foregoing parenthetical, an "<u>Incremental Lender</u>"), in each case on terms permitted in this Section and otherwise on terms reasonably acceptable to the Administrative Agent and L/C Issuer, <u>provided</u> that the Administrative Agent, L/C Issuer, the Swing Line Lender and the Parent Borrower shall have

------

consented (not to be unreasonably withheld) to such Lender's or Incremental Lender's, as the case may be, making such Incremental Loans if such consent would be required under <u>Section 10.06</u> for an assignment of Loans to such Lender or Incremental Lender, as the case may be. No Lender shall be obligated to provide any Incremental Loans, unless it so agrees. Each Lender shall notify the Administrative Agent within such time period whether or not it agrees to provide an Incremental Commitment and, if so, whether by an amount equal to, greater than, or less than its Revolving Facility Percentage of such requested increase (which shall be calculated on the basis of the amount of the funded and unfunded exposure under the Facility). Any Lender not responding within such time period shall be deemed to have declined to provide an Incremental Commitment. The Administrative Agent shall notify the Parent Borrower and each Lender of the Lenders' responses to each request made hereunder. To achieve the full amount of a requested increase, the Parent Borrower may also invite additional Eligible Assignees to become Lenders pursuant to an accession agreement in form and substance reasonably satisfactory to the Administrative Agent and its counsel.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(d) <u>*Incremental Commitments Amendment*</u>. Revolving Facility Commitments in respect of any Incremental Commitments shall become Revolving Facility Commitments under this Agreement pursuant to an amendment (an "<u>Incremental Commitments Amendment</u>") to this Agreement and, as appropriate, the other Loan Documents, executed by Holdings, each Borrower, each Lender agreeing to provide such Revolving Facility Commitment, if any, each Incremental Lender, if any, and the Administrative Agent. An Incremental Commitments Amendment may, without the consent of any other Lenders, effect such amendments to any Loan Documents as may be necessary or appropriate, in the opinion of the Administrative Agent, to effect the provisions of this Section.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(e)*<u>Effective Date and Allocations</u>*. If any Incremental Commitments are added in accordance with this <u>Section 2.14</u>, the Administrative Agent and the Parent Borrower shall determine the effective date (the "<u>Incremental Commitments Effective Date</u>") and the final allocation of such addition. The Administrative Agent shall promptly notify the Parent Borrower and the Lenders of the final allocation of such addition, the Incremental Commitments Effective Date and the amount of each Lender's Revolving Facility Percentage of Loans after giving effect to such Incremental Commitments.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(f) <u>*Conditions to Effectiveness of Increase*</u>. The effectiveness of any Incremental Commitments Amendment shall, unless otherwise agreed to by the Administrative Agent, L/C Issuer, each Lender party thereto, if any, and the Incremental Lenders, if any, be subject to the satisfaction or waiver by the Administrative Agent on the date thereof of each 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;&nbsp;&nbsp;&nbsp;&nbsp;(i) the Administrative Agent shall have received on or prior to the Incremental Commitments Effective Date each of the following, each dated the applicable Incremental Commitments Effective Date unless otherwise indicated or agreed to by the Administrative Agent and each in form and substance reasonably satisfactory to the Administrative Agent: (A) the applicable Incremental Commitments Amendment; (B) certified copies of resolutions of the board of directors (or other similar governing body) of each Loan Party approving the execution, delivery and performance of the Incremental Commitments Amendment; and (C) a favorable opinion of counsel for the Loan Parties dated the Incremental Commitments Effective Date, to the extent requested by the Administrative Agent addressed to the Administrative Agent and the Lenders and in form and substance and from counsel 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;&nbsp;&nbsp;&nbsp;&nbsp;(ii) A) such increase shall be made on the terms and conditions provided for above, (B) both at the time of any request for Incremental Commitments and upon the effectiveness of any Incremental Commitments Amendment, no Default or Event of Default shall exist and at the time that any such Incremental Loan is made (and after giving effect thereto) no Default or Event of Default shall exist, (C) the conditions specified in <u>Section 4.02</u> shall have been satisfied, (D) the representations and warranties in the Loan Documents shall be true and correct in all material respects on and as of the date of the incurrence of the Incremental Loans (although any representations and warranties which expressly relate to a given date or period shall be required only to be true and correct in all material respects as of the respective date or for the respective period, as the case may be), before and after giving effect to such incurrence, as though made on and as of such date, and (E) the Fixed Charge Coverage Ratio would not be less than 1.00 to 1.00 as of the most recently completed Measurement Period on a pro forma basis, after giving effect to the incurrence of such Incremental Loans or Incremental Commitments (assuming that the full amount of such Incremental Commitments would be drawn as Incremental Loans); 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;(iii) there shall have been paid to the Administrative Agent, for the account of the Administrative Agent and the Lenders (including any Person becoming a Lender as part of such Incremental Commitments Amendment on the related Incremental Commitments Effective Date), as applicable, all reasonable fees and out-of-pocket expenses (including reasonable out-of-pocket fees, charges and disbursements of counsel) that are due and payable on or before the Incremental Commitments Effective Date.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(g) <u>*Effect of Incremental Commitments Amendment*</u>. On each Incremental Commitments Effective Date, each Lender or Eligible Assignee which is providing an Incremental Commitment (i) shall become a "Lender" for all purposes of this Agreement and the other Loan Documents, (ii) shall have an Incremental Commitment which shall be a "Revolving Facility Commitment" hereunder and (iii) shall make an Incremental Loan to the Borrowers in a principal amount equal to such Incremental Commitment, and such Incremental Loan shall be a "Loan" for all purposes of this Agreement and the other Loan Documents.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(h) <u>*Conflicting Provisions*</u>. This <u>Section 2.14</u> shall supersede any provision of <u>Section 2.13</u> or <u>Section 10.01</u> to the contrary.

**Section 2.15 <u>Defaulting Lenders</u>.**

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a) <u>*Adjustments*</u>. Notwithstanding anything to the contrary contained in this Agreement, if any Lender becomes a Defaulting Lender, then, until such time as that Lender is no longer a Defaulting Lender, to the extent permitted by applicable Requirements of 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;&nbsp;&nbsp;&nbsp;&nbsp;(i) That Defaulting Lender's right to approve or disapprove any amendment, waiver or consent with respect to this Agreement or any other Loan Document shall be restricted as set forth in the definition of "Required Lenders" and <u>Section 10.01</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;&nbsp;&nbsp;&nbsp;&nbsp;(ii) Any payment of principal, interest, fees or other amounts received by the Administrative Agent for the account of that Defaulting Lender (whether voluntary or mandatory, at maturity, pursuant to <u>Article VIII</u> or otherwise, and including any amounts made available to the Administrative Agent by that Defaulting Lender pursuant to <u>Section 10.08),</u> shall be applied at such time or times as may be determined by the Administrative Agent as follows: <u>first</u>, to the payment of any amounts owing by that Defaulting Lender to the Administrative Agent hereunder; <u>second,</u> to the payment on a pro rata basis of any amounts owing by such Defaulting Lender to any L/C Issuer or Swing Line Lender hereunder; <u>third</u>, to Cash Collateralize the L/C Issuer's Fronting Exposure with respect to such Defaulting Lender in accordance with <u>Section 2.16</u>; <u>fourth</u>, as the Parent Borrower may request (so long as no Event of Default exists), to the funding of any Loan in respect of which that Defaulting Lender has failed to fund its portion thereof as required by this Agreement, as determined by the Administrative Agent; <u>fifth,</u> if so determined by the Administrative Agent and the Parent Borrower, to be held in a non-interest bearing deposit account and released in order to (x) satisfy obligations of that Defaulting Lender to fund Loans under this Agreement and (y) Cash Collateralize the L/C Issuer's future Fronting Exposure with respect to such Defaulting Lender with respect to future Letters of Credit issued under this Agreement, in accordance with <u>Section 2.16</u>; <u>sixth</u>, to the payment of any amounts owing to the Lenders, the L/C Issuers or Swing Line Lender as a result of any judgment of a court of competent jurisdiction obtained by any Lender, L/C Issuer or Swing Line Lender against that Defaulting Lender as a result of that Defaulting Lender's breach of its obligations under this Agreement; <u>seventh,</u> so long as no Event of Default exists, to the payment of any amounts owing to any Borrower as a result of any judgment of a court of competent jurisdiction obtained by any Borrower against that Defaulting Lender as a result of that Defaulting Lender's breach of its obligations under this Agreement; and <u>eighth</u>, to that Defaulting Lender or as otherwise directed by a court of competent jurisdiction; <u>provided</u> that if (x) such payment is a payment of the principal amount of any Loans or Letter of Credit Borrowings in respect of which that Defaulting Lender has not fully funded its appropriate share and (y) such Loans or the related Letters of Credit were made at a time when the conditions set forth in <u>Section 4.01(j)</u> or <u>(k)</u> were satisfied or waived, such payment shall be applied solely to pay the Loans of, and L/C Obligations owed to, all non-Defaulting Lenders on a pro rata basis prior to being applied to the payment of any Loans of, or L/C Obligations owed to, that Defaulting Lender until such time as all Loans and funded and unfunded participations in L/C Obligations and Swing Line Loans are held by the Lenders pro-rata in accordance with the Commitments hereunder without giving effect to <u>Section 2.15(a)(v)</u>. Any payments, prepayments or other amounts paid or payable to a Defaulting Lender that are applied (or held) to pay amounts owed by a Defaulting Lender or to post Cash Collateral pursuant to this <u>Section 2.16(a)(ii)</u> shall be deemed paid to and redirected by that Defaulting Lender, and each Lender irrevocably consents 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;&nbsp;&nbsp;&nbsp;&nbsp;(iii) That Defaulting Lender shall not be entitled to any fee pursuant to <u>Section 2.09(d)</u> for any period during which that 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;&nbsp;&nbsp;&nbsp;&nbsp;(iv) <u>*Certain 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;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(A) Each Defaulting Lender shall be entitled to receive fees payable under <u>Section 2.09(a)</u> for any period during which that Lender is a Defaulting Lender only to extent allocable to the sum of (1) the outstanding principal amount of the Revolving Facility Loans funded by it, and (2) its Revolving Facility Percentage of the stated amount of Letters of Credit for which it has provided Cash Collateral pursuant to <u>Section 2.16</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;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(B) Each Defaulting Lender shall be entitled to receive Letter of Credit Fees for any period during which that Lender is a Defaulting Lender only to the extent allocable to its applicable percentage of the stated amount of Letters of Credit for which it has provided Cash Collateral pursuant to <u>Section 2.16</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;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(C) With respect to any fee payable under <u>Section 2.09(a)</u> or any Letter of Credit Fee not required to be paid to any Defaulting Lender pursuant to <u>clause (A)</u> or <u>(B)</u> above, the Parent Borrower shall (x) pay to each Non-Defaulting Lender that portion of any such fee otherwise payable to such Defaulting Lender with respect to such Defaulting Lender's participation in L/C Obligations or Swing Line Loans that has been reallocated to such Non-Defaulting Lender pursuant to <u>clause (v)</u> below, (y) pay to the applicable L/C Issuers and Swing Line Lender, as applicable, the amount of any such fee otherwise payable to such Defaulting Lender to the extent allocable to such L/C Issuers' or Swing Line Lender's Fronting Exposure to such Defaulting Lender and (z) not be required to pay the remaining amount of any such 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;&nbsp;&nbsp;&nbsp;&nbsp;(v) <u>*Reallocation of Revolving Facility Percentages to Reduce Fronting Exposure*</u>. All or any part of such Defaulting Lender's participation in L/C Obligations and Swing Lien<u>Line</u> Loans shall be reallocated among the Non-Defaulting Lenders in accordance with their respective Revolving Facility Percentages (calculated without regard to such Defaulting Lender's Revolving Facility Commitment) but only to the extent that (x) the conditions set forth in <u>Section 4.02</u> are satisfied at the time of such reallocation (and, unless the Parent Borrower shall have otherwise notified the Administrative Agent at such time, the Parent Borrower shall be deemed to have represented and warranted that such conditions are satisfied at such time), and (y) such reallocation does not cause the aggregate Revolving Facility Credit Exposure of any Non-Defaulting Lender to exceed such Non-Defaulting Lender's Revolving Facility Commitment. Subject to <u>Section 10.23</u>, no reallocation hereunder shall constitute a waiver or release of any claim of any party hereunder against a Defaulting Lender arising from that Lender having become a Defaulting Lender, including any claim of a Non-Defaulting Lender as a result of such Non-Defaulting Lender's increased exposure following such reallocation.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(vi) <u>*Cash Collateral, Repayment of Swing Line Loans*</u>. If the reallocation described in <u>clause (a)(v)</u> above cannot, or can only partially, be effected, the Borrowers shall, without prejudice to any right or remedy available to it hereunder or under applicable Law, (x) first, prepay Swing Line Loans in an amount equal to the Swing Line Lender's Fronting Exposure and (y) second, Cash Collateralize the L/C Issuers' Fronting Exposure in accordance with the procedures set forth in <u>Section 2.16</u>.

------

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b) <u>*Defaulting Lender Cure*</u>. If the Parent Borrower, the Administrative Agent, the Swing Line Lender and one or more applicable L/C Issuer agree in writing in their sole discretion that a Defaulting Lender should no longer be deemed to be a Defaulting Lender, the Administrative Agent will so notify the parties hereto, whereupon as of the effective date specified in such notice and subject to any conditions set forth therein (which may include arrangements with respect to any Cash Collateral), that Lender will, to the extent applicable, purchase that portion of outstanding Loans of the other Lenders or take such other actions as the Administrative Agent may determine to be necessary to cause the Loans and funded and unfunded participations in Letters of Credit and Swing Line Loans to be held on a pro rata basis by the Lenders in accordance with their Revolving Facility Percentages, whereupon that Lender will cease to be a Defaulting Lender; <u>provided</u> that no adjustments will be made retroactively with respect to fees accrued or payments made by or on behalf of the Borrowers while that Lender was a Defaulting Lender; and <u>provided</u>, <u>further</u>, that except to the extent otherwise expressly agreed by the affected parties, no change hereunder from Defaulting Lender to Lender will constitute a waiver or release of any claim of any party hereunder arising from that Lender's having been a Defaulting Lender.

**Section 2.16 <u>Cash Collateral</u>.** 

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a) <u>*Certain Credit Support Events*</u>. If (i) an L/C Issuer has honored any full or partial drawing request under any Letter of Credit and such drawing has resulted in a Letter of Credit Borrowing, (ii) as of the Letter of Credit Expiration Date, any L/C Obligation for any reason remains outstanding, (iii) the Borrowers shall be required to provide Cash Collateral pursuant to <u>Section 8.02</u>, or (iv) there shall exist a Defaulting Lender, the Borrowers shall immediately (in the case of <u>clause (iii)</u> above) or within one Business Day (in all other cases) following any request by the Administrative Agent or the L/C Issuer, provide Cash Collateral in an amount not less than the applicable Minimum Collateral Amount (determined in the case of Cash Collateral provided pursuant to <u>clause (iv)</u> above, after giving effect to <u>Section 2.16(a)(iv)</u> and any Cash Collateral provided by the Defaulting Lender).

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b) <u>*Grant of Security Interest*</u>. Each Loan Party and to the extent provided by any Defaulting Lender, such Defaulting Lender, hereby grants to (and subjects to the control of) the Administrative Agent, for the benefit of the Administrative Agent, the L/C Issuers and the Lenders, and agrees to maintain, a first priority security interest in all such cash, deposit accounts and all balances therein, and all other property so provided as collateral pursuant hereto, and in all proceeds of the foregoing, all as security for the obligations to which such Cash Collateral may be applied pursuant to <u>clause (c)</u> below. If at any time the Administrative Agent determines that Cash Collateral is subject to any right or claim of any Person other than the Administrative Agent or an L/C Issuer as herein provided, or that the total amount of such Cash Collateral is less than the Minimum Collateral Amount, the Borrowers will, promptly upon demand by the Administrative Agent, pay or provide to the Administrative Agent additional Cash Collateral in an amount sufficient to eliminate such deficiency. All Cash Collateral (other than credit support not constituting funds subject to deposit) shall be maintained in one or more Controlled Accounts at Bank of America. The Borrowers shall jointly and severally pay on demand therefor from time to time all customary account opening, activity and other administrative fees and charges in connection with the maintenance and disbursement of Cash Collateral.

------

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c)*<u>Application</u>*. Notwithstanding anything to the contrary contained in this Agreement, Cash Collateral provided under any of this <u>Section 2.16</u>, <u>2.03</u>, <u>2.15</u> or <u>8.02</u> in respect of Letters of Credit shall be held and applied to the satisfaction of the specific L/C Obligations, obligations to fund participations therein (including, as to Cash Collateral provided by a Defaulting Lender, any interest accrued on such obligation) and other obligations for which the Cash Collateral was so provided, prior to any other application of such property as may otherwise be provided for herein.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(d)*<u>Release</u>*. Cash Collateral (or the appropriate portion thereof) provided to reduce Fronting Exposure or to secure other obligations shall be released promptly following (i) the elimination of the applicable Fronting Exposure or other obligations giving rise thereto (including by the termination of Defaulting Lender status of the applicable Lender (or, as appropriate, its assignee following compliance with <u>Section 10.06(b)(vi)</u>)) or (ii) the determination by the Administrative Agent and the applicable L/C Issuer that there exists excess Cash Collateral; <u>provided</u>, <u>however</u>, (x) any such release shall be without prejudice to, and any disbursement or other transfer of Cash Collateral shall be and remain subject to, any other Lien conferred under the Loan Documents and the other applicable provisions of the Loan Documents, and (y) the Person providing Cash Collateral and the applicable L/C Issuer may agree that Cash Collateral shall not be released but instead held to support future anticipated Fronting Exposure or other obligations.

**Section 2.17 <u>Agent Advances; Overadvances</u>.** 

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a) <u>*Agent Advances*</u>. Any Agent may from time to time make such disbursements and advances ("<u>Agent Advances</u>") which such Agent, in its sole discretion, deems necessary or desirable to preserve, protect, prepare for sale or lease or dispose of the Collateral or any portion thereof, to enhance the likelihood or maximize the amount of repayment by the Borrowers of the Loans, L/C Obligations and other ABL Credit Obligations or to pay any other amount chargeable to the Borrowers pursuant to the terms of this Agreement, including, without limitation, costs, fees and expenses as described in <u>Section 10.04</u>. The Agent Advances shall be repayable on demand and be secured by the Collateral and shall bear interest at a rate per annum equal to the rate then applicable to Loans that are Base Rate Loans. The Agent Advances shall constitute ABL Credit Obligations hereunder. The Agent making the Agent Advance shall notify the other Agent and each Lender and the Parent Borrower in writing of each such Agent Advance, which notice shall include a description of the purpose of such Agent Advance. Without limitation to its obligations pursuant to <u>Section 10.05</u>, each Lender agrees that it shall make available to the Agent making the Agent Advance, upon such Agent's demand, in Dollars in immediately available funds, the amount equal to such Lender's pro rata share of each such Agent Advance. If such funds are not made available to the Agent making such Agent Advance by such Lender, such Agent shall be entitled to recover such funds on demand from such Lender, together with interest thereon for each day from the date such payment was due until the date such amount is paid to such Agent, at the Federal Funds Rate for three Business Days and thereafter at the Base Rate.

------

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b)*<u>Overadvances</u>*. If the aggregate Outstanding Amounts exceed the Borrowing Base ("<u>Overadvance</u>") at any time, the excess amount shall be payable jointly and severally by Borrowers within one (1) Business Day after demand by the Administrative Agent, but all such Loans shall nevertheless constitute ABL Credit Obligations secured by the Collateral and entitled to all benefits of the Loan Documents. Unless its authority has been revoked in writing by the Required Lenders, the Administrative Agent may require Lenders to honor requests for Overadvances and to forbear from requiring Borrowers to cure an Overadvance, (a) when no other Default or Event of Default is known to the Administrative Agent, as long as (i) the Overadvance does not continue for more than 45 consecutive days (and no Overadvance may exist for at least five consecutive days thereafter before further Overadvances are required), and (ii) the Overadvance is not known by the Administrative Agent to exceed 10% of the Borrowing Base at any time while such Overadvance is outstanding; and (b) regardless of whether Default or an Event of Default exists, if the Administrative Agent discovers an Overadvance not previously known by it to exist, as long as from the date of such discovery the Overadvance (i) is not increased by more than $1,000,000, and (ii) does not continue for more than 45 consecutive days. In no event shall Overadvances be required that would cause the outstanding Loans and L/C Obligations to exceed the Aggregate Commitments. Any funding of an Overadvance or sufferance of an Overadvance shall not constitute a waiver by the Administrative Agent or Lenders of the Default or Event of Default caused thereby. In no event shall any Borrower or other Loan Party be deemed a beneficiary of this <u>clause (b)</u> nor authorized to enforce any of its terms.

**Section 2.18 <u>Settlement</u>**. Except as may be specifically provided otherwise herein, it is agreed that each Lender's funded portion of the Loans is intended by the Lenders to be equal at all times to such Lender's applicable pro rata share of the outstanding Loans of such Type. Notwithstanding such agreement, the Administrative Agent and the Lenders agree (which agreement shall not be for the benefit of or enforceable by the Borrowers) that in order to facilitate the administration of this Agreement and the other Loan Documents, settlement among them as to the Loans, including the Agent Advances and Overadvances, shall take place on a periodic basis in accordance with the following provisions:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a) The Administrative Agent shall request settlement (a "<u>Settlement</u>") with the Lenders at least twice a month, or on a more frequent basis if so determined by the Administrative Agent, (i) for itself, with respect to each Agent Advance and Overadvance, as applicable, and (ii) with respect to Collections received, in each case, by notifying the Lenders of such requested Settlement by telecopy, telephone, or other means of written electronic communication, no later than 12:00 noon on the date of such requested Settlement (the "<u>Settlement Date</u>"). Each Revolving Facility Lender (other than the Administrative Agent, in the case of Agent Advances and Overadvances) shall make the amount of such Lender's pro rata share of the outstanding principal amount of Agent Advances and Overadvances, as applicable, with respect to which Settlement is requested available to the Administrative Agent at the Administrative Agent's Office not later than 3:00 p.m. on the Settlement Date applicable thereto, which may occur before or after the occurrence or during the continuation of a Default or an Event of Default and whether or not the applicable conditions precedent set forth in <u>Article IV</u> have then been satisfied. Such amounts made available to the Administrative Agent shall be applied against the amounts of the applicable Agent Advance or Overadvances, as applicable, and shall constitute Revolving Facility Loans of the Lenders. If any such amount is not made available to the Administrative Agent by any Lender on the Settlement Date applicable thereto, the Administrative Agent shall, for itself with respect to each Agent Advance and Overadvance, be entitled to recover such amount on demand from such Lender together with interest thereon at the Federal Funds Rate for the first three days from and after the Settlement Date and thereafter at the Interest Rate then applicable to Revolving Facility Loans that are Base Rate Loans.

------

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b) Notwithstanding the foregoing, not more than one Business Day after demand is made by the Administrative Agent (whether before or after the occurrence of a Default or an Event of Default and regardless of whether the Administrative Agent has requested a Settlement with respect to an Agent Advance or Overadvance), each Lender (i) shall irrevocably and unconditionally purchase and receive from the Administrative Agent, without recourse or warranty, an undivided interest and participation in such Agent Advance or Overadvance, as applicable, equal to such Lender's pro rata share of such Agent Advance and (ii) if Settlement has not previously occurred with respect to such Agent Advances, upon demand by the Administrative Agent, shall pay to the Administrative Agent as the purchase price of such participation an amount equal to one-hundred percent (100%) of such Lender's pro rata share of such Agent Advances or Overadvance, as applicable. If such amount is not in fact made available to the Administrative Agent by any Lender, the Administrative Agent shall be entitled to recover such amount on demand from such Lender together with interest thereon at the Federal Funds Rate for the first three days from and after such demand and thereafter at the Interest Rate then applicable to Base Rate Loans.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c) From and after the date, if any, on which any Lender purchases an undivided interest and participation in any Agent Advance or Overadvance pursuant to <u>clause (b)</u> above, the Administrative Agent shall promptly distribute to such Lender such Lender's pro rata share of all payments of principal and interest and all proceeds of Collateral received by the Administrative Agent in respect of such Agent Advance or Overadvance, as applicable.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(d) During the period between Settlement Dates, the Administrative Agent with respect to Agent Advances or Overadvances, as applicable, and each Lender with respect to the Revolving Facility Loans other than Agent Advances or Overadvances, shall be entitled to interest at the applicable rate or rates payable under this Agreement on the actual average daily amount of funds employed by the Administrative Agent and the Lenders.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(e) Unless the Administrative Agent has received written notice from a Lender to the contrary, the Administrative Agent may assume that the applicable conditions precedent set forth in <u>Article IV</u> have been satisfied and the requested Borrowing will not exceed Availability on any date for funding a Revolving Facility Loan. If any Lender makes available to the Administrative Agent funds for any Revolving Facility Loan to be made by such Lender as provided in the provisions of this <u>Article II</u>, and such funds are not made available to the Borrowers by the Administrative Agent because the conditions set forth in <u>Article IV</u> are not satisfied or waived in accordance with the terms hereof, the Administrative Agent shall return such funds (in like funds as received from such Lender) to such Lender, without interest.

------

**ARTICLE III** 

**TAXES, YIELD PROTECTION AND ILLEGALITY** 

**Section 3.01 <u>Taxes</u>.** 

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a) <u>*Payments Free of Taxes; Obligation to Withhold; Payments on Account of 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;&nbsp;&nbsp;&nbsp;&nbsp;(i) Any and all payments by or on account of any obligation of the Borrowers hereunder or under any other Loan Document shall to the extent permitted by applicable Requirements of Law be made free and clear of and without reduction or withholding for any Taxes. If, however, applicable Requirements of Law require any Borrower or the Administrative Agent to withhold or deduct any Tax, such Tax shall be withheld or deducted in accordance with such Requirements of Law as determined by the Parent Borrower or the Administrative Agent, as the case may be, upon the basis of the information and documentation to be delivered pursuant to <u>subsection (e)</u> below.

&nbsp;&nbsp;&nbsp;&nbsp;&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) If any Borrower or the Administrative Agent shall be required by the Code to withhold or deduct any Taxes, including both United States federal backup withholding and withholding taxes, from any payment, then (A) <u>such Borrower or</u> the Administrative Agents<u>, as applicable,</u> shall withhold or make such deductions as are determined by <u>such Borrower or</u> the Administrative Agent<u>, as applicable,</u> to be required based upon the information and documentation it has received pursuant to <u>subsection (e)</u> below, (B) <u>such Borrower or</u> the Administrative Agent<u>, as applicable,</u> shall timely pay the full amount withheld or deducted to the relevant Governmental Authority in accordance with the Code and (C) to the extent that the withholding or deduction is made on account of Indemnified Taxes or Other Taxes, the sum payable by the Borrowers shall be increased as necessary so that after any required withholding or the making of all required deductions (including deductions applicable to additional sums payable under this Section) the Administrative Agent or Lender or L/C Issuer, as the case may be, receives an amount equal to the sum it would have received had no such withholding or deduction been made.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b) <u>*Payment of Other Taxes by the Borrowers*</u>. Without limiting the provisions of <u>subsection (a)</u> above, each Borrower shall timely pay any Other Taxes to the relevant Governmental Authority in accordance with applicable Requirement of Law.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c) <u>*Tax Indemnifications*</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;&nbsp;&nbsp;&nbsp;&nbsp;(i) Without limiting the provisions of <u>subsection (a)</u> or <u>(b)</u> above, each Borrower shall, and does hereby, jointly and severally, indemnify the Administrative Agent, each Lender and each L/C Issuer, and shall make payment in respect thereof within ten days after written demand therefor, for the full amount of any Indemnified Taxes or Other Taxes (including Indemnified Taxes or Other Taxes imposed or asserted on or attributable to amounts payable under this <u>Section 3.01</u>) withheld or deducted by the Borrowers or the Administrative Agent or paid by the Administrative Agent, such Lender or such L/C Issuer, as the case may be, and any penalties, interest and reasonable expenses arising therefrom or with respect thereto, whether or not such Indemnified Taxes or Other

------

Taxes were correctly or legally imposed or asserted by the relevant Governmental Authority. Each Borrower shall also, and does hereby, indemnify the Administrative Agent, and shall make payment in respect thereof within ten days after written demand therefor, for any amount which a Lender or an L/C Issuer for any reason fails to pay indefeasibly to the Administrative Agent as required by <u>clause (ii)</u> of this <u>subsection (c)</u>. A certificate as to the amount of any such payment or liability delivered to the Parent Borrower by a Lender or an L/C Issuer (with a copy to the Administrative Agent), or by the Administrative Agent on its own behalf or on behalf of a Lender or an L/C Issuer, 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;&nbsp;&nbsp;&nbsp;&nbsp;(ii) Without limiting the provisions of <u>subsection (a)</u> or <u>(b)</u> above, each Lender and each L/C Issuer shall, and does hereby, indemnify the Borrowers and the Administrative Agent, and shall make payment in respect thereof within ten days after demand therefor, against any and all Taxes and any and all related losses, claims, liabilities, penalties, interest and expenses (including the fees, charges and disbursements of any counsel for the Borrowers or the Administrative Agent) incurred by or asserted against the Borrowers or the Administrative Agent by any Governmental Authority <u>(x)</u> as a result of the failure by such Lender or such L/C Issuer, as the case may be, to deliver, or as a result of the inaccuracy, inadequacy or deficiency of, any documentation required to be delivered by such Lender or such L/C Issuer, as the case may be, to the Borrowers or the Administrative Agent pursuant to <u>subsection (e)</u> <u>or attributable to such Lender's failure to comply with the provisions of Section 10.06(d) relating to the maintenance of a Participant Register or (y) that are Excluded Taxes attributable to such Lender or such L/C Issuer</u>. Each Lender and each L/C Issuer hereby authorizes the Administrative Agent to set off and apply any and all amounts at any time owing to such Lender or such L/C Issuer, as the case may be, under this Agreement or any other Loan Document against any amount due to the Administrative Agent under this <u>clause (ii)</u>. The agreements in this <u>clause (ii)</u> shall survive the resignation and/or replacement of the Administrative Agent, any assignment of rights by, or the replacement of, a Lender or an L/C Issuer, the termination of the Aggregate Commitments and the repayment, satisfaction or discharge of all other Finance Obligations.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(d) <u>*Evidence of Payments*</u>. Upon request by the Parent Borrower or the Administrative Agent, as the case may be, after any payment of Taxes by any Borrower or the Administrative Agent to a Governmental Authority as provided in this <u>Section 3.01</u>, the Parent Borrower shall deliver to the Administrative Agent or the Administrative Agent shall deliver to the Parent Borrower, as the case may be, the original or a certified copy of a receipt issued by such Governmental Authority evidencing such payment, a copy of any return required by Requirements of Law to report such payment or other evidence of such payment reasonably satisfactory to the Parent Borrower or the Administrative Agent, 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;(e) <u>*Status of Lenders; Tax Documentation*</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;&nbsp;&nbsp;&nbsp;&nbsp;(i) Each Lender shall deliver to the Parent Borrower and to the Administrative Agent, at the time or times prescribed by applicable Requirements of Law or when reasonably requested by the Parent Borrower or the Administrative Agent, such properly completed and executed documentation prescribed by applicable Requirements

------

of Law or by the Taxing authorities of any jurisdiction and such other reasonably requested information as will permit the Parent Borrower or the Administrative Agent, as the case may be, to determine (A) whether or not payments made hereunder or under any other Loan Document are subject to Taxes, (B) if applicable, the required rate of withholding or deduction, and (C) such Lender's entitlement to any available exemption from, or reduction of, applicable Taxes in respect of all payments to be made to such Lender by the Borrowers pursuant to this Agreement or otherwise to establish such Lender's status for withholding Tax purposes in the applicable 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;&nbsp;&nbsp;&nbsp;&nbsp;(ii) Without limiting the generality 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;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(A) any Lender that is a "United States person" within the meaning of Section 7701(a)(30) of the Code shall deliver to the Parent Borrower and the Administrative Agent executed originals<u>copy</u> of Internal Revenue Service Form W-9 or such other documentation or information prescribed by applicable Requirements of Law or reasonably requested by the Parent Borrower or the Administrative Agent as will enable the Parent Borrower or the Administrative Agent, as the case may be, to determine whether or not such Lender is subject to backup withholding or information reporting requirements; 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;(B) each Foreign Lender that is entitled under the Code or any applicable treaty to an exemption from or reduction of withholding tax with respect to payments hereunder or under any other Loan Document shall 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 request of the Parent Borrower or the Administrative Agent, but only if such Foreign Lender is legally entitled to do so), 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;(1) <u>an</u> executed originals<u>copy</u> of Internal Revenue Service Form W-8BEN<u>-E</u> claiming eligibility for benefits of an income tax treaty to which the United States is a 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;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(2) <u>an</u> executed originals<u>copy</u> of Internal Revenue Service 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;(3) <u>an</u> executed originals<u>copy</u> of Internal Revenue Service Form W-8IMY and all required supporting documentation;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&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) in the case of a Foreign Lender claiming the benefits of the exemption for portfolio interest under Section 881(c) of the Code, (x) a certificate to the effect that such Foreign Lender is not (A) a "bank" within the meaning of Section 881(c)(3)(A) of the Code, (B) a "10 percent shareholder" of any Borrower within the meaning of Section 881(c)(3)(B) of the Code, or (C) a "controlled foreign corporation" described in Section 881(c)(3)(C) of the Code and (y) <u>an</u> executed originals<u>copy</u> of Internal Revenue Service Form W-8BEN <u>or W-8BEN-E</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;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(5) executed originals of any other form prescribed by applicable Requirements of Law as a basis for claiming exemption from or a reduction in United States federal withholding tax together with such supplementary documentation as may be prescribed by applicable Requirements of Law to permit the Parent Borrower or the Administrative Agent to determine the withholding or deduction required to be 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;&nbsp;&nbsp;&nbsp;&nbsp;(iii) If a payment made to any Lender hereunder or under any other Loan Document would be subject to United States federal withholding tax imposed pursuant to FATCA if such Lender fails to comply with applicable reporting and other requirements of FATCA (including those contained in Section 1471(b) or 1472(b) of the Code, as applicable), such Lender shall use commercially reasonable efforts to deliver to the Parent Borrower and the Administrative Agent, at the time or times prescribed by applicable law or as reasonably requested by the Parent Borrower or the Administrative Agent, (A) two accurate, complete and signed certifications prescribed by applicable law and/or reasonably satisfactory to the Parent Borrower and the Administrative Agent that establish that such payment is exempt from United States federal withholding tax imposed pursuant to FATCA and (B) any other documentation reasonably requested by the Parent Borrower or the Administrative Agent sufficient for the Parent Borrower and the Administrative Agent to comply with their obligations under FATCA and to determine that a Lender has complied with such applicable reporting and other requirements of FATCA.

&nbsp;&nbsp;&nbsp;&nbsp;&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) Each Lender shall promptly (A) notify the Parent Borrower and the Administrative Agent of any change in circumstances which would modify or render invalid any claimed exemption or reduction, and (B) take such steps as shall not be materially disadvantageous to it, in the reasonable judgment of such Lender, and as may be reasonably necessary (including the re-designation of its Lending Office) to avoid any requirement of applicable Requirements of Law of any jurisdiction that the Parent Borrower or the Administrative Agent make any withholding or deduction for Taxes from amounts payable to such Lender.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(f) <u>*Treatment of Certain Refunds*</u>. Unless required by applicable Requirements of Law, at no time shall the Administrative Agent have any obligation to file for or otherwise pursue on behalf of a Lender or an L/C Issuer, or have any obligation to pay to any Lender or any L/C Issuer, any refund of Taxes withheld or deducted from funds paid for the account of such Lender or such L/C Issuer, as the case may be. If the Administrative Agent, any Lender or any L/C Issuer determines, in its sole discretion, that it has received a refund of any Taxes or Other Taxes as to which it has been indemnified by the Borrowers or with respect to which the Borrowers have paid additional amounts pursuant to this <u>Section 3.01</u>, it shall pay to the Borrowers an amount equal to such refund (but only to the extent of indemnity payments made, or additional amounts paid, by the Borrowers under this <u>Section 3.01</u> with respect to the Taxes or Other Taxes giving rise to such refund), net of all out-of-pocket expenses incurred by the Administrative Agent, such Lender or such L/C Issuer, as the case may be, and without interest (other than any interest paid by the relevant Governmental Authority with respect to such refund), <u>provided</u> that the Borrowers,

------

upon the request of the Administrative Agent, such Lender or such L/C Issuer, agree to jointly and severally repay the amount paid over to the Borrowers (plus any penalties, interest or other charges imposed by the relevant Governmental Authority) to the Administrative Agent, such Lender or such L/C Issuer in the event the Administrative Agent or such Lender is required to repay such refund to such Governmental Authority. This subsection shall not be construed to require the Administrative Agent, any Lender or any L/C Issuer to make available its tax returns (or any other information relating to its taxes that it deems confidential) to the Borrowers or any other Person.

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

**Section 3.03 <u>Inability to Determine Rates</u>**. If (a) the Required Lenders determine for any reason in connection with any request for a Loan or a conversion to or continuation thereof that (i) Dollar deposits are not being offered to banks in the applicable offshore interbank market for such currency for the applicable amount and Interest Period of such Loan, (ii) adequate and reasonable means do not exist for determining the Eurodollar Rate for any requested Interest Period with respect to a proposed Eurodollar Rate Loan or in connection with an existing or proposed Base Rate Loan (in each case with respect to clause (a) above, "<u>Impacted Loans</u>") or (b) the Administrative Agent or the Required Lenders determine that for any reason the Eurodollar Rate for any requested Interest Period with respect to a proposed Eurodollar Rate

------

Loan does not adequately and fairly reflect the cost to such Lenders of funding such Eurodollar Rate Loan, the Administrative Agent will promptly so notify the Parent Borrower and each Lender. Thereafter, (i) the obligation of the Lenders to make or maintain Eurodollar Rate Loans shall be suspended and (ii) in the event of a determination described in the preceding sentence with respect to the Eurodollar Rate component of the Base Rate, the utilization of the Adjusted Eurodollar Rate component in determining the Base Rate shall be suspended, in each case until the Administrative Agent upon the instruction of the Required Lenders revokes such notice. Upon receipt of such notice, the Parent Borrower may revoke any pending request for a Borrowing of, conversion to or continuation of Eurodollar Rate Loans or, failing that, will be deemed to have converted such request into a request for a Borrowing of Base Rate Loans in the amount specified therein.

Notwithstanding the foregoing, if the Administrative Agent has made the determination described in clause (a) of the first sentence of this section, the Administrative Agent, in consultation with the Parent Borrower and the affected Lenders, may establish an alternative interest rate for the Impacted Loans, in which case, such alternative rate of interest shall apply with respect to the Impacted Loans until (1) the Administrative Agent revokes the notice delivered with respect to the Impacted Loans under clause (a) of the first sentence of this section, (2) the Administrative Agent or the Required Lenders notify the Administrative Agent and the Parent Borrower that such alternative interest rate does not adequately and fairly reflect the cost to such Lenders of funding the Impacted Loans, or (3) any Lender determines that any Requirement of Law has made it unlawful, or that any Governmental Authority has asserted that it is unlawful, for such Lender or its applicable Lending Office to make, maintain or fund Loans whose interest is determined by reference to such alternative rate of interest or to determine or charge interest rates based upon such rate or any Governmental Authority has imposed material restrictions on the authority of such Lender to do any of the foregoing and provides the Administrative Agent and the Parent Borrower written notice thereof.

**Section 3.04** <u>**Increased Costs**</u>**.** 

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a) <u>*Increased Costs Generally*</u>. 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;&nbsp;&nbsp;&nbsp;&nbsp;(i) impose, modify or deem applicable any reserve, special deposit, compulsory loan, insurance charge or similar requirement against assets held by, deposits with or for the account of, or credit extended or participated in by, any Lender (or its Lending Office) (except any reserve requirement which is reflected in the determination of the Adjusted Eurodollar Rate hereunder) or any L/C Issuer;

&nbsp;&nbsp;&nbsp;&nbsp;&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) subject any Lender (or its Lending Office) or any L/C Issuer to any Tax of any kind whatsoever with respect to this Agreement, any Letter of Credit or any participation interest in any Letter of Credit, or any Eurodollar Rate Loan made by it, or change the basis of Taxation of payments to such Lender or L/C Issuer in respect thereof (except for Indemnified Taxes or Other Taxes covered by <u>Section 3.01</u> and the imposition of, or any change in the rate of, any Excluded Tax payable by such Lender or L/C Issuer); 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;(iii) impose on any Lender (or its Lending Office) or L/C Issuer or the London interbank market any other condition, cost or expense affecting this Agreement or Eurodollar Rate Loans made by such Lender or Letter of Credit issued by such L/C Issuer;

and the result of any of the foregoing shall be to increase the cost to such Lender (or its Lending Office) of making, converting to, continuing or maintaining any Loan the interest on which is determined by reference to the Eurodollar Rate (or of maintaining its obligation to make any such Loan), or to increase the cost to such Lender or any L/C Issuer of participating in, issuing or maintaining any Letter of Credit (or of maintaining its obligation to participate in or to issue any Letter of Credit), or to reduce the amount of any sum received or receivable by such Lender or L/C Issuer hereunder (whether of principal, interest or any other amount) then, upon request of such Lender or L/C Issuer, the Borrowers will pay to such Lender or L/C Issuer, as the case may be, such additional amount or amounts as will compensate such Lender or L/C Issuer 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;(b)*<u>Capital Requirements</u>*. If (x) any Lender or an L/C Issuer determines that any Change in Law affecting such Lender or L/C Issuer or any Lending Office of such Lender or such Lender's or L/C Issuer's holding company, if any, regarding capital or liquidity requirements has or would have the effect of reducing the rate of return on such Lender's or L/C Issuer's capital or on the capital of such Lender's or L/C Issuer's holding company, if any, as a consequence of this Agreement, the Revolving Facility Commitments of such Lender or the Loans made by or participations in Letters of Credit or Swing Line Loans held by, such Lender, or the Letters of Credit issued by such L/C Issuer to a level below that which such Lender or L/C Issuer or such Lender's or L/C Issuer's holding company could have achieved but for such Change in Law (taking into consideration such Lender's or L/C Issuer's policies and the policies of such Lender's or L/C Issuer's holding company with respect to capital adequacy) and (y) such Lender or L/C Issuer is, as a policy, seeking compensation in respect of such reduction from other similarly-situated customers, then, subject to <u>subsection (c)</u> or <u>(d)</u> of this <u>Section 3.04</u> and <u>Section 3.06</u>, then from time to time the Borrowers will pay to such Lender or L/C Issuer such additional amount or amounts as will compensate such Lender or L/C Issuer or such Lender's or L/C Issuer'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;(c) <u>*Certificates for Reimbursement*</u>. A certificate of a Lender or L/C Issuer setting forth the amount or amounts necessary to compensate such Lender or L/C Issuer or its holding company, as the case may be, as specified in <u>subsection (a)</u> or <u>(b)</u> of this <u>Section 3.04</u> and delivered to the Parent Borrower shall be conclusive absent manifest error. The Borrowers shall pay such Lender or L/C Issuer the amount shown as due on any such certificate within ten days after receipt thereof.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(d) <u>*Delays in Requests*</u>. Failure or delay on the part of any Lender or L/C Issuer to demand compensation pursuant to the foregoing provisions of this <u>Section 3.04</u> shall not constitute a waiver of such Lender's or L/C Issuer's right to demand such compensation; <u>provided</u> that the Borrowers shall not be required to compensate a Lender or L/C Issuer pursuant to the foregoing provisions of this <u>Section 3.04</u> for any increased costs incurred or reductions suffered more than nine months prior to the date that such Lender or L/C Issuer, 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 L/C Issuer's intention to claim compensation therefor (except that, if the Change in Law giving rise to such increased costs or reductions is retroactive, then the nine-month period referred to above shall be extended to include the period of retroactive effect thereof).

------

**Section 3.05 <u>Compensation for Losses</u>**. Upon demand of any Lender to the Parent Borrower (with a copy to the Administrative Agent) from time to time, the Borrowers shall promptly (and in no event more than ten days after receipt by the Parent Borrower of notice thereof from such Lender) compensate such Lender for and hold such Lender harmless from any loss, cost or expense incurred by it as a result 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;(i) any continuation, conversion, payment or prepayment of any Loan other than a Base Rate Loan on a day other than the last day of the Interest Period for such Loan (whether voluntary, mandatory, automatic, by reason of acceleration, or otherwise);

&nbsp;&nbsp;&nbsp;&nbsp;&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) any failure by any Borrower (for a reason other than the failure of such Lender to make a Loan) to prepay, borrow, continue or convert any Loan other than a Base Rate Loan on the date or in the amount notified by any Borrower; 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;(iii) any assignment of a Eurodollar Rate Loan on a day other than the last day of the Interest Period therefor as a result of a request by the Parent Borrower pursuant to <u>Section 10.13</u>;

including any loss of anticipated profits (other than Applicable Rate) and any loss or expense arising from the liquidation or reemployment of funds obtained by it to maintain such Loan or from fees payable to terminate the deposits from which such funds were obtained and after giving effect to such Lender's commercially reasonable efforts to mitigate damages. The Borrowers shall also pay any customary administrative fees charged by such Lender in connection with the foregoing. For purposes of calculating amounts payable by the Borrowers to the Lenders under this <u>Section 3.05</u>, each Lender shall be deemed to have funded each Eurodollar Rate Loan made by it at the Eurodollar Rate used in determining the Adjusted Eurodollar Rate for such Loan by a matching deposit or, other borrowing in the London interbank eurodollar market for a comparable amount and for a comparable period, whether or not such Eurodollar Rate Loan was in fact so funded.

**Section 3.06 <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;(a) <u>*Designation of a Different Lending Office*</u>. If any Lender requests compensation under <u>Section 3.04</u>, or the Borrowers are required to pay any additional amount to any Lender, L/C Issuer or any Governmental Authority for the account of any Lender or L/C Issuer pursuant to <u>Section 3.01</u>, or if any Lender gives a notice pursuant to <u>Section 3.02</u>, then such Lender or L/C Issuer shall, as applicable, 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 or L/C Issuer, such designation or assignment (i) would eliminate or reduce amounts payable pursuant to <u>Section 3.01</u> or <u>3.04</u>, as the case may be, in the future, or eliminate the need for the notice pursuant to <u>Section 3.02</u>, as applicable, and (ii) in each case, would not subject such Lender or L/C Issuer to any unreimbursed cost or expense and would not otherwise be disadvantageous to such Lender or L/C Issuer, as the case may be. Each of the Borrowers hereby agrees, jointly and severally, to pay all reasonable costs and expenses incurred by any Lender or L/C Issuer 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;(b) <u>*Replacement of Lenders*</u>. If any Lender requests compensation under <u>Section 3.04</u>, or if the Borrowers are required to pay any additional amount to any Lender or any Governmental Authority for the account of any Lender or L/C Issuer pursuant to <u>Section 3.01</u>, the Parent Borrower may replace such Lender or L/C Issuer in accordance with <u>Section 10.13</u>.

<u>**Section 3.07** LIBOR Amendment</u><u>. Notwithstanding anything to the contrary in this Agreement or any other Loan Documents, if the Administrative Agent determines (which determination shall be conclusive absent manifest error), or the Borrowers or Required Lenders notify the Administrative Agent (with, in the case of the Required Lenders, a copy to Borrowers) that the Borrowers or Required Lenders (as applicable) have determined, that:</u>

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

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<u>(b)</u> <u>the administrator of the LIBOR Screen Rate or a Governmental Authority having jurisdiction over the Administrative Agent has made a public statement identifying a specific date after which LIBOR or the LIBOR Screen Rate shall no longer be made available, or used for determining the interest rate of loans (such specific date, the "Scheduled Unavailability Date"), or</u>

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<u>(c)</u> <u>syndicated loans currently being executed, or that include language similar to that contained in this Section, are being executed or amended (as applicable) to incorporate or adopt a new benchmark interest rate to replace LIBOR,</u> 

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

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

------

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

**Section 3.08 Section 3.07 <u>Survival</u>.** All of the Borrowers' obligations under this <u>Article III</u> shall survive termination of the Revolving Facility Commitments, repayment of all other ABL Credit Obligations hereunder and resignation of the Administrative Agent.

**ARTICLE IV** 

**CONDITIONS PRECEDENT** 

The obligation of (a) each Lender to make Loans and (b) any L/C Issuer to issue Letters of Credit or increase the stated amount of Letters of Credit hereunder (each of <u>clauses (a)</u> and/or <u>(b)</u>, a "<u>Credit Event</u>") is subject to the satisfaction or waiver by the Administrative Agent of the following conditions precedent:

**Section 4.01 <u>Conditions to</u> <u>Original</u> <u>Closing Date Borrowing</u>**. The obligation of each Lender to make its initial Loan as a part of the Borrowing and of the L/C Issuer to issue Letters of Credit, in each case, on the <u>Original</u> Closing Date is subject to the satisfaction or waiver by the Administrative Agent of the following conditions precedent:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a) <u>*Deliverables*</u>. The Administrative Agent's receipt (or receipt by the Control Agent (as defined in the ABL/Term Intercreditor Agreement) on behalf of the Administrative Agent) of the following, each of which shall be originals or telecopies (followed promptly by originals) unless otherwise specified, each properly executed by a Responsible Officer of the signing Loan Party, each dated the <u>Original</u> Closing Date (or, in the case of certificates of governmental officials, a recent date before the <u>Original</u> Closing Date) and each in form and substance satisfactory to the Administrative Agent and each 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;&nbsp;&nbsp;&nbsp;&nbsp;(i) fully executed counterparts of this Agreement and the Guaranty, sufficient in number for distribution to the Administrative Agent, each Lender and the Parent Borrower;

&nbsp;&nbsp;&nbsp;&nbsp;&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) a Note executed by the Borrowers in favor of each Lender requesting a Note;

&nbsp;&nbsp;&nbsp;&nbsp;&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) executed counterparts of the Pledge and Security Agreement and all other Collateral Documents, duly executed by each Loan Party, together with:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&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) a Perfection Certificate from each 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;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(C) copies of reports from CT Corporation or another independent search service reasonably satisfactory to the Collateral Agent listing all effective financing statements, notices of tax, PBGC or judgment liens or similar notices that name Holdings, any Borrower, any other Loan Party, as such (under its present name and any previous name and, if requested by the Collateral Agent, under any trade names), as debtor or seller that are filed in the jurisdictions referred to in <u>clause (B)</u> above or in any other jurisdiction having files which must be searched in order to determine fully the existence of the UCC security interests, notices of the filing of federal tax Liens (filed pursuant to Section 6323 of the Code), Liens of the PBGC (filed pursuant to Section 4068 of ERISA) or judgment Liens on any Collateral, together with copies of such financing statements, notices of tax, PBGC or judgment Liens or similar notices (none of which shall cover the Collateral except to the extent evidencing Permitted Liens or for which the Collateral Agent shall have received estoppel letters or termination statements (Form UCC-3 or such other termination statements as shall be required by local Requirement of Law) authenticated and authorized for filing);

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&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) searches of ownership of intellectual property in the appropriate governmental offices and such patent, trademark and/or copyright filings as may be requested by the Collateral Agent at least 15 days prior to the <u>Original</u> Closing Date, in each case, to the extent necessary or reasonably advisable to perfect the Collateral Agent's security interest in intellectual property Collateral in 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;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(E) all of the Pledged Collateral, which Pledged Collateral shall be in suitable form for transfer by delivery, or shall be accompanied by duly executed instruments of transfer or assignment in blank, with signatures appropriately guaranteed, accompanied in each case by any required transfer tax stamps, all in form and substance reasonably satisfactory to the Collateral Agent; 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;(iv) Reserved;

------

&nbsp;&nbsp;&nbsp;&nbsp;&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) a short form collateral assignment or grant of security interest in intellectual property, in form and substance satisfactory to the Administrative Agent, duly executed by each Loan Party, together with evidence that all action that the Administrative Agent may deem necessary or desirable in order to perfect, in the United States, the Liens in intellectual property created under the Pledge and Security Agreements and under such short form assignments or grants of security interests has been taken;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(vi) a copy of the Organization Documents, including all amendments thereto, of each Loan Party, and with respect to the certificate or articles of formation or certificate or articles of incorporation, as applicable, certified as of a recent date by the Secretary of State or other applicable Governmental Authority of its respective jurisdiction of organization, together with:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&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) a certificate as to the good standing of each Loan Party, as of a recent date, from the Secretary of State or other applicable authority of its respective jurisdiction of organization and from each other jurisdiction in which such Loan Party is qualified to do business, together in each case, to the extent taxes are not covered by such certificate of good standing, with a certificate or other evidence of good standing as to payment of any applicable franchise or similar taxes from the appropriate Taxing authority of each such 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;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(B) a certificate of a Responsible Officer, secretary or assistant secretary (or any other officer having substantially the same authority and responsibility or otherwise satisfactory to the Administrative Agent) of each Loan Party dated the <u>Original</u> Closing Date and certifying (1) that the Organization Documents of such Loan Party have not been amended since the date of the last amendment thereto shown on the certified document from its jurisdiction of organization furnished pursuant to the preamble of this <u>clause (vi)</u> above; (2) that attached thereto is a true and complete copy of the agreement of limited partnership, operating agreement or by-laws of such Loan Party, as applicable, as in effect on the <u>Original</u> Closing Date and at all times since a date prior to the date of the resolutions described in <u>clause (3)</u> below, (3) that attached thereto is a true and complete copy of resolutions duly adopted by the board of directors (or other similar governing body) of such Loan Party authorizing the execution, delivery and performance of the Loan Documents to which it is to be a party and, in the case of each Borrower, the borrowings hereunder, and that such resolutions have not been modified, rescinded or amended and are in full force and effect; and (4) as to the incumbency and specimen signature of each officer executing any Loan Document or any other document delivered in connection herewith on behalf of such 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;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(C) a certificate of another officer as to the incumbency and specimen signature of a Responsible Officer, secretary or assistant secretary (or any other officer having substantially the same authority and responsibility or otherwise satisfactory to the Administrative Agent) executing the certificate pursuant to <u>clause (B)</u> 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;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(D) such other corporate or other constitutive or organizational documents as the Administrative Agent or Fried, Frank, Harris, Shriver & Jacobson, LLP, counsel for the Administrative Agent, may reasonably request;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(vii) a favorable written opinion of Akin Gump Strauss Hauer & Feld LLP, special counsel to the Loan Parties, addressed to the Administrative Agent, the Collateral Agent, the L/C Issuer and each Lender from time to time party hereto, dated the <u>Original</u> Closing Date, covering such matters incident to the transactions contemplated hereby as the Administrative Agent may reasonably request;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(viii) Reserved;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(ix) Reserved;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(x) from special Ohio counsel to the Loan Parties organized under the laws of Ohio, a favorable written opinion addressed to the Administrative Agent, the Collateral Agent and each Lender from time to time party hereto, dated the <u>Original</u> Closing Date, covering such additional matters incident to the transactions contemplated hereby as the Administrative Agent may reasonably request;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(xi) a certificate signed by a Responsible Officer of the Parent Borrower certifying (A) that the conditions specified in <u>Sections 4.01(f)</u> through <u>(j)</u>, <u>(m)</u>, <u>(n)</u> and <u>(q)</u> have been satisfied, and (B) that there has been no event or circumstance since the date of the Audited Financial Statements that has had or could reasonably be expected to have, either individually or in the aggregate, 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;&nbsp;&nbsp;&nbsp;&nbsp;(xii) Reserved;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(xiii) a certificate from the chief financial officer of the Parent Borrower addressed to the Administrative Agent and the Lenders from time to time party to this Agreement, reasonably satisfactory in form and substance to the Administrative Agent and the Joint Lead Arrangers and substantially in the form of <u>Exhibit G</u> hereto, demonstrating the financial condition and Solvency of Holdings, the Parent Borrower and their Subsidiaries on a consolidated basis after giving effect to the incurrence of all Loans to occur on the <u>Original</u> Closing Date and the "rollover" of all Existing Letters of Credit into this Facility, all credit extensions under the Term Credit Agreement and the Second Lien Credit Agreement to occur on the <u>Original</u> Closing Date and all other elements of the Transaction to occur on the <u>Original</u> Closing Date and the incurrence of all Indebtedness related thereto, and to the extent reasonably requested by the Administrative Agent, together with copies of additional valuations, appraisals and similar reports prepared by or on behalf of Holdings or any of its Subsidiaries or the Sponsor in connection with the Transaction;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(xiv) evidence that all insurance required to be maintained pursuant to the Loan Documents has been obtained and is in effect, together with the certificates of insurance, naming the Administrative Agent, on behalf of the Lenders, as an additional insured or loss payee, as the case may be, under all insurance policies maintained with respect to the assets and properties of the Loan Parties that constitutes Collateral; 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;(xv) such other assurances, certificates, documents, consents or opinions as the Administrative Agent or any Lender reasonably may require.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b) <u>*Certain Fees*</u>. All fees required to be paid on or before the <u>Original</u> Closing Date (i) to the Administrative Agent and the Joint Lead Arrangers and (ii) to the Administrative Agent for the benefit of the Lenders shall (to the extent invoiced at least two Business Days prior to the <u>Original</u> Closing Date, except as otherwise reasonably agreed by the Parent Borrower) in each case have been paid.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c) <u>*Counsel Fees*</u>. The Parent Borrower shall have paid all reasonable fees, out-of-pocket charges and disbursements of one counsel to the Administrative Agent (and any reasonably necessary special counsel and up to one local counsel in each applicable jurisdiction) (directly to such counsel if requested by the Administrative Agent) to the extent invoiced prior to or on the <u>Original</u> Closing Date, plus such additional amounts of such fees, charges and disbursements as shall constitute its reasonable estimate of such fees, charges and disbursements incurred or to be incurred by it through the closing proceedings (<u>provided</u> that such estimate shall not thereafter preclude a final settling of accounts between the Parent Borrower and the Administrative Agent).

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(d)<u>*Original*</u> <u>*Closing Date*</u>. The <u>Original</u> Closing Date shall have occurred on or before December 12, 2013.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(e) <u>*Financial Information*</u>. The Administrative Agent shall have received (i) the Audited Financial Statements; (ii) unaudited consolidated balance sheets and related statements of income, stockholders' equity and cash flows of the Company and its subsidiaries, for any interim quarterly period which have ended since the Audited Financial Statements at least 45 days prior to the <u>Original</u> Closing Date, each prepared in accordance with GAAP; and (iii) an unaudited pro forma consolidated balance sheet and related unaudited pro forma consolidated statement of income of Holdings and its subsidiaries as of and for the twelve-month period ending on the last day of the most recently completed four-fiscal quarter period ended at least 45 days prior to the <u>Original</u> Closing Date, prepared after giving effect to the Transaction as if the Transaction had occurred as of such date (in the case of such pro forma balance sheet) and at the beginning of such period (in the case of such pro forma statement of income) (which, for the avoidance of doubt, excludes the impacts of purchase accounting adjustments arising as a result of the Transaction).

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(f) <u>*Equity Contribution*</u>. On the <u>Original</u> Closing Date, substantially concurrently with the Borrowing of the initial Term Loans, the initial Loans (if any) and the "rollover" of all Existing Letters of Credit into this Facility, the Administrative Agent shall have received evidence that the Parent Borrower has received cash proceeds from the issuance to the Sponsor and other co-investors (if any) of common equity (or other equity reasonably acceptable to the Administrative Agent) of Holdings (or other equity reasonably acceptable to the Administrative Agent), and the cash contribution thereof to the Parent Borrower (the "<u>Equity Contribution</u>") in an amount equal to at least 35.0% of the total amount of the funds necessary to consummate the Transaction.

------

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(g) <u>*Term Loan Documents*</u>. On or prior to the <u>Original</u> Closing Date, (i) Holdings and the Term Borrower shall have entered into the Term Credit Agreement on terms and conditions reasonably satisfactory to the Administrative Agent and (ii) the Administrative Agent shall have received true and correct copies, certified as such by an appropriate officer of the Term Borrower of the Term Loan Documents as in effect on the <u>Original</u> Closing Date and each of the other Term Finance Documents as originally executed and delivered on the <u>Original</u> Closing Date (each of which shall be 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;(h) <u>*Second Lien Loan Documents*</u>. On or prior to the <u>Original</u> Closing Date, (i) Holdings and the Term Borrower shall have entered into the Second Lien Credit Agreement on terms and conditions reasonably satisfactory to the Administrative Agent and (ii) the Administrative Agent shall have received true and correct copies, certified as such by an appropriate officer of the Term Borrower of the Second Lien Loan Documents as in effect on the <u>Original</u> Closing Date and each of the other Second Lien Loan Documents as originally executed and delivered on the <u>Original</u> Closing Date (each of which shall be 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;(i) <u>*Refinancing of Existing Indebtedness*</u>. On the <u>Original</u> Closing Date, after giving effect to the Transaction, neither Holdings nor any of its Subsidiaries shall have any material Indebtedness for borrowed money other than the Facility, Indebtedness incurred under the Term Loan Documents, Indebtedness incurred under the Second Lien Loan Documents, working capital facilities for Foreign Subsidiaries, other Indebtedness incurred in the Ordinary Course of Business, other Indebtedness incurred that is permitted pursuant to the terms of the Merger Agreement, and other debt agreed to by the Administrative Agent and the Parent Borrower.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(j) <u>*Representations and Warranties*</u>. Each of the Specified Representations and the representations and warranties made by the Company in the Merger Agreement shall be true and correct in all material respects on and as of the date of such Borrowing, except to the extent that such representations and warranties specifically refer to an earlier date, in which case they shall be true and correct in all material respects as of such earlier date (but in any respect if any such representation or warranty is qualified by "material" or "material adverse effect" such representation or warranty shall 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;(k) <u>*Notice*</u>. The Administrative Agent shall have received a Request for Credit Extension in accordance with the requirements hereof.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(l) <u>*ABL Term Intercreditor Agreement*</u>. The ABL/Term Intercreditor Agreement shall have been duly executed and delivered by each party thereto 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;(m) <u>*Consummation of the Closing Date Acquisition*</u>. On the <u>Original</u> Closing Date, immediately prior to the Borrowing of the initial Term Loans, the initial Loans (if any) and the "rollover" of all Existing Letters of Credit, into this Facility, the Closing Date Acquisition shall have been consummated pursuant to the Merger Agreement (without giving effect to any amendment or modification thereof or waiver with respect thereto, in each case, in a manner materially adverse to the Lenders (in their capacities as such) without the prior written consent of the Joint Lead Arrangers (such consent not to be unreasonably withheld, delayed or conditioned

------

(it being agreed by the Joint Lead Arrangers that, with respect to any consent to any amendment, modification or waiver of the Merger Agreement, its consent shall be deemed to have been given if the Joint Lead Arrangers do not object in writing to a written request for such consent within one Business Day after such request for consent is delivered to the Joint Lead Arrangers in writing)); <u>provided</u> that (a) any reduction not in excess of 15% of the aggregate purchase price shall be deemed not to be materially adverse to the Lenders if such reduction is applied to reduce the Equity Contribution and the amount of funded debt on the <u>Original</u> Closing Date under this Agreement, the Term Credit Agreement and the Second Lien Credit Agreement on a pro rata basis and (b) any amendment or waiver of the definition of Material Adverse Effect or the conditions precedent in the Merger Agreement shall require the consent of the Joint Lead Arrangers (such consent not to be unreasonably withheld, delayed or conditioned)).

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(n) <u>*Company Material Adverse Effect*</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;&nbsp;&nbsp;&nbsp;&nbsp;(i) Since January 1, 2013 through August 14, 2013, except as disclosed in (a) the Company SEC Documents (as defined in the Merger Agreement) filed with the SEC (as defined in the Merger Agreement) on or after January 1, 2010, and prior to the date of the Merger Agreement (excluding any exhibits or any disclosures in such SEC Filings contained in the "Risk Factors" and "Forward Looking Statements" sections thereof or any other disclosures in such SEC Filings that are forward-looking or cautionary in nature) or (b) the Company Disclosure Letter (as defined in the Merger Agreement (and provided to the Administrative Agent prior to the August 14, 2013)<u>)</u>, there has not been any change, effect, event or occurrence that, individually or in the aggregate, has had or would reasonably be expected to have a Company Material Adverse Effect (as defined in the Merger Agreement); 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;(ii) Since August 14, 2013, there shall not have been any change, effect, event or occurrence that, individually or in the aggregate with all other changes, effects, events or occurrences, has resulted in a Company Material Adverse Effect.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(o) <u>*Patriot Act*</u>. The Administrative Agent and the Lenders (to the extent reasonably requested in writing at least ten days prior to the <u>Original</u> Closing Date) shall have received, at least three Business Days prior to the <u>Original</u> Closing Date, all documentation and other information that the Administrative Agent reasonably determines to be required by Governmental Authorities under applicable "know your customer" and anti-money-laundering rules and regulations, including the Patriot Act.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(p) <u>*Borrowing Base Certificate*</u>. The Administrative Agent shall have received the borrowing base certificate most recently delivered under the Existing Credit Agreement prior to the <u>Original</u> Closing Date.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(q) <u>*Outstandings*</u>. On the <u>Original</u> Closing Date, the total Outstanding Amount shall not exceed $20,000,000.

Without limiting the generality of the provisions of the last paragraph of <u>Section 9.03</u>, for purposes of determining compliance with the conditions specified in this <u>Section 4.01</u>, each Lender that has signed this Agreement shall be deemed to have consented to, approved or accepted or to be satisfied with, each document or other matter required thereunder to be consented to or approved by or acceptable or satisfactory to a Lender unless the Administrative Agent shall have received notice from such Lender prior to the proposed <u>Original</u> Closing Date specifying its objection thereto.

------

**Section 4.02 <u>All Credit Events</u>.** On the date of each Credit Event after the <u>Original</u> Closing Date:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a) <u>*Committed Loan Notice*</u>. The Administrative Agent shall have received, in the case of a Borrowing, a Committed Loan Notice as required by <u>Section 2.02(a)</u> or, in the case of the issuance of a Letter of Credit, the applicable L/C Issuer and the Administrative Agent shall have received a Letter of Credit Application as required by <u>Section 2.03(b)</u>.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b) <u>*Representations and Warranties*</u>. The representations and warranties set forth in the Loan Documents shall be true and correct in all material respects as of such date (other than an amendment, extension or renewal of a Letter of Credit without any increase in the stated amount of such Letter of Credit), as applicable, with the same effect as though made on and as of such date, except to the extent such representations and warranties expressly relate to an earlier date (in which case such representations and warranties shall be true and correct in all material respects as of such earlier date).

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c) <u>*No Default or Event of Default*</u>. At the time of and immediately after such Borrowing or issuance, amendment, extension or renewal of a Letter of Credit (other than an amendment, extension or renewal of a Letter of Credit without any increase in the stated amount of such Letter of Credit), as applicable, no Event of Default or Default shall have occurred and be continuing or would result therefrom.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(d)*<u>Availability; No Standstill Period</u>*. At the time of and immediately after such Borrowing or issuance, amendment, extension or renewal of a Letter of Credit, as applicable, (i) except as expressly set forth in <u>Section 2.17</u>, the total Outstanding Amount does not exceed the Borrowing Base and (ii) no Standstill Period is then in effect. Each such Credit Event shall be deemed to constitute a representation and warranty by each Borrower on the date of such Borrowing, issuance, amendment, extension or renewal as applicable, as to the matters specified in <u>paragraphs (b)</u>, <u>(c)</u> and <u>(d)</u> of this <u>Section 4.02</u>.

<u>**Section 4.03** Amendment. On the Second Amendment Effective Date, upon satisfaction of the conditions set forth in Section 2 of the Second Amendment, the Existing Credit Agreement will be automatically amended to read as set forth in this Agreement. The rights and obligations of the parties hereto shall be governed (i) prior to the Second Amendment Effective Date, by the Existing Credit Agreement and (ii) on and after the Second Amendment Effective Date, by this Agreement. Once the Second Amendment Effective Date has occurred, all references to the Existing Credit Agreement in any document, instrument, agreement or writing shall be deemed to refer to this Agreement.</u>

------

**ARTICLE V** 

**REPRESENTATIONS AND WARRANTIES** 

The Loan Parties, jointly and severally, represent and warrant to the Administrative Agent and the Lenders that on the date of each Credit Event the following are true, correct and complete:

**Section 5.01 <u>Corporate Existence and Power; Compliance with Laws</u>.** Each Loan Party and each of their respective Subsidiaries:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a) is a corporation, limited liability company or limited partnership, as applicable, duly organized, validly existing and in good standing under the laws of the jurisdiction of its incorporation, organization or formation, as applicable;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b) has the power and authority and all governmental licenses, authorizations, Permits, consents and approvals to own its assets, carry on its business and execute, deliver, and perform its obligations under, the Loan Documents and the Related Agreements to which it is a party;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c) is duly qualified as a foreign corporation, limited liability company or limited partnership, as applicable, and licensed and in good standing, under the laws of each jurisdiction where its ownership, lease or operation of Property or the conduct of its business requires such qualification or license; and

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(d) is in compliance with all Requirements of Law; except, in each case referred to in <u>clause (c)</u> or <u>clause (d)</u>, to the extent that the failure to do so would not reasonably be expected to have, either individually or in the aggregate, a Material Adverse Effect.

**Section 5.02 <u>Corporate Authorization; No Contravention</u>.** The execution, delivery and performance by each of the Loan Parties of this Agreement, and by each of the Loan Parties and each of their respective Subsidiaries of any other Loan Document and Related Agreement to which such Person is party, have been duly authorized by all necessary action, and do not and will not:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a) contravene the terms of any of that Person's Organization Documents;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b) conflict with or result in any material breach or contravention of, or result in the creation of any Lien under, any document evidencing any material Contractual Obligation to which such Person is a party or any order, injunction, writ or decree of any Governmental Authority to which such Person or its Property is subject; or

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c) violate any material Requirement of Law in any material respect.

**Section 5.03 <u>Governmental Authorization</u>.** No approval, consent, exemption, authorization, or other action by, or notice to, or filing with, any Governmental Authority or any other Person is necessary or required in connection with the execution, delivery or performance by, or enforcement against, any Loan Party or any Subsidiary of any Loan Party of this Agreement, any other Loan Document or Related Agreement except (a) for recordings and filings in connection

------

with the Liens granted to the Collateral Agent under the Collateral Documents and in connection with the Liens granted to the applicable collateral agent under the Term Collateral Documents and the Second Lien Loan Documents, (b) those obtained or made on or prior to the <u>Second Amendment</u> Effective Date, (c) in the case of any approval, consent, authorization, or other action by, or notice to any other Person (other than any Governmental Authority), those which, if not obtained or made, would not reasonably be expected to have, either individually or in the aggregate, a Material Adverse Effect, and (d) in the case of any Related Agreement, those which, if not obtained or made, would not reasonably be expected to have, either individually or in the aggregate, a Material Adverse Effect.

**Section 5.04 <u>Binding Effect</u>.** This Agreement and each other Loan Document and Related Agreement to which any Loan Party or any Subsidiary of any Loan Party is a party have been duly executed and delivered by such Person and constitute the legal, valid and binding obligations of each such Person which is a party thereto, enforceable against such Person in accordance with their respective terms, except as enforceability may be limited by applicable bankruptcy, insolvency, or similar laws affecting the enforcement of creditors' rights generally or by equitable principles relating to enforceability.

**Section 5.05 <u>Litigation</u>.** Except as specifically disclosed in <u>Schedule 5.05</u>, there are no actions, suits, proceedings, claims or disputes pending, or to the best knowledge of each Loan Party, threatened or contemplated, at law, in equity, in arbitration or before any Governmental Authority, against any Loan Party, any Subsidiary of any Loan Party or any of their respective Properties which:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a) as of the <u>Second Amendment</u> Effective Date, purport to affect or pertain to this Agreement, any other Loan Document or Related Agreement, or any of the transactions contemplated hereby or thereby;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b) as of the <u>Second Amendment</u> Effective Date, would reasonably be expected to result in equitable relief or monetary judgment(s), individually or in the aggregate, in excess of $5,000,000 in excess of applicable insurance coverage; or

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c) would reasonably be expected to result in equitable relief or monetary judgment(s), individually or in the aggregate, that would reasonably have a Material Adverse Effect.

No injunction, writ, temporary restraining order or any order of any nature has been issued by any court or other Governmental Authority purporting to enjoin or restrain the execution, delivery or performance of this Agreement, any other Loan Document or any Related Agreement, or directing that the transactions provided for herein or therein not be consummated as herein or therein provided. As of the <u>Second Amendment</u> Effective Date, except as disclosed on <u>Schedule 5.05</u>, no Loan Party or any Subsidiary of any Loan Party is the subject of an audit by the IRS or other Governmental Authority or, to each Loan Party's knowledge, any review or investigation by the IRS or other Governmental Authority concerning the violation or possible violation of any Requirement of Law. No Loan Party and no Subsidiary of any Loan Party is a party to or is otherwise subject to any agreements or instruments or any charter or other internal restrictions which, individually or in the aggregate, could reasonably be expected to result in a Material Adverse Effect.

------

**Section 5.06 <u>No Default</u>.** No Default or Event of Default exists or would result from the incurring of any Finance Obligations by any Loan Party or the grant or perfection of the Collateral Agent's Liens on the Collateral or the consummation of the Related Transactions. No Loan Party and no Subsidiary of any Loan Party is in default under or with respect to any Contractual Obligation in any respect which, individually or together with all such defaults, would reasonably be expected to have a Material Adverse Effect.

**Section 5.07 <u>ERISA Compliance</u>.** <u>Schedule 5.07</u> sets forth, as of the <u>Second Amendment</u> Effective Date, a complete and correct list of, and that separately identifies, (a) all Title IV Plans and (b) all Multiemployer Plans. Except for those that would not, in the aggregate, have a Material Adverse Effect, (x) each Benefit Plan is in compliance with applicable provisions of ERISA, the Code and other Requirements of Law, (y) there are no existing or pending (or to the knowledge of any Loan Party, threatened) claims (other than routine claims for benefits in the normal course), sanctions, actions, lawsuits or other proceedings or investigation involving any Benefit Plan to which any Loan Party incurs or otherwise has or could reasonably be expected to have an obligation or any Liability and (z) no ERISA Event is reasonably expected to occur. On the <u>Second Amendment</u> Effective Date, no ERISA Event has occurred in connection with which obligations and liabilities (contingent or otherwise) remain outstanding except as would not result in a Material Adverse Effect. Except as set forth in <u>Schedule 5.07</u>, to the knowledge of any Loan Party, no ERISA Affiliate would have any withdrawal liability as a result of a complete withdrawal from any Multiemployer Plan on the date this representation is made except as would not reasonably be expected to result in a Material Adverse Effect.

**Section 5.08 <u>Use of Proceeds; Margin Regulations</u>.** The proceeds of the Loans are intended to be and shall be used solely for the purposes set forth in and permitted by <u>Section 6.10</u>, and are intended to be and shall be used in compliance with <u>Section 7.08</u>. No Loan Party and no Subsidiary of any Loan Party is engaged in the business of purchasing or selling Margin Stock or extending credit for the purpose of purchasing or carrying Margin Stock in a manner that would result in a violation of Regulation U of the Federal Reserve Board. The proceeds of the Loans shall not be used for the purpose of purchasing Margin Stock.

**Section 5.09 <u>Ownership of Property; Liens</u>.** As of the <u>Second Amendment</u> Effective Date, the Real Estate listed in <u>Schedule 5.09</u> constitutes all of the Real Estate of each Loan Party and each of their respective Subsidiaries. Each of the Loan Parties and each of their respective Subsidiaries has good record and marketable title in fee simple to, or valid leasehold interests in, all Real Estate, and good and valid title to all owned personal property and valid leasehold interests in all leased personal property, in each instance, necessary or used in the ordinary conduct of their respective businesses. As of the <u>Second Amendment</u> Effective Date, none of the Real Estate of any Loan Party or any Subsidiary of any Loan Party is subject to any Liens other than Permitted Liens. As of the <u>Second Amendment</u> Effective Date, <u>Schedule 5.09</u> also describes any purchase options, rights of first refusal or other similar contractual rights pertaining to any Real Estate. As of the <u>Second Amendment</u> Effective Date, all material permits required to have been issued or appropriate to enable the Real Estate to be lawfully occupied and used for all of the purposes for which it is currently occupied and used have been lawfully issued and are in full force and effect.

------

**Section 5.10 <u>Taxes</u>.** Except as disclosed in <u>Schedule 5.10</u>, (i) all federal, state, local and foreign income and franchise and other material Tax returns, reports and statements (collectively, the "<u>Tax Returns</u>") required to be filed by any of Holdings, the Borrowers or their Subsidiaries have been filed with the appropriate Governmental Authorities in all jurisdictions in which such Tax Returns are required to be filed, all such Tax Returns are true and correct in all material respects, and all Taxes reflected therein or otherwise due and payable have been timely paid except for those contested in good faith by appropriate proceedings diligently conducted and for which adequate reserves are maintained on the books of the appropriate Tax Affiliate in accordance with GAAP; (ii) as of the <u>Second Amendment</u> Effective Date, no Tax Return is under audit or examination by any Governmental Authority and no written notice of any pending audit or examination or any assertion of any claim for Taxes has been given or made by any Governmental Authority; and (iii) proper and accurate amounts have been withheld for all periods by each of Holdings, the Borrowers and their Subsidiaries from their respective employees in material compliance with the Tax, social security and unemployment withholding provisions of applicable Requirements of Law and such withholdings have been timely paid to the respective Governmental Authorities. No Tax Affiliate has participated in a "transaction" within the meaning of Treasury Regulation Section 1.601 l-4(b)(2).

**Section 5.11 <u>Financial Condition</u>.** 

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a) Each of (i) the audited consolidated balance sheet of the Acquired Business<u>Holdings</u> and its Subsidiaries dated December 31, 2012<u>6</u> , and the related audited consolidated statements of income or operations, shareholders' equity and cash flows for the Fiscal Year ended on that date and (ii) the unaudited interim consolidated balance sheet of the Acquired Business<u>Holdings</u> and its Subsidiaries dated June<u>September</u> 30, 2013<u>7</u> and the related unaudited consolidated statements of income, shareholders' equity and cash flows for the six<u>nine</u> fiscal months then ended, in each case, as attached hereto as <u>Schedule 5.11(a)</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;&nbsp;&nbsp;&nbsp;&nbsp;(i) were prepared in accordance with GAAP (except, in the case of unaudited statements, as permitted by the rules and regulations of the SEC) applied on a consistent basis during the periods involved (except as may be indicated therein or in the notes 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;&nbsp;&nbsp;&nbsp;&nbsp;(ii) fairly present in all material respects the consolidated financial position of the Company and its consolidated subsidiaries as at the respective dates thereof and their consolidated results of operations and consolidated cash flows for the respective periods then ended (subject, in the case of unaudited statements, to normal year-end audit adjustments and to any other adjustments described therein, including in any notes thereto).

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b) The pro forma unaudited consolidated balance sheet of Holdings and its Subsidiaries dated June 30, 2013 delivered on the Effective Date and attached hereto as <u>Schedule 5.11(b)</u> was prepared by Holdings giving pro forma effect to the Related Transactions, was based on the unaudited consolidated and consolidating balance sheets of the Acquired Business and its Subsidiaries dated June 30, 2013, and was prepared in accordance with GAAP, with only such adjustments thereto as would be required in a manner consistent with GAAP.<u>[Reserved.]</u>

------

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c) Since December 31, 2012<u>6</u>, there has been no Material Adverse Effect.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(d) The Loan Parties and their Subsidiaries (i) have no Indebtedness other than Indebtedness permitted pursuant to <u>Section 7.05</u> and have no Contingent Obligations other than Contingent Obligations permitted pursuant to <u>Section 7.09</u> and (ii) as of the <u>Second Amendment</u> Effective Date, have no other contingent liabilities or liabilities for long-term leases or unusual forward or long-term commitments except for contingent liabilities or liabilities for long-term leases or unusual forward or long-term commitments that are reflected or reserved against in the financial statements referred to in <u>Section 5.11(a)</u> or the notes thereto and which in any such case are material in relation to the business, operations, properties, assets, condition (financial or otherwise) or prospects of the Loan Parties and their respective Subsidiaries.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(e) All financial performance projections delivered to the Administrative Agent, including the financial performance projections delivered on the Effective Date and attached hereto as <u>Schedule 5.11(e)</u>, represent the Parent Borrower's best good faith estimate of future financial performance and are based on assumptions believed by the Parent Borrower to be fair and reasonable in light of current market conditions, it being acknowledged and agreed by the Administrative Agent and the Lenders that projections as to future events are not to be viewed as facts and that the actual results during the period or periods covered by such projections may differ from the projected results.

**Section 5.12 <u>Environmental Matters</u>.** Except as set forth in <u>Schedule 5.12</u>, and except where any failures to comply would not reasonably be expected to result in, either individually or in the aggregate, Material Environmental Liabilities to the Loan Parties and their Subsidiaries, (a) the operations of each Loan Party and each Subsidiary of each Loan Party are and have been in compliance with all applicable Environmental Laws, including obtaining, maintaining and complying with all Permits required by any applicable Environmental Law, (b) no Loan Party and no Subsidiary of any Loan Party is party to, and no Loan Party and no Subsidiary of any Loan Party and no Real Estate currently (or to the knowledge of any Loan Party previously) owned, leased, subleased, operated or otherwise occupied by or for any such Person is subject to or the subject of, any Contractual Obligation or any pending (or, to the knowledge of any Loan Party, threatened) order, action, investigation, suit, proceeding, audit, claim, demand, dispute or notice of violation or of potential liability or similar notice relating in any manner to any Environmental Laws, (c) no Lien in favor of any Governmental Authority securing, in whole or in part, Environmental Liabilities has attached to any Property of any Loan Party or any Subsidiary of any Loan Party and, to the knowledge of any Loan Party, no facts, circumstances or conditions exist that could reasonably be expected to result in any such Lien attaching to any such Property, (d) no Loan Party and no Subsidiary of any Loan Party has caused or suffered to occur a Release of Hazardous Materials at, to or from any Real Estate, (e) all Real Estate currently (or to the knowledge of any Loan Party previously) owned, leased, subleased, operated or otherwise occupied by or for any such Loan Party and each Subsidiary of each Loan Party is free of contamination by any Hazardous Materials, and (f) no Loan Party and no Subsidiary of any Loan Party (i) is or has been engaged in, or has permitted any current or former tenant to engage in, operations in violation of any Environmental Law or (ii) knows of any facts, circumstances or

------

conditions reasonably constituting notice of a violation of any Environmental Law, including receipt of any information request or notice of potential responsibility under the Comprehensive Environmental Response, Compensation and Liability Act of 1980 or similar Environmental Laws. Each Loan Party has made available to the Administrative Agent copies of all existing environmental reports, reviews and audits and all material documents pertaining to actual or potential Environmental Liabilities, in each case to the extent such reports, reviews, audits and documents are in their possession, custody, control or otherwise available to the Loan Parties.

**Section 5.13 <u>Regulated Entities</u>.** No Loan Party, no Person controlling any Loan Party, nor any Subsidiary of any Loan Party, is (a) an "investment company" within the meaning of the Investment Company Act of 1940 or (b) subject to regulation under the Federal Power Act of 1935, the Interstate Commerce Act of 1887, any state public utilities code, or any other federal or state statute, rule or regulation limiting its ability to incur Indebtedness, pledge its assets or perform its obligations under the Loan Documents.

**Section 5.14 <u>Solvency</u>.** Both before and after giving effect to (a) the Loans made and Letters of Credit issued on or prior to the date this representation and warranty is made or remade, (b) the disbursement of the proceeds of such Loans, (c) the consummation of the Related Transactions and (d) the payment and accrual of all transaction costs in connection with the foregoing, Holdings and its Subsidiaries, on a consolidated basis, are Solvent.

**Section 5.15 <u>Labor Relations</u>.** There are no strikes, work stoppages, slowdowns or lockouts existing, pending (or, to the knowledge of any Loan Party, threatened) against or involving any Loan Party or any Subsidiary of any Loan Party, except for those that would not, in the aggregate, reasonably be expected to have a Material Adverse Effect. Except as set forth on <u>Schedule 5.15</u>, as of the <u>Second Amendment</u> Effective Date, (a) there is no collective bargaining or similar agreement with any union, labor organization, works council or similar representative covering any employee of any Loan Party or any Subsidiary of any Loan Party and (b) no petition for certification or election of any such representative is existing or pending with respect to any employee of any Loan Party or any Subsidiary of any Loan Party.

**Section 5.16 <u>Intellectual Property</u>.** <u>Schedule 5.16</u> sets forth a true and complete list as of the <u>Second Amendment</u> Effective Date of the following Intellectual Property each Loan Party owns, licenses or otherwise has the right to use: (i) Intellectual Property that is registered or subject to applications for registration and (ii) Internet Domain Names, separately identifying that owned and licensed to such Loan Party and including for each of the foregoing items (1) the owner, (2) the title, (3) the jurisdiction in which such item has been registered or otherwise arises or in which an application for registration has been filed, (4) as applicable, the registration or application number and registration or application date and (5) any IP Licenses or other rights (including franchises) granted by such Loan Party with respect thereto. Each Loan Party and each Subsidiary of each Loan Party owns, or is licensed to use, all Intellectual Property necessary to conduct its business as currently conducted except for such Intellectual Property the failure of which to own or license would not reasonably be expected to have, either individually or in the aggregate, a Material Adverse Effect. To the knowledge of each Loan Party, (a) the conduct and operations of the businesses of each Loan Party and each Subsidiary of each Loan Party does not infringe, misappropriate, dilute, violate or otherwise impair any Intellectual Property owned by any other Person and (b) no other Person has contested any right, title or interest of any Loan Party or any Subsidiary of any Loan Party in, or relating to, any Intellectual Property, other than, in each case, as cannot reasonably be expected to affect the Loan Documents and the transactions contemplated therein and would not, in the aggregate, reasonably be expected to have a Material Adverse Effect.

------

**Section 5.17 <u>Brokers' Fees; Transaction Fees</u>.** Except as disclosed on <u>Schedule 5.17</u> and except for fees payable to the Administrative Agent and the Lenders, none of the Loan Parties or any of their respective Subsidiaries has any obligation to any Person in respect of any finder's, broker's or investment banker's fee in connection with the transactions contemplated hereby.

**Section 5.18 <u>Insurance</u>.** <u>Schedule 5.18</u> lists all insurance policies of any nature maintained, as of the <u>Second Amendment</u> Effective Date, for current occurrences by each Loan Party, including issuers, coverages and deductibles. Each of the Loan Parties and each of their respective Subsidiaries and their respective Properties are insured with financially sound and reputable insurance companies which are not Affiliates of the Borrowers, in such amounts, with such deductibles and covering such risks as are customarily carried by companies engaged in similar businesses of the same size and character as the business of the Loan Parties and, to the extent relevant, owning similar Properties in localities where such Person operates.

**Section 5.19 <u>Ventures, Subsidiaries and Affiliates; Outstanding Stock</u>.** Except as set forth in <u>Schedule 5.19</u>, as of the <u>Second Amendment</u> Effective Date, no Loan Party and no Subsidiary of any Loan Party (a) has any Subsidiaries, or (b) is engaged in any joint venture or partnership with any other Person, or is an Affiliate of any other Person. All issued and outstanding Stock and Stock Equivalents of each of the Loan Parties and each of their respective Subsidiaries are duly authorized and validly issued, fully paid, non-assessable, and free and clear of all Liens other than, with respect to the Stock and Stock Equivalents of the Borrowers and Subsidiaries of the Borrowers, those in favor of the Collateral Agent, for the benefit of the Secured Parties. All such securities were issued in compliance with all applicable state and federal laws concerning the issuance of securities. All of the issued and outstanding Stock of each Loan Party (other than Holdings), each Subsidiary of each Loan Party and, as of the <u>Second Amendment</u> Effective Date, Holdings is owned by each of the Persons and in the amounts set forth in <u>Schedule 5.19</u>. Except as set forth in <u>Schedule 5.19</u>, there are no pre-emptive or other outstanding rights to purchase, options, warrants or similar rights or agreements pursuant to which any Loan Party may be required to issue, sell, repurchase or redeem any of its Stock or Stock Equivalents or any Stock or Stock Equivalents of its Subsidiaries. Set forth in <u>Schedule 5.19</u> is a true and complete organizational chart of Holdings and all of its Subsidiaries, which the Parent Borrower shall update upon notice to the Administrative Agent promptly following the incorporation, organization or formation of any Subsidiary and promptly following the completion of any Permitted Acquisition.

**Section 5.20 <u>Jurisdiction of Organization; Chief Executive Office</u>.** <u>Schedule 5.20</u> lists each Loan Party's jurisdiction of organization, legal name and organizational identification number, if any, and the location of such Loan Party's chief executive office or sole place of business, in each case as of the date hereof, and such <u>Schedule 5.20</u> also lists all jurisdictions of organization and legal names of such Loan Party for the five years preceding the <u>Second Amendment</u> Effective Date.

------

**Section 5.21 <u>Status of Steinway and Sons</u>.** As of the <u>Second Amendment</u> Effective Date, all of the Property of Steinway and Sons (other than Property that (at fair market value) does not exceed $500,000 in the aggregate for all such Property) is located outside of the United States.

**Section 5.22 <u>Full Disclosure</u>.** None of the representations or warranties made by any Loan Party or any of their Subsidiaries in the Loan Documents as of the date such representations and warranties are made or deemed made, and none of the statements contained in each exhibit, report, statement or certificate (including any Borrowing Base Certificate) furnished by or on behalf of any Loan Party or any of their Subsidiaries in connection with the Loan Documents (including the offering and disclosure materials, if any, delivered by or on behalf of any Loan Party to the Administrative Agent or the Lenders prior to the <u>Second Amendment</u> Effective Date), contains any untrue statement of a material fact or omits any material fact required to be stated therein or necessary to make the statements made therein, in light of the circumstances under which they are made, not misleading as of the time when made or delivered.

**Section 5.23 <u>Foreign Assets Control Regulations, Export Controls and Anti-Money Laundering</u>.** Each Loan Party and each Subsidiary of each Loan Party is in compliance in all material respects with (i) all applicable U.S. economic sanctions Requirements of Law, executive orders and implementing regulations as promulgated by the U.S. Treasury Department's Office of Foreign Assets Control ("<u>OFAC</u>"), (ii) the Export Administration Act and Regulations, the Arms Export Control Act and the International Traffic in Arms Regulations, (iii) all applicable anti-money laundering and counter-terrorism financing Requirements of Law, including, but not limited to, the Bank Secrecy Act, as amended by the Patriot Act and the Money Laundering Control Act of 1986 (i.e., 18 U.S.C. §§ 1956 and 1957); and (iv) any similar applicable Requirements of Law enacted in the United States or any other jurisdictions in which the parties to this agreement operate, as any of the foregoing Requirements of Law may from time to time be amended, renewed, extended, or replaced and all other applicable legal requirements of any Governmental Authority governing, addressing, relating to, or attempting to eliminate, terrorist acts and acts of war and any regulations promulgated pursuant thereto (collectively, "<u>Anti-Money Laundering Laws, Export Controls, and Economic Sanctions</u>"). None of Loan Parties, nor any of their respective Subsidiaries nor any of their respective officers, directors, employees or agents (i) is a Person designated by the U.S. government on the list of the Specially Designated Nationals and Blocked Persons (the "<u>SDN List</u>") with which a U.S. Person cannot deal with or otherwise engage in business transactions, (ii) is a Person who is otherwise the target of U.S. <u>or applicable foreign</u> economic sanctions Requirements of Law such that a U.S. Person cannot deal or otherwise engage in business transactions with such Person or (iii) is controlled by (including without limitation by virtue of such person being a director or owning controlling voting shares or interests), or acts, directly or indirectly, for or on behalf of, any person or entity on the SDN List or <u>similar applicable U.S. or foreign economic sanctions list or</u> a foreign government that is the target of U.S.<u>applicable</u> economic sanctions prohibitions such that the entry into, or performance under, this Agreement or any other Loan Document would be prohibited under U.S.<u>applicable</u> Requirement of Law. No part of the proceeds of any Loan will be used directly or indirectly in violation of any Anti-Money Laundering Laws, Export Controls and Economic Sanctions.

------

**Section 5.24 <u>Patriot Act</u>.** The Loan Parties, and each of their Subsidiaries are in compliance in all material respects with (a) the Trading with the Enemy Act of the United States (50 U.S.C. App. §§ 1 et seq.), as amended, and each of the foreign assets control regulations of the United States Treasury Department (31 CFR, subtitle B, Chapter V, as amended) and any other enabling legislation or executive order relating thereto, (b) the Patriot Act and<u>,</u> (c) other applicable federal or state Requirements of Law relating to "know your customer" and anti-money laundering rules and regulations<u>, and (d) the United States Foreign Corrupt Practices Act of 1977, as amended, or any other applicable anti-corruption Requirements of Law</u>. No part of the proceeds of any Loan will be used directly or indirectly for any payments to any government official or employee, political party, official of a political party, candidate for political office, or anyone else acting in an official capacity, in order to illegally obtain, retain or direct business or obtain any improper advantage, in violation of the United States Foreign Corrupt Practices Act of 1977, as amended, or any other applicable anti-corruption Requirements of Law.

**Section 5.25 <u>No Restricted Payments</u>** . Since August 14, 2013, neither Holdings nor any of its Subsidiaries has directly or indirectly declared, ordered, paid or made, or set apart any sum or property for, any Restricted Payment or agreed to do so, except for purchases, redemption or other acquisition of the Company's common stock required in connection with the forfeiture, exercise or vesting of any stock option outstanding on August 14, 2013 or issued after August 14, 2013 in accordance with the requirement of the Merger Agreement or as permitted pursuant to Section 7.11, as disclosed in financial statements previously delivered to Administrative Agent, or as contemplated by the transactions contemplated by the Loan Documents.<u>Reserved.</u>

**Section 5.26 <u>Collateral Documents</u>.** 

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a)*<u>Article 9 Collateral</u>*. The Pledge and Security Agreement is effective to create in favor of the Collateral Agent, for the ratable benefit of the Secured Parties, a legal, valid and enforceable security interest in the Collateral described therein and, when financing statements in appropriate form are filed in the offices specified on Schedule IV to the Pledge and Security Agreement and the Pledged Collateral is delivered to the Collateral Agent, the Pledge and Security Agreement shall constitute <u>such security interest constitutes</u> a fully perfected Lien on, and security interest in, all right, title and interest of the grantors thereunder in such of the Collateral in which a security interest can be perfected under Article 9 of the UCC, in each case securing the Finance Obligations and prior and superior in right to any other Person (other than the Term Collateral Agent with respect to the Term Priority Collateral), other than with respect to Permitted Liens existing on the Closing<u>Second Amendment Effective</u> Date, other non-consensual Permitted Liens not perfected by the filing of UCC financing statements whose priority is determined by applicable law (other than with respect to the property of any newly formed or acquired Subsidiary or newly acquired property of any existing Loan Party to the extent Holdings and the Borrowers are in compliance with <u>Section 6.13)</u> and any title exceptions referred to in the title insurance policies reasonably acceptable to the Collateral Agent.

------

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b)*<u>Intellectual Property</u>.* When financing statements in the appropriate form are filed in the applicable intellectual property offices, the "Notice of Grant of Liens in Patents and Trademarks", in form and substance satisfactory to the Administrative Agent, is filed in the United States Patent and Trademark Office and the "Notice of Grant of Liens in Copyrights", in form and substance satisfactory to the Administrative Agent, is filed in the United States Copyright Office, the<u>The</u> Pledge and Security Agreement shall constitute<u>constitutes</u> a fully perfected Lien on, and security interest in, all right, title and interest of the grantors thereunder in the United States patents, trademarks, copyrights, licenses and other intellectual property rights covered in such "Notices", in each case securing the Finance Obligations and prior and superior in right to any other Person (other than the Term Collateral Agent with respect to the Term Priority Collateral) (it being understood that subsequent recordings in the United States Patent and Trademark Office and the United States Copyright Office may be necessary to perfect a lien on registered trademarks, trademark applications and copyrights acquired by the Loan Parties after the Closing<u>Second Amendment Effective</u> Date) (other than with respect to such property of any newly formed or acquired Subsidiary or such newly acquired property to the extent Holdings and the Borrowers are in compliance with <u>Section 6.13)</u>.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c)*<u>Real Property Mortgages</u>*. The Mortgages are (subject to <u>Section 6.15</u>) effective to create in favor of the Collateral Agent, for the ratable benefit of the Secured Parties, a legal, valid and enforceable Lien on all of the right, title and interest of the Loan Parties in and to the Mortgaged Properties thereunder and the proceeds thereof, and when the Mortgages are filed in the recorders' offices of the counties in which the Mortgaged Properties are located, the Mortgages shall constitute a fully perfected Lien on, and security interest in, all right, title and interest of the Loan Parties in such Mortgaged Properties and the proceeds thereof, in each case securing the Finance Obligations and prior in right to any other Person, other than with respect to Liens permitted by <u>Section 7.01(g)</u> and non-consensual Permitted Liens not perfected by the filing of UCC financing statements whose priority is determined by applicable law (other than with respect to such property of any newly formed or acquired Subsidiary or such newly acquired property to the extent Holdings and the Borrowers are in compliance with <u>Section 6.13</u>).

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(d)*<u>Status of Liens</u>*. The Collateral Agent, for the ratable benefit of the Secured Parties, will at all times have the Liens provided for in the Collateral Documents and, subject to the filing by the Collateral Agent of continuation statements to the extent required by the UCC, the Collateral Documents will at all times constitute valid and continuing liens of record and first priority perfected security interests in all the Collateral referred to therein, except as priority may be (i) in the case of Term Priority Collateral but subject to the ABL/Term Intercreditor Agreement, subject only to the Liens of the Term Collateral Documents and (ii) affected by Permitted Liens existing on the Closing<u>Second Amendment Effective</u> Date or by non-consensual Permitted Liens not perfected by the filing of UCC financing statements whose priority is determined by applicable law. As of the Closing<u>Second Amendment Effective</u> Date, no filings or recordings are required in order to perfect the security interests created under the Collateral Documents, except for filings or recordings listed on <u>Schedule IV</u> to the Pledge and Security Agreement, and all such listed filings and recordings shall be made on or about the Closing Date, and the filings and recordings of the Mortgages in accordance with the terms hereof.

------

**ARTICLE VI** 

**AFFIRMATIVE COVENANTS** 

So long as any Lender shall have any Revolving Facility Commitment hereunder, any Loan or other ABL Credit Obligation hereunder shall remain unpaid or unsatisfied (other than unasserted contingent indemnification obligations not due and payable), and until all Letters of Credit have been canceled or have expired (or shall have been Cash Collateralized or backstopped on terms reasonably satisfactory to the Administrative Agent) and all amounts drawn or paid thereunder have been reimbursed in full, each Loan Party and each of their respective Subsidiaries covenants and agrees that:

**Section 6.01 <u>Financial Statements</u>.** Each Loan Party shall maintain, and shall cause each of its Subsidiaries to maintain, a system of accounting established and administered in accordance with sound business practices to permit the preparation of financial statements in conformity with GAAP (provided that monthly financial statements shall not be required to have footnote disclosures and are subject to normal year-end adjustments). The Parent Borrower shall deliver to the Administrative Agent and each Lender by Electronic Transmission and in detail reasonably satisfactory to the Administrative Agent and the Required Lenders:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a) as soon as available, but not later than 90 days after the end of each Fiscal Year, a copy of the audited consolidated and unaudited Consolidating balance sheets of Holdings and each of its Subsidiaries as at the end of such year and the related consolidated and Consolidating statements of income or operations, shareholders' equity and cash flows for such Fiscal Year, setting forth in each case in comparative form the figures for the previous Fiscal Year, and accompanied by the report of any "Big Four" or other nationally recognized independent certified public accounting firm reasonably acceptable to the Administrative Agent which report shall contain an unqualified opinion stating that such consolidated financial statements present fairly in all material respects the financial position for the periods indicated in conformity with GAAP and shall not be subject to any "going concern" or like qualification or exception or any qualification or exception as to the scope of such audit (except for an explanatory paragraph solely with respect to or resulting solely from an upcoming scheduled maturity date of the Loans or other series of Indebtedness permitted under <u>Section 7.05(g)</u>, in each case, occurring within one year from the time such report is delivered); and

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b) as soon as available, but not later than 45 days after the end of each of the first three Fiscal Quarters of each Fiscal Year, a copy of the unaudited consolidated and Consolidating balance sheets of Holdings and each of its Subsidiaries, and the related consolidated and Consolidating statements of income, shareholders' equity and cash flows as of the end of such Fiscal Quarter and for the portion of the Fiscal Year then ended, each of which shall fairly present, in all material respects, in accordance with GAAP, the financial position and the results of operations of Holdings and its Subsidiaries, subject to normal year-end adjustments and absence of footnote disclosures.

**Section 6.02 <u>Certificates; Other Information</u>.** The Parent Borrower shall furnish to the Administrative Agent and each Lender by Electronic Transmission:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a) together with each delivery of financial statements pursuant to <u>Sections 6.01(a)</u> and <u>6.01(b)</u>, (i) a management report, in reasonable detail, signed by a Responsible Officer of the Parent Borrower, describing the operations and financial condition of the Loan Parties and their Subsidiaries for the Fiscal Quarter and the portion of the Fiscal Year then ended (or for the Fiscal Year then ended in the case of annual financial statements), and (ii) a report setting forth in comparative form the corresponding figures for the corresponding periods of the previous Fiscal Year and the corresponding figures from the most recent projections for the current Fiscal Year delivered pursuant to <u>Section 6.02(e)</u> and discussing the reasons for any significant variations;

------

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b) concurrently with the delivery of the financial statements referred to in <u>Sections 6.01(a)</u> and <u>6.01(b)</u> a fully and properly completed certificate in the form of <u>Exhibit D</u> (a "<u>Compliance Certificate</u>"), certified on behalf of the Parent Borrower by a Responsible Officer;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c) promptly after the same become publicly available, copies of all financial statements and regular, periodic or special reports which any Loan Party sends to its shareholders or other equity holders, as applicable, or furnishes to, or files with, the SEC or any successor or similar Governmental Authority;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(d) at the time of delivery of each of the quarterly financial statements delivered pursuant to <u>Section 6.01</u>, (i) a listing of government contracts of the Borrowers subject to the federal Assignment of Claims Act of 1940 or any similar state law; and (ii) a list of any applications for the registration of any Patent, Trademark or Copyright filed by any Loan Party with the United States Patent and Trademark Office, the United States Copyright Office or any similar office or agency in each case entered into or filed in the prior Fiscal Quarter;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(e) as soon as available and in any event no later than 45 days after the last day of each Fiscal Year of the Parent Borrower, projections of the Loan Parties (and their Subsidiaries') consolidated and Consolidating financial performance for the forthcoming Fiscal Year on a month by month basis;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(f) promptly upon receipt thereof, copies of any reports submitted by the Parent Borrower's certified public accountants in connection with each annual, interim or special audit or review of any type of the financial statements or internal control systems of any Loan Party made by such accountants;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(g) promptly upon receipt thereof, copies of any credit rating materials with respect to any Indebtedness permitted under <u>Section 7.05(g)</u>;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(h) promptly, such additional business, financial, collateral, corporate affairs, perfection certificates and other information as the Administrative Agent may from time to time reasonably request;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(i) as soon as available, and in any event within twenty Business Days after the end of each fiscal month of Parent Borrower (commencing with the first fiscal month ending after the Closing Date), reports in form and detail reasonably satisfactory to the Administrative Agent and certified by a Responsible Officer of the Parent Borrower as being accurate and complete in all material respects, but without duplication of the reports and other information otherwise required to be provided pursuant to <u>Section 6.01</u> or this <u>Section 6.02</u>, as of the last Business Day of the immediately preceding month, (A) listing all Accounts of the Loan Parties in a report consistent in all material respects with the report provided under the Existing Credit Agreement (including such other information as the Administrative Agent may reasonably request), (B) listing all accounts payable of the Loan Parties in a report consistent in all material respects with the report provided under the Existing Credit Agreement (including such other information as the Administrative Agent may reasonably request), and (C) listing of Inventory in a report consistent in all material respects with the report provided under the Existing Credit Agreement (including such other information as the Administrative Agent may reasonably request); and

------

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(j) i) as soon as available, and in any event within twenty Business Days after the end of each fiscal month of Parent Borrower (commencing with the first fiscal month ending after the Closing Date), a Borrowing Base Certificate, current as of the close of business on the last Business Day of the immediately preceding month, supported by schedules showing the derivation thereof and containing such detail and other information as the Administrative Agent may request from time to time (it being agreed that the form and detail set forth in <u>Exhibit I</u> is deemed satisfactory) and (ii) at any time (but only) during any Cash Dominion Period, as soon as available and in any event no later than the third Business Day of each week commencing with the first week beginning after the commencement of such Cash Dominion Period, a weekly update report with respect to the most recently delivered Borrowing Base Certificate reflecting sales, receipts of cash, credits and collections during the preceding week, <u>provided</u> that (A) the Borrowing Base set forth in the Borrowing Base Certificate (as updated by the weekly reports, when applicable) shall be effective from and including the date such Borrowing Base Certificate is duly received by the Administrative Agent but not including the date on which a subsequent Borrowing Base Certificate is received by the Administrative Agent, unless the Administrative Agent disputes the eligibility of any property included in the calculation of the Borrowing Base or the valuation thereof by notice of such dispute to the Parent Borrower and (B) in the event of any dispute about the eligibility of any property included in the calculation of the Borrowing Base or the valuation thereof, the Administrative Agent's good faith judgment shall control.

Documents required to be delivered (A) pursuant to <u>Section 6.02(c)</u> shall be deemed to have been furnished on the date on which the Administrative Agent receives notice that such Loan Party has filed such document with the SEC and is available on the EDGAR website on the Internet at www.sec.gov or any successor government website that is freely and readily available to the Administrative Agent and the Lenders without charge and (B) pursuant to <u>Section 6.01(a)</u> or <u>(b)</u> or <u>Section 6.02(c)</u> (to the extent any such documents are included in materials not otherwise filed with the SEC) may be delivered electronically and if so delivered, shall be deemed to have been delivered on the date (i) on which such Loan Party posts such documents, or provides a link thereto on such Loan Party's website on the Internet at the website address listed on <u>Schedule 10.02</u>; or (ii) on which such documents are posted on such Loan Party's behalf on an Internet or Intranet website, if any, to which each Lender and the Administrative Agent have access (whether a commercial, third-party website or whether sponsored by the Administrative Agent); <u>provided</u> that: (i) such Loan Party shall deliver paper copies of such documents to the Administrative Agent or any Lender upon its request to such Loan Party to deliver such paper copies until a written request to cease delivering paper copies is given by the Administrative Agent or such Lender and (ii) such Loan Party shall notify (which may be by facsimile or electronic mail) the Administrative Agent and each Lender of the posting of any such documents and provide to the Administrative Agent by electronic mail electronic versions (<u>i.e.</u>, soft copies) of such documents. The Administrative Agent shall have no obligation to request the delivery of or to maintain paper copies of the documents referred to above, and in any event shall have no responsibility to monitor compliance by the such Loan Party with any such request by a Lender for delivery, and each Lender shall be solely responsible for requesting delivery to it or maintaining its copies of such documents.

------

Each of Holdings and the Borrowers hereby acknowledge that (i) the Administrative Agent and/or the Joint Lead Arrangers will make available to the Lenders materials and/or information provided by or on behalf of Holdings and the Borrowers hereunder (collectively, "<u>Borrower Materials</u>") by posting the Borrower Materials on Intralinks<sup>®</sup> or another similar electronic system (the "<u>Platform</u>") and (ii) certain of the Lenders (each, a "<u>Public Lender</u>") may have personnel who do not wish to receive MNPI with respect to the Borrowers or their respective Affiliates, or the respective securities of any of the foregoing, and who may be engaged in investment and other market-related activities with respect to such Persons' securities. Each of Holdings and the Borrowers hereby agree that so long as Holdings or the Borrowers are the issuer of any outstanding debt or equity securities that are registered or issued pursuant to a private offering or is actively contemplating issuing any such securities it will use commercially reasonable efforts to identify that portion of the Borrower Materials that may be distributed to the Public Lenders and that: (w) all such Borrower Materials shall be clearly and conspicuously marked "PUBLIC" which, at a minimum, shall mean that the word "PUBLIC" shall appear prominently on the first page thereof; (x) by marking Borrower Materials "PUBLIC," Holdings and each Borrower shall be deemed to have authorized the Administrative Agent, the Joint Lead Arrangers and the Lenders to treat such Borrower Materials as not containing any MNPI (although it may be sensitive and proprietary) with respect to Holdings or the Borrowers or any of their securities for purposes of United States federal and state securities laws (<u>provided</u>, <u>however</u>, that to the extent such Borrower Materials constitute Information, they shall be treated as set forth in <u>Section 10.07)</u>; (y) all Borrower Materials marked "PUBLIC" are permitted to be made available through a portion of the Platform designated "Public Side Information;" and (z) the Administrative Agent and the Joint Lead Arrangers shall be entitled to treat the Borrower Materials that are not marked "PUBLIC" as being suitable only for posting on a portion of the Platform not designated "Public Side Information."

**Section 6.03 <u>Notices</u>.** The Parent Borrower shall notify promptly the Administrative Agent, in writing, and each Lender of each of the following (and in no event later than five Business Days after a Responsible Officer becomes aware thereof):

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a) the occurrence or existence of any Default or Event of Default, or any event or circumstance that foreseeably will become a Default or Event of Default;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b) any breach or non-performance of, or any default under, any Contractual Obligation of any Loan Party or any Subsidiary of any Loan Party, or any violation of, or non-compliance with, any Requirement of Law, which would reasonably be expected to result, either individually or in the aggregate, in a Material Adverse Effect, including a description of such breach, non-performance, default, violation or non-compliance and the steps, if any, such Person has taken, is taking or proposes to take in respect thereof;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c) any action, suit, dispute, litigation, investigation, proceeding or suspension which may exist at any time between any Loan Party or any Subsidiary of any Loan Party and any Governmental Authority, other regulatory body or any arbitrator which would reasonably be expected to result, either individually or in the aggregate, 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;(d) the commencement of, or any material development in, any litigation or proceeding affecting any Loan Party or any Subsidiary of any Loan Party or its respective property (i) in which the amount of damages claimed is $3,000,000 or more, (ii) in which injunctive or similar relief is sought and which, if adversely determined, would reasonably be expected to have a Material Adverse Effect, or (iii) in which the relief sought is an injunction or other stay of the performance of this Agreement, any other Loan Document or any Related Agreement;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(e) i) the receipt by any Loan Party of any notice of violation of or potential liability or similar written notice under Environmental Law that could reasonably be expected to result in Material Environmental Liabilities, (ii)(A) unpermitted Releases, (B) the existence of any condition that could reasonably be expected to result in violations of or Liabilities under, any Environmental Law or (C) the commencement of, or any material change to, any action, investigation, suit, proceeding, audit, claim, demand, dispute alleging a violation of or Liability under any Environmental Law, that, for each of <u>clauses (A)</u>, <u>(B)</u> and <u>(C)</u> above (and, in the case of <u>clause (C)</u>, if adversely determined), in the aggregate for each such clause, could reasonably be expected to result in Material Environmental Liabilities, (iii) the receipt by any Loan Party of notification that any Property of any Loan Party is subject to any Lien in favor of any Governmental Authority securing, in whole or in part, Environmental Liabilities and (iv) any proposed acquisition or lease of Real Estate, if such acquisition or lease would have a reasonable likelihood of resulting in Material Environmental Liabilities;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(f) i) on or prior to any filing by any ERISA Affiliate of any notice of any reportable event under Section 4043 of ERISA or notice of intent to terminate any Title IV Plan, a copy of such notice, (ii) promptly, and in any event within ten days, after any officer of any ERISA Affiliate knows that a request for a minimum funding waiver under Section 412 of the Code has been filed with respect to any Title IV Plan or Multiemployer Plan, a notice describing such waiver request and the actions, if any, that any ERISA Affiliate proposes to take with respect thereto, together with a copy of any notice filed with the PBGC or the IRS pertaining thereto (but, with respect to a Multiemployer Plan, only if such notices are in possession of the Loan Parties), and (iii) promptly, and in any event within ten days after any officer of the Parent Borrower knows that an ERISA Event will or has occurred, a notice describing such ERISA Event, and the actions, if any, that any ERISA Affiliate proposes to take with respect thereto, together with a copy of any notices received from or filed with the PBGC, IRS, Multiemployer Plan or other Benefit Plan pertaining thereto (but, with respect to a Multiemployer Plan, only if such notices are in possession of the Loan Parties), provided, that if the agent and each lender have previously received notice of an ERISA Event, no notice shall be required of the continuation of such ERISA Event;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(g) any Material Adverse Effect subsequent to the date of the most recent audited financial statements delivered to the Administrative Agent and the Lenders pursuant to this Agreement;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(h) any material change in accounting policies or financial reporting practices by any Loan Party or any Subsidiary of any Loan Party;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(i) any strike, work stoppage, boycott, shutdown or other labor disruption against or involving any Loan Party or any Subsidiary of any Loan Party if the same would reasonably be expected to have, either individually or in the aggregate, a Material Adverse Effect;

------

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(j) the occurrence of any Disposition of property or assets for which the Borrowers are required to notify the Administrative Agent pursuant to <u>Section 2.05(b)(ii)</u> or the incurrence or issuance of any Indebtedness for which the Borrowers are required to make a mandatory prepayment pursuant to <u>Section 2.05(b)(i)</u>; and

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(k) any announcement by Moody's or S&P of any change in the rating of the Facility as determined by either Moody's or S&P.

Each notice pursuant to this <u>Section 6.03</u> shall be in electronic form accompanied by a statement by a Responsible Officer on behalf of the Parent Borrower setting forth details of the occurrence referred to therein, and stating what action the Parent Borrower or other Person proposes to take with respect thereto and at what time. Each notice under <u>Section 6.03(a)</u> shall describe with particularity any and all clauses or provisions of this Agreement or other Loan Document that have been breached or violated.

**Section 6.04 <u>Preservation of Corporate Existence, Etc</u>.** Each Loan Party shall, and shall cause each of its Subsidiaries, other than Non-Material Subsidiaries, to:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a) preserve and maintain in full force and effect its organizational existence and good standing under the laws of its jurisdiction of incorporation, organization or formation, as applicable, except, with respect to the Parent Borrower's Subsidiaries, in connection with transactions permitted by <u>Section 7.03</u>;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b) preserve and maintain in full force and effect all rights, privileges, qualifications, permits, licenses and franchises necessary in the normal conduct of its business except in connection with transactions permitted by <u>Section 7.03</u> and sales of assets permitted by <u>Section 5.02</u> and except as would not reasonably be expected to have, either individually or in the aggregate, a Material Adverse Effect;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c) preserve or renew all of its registered Trademarks, the non-preservation of which would reasonably be expected to have, either individually or in the aggregate, 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;(d) conduct its business and affairs without infringement of or interference with any Intellectual Property of any other Person in any respect and shall comply in all respects with the terms of its IP Licenses except, in each case, as would not be expected to have, either individually or in the aggregate, a Material Adverse Effect.

**Section 6.05 <u>Maintenance of Property</u>.** Each Loan Party shall maintain, and shall cause each of its Subsidiaries to maintain, and preserve all its Property which is necessary in its business in good working order and condition, ordinary wear and tear and fire, casualty or condemnation excepted and shall make all necessary repairs thereto and renewals and replacements thereof except where the failure to do so would not reasonably be expected to have, either individually or in the aggregate, a Material Adverse Effect.

------

**Section 6.06 <u>Insurance</u>.**

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a) Each Loan Party shall, and shall cause each of its Subsidiaries to, (i) maintain or cause to be maintained in full force and effect all policies of insurance of any kind with respect to the Property and businesses of the Loan Parties and such Subsidiaries (including policies of life, fire, theft, product liability, public liability, Flood Insurance, property damage, other casualty, employee fidelity, workers' compensation, business interruption and employee health and welfare insurance) with financially sound and reputable insurance companies or associations (in each case that are not Affiliates of the Borrowers) of a nature and providing such coverage as is sufficient and as is customarily carried by businesses of the size and character of the business of the Loan Parties and (ii) cause all such insurance relating to any Property or business of any Loan Party to name the Administrative Agent as additional insured or lenders loss payee as agent for the Lenders, as appropriate. All policies of insurance on real and personal Property of the Loan Parties will contain an endorsement, in form and substance acceptable to the Administrative Agent, showing loss payable to the Administrative Agent (Form CP 1218 or equivalent and naming the Administrative Agent as lenders loss payee as agent for the Lenders) and extra expense and business interruption endorsements. Such endorsement, or an independent instrument furnished to the Administrative Agent, will provide that the insurance companies or the Parent Borrower's insurance broker will give the Administrative Agent at least 30 (or 10 in case of non-payment) days' prior written notice before any such policy or policies of insurance shall be canceled and that no act or default of the Loan Parties or any other Person shall affect the right of the Administrative Agent to recover under such policy or policies of insurance in case of loss or damage. Each Loan Party shall direct all present and future insurers under its "All Risk" policies of property insurance to pay all proceeds payable thereunder directly to the Administrative Agent. If any insurance proceeds are paid by check, draft or other instrument payable to any Loan Party and the Administrative Agent jointly, the Administrative Agent may endorse such Loan Party's name thereon and do such other things as the Administrative Agent may deem advisable to reduce the same to cash. The Administrative Agent reserves the right at any time, upon review of each Loan Party's risk profile, to require additional forms and limits of insurance. Notwithstanding the requirement in clause (i) above, Flood Insurance shall not be required for (x) Real Estate not located in a Special Flood Hazard Area, or (y) Real Estate located in a Special Flood Hazard Area in a community that does not participate in the National Flood Insurance Program.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b) Unless the Loan Parties provide the Administrative Agent with evidence of the insurance coverage required by this Agreement (including, without limitation, Flood Insurance), the Administrative Agent may purchase insurance (including, without limitation, Flood Insurance) at the Loan Parties' expense to protect the Administrative Agent's and the Lenders' interests in the Loan Parties' and their Subsidiaries' properties. This insurance may, but need not, protect the Loan Parties' and their Subsidiaries' interests. The coverage that the Administrative Agent purchases may not pay any claim that any Loan Party or any Subsidiary of any Loan Party makes or any claim that is made against such Loan Party or any Subsidiary in connection with said Property. The Loan Parties may later cancel any insurance purchased by the Administrative Agent, but only after providing the Administrative Agent with evidence that there has been obtained insurance as required by this Agreement. If the Administrative Agent purchases insurance, the Loan Parties will be responsible for the costs of that insurance, including interest and any other charges the Administrative Agent may impose in connection with the placement of insurance, until the effective date of the cancellation or expiration of the insurance. The costs of the insurance shall be added to the Finance Obligations. The costs of the insurance may be more than the cost of insurance the Loan Parties may be able to obtain on their own.

------

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c) Subject to the ABL/Term Intercreditor Agreement, the Loan Parties appoint the Administrative Agent as their attorney-in-fact to settle or adjust all property damage claims under its casualty insurance policies; provided, that such power of attorney shall only be exercised so long as an Event of Default has occurred and is continuing or if the casualty claim exceeds $1,000,000. The Administrative Agent shall have no duty to exercise such power of attorney, but may do so at its discretion.

**Section 6.07 <u>Payment of Obligations</u>.** Each Loan Party shall, and shall cause each of its Subsidiaries to, pay, discharge and perform as the same shall become due and payable or required to be performed:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a) all federal and other material Tax liabilities, assessments and governmental charges or levies upon it or its Property, before the same shall become delinquent or in default, unless the same are being contested in good faith by appropriate proceedings diligently prosecuted which stay the filing or enforcement of any Lien and for which adequate reserves in accordance with GAAP are being maintained by such Person.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b) all lawful claims which, if unpaid, would by law become a Lien upon its Property unless the same are being contested in good faith by appropriate proceedings diligently prosecuted which stay the imposition or enforcement of any Lien and for which adequate reserves in accordance with GAAP are being maintained by such Person;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c) the performance of all obligations under any Contractual Obligation to such Loan Party or any of its Subsidiaries is bound, or to which it or any of its Property is subject, including the Related Agreements, except where the failure to perform would not reasonably be expected to have, either individually or in the aggregate, 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;(d) payments to the extent necessary to avoid the imposition of a Lien on assets of any Loan Party or any of its Subsidiaries with respect to, or the involuntary termination of, any underfunded Benefit Plan that is described in Section 3(2) of ERISA.

**Section 6.08 <u>Compliance with Laws</u>.** Each Loan Party shall, and shall cause each of its Subsidiaries to, comply with all Requirements of Law of any Governmental Authority having jurisdiction over it or its business, except where the failure to comply would not reasonably be expected to have, either individually or in the aggregate, a Material Adverse Effect.

**Section 6.09 <u>Inspection of Property and Books and Records; Quarterly Management Calls</u>.**

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a) Each Loan Party shall, and shall cause each of its Subsidiaries to maintain, proper books of record and account, in which full, true and correct entries in conformity with GAAP consistently applied shall be made of all financial transactions and matters involving the assets and business of such Person. Each Loan Party shall, and shall cause each of its Subsidiaries to, with respect to each owned, leased, or controlled property, during normal business hours and upon reasonable advance notice (unless an Event of Default shall have occurred and be continuing,

------

in which event no notice shall be required and the Administrative Agent shall have access at any and all times during the continuance thereof): (a) provide access to such property to the Administrative Agent and any of its Related Parties, as frequently as the Administrative Agent reasonably determines to be appropriate; and (b) permit the Administrative Agent and any of its Related Parties to conduct field examinations (including any Field Survey and Audit), audit, inspect and make extracts and copies (or take originals if reasonably necessary) from all of such Loan Party's books and records, and evaluate and make physical verifications of the Inventory and other Collateral in any manner and through any medium that the Administrative Agent reasonably considers advisable, in each instance, at the Loan Parties' expense; <u>provided</u>, that excluding any such visits and inspections during the continuation of an Event of Default, (x) only the Administrative Agent on behalf of the Lenders may exercise rights of the Administrative Agent and the Lenders under this <u>Section 6.09(a)</u>, and the Administrative Agent shall not exercise such rights more often than two times during any calendar year and (y) other than pursuant to <u>Section 6.19</u>, inventory appraisals may only be performed during an Inspection Trigger Period; <u>provided</u>, <u>further,</u> that when (A) a Default or Event of Default exists, the Administrative Agent or any Lender may do any of the foregoing at the expense of the Borrowers at any time and (B) during an Inspection Trigger Period, the Administrative Agent may do any of the foregoing at the expense of the Borrowers up to one additional time during such calendar year.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b) Promptly after the time of delivery of financial statements with respect to the preceding Fiscal Quarter pursuant to <u>Section 6.01(a)</u> or <u>Section 6.01(b)</u>, as applicable, (and in no event more than ten days after the time such financial statements are required to be delivered pursuant to <u>Section 6.01(a)</u> or <u>Section 6.01(b)</u>, as applicable), the Parent Borrower shall, and shall cause its Responsible Officers to, conduct a conference call with the Administrative Agent and the Lenders to discuss such financial statements.

**Section 6.10 <u>Use of Proceeds</u>.** The Borrowers shall use the proceeds of the Loans solely as follows: (a) first, to refinance on the Closing Date Prior Indebtedness and then to pay on the Closing Date a portion of the purchase price for the Acquired Business, (b)<u>on the Second Amendment Effective Date, to repay a portion of the Term Loans, (b) on the Second Amendment Effective Date,</u> to pay costs and expenses of the Related Transactions and costs and expenses required to be paid pursuant to Article IV<u>Sections 2.09 and 10.04</u>, and (c) after the Closing<u>Second Amendment Effective</u> Date, for capital expenditures and other general corporate purposes not in contravention of any Requirement of Law and not in violation of this Agreement or the other Loan Documents.

**Section 6.11 <u>Collection of Accounts; Management of Collateral</u>.**

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a) Within 90 days<u>As</u> of the Closing<u>Second Amendment Effective</u> Date (or such later date, subject to <u>Section 6.15</u>), the Loan Parties shall have established and thereafter shall maintain cash management services and Cash Management Accounts of a type and on terms reasonably satisfactory to the Collateral Agent, which Cash Management Accounts are in each case subject to a Deposit Account Control Agreement or Securities Account Control Agreement (i) in favor of the Collateral Agent and (ii) which provides that all amounts on deposit in each such Cash Management Account be automatically transferred each Business Day during a Cash Dominion Period (as defined below) to at least one Cash Management Account (as designated by the Collateral Agent) at the Administrative Agent or a Cash Management Bank designated by the

------

Collateral Agent, to be used as a collections account (such account, together with any other collections accounts (including any "lockbox accounts") established by the Loan Parties with the Administrative Agent or Cash Management Bank so designated, the "<u>Cash Management Collections Accounts</u>").

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b) If (i) a Default or Event of Default has occurred and is continuing or (ii) Availability is less than 17.5% of the Revolving Facility Commitment for five consecutive Business Days (each a "<u>Cash Management Triggering Event</u>") and until such Cash Management Triggering Event no longer exists for a 30 consecutive calendar day period (such period, a "<u>Cash Dominion Period</u>"), then (A) the Loan Parties shall deposit or cause to be deposited promptly, and in any event no later than the next Business Day after the occurrence of a Cash Management Triggering Event, all proceeds in respect of any Collateral, all collections of a nature susceptible to a deposit in a bank account and all other amounts received by any Loan Party (including payments made by Account Debtors directly to any Loan Party and remittances on credit card sales) into the Cash Management Collections Accounts, and (B) subject to the conditions set forth in a Cash Management Agreement with respect to a Cash Management Account, pursuant to each applicable Deposit Account Control Agreement or Securities Account Control Agreement (or otherwise at the instruction of the Collateral Agent) all amounts on deposit in the Cash Management Accounts each Business Day to the Cash Management Collections Accounts. At all times prior to and after a Cash Dominion Period, the Loan Parties shall have full dominion and control over the Cash Management Accounts, and the Collateral Agent agrees not to deliver a control notice or take any other action to control the Cash Managements Accounts unless and until a Cash Management Triggering Event has occurred and is continuing. The Collateral Agent further agrees that upon the termination of a Cash Dominion Period, the Collateral Agent shall provide notice to the banks with Cash Management Accounts and take all other commercially reasonable actions necessary to revert control of such Cash Managements Accounts to the Loan Parties.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c) Except as otherwise provided for in <u>Section 8.03</u>, all amounts received or deposited into the Cash Management Collections Accounts during a Cash Dominion Period (whether under this <u>Section 6.11</u> or otherwise) shall be applied to the payment of the outstanding principal balance of the Loans and the L/C Obligations (or, to the extent such L/C Obligations are contingent, to provide Cash Collateral in respect of such L/C Obligations).

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(d) The Loan Parties shall not maintain cash, Cash Equivalents or other amounts in either (i) any Deposit Account, unless the Collateral Agent shall have received a Deposit Account Control Agreement in respect of such Deposit Account (other than Excluded Accounts) or (ii) any securities account, unless the Collateral Agent shall have received a Securities Account Control Agreement in respect of such securities account (other than Excluded Accounts).

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(e) Each Loan Party shall close any of its Cash Management Accounts maintained with a bank or depositary institution promptly and in any event within forty-five days (or such longer period as the Collateral Agent is willing, in its sole discretion, to accommodate from time to time) of notice from the Collateral Agent that the creditworthiness of such bank or depositary institution is no longer acceptable in the Collateral Agent's Credit Judgment, or that the operating performance, funds transfer, or availability procedures or performance of such bank or depositary institution with respect to Cash Management Accounts or the Collateral Agent's liability under any Cash Management Agreement with such bank or depositary institution is no longer acceptable in the Collateral Agent's Credit Judgment.

------

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(f) The Cash Management Accounts with Cash Management Banks shall be cash collateral accounts, with all cash, checks and similar items of payment in such accounts securing payment of the Finance Obligations, and in which the Loan Parties are hereby deemed to have granted a Lien to the Collateral Agent for the benefit of the Secured Parties. All checks, drafts, notes, money orders, acceptances, cash and other evidences of Indebtedness received during a Cash Dominion Period directly by any Loan Party from any of its Account Debtors, as proceeds from Accounts of such Loan Party or as proceeds of any other Collateral shall be held by such Loan Party in trust for the Secured Parties and if of a nature susceptible to a deposit in a bank account, upon receipt be deposited by such Loan Party in original form and no later than the next Business Day after receipt thereof into a Cash Management Account in accordance with <u>Section 6.11(b)</u>. Each Loan Party shall not commingle such collections with the proceeds of any Property not included in the Collateral. No checks, drafts or other instrument received by the Administrative Agent shall constitute final payment to the Administrative Agent unless and until such instruments have actually been collected.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(g) The Loan Parties shall take all reasonable steps to enforce, collect and receive all amounts owing on the Accounts of the Loan Parties or any of their Subsidiaries. After the occurrence and during the continuance of a Default or Event of Default, the Collateral Agent may send a notice of assignment and/or notice of the Secured Parties' security interest to any and all Account Debtors or third parties holding or otherwise concerned with any of the Collateral, and thereafter the Collateral Agent or its designee shall have the sole right to collect the Accounts and/or take possession of the Collateral and the books and records relating thereto.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(h) Each Loan Party hereby appoints each Agent or its designee on behalf of such Agent as the Loan Parties' attorney-in-fact with power to endorse any Loan Party's name upon any notes, acceptances, checks, drafts, money orders or other evidences of payment relating to the Accounts, to sign any Loan Party's name on any invoice or bill of lading relating to any of the Accounts, drafts against Account Debtors with respect to Accounts, assignments of Accounts, verification of Accounts of any Account Debtor with an outstanding balance of Accounts owing to the Loan Parties in excess of $1,000,000 and notices to such Account Debtors with respect to Accounts. All acts of said attorney or designee are hereby ratified and approved, and such attorney or designee shall not be liable for any acts of omission or commission (other than acts of omission or commission constituting gross negligence or willful misconduct as determined by a final judgment of a court of competent jurisdiction), or for any error of judgment or mistake of fact or law; this power being coupled with an interest is irrevocable until the date on which all Finance Obligations are paid in full and all of the Loan Documents are terminated. Each Agent agrees not to deliver any such notice or take any such actions unless and until a Cash Management Triggering Event has occurred and is continuing.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(i) Nothing herein contained shall be construed to constitute any Agent as agent of any Loan Party for any purpose whatsoever, and the Agents shall not be responsible or liable for any shortage, discrepancy, damage, loss or destruction of any part of the Collateral wherever the same may be located and regardless of the cause thereof (other than from acts of omission or commission constituting gross negligence or willful misconduct as determined by a final judgment

------

of a court of competent jurisdiction). The Agents shall not, under any circumstance or in any event whatsoever, have any liability for any error or omission or delay of any kind occurring in the settlement, collection or payment of any of the Accounts or any instrument received in payment thereof or for any damage resulting therefrom (other than acts of omission or commission constituting gross negligence or willful misconduct as determined by a final judgment of a court of competent jurisdiction). The Agents, by anything herein or in any assignment or otherwise, do not assume any of the obligations under any contract or agreement assigned to any Agent and shall not be responsible in any way for the performance by any Loan Party of any of the terms and conditions thereof.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(j) If any Account includes a charge for any tax payable to any Governmental Authority, each Agent is hereby authorized (but in no event obligated) in its discretion to pay the amount thereof to the proper taxing authority for the Loan Parties' account and to charge the Loan Parties therefor. The Loan Parties shall notify the Agents if any Account includes any taxes due to any such Governmental Authority and, in the absence of such notice, the Agents shall have the right to retain the full proceeds of such Account and shall not be liable for any taxes that may be due by reason of the sale and delivery creating such Account.

Notwithstanding any other terms set forth in the Loan Documents, the rights and remedies of the Agents and the Lenders herein provided, and the obligations of the Loan Parties set forth herein, are cumulative of, may be exercised singly or concurrently with, and are not exclusive of, any other rights, remedies or obligations set forth in any other Loan Document or as provided by law

**Section 6.12 <u>Landlord Agreements</u>.** Each Loan Party shall use commercially reasonable efforts to obtain a Collateral Access Agreement, from the lessor of each leased property, bailee in possession of any Collateral or mortgagee of any owned property with respect to each location where any Collateral having a value in excess of $500,000 is stored or located, which agreement shall be reasonably satisfactory in form and substance to Agent.

**Section 6.13 <u>Further Assurances</u>.** Each Loan Party shall ensure that all written information, exhibits and reports furnished to the Administrative Agent or the Lenders do not and will not contain any untrue statement of a material fact and do not and will not omit to state any material fact or any fact necessary to make the statements contained therein not materially misleading in light of the circumstances in which made, and will promptly disclose to the Administrative Agent and the Lenders and correct any defect or error that may be discovered therein or in any Loan Document or in the execution, acknowledgement or recordation thereof.

------

convey, grant, assign, transfer, preserve, protect and confirm to the Secured Parties the rights granted or now or hereafter intended to be granted to the Secured Parties under any Loan Document. Without limiting the generality of the foregoing and except as otherwise approved in writing by Required Lenders, the Loan Parties shall cause each of their Domestic Subsidiaries (other than Excluded Subsidiaries), promptly after formation or acquisition thereof, to execute and deliver to the Collateral Agent the Accession Agreement pursuant to which such Subsidiary shall guaranty the Finance Obligations and grant to the Collateral Agent, for the benefit of the Secured Parties, a security interest in, subject to the limitations set forth herein and in the Collateral Documents (including the Intercreditor Agreements), all of such Subsidiary's Property to secure such guaranty. Furthermore and except as otherwise approved in writing by Required Lenders, each Loan Party shall pledge, and shall cause each of its Domestic Subsidiaries (other than Excluded Subsidiaries) to pledge, (i) all of the Stock and Stock Equivalents of each of its Domestic Subsidiaries (other than Excluded Subsidiaries) and (ii) sixty-five percent (65%) of the outstanding voting Stock and Stock Equivalents and one hundred percent (100%) of outstanding non-voting Stock and Stock Equivalents of each Foreign Subsidiary directly owned by a Loan Party and each Excluded Domestic Holdco directly owned by a Loan Party, in each instance, to the Term Administrative Agent, for the benefit of the Secured Parties (subject to the ABL/Term Intercreditor Agreement), to secure the Finance Obligations, promptly after formation or acquisition of such Subsidiary. For the avoidance of doubt, notwithstanding anything herein or in the Collateral Documents to the contrary, (i) no Foreign Subsidiary or Excluded Subsidiary will guaranty the Finance Obligations or grant a Lien on any of its assets to secure payment of the Finance Obligations and (ii) no more than sixty-five percent (65%) of the outstanding voting Stock and Stock Equivalents of any Foreign Subsidiary directly owned by a Loan Party or any Excluded Domestic Holdco directly owned by a Loan Party will be pledged to secure the Finance Obligations. The Loan Parties shall deliver, or cause to be delivered, to the Administrative Agent, appropriate resolutions, secretary certificates, certified Organization Documents and, if requested by the Administrative Agent, legal opinions relating to the matters described in this <u>Section 6.13</u> (which opinions shall be in form and substance reasonably acceptable to the Administrative Agent and, to the extent applicable, substantially similar to the opinions delivered on the Effective<u>Original Closing</u> Date), in each instance with respect to each Loan Party formed or acquired after the Effective<u>Original Closing</u> Date. In connection with each pledge of Stock and Stock Equivalents, the Loan Parties shall deliver, or cause to be delivered, to the Term Collateral Agent (subject to the ABL/Term Intercreditor Agreement), irrevocable proxies and stock powers and/or assignments, as applicable, duly executed in blank. In the event any Loan Party acquires any fee interest in Real Estate located in the United States (it being understood and agreed that any Real Estate owned by a Governmental Authority in connection with a tax exempt financing and leased by such Governmental Authority to such Loan Party shall be deemed to be owned in fee by such Loan Party) having a fair value exceeding $2,500,000, simultaneously with (or such later date as may be agreed by the Collateral Agent in its sole discretion) such acquisition, such Person shall execute and/or deliver, or cause to be executed and/or delivered, to the Collateral Agent, (w) a fully executed Mortgage, in form and substance reasonably satisfactory to the Collateral Agent together with an A.L.T.A. lender's title insurance policy (any such policy, a "<u>Mortgage Policy</u>") issued by a title insurer reasonably satisfactory to the Collateral Agent, in form and substance and in an amount reasonably satisfactory to the Collateral Agent insuring that the Mortgage is a valid and enforceable first priority Lien on the respective property, free and clear of all defects, encumbrances and Liens other than Permitted Liens and any title exceptions referred to in the title

------

insurance polices<u>policies</u> reasonably acceptable to the Collateral Agent, and (x) then current A.L.T.A. surveys, certified to the Collateral Agent by a licensed surveyor sufficient to allow the issuer of the lender's title insurance policy to issue such policy without a survey exception. In the event any Loan Party acquires any Real Estate located in the United States having a fair value exceeding $2,500,000, at the Collateral Agent's request, the Loan Parties shall cause to be delivered to the Administrative Agent, within 90 days after such acquisition, an environmental site assessment prepared by a qualified firm reasonably acceptable to the Collateral Agent, in form and substance reasonably satisfactory to the Administrative Agent. In addition to the obligations set forth in <u>Section 6.06(a)</u>, within 90 days after written notice from the Administrative Agent to the Loan Parties that any Real Estate is located in a Special Flood Hazard Area, the Loan Parties shall satisfy the Flood Insurance requirements of <u>Section 6.06(a)</u>. For the avoidance of doubt, the provisions of this paragraph shall be subject to the terms of the Intercreditor Agreements.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b) Notwithstanding anything herein or in the Collateral Documents to the contrary, on the Effective<u>Original Closing</u> Date, Conn-Selmer shall pledge all of the Stock and Stock Equivalents of Steinway and Sons to the Collateral Agent, for the benefit of the Secured Parties, to secure the Finance Obligations.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c) The Parent Borrower shall, promptly following receipt of the acknowledgment copy of any financing statements filed under the UCC in any jurisdiction by or on behalf of the Secured Parties, deliver to the Administrative Agent completed requests for information listing such financing statement and all other effective financing statements filed in such jurisdiction that name any Loan Party as debtor, together with copies of such other financing statements.

**Section 6.14 <u>Environmental Matters</u>.** Each Loan Party shall, and shall cause each of its Subsidiaries to, comply with, and maintain its Real Estate, whether owned, leased, subleased or otherwise operated or occupied, in compliance with, all applicable Environmental Laws (including by implementing any Remedial Action necessary to achieve such compliance) or that is required by orders and directives of any Governmental Authority, except in each case where the failure to comply would not reasonably be expected to, individually or in the aggregate, result in a Material Environmental Liability. Without limiting the foregoing, if an Event of Default is continuing or if the Administrative Agent at any time has a reasonable basis to believe that there exist material violations of Environmental Laws by any Loan Party or any Subsidiary of any Loan Party or that there exist any material Environmental Liabilities, then each Loan Party shall, promptly upon receipt of request from the Administrative Agent, cause the performance of, and allow the Administrative Agent and its Related Parties access to such Real Estate for the purpose of conducting, such environmental audits and assessments, including subsurface sampling of soil and groundwater, and cause the preparation of such reports, in each case as the Administrative Agent may from time to time reasonably request. Such audits, assessments and reports, to the extent not conducted by the Administrative Agent or any of its Related Parties, shall be conducted and prepared by reputable environmental consulting firms reasonably acceptable to the Administrative Agent and shall be in form and substance reasonably acceptable to the Administrative Agent.

------

**Section 6.15 <u>Post-Closing Obligations</u>.** The Parent Borrower will, as promptly as practicable, and in any event within the time periods after the <u>Second Amendment</u> Effective Date specified in <u>Schedule 6.15</u> (or such later date as may be agreed by the Collateral Agent in its sole discretion), deliver the documents or take the actions specified on <u>Schedule 6.15</u>, in each case except to the extent otherwise agreed to by the Required Lenders. In the event of any conflict between the terms set forth on <u>Schedule 6.15</u> and the terms of any of <u>Article V</u>, <u>VI</u> or <u>VII</u>, the terms set forth on <u>Schedule 6.15</u> shall control.

**Section 6.16 <u>Material Contracts</u>.** Each Loan Party shall, and shall cause each of its Subsidiaries to, perform and observe all the terms and provisions of each Material Contract to be performed or observed by it, maintain each such Material Contract in full force and effect, enforce each such Material Contract in accordance with its terms, take all such action to such end as may be from time to time requested by the Administrative Agent and, upon request of the Administrative Agent, make to each other party to each such Material Contract such demands and requests for information and reports or for action as any Loan Party or any of its Subsidiaries is entitled to make under such Material Contract, and cause each of its Subsidiaries to do so.

**Section 6.17 <u>Designation as Senior Debt</u>.** All ABL Credit Obligations shall be "Designated Senior Indebtedness" or similar term for purposes of and as defined in any documentation with respect to any Subordinated Indebtedness.

**Section 6.18 <u>Change in Collateral; Collateral Records; Account Documentation</u>.**

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a) The Parent Borrower shall advise the Collateral Agent promptly, in sufficient detail, of any location not identified in the reports delivered to the Agents pursuant to <u>Section 6.02(i)</u> at which Collateral with a fair market value in excess of $500,000 is located and of any material adverse change relating to the type, quantity or quality of the Collateral or the Lien granted thereon, and execute and deliver, and cause each of its Subsidiaries to execute and deliver, to the Collateral Agent for the benefit of the Agents and the Lenders from time to time, solely for the Collateral Agent's convenience in maintaining a record of Collateral, such written statements and schedules as the Collateral Agent may reasonably require, designating, identifying or describing the Collateral.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b) The Loan Parties will at such intervals as the Agents may reasonably require during a Cash Dominion Period, execute and deliver confirmatory written assignments of the Accounts to the Agents and furnish such further schedules and/or information as any Agent may require relating to the Accounts, including, without limitation, sales invoices or the equivalent, credit memos issued, remittance advices, reports and copies of deposit slips and copies of original shipping or delivery receipts for all merchandise sold. The items to be provided under this <u>Section 6.18(b)</u> are to be in form reasonably satisfactory to the Collateral Agent and are to be executed and delivered to the Collateral Agent from time to time solely for their convenience in maintaining records of the Collateral. If the Loan Parties become aware of anything materially detrimental to the credit (that is not otherwise public information) of any Account Debtor with an aggregate outstanding balance of Accounts owing to the Borrowers in excess of $1,000,000, the Parent Borrower shall promptly advise the Agents thereof.

------

**<u>Section 6.19 Mortgage Amendments</u>Section 6.19 <u>First Amendment Appraisal</u>**. The Parent Borrower will, as promptly as <u>reasonably</u> practicable, and in any event within 9<u>15</u>0 days after the First<u>Second</u> Amendment Effective Date (or such later date as may be agreed by the Required Lenders in their<u>Administrative Agent in its</u> sole discretion), cause an appraisal to be completed over all Inventory. The Borrowers shall be obligated, jointly and severally, to reimburse the Administrative Agent for this appraisal to be conducted in connection with the First Amendment and such appraisal shall not be counted against the limitation on appraisals set forth in Section 2.09(d).<u>each Loan Parties to deliver the following with respect to the Mortgages existing as of the Second Amendment Effective Date, in each case in form and substance reasonably acceptable to the Administrative Agent:</u>

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<u>(a) an amendment to each Mortgage (each, a "Mortgage Amendment") to reflect the matters set forth herein, duly executed and acknowledged by the applicable Loan Party, and in form for recording in the recording office where such Mortgage was recorded, together with such certificates, affidavits, questionnaires or returns as shall be required in connection with the recording or filing thereof under applicable law; provided that such Mortgage Amendment shall not be required if</u> <u>the Administrative Agent shall have received,</u> <u>within such 150 day period, written confirmation from local counsel (in form satisfactory to the Administrative Agent) that such Mortgage continues to be in full force and effect as enforceable Liens securing the Finance Obligations of the applicable Loan Party, as amended, and having priority as of the date of recordation of the original mortgage, without the necessity of any Mortgage Amendment;</u>

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<u>(b)</u> <u>a favorable opinion addressed to the Administrative Agent and the Secured Parties covering, among other things, the enforceability of the applicable Mortgage as amended by the Mortgage Amendment (such opinion may, without limitation, take assumptions for any matters addressed in the local counsel opinion originally delivered in connection with such Mortgage), or if any Mortgage Amendment is not required pursuant to Section 6.19(a) above, written confirmation from local counsel as described in Section 6.19(a);</u>

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<u>(c)</u> <u>with respect to any Mortgage Amendment required hereunder, a date-down endorsement to the existing title policy, which shall be in form and substance reasonably satisfactory to the Administrative Agent and reasonably assure the Administrative Agent as of the date of such endorsement that the real property subject to the Lien of such Mortgage is free and clear of all defects and encumbrances except those Liens permitted under such Mortgage;</u>

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<u>(d)</u> <u>with respect to any Mortgage Amendment required hereunder, evidence of payment of all search charges, mortgage recording taxes, fees, charges, costs and expenses required for the recording of the Mortgage Amendment referred to above; and</u>

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<u>(e)</u> <u>with respect to any Mortgage Amendment required hereunder, such affidavits, certificates, information and instruments of indemnification as shall be required to induce the title insurance company to issue the endorsement to the title policy contemplated in this Section 6.19 and evidence of payment of all applicable title insurance premiums required for the issuance of the endorsement to the title policy contemplated in this Section 6.19.</u>

------

**ARTICLE VII** 

**NEGATIVE COVENANTS** 

So long as any Lender shall have any Revolving Facility Commitment hereunder, any Loan or other ABL Credit Obligation hereunder shall remain unpaid or unsatisfied (other than unasserted contingent indemnification obligations not due and payable), and until all Letters of Credit have been canceled or have expired (or shall have been Cash Collateralized or backstopped on terms reasonably satisfactory to the Administrative Agent) and all amounts drawn or paid thereunder have been reimbursed in full, each Loan Party and each of their respective Subsidiaries covenants and agrees that:

**Section 7.01 <u>Limitation on Liens</u>.** No Loan Party shall, and no Loan Party shall suffer or permit any of its Subsidiaries to, directly or indirectly, make, create, incur, assume or suffer to exist any Lien upon or with respect to any part of its Property, whether now owned or hereafter acquired, other than the following ("<u>Permitted Liens</u>"):

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a) any Lien existing on the Property of a Loan Party or a Subsidiary of a Loan Party on the <u>Second Amendment</u> Effective Date and set forth in <u>Schedule 7.01</u> securing Indebtedness outstanding on such date and permitted by <u>Section 7.05(c)</u>, including replacement Liens on the Property currently subject to such Liens securing Indebtedness permitted by <u>Section 7.05(c)</u>;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b) any Lien created under any Loan Document;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c) Liens for Taxes (i) which are not delinquent <u>for more than 30 days</u>, or (ii) the non-payment of which is permitted by <u>Section 6.07</u>;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(d) carriers', warehousemen's, mechanics', landlords', materialmen's, repairmen's or other similar Liens arising in the Ordinary Course of Business which are not delinquent for more than 90 days or remain payable without penalty or which are being contested in good faith and by appropriate proceedings diligently prosecuted, which proceedings have the effect of preventing the forfeiture or sale of the Property subject thereto and for which adequate reserves in accordance with GAAP are being maintained;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(e) Liens (other than any Lien imposed by ERISA) consisting of pledges or deposits required in the Ordinary Course of Business in connection with workers' compensation, unemployment insurance and other social security legislation or to secure the performance of tenders, statutory obligations, surety, stay, customs and appeals bonds, bids, leases, governmental contract, trade contracts, performance and return of money bonds and other similar obligations (exclusive of obligations for the payment of borrowed money) or to secure liability to insurance carriers;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(f) Liens consisting of judgment or judicial attachment liens with respect to judgments the existence of which do not constitute and Event of Default;

------

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(g) any title exceptions referred to in the title insurance policies purchased by any Loan Party in connection with the purchase of Property pursuant to the Merger Agreement, and easements, rights-of-way, zoning and other restrictions, encroachments, minor defects or other irregularities in title, and other similar encumbrances incurred in the Ordinary Course of Business which, either individually or in the aggregate, do not materially detract from the value of the Property subject thereto or interfere in any material respect with the ordinary conduct of the businesses of any Loan Party or any Subsidiary of any Loan Party;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(h) Liens on any Property acquired or held by any Loan Party or any Subsidiary of any Loan Party securing Indebtedness incurred or assumed for the purpose of financing (or refinancing) all or any part of the cost of acquiring such Property and permitted under <u>Section 7.05(d)</u>; <u>provided</u> that (i) any such Lien attaches to such Property concurrently with or within 30 days after the acquisition thereof, (ii) such Lien attaches solely to the Property so acquired in such transaction and any accession thereto and proceeds thereof, and (iii) the principal amount of the debt secured thereby does not exceed 100% of the cost of such Property;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(i) Liens securing Capital Lease Obligations permitted under <u>Section 7.05(d)</u>;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(j) any interest or title of a lessor or sublessor under any lease permitted by this Agreement and matters affecting the interest or title of a lessor or sublessor to any leased Property;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(k) Liens arising from precautionary UCC financing statements filed under any lease permitted by this Agreement;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(l) licenses, sublicenses, leases or subleases granted to third parties in the Ordinary Course of Business not interfering in any material respect with the business of the Loan Parties or any of their Subsidiaries;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(m) Liens in favor of collecting banks arising by operation of law under Section 4-210 of the UCC or, with respect to collecting banks located in the State of New York, under Section 4-208 of the UCC;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(n) Liens (including the right of set-off) in favor of a bank or other depository institution arising as a matter of law encumbering deposits;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(o) Liens arising out of consignment or similar arrangements for the sale of goods entered into by the Parent Borrower or any of its Subsidiaries 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;(p) Liens arising by operation of law or contract on insurance policies and proceeds thereof to secure premiums payable thereunder;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(q) Liens in favor of customs and revenue authorities arising as a matter of law which secure payment of customs duties in connection with the importation of goods 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;(r) other Liens not described above on assets not constituting Collateral that secure obligations other than Indebtedness, <u>provided</u> that the aggregate outstanding amount of the obligations secured thereby does not exceed $2,500,000 in the aggregate at any one time;

------

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(s) Liens on assets of a Subsidiary acquired in connection with a Permitted Acquisition so long as such Liens were not incurred in anticipation of such Permitted Acquisition and are either Permitted Liens hereunder or encumber assets of such Subsidiary (other than the Stock, Accounts or Inventory of such Subsidiary) with a value not in excess of $5,000,000;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(t) ground leases in respect of real property on which facilities owned or leased by any Loan Party or any of its Subsidiaries are located;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(u) subject to the terms of the Intercreditor Agreements, Liens securing Indebtedness permitted under <u>Section 7.05(g)</u> and any Permitted Refinancing thereof;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(v) Liens on assets of Foreign Subsidiaries (including Steinway and Sons, but only for so long as it is not a Loan Party hereunder) to secure Indebtedness permitted by Section 7.05(j); and

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(w) the right, title and interest of NYCIDA to the property located at 19th and Steinway Place pursuant to (i) the Guaranty Agreement, dated as of June 1, 1999 from Steinway to the NYCIDA, (ii) the PILOT Escrow Agreement, dated as of June 1, 1999, by and among Steinway, the NYCIDA and the United States Trust Company and (iii) the Lease Agreement, dated as of June 1, 1999 between Steinway and the NYCIDA.

**Section 7.02 <u>Disposition of Assets</u>.** No Loan Party shall, and no Loan Party shall suffer or permit any of its Subsidiaries to, directly or indirectly, sell, assign, lease, convey, transfer or otherwise dispose of (whether in one or a series of transactions) any Property (including the Stock of any Subsidiary of any Loan Party, whether in a public or a private offering or otherwise, and accounts and notes receivable, with or without recourse) or enter into any agreement to do any of the foregoing (except subject to compliance with, or termination of, this Agreement), except:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a) dispositions of inventory, or used, worn-out or surplus equipment or defaulted receivables for collection, all 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;(b) dispositions not otherwise permitted hereunder which are made for fair market value (excluding Accounts, Inventory and notes receivable); <u>provided</u>, that (i) at the time of any disposition, no Event of Default shall exist or shall result from such disposition, (ii) not less than 75% of the aggregate sales price from such disposition shall be paid in cash, (iii) such dispositions are made for fair market value, (iv) the requirements of <u>Section 2.05(b)(ii)</u>, to the extent applicable, are complied with in connection therewith, <u>provided</u> that, all Net Cash Proceeds received from dispositions in any Fiscal Year under this clause (b) in an aggregate amount in excess of $7,500,000 per annum shall be paid in accordance with Section 2.03(b) of the Term Credit Agreement or, if applicable, Second Lien Credit Agreement, and (v) after giving effect to such disposition, the Loan Parties are in compliance on a pro forma basis with the covenant set forth in <u>Section 7.19</u>, recomputed for the most recent Fiscal Quarter for which financial statements have been delivered;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c) dispositions of Cash Equivalents;

------

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(d) licenses, sublicenses, leases or subleases granted to third parties in the Ordinary Course of Business not interfering with the business of the Loan Parties or any of their Subsidiaries;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(e) dispositions constituting an Investment or Restricted Payment permitted under this Agreement;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(f) dispositions in connection with an Event of Loss; <u>provided</u> that the requirements of <u>Section 2.05(b)</u> and <u>Section 2.03(b)</u> of the Term Credit Agreement are complied with in connection therewith;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(g) dispositions of the assets of any Non-Material Subsidiary;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(h) sale-leasebacks of real estate, machinery and equipment with a value not to exceed $10,000,000 in the aggregate;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(i) termination of a lease that is not reasonably likely to result in a Material Adverse Effect and does not result from a default by a Loan Party; and

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(j) any disposition described in the Structure Memorandum.

**Section 7.03 <u>Consolidations and Mergers</u>.** No Loan Party shall, and no Loan Party shall suffer or permit any of its Subsidiaries to, merge, consolidate with or into, or convey, transfer, lease or otherwise dispose of (whether in one transaction or in a series of transactions) all or substantially all of its assets (whether now owned or hereafter acquired) to or in favor of any Person, except upon not less than five Business Days' prior written notice to the Administrative Agent, (a) any Subsidiary of the Parent Borrower may be transferred or conveyed to, merge with, or dissolve or liquidate into, the Parent Borrower or any other Loan Party, <u>provided</u> that the Parent Borrower or such other Loan Party shall be the continuing or surviving entity and all actions required to maintain perfected Liens on the Stock of the surviving entity and other Collateral in favor of the Administrative Agent shall have been completed and (b) any Foreign Subsidiary or Excluded Subsidiary may be transferred or conveyed to, merge with or dissolve or liquidate into another Foreign Subsidiary or Excluded Subsidiary.

**Section 7.04 <u>Acquisitions; Loans and Investments</u>.** No Loan Party shall and no Loan Party shall suffer or permit any of its Subsidiaries to (i) purchase or acquire, or make any commitment to purchase or acquire (except subject to compliance with, or termination of, this Agreement), any Stock or Stock Equivalents, or any obligations or other securities of, or any interest in, any Person, including the establishment or creation of a Subsidiary, (ii) make or commit to make (except subject to compliance with, or termination of, this Agreement) any Acquisitions, or any other acquisition of all or substantially all of the assets of another Person, or of any business or division of any Person, including without limitation, by way of merger, consolidation or other combination, or (iii) make or purchase or commit to make or purchase (except subject to compliance with, or termination of, this Agreement), any advance, loan, extension of credit or capital contribution to or any other investment in, any Person including any Affiliate of the Parent Borrower or any Subsidiary of the Parent Borrower but excluding any trade payables arising in the Ordinary Course of Business among the Parent Borrower and its Subsidiaries (the items described in clauses (i), (ii) and (iii) are referred to as "<u>Investments</u>"), except for:

------

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a) Investments in cash and Cash Equivalents;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b) x) Investments consisting of (i) capital contributions by Holdings in then existing Loan Parties, (ii) extensions of credit or capital contributions by any Subsidiary of Holdings to or in <u>(or Guarantees by such Subsidiary of Holdings of Indebtedness permitted to be incurred hereunder of)</u> any other then existing Loan Party (other than Holdings), (iii) extensions of credit or capital contributions by the Parent Borrower or any other Loan Party (other than Holdings) to or in <u>(or Guarantees by the Borrower or such Loan Party (other than Holdings) of Indebtedness permitted to be incurred hereunder of)</u> any then existing Subsidiary of the Parent Borrower that is not a Loan Party not to exceed $15,000,000 in the aggregate at any time outstanding for all such extensions of credit and capital contributions in the aggregate plus any returns (including dividends, interest, distributions, returns of principal, profits on sale, repayments, income and similar amounts) actually received by the Parent Borrower or any other Loan Party in cash; <u>provided</u>, that (A) if any Loan Party executes and delivers to any other Loan Party a note (collectively, the "<u>Intercompany Notes</u>") to evidence any debt Investments described in the foregoing clauses (i), (ii) and (iii), that Intercompany Note shall be pledged and delivered to the Term Administrative Agent pursuant to the Pledge and Security Agreement (subject to the Term/ABL Intercreditor Agreement) as additional collateral security for the Finance Obligations; (B) the applicable Loan Party shall accurately record all intercompany transactions on its books and records; and (C) at the time any such intercompany loan or advance is made by any Loan Party to any other Loan Party and after giving effect thereto, each such Loan Party shall be Solvent; (iv) extensions of credit by any Subsidiary of the Parent Borrower that is not a Loan Party to any then existing Loan Party; provided that any such indebtedness shall be subordinated to the Finance Obligations in a manner satisfactory to the Administrative Agent, and (v) extensions of credit or capital contributions by any Subsidiary of the Parent Borrower that is not a Loan Party or (y) other Investments described in the Structure Memorandum;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c) loans and advances to employees of Loan Parties in the Ordinary Course of Business for moving, entertainment and travel expenses, drawing accounts and similar expenditures in an amount not to exceed $3,000,000 in the aggregate at any time outstanding;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(d) Investments received as the non-cash portion of consideration received in connection with transactions permitted pursuant to <u>Section 7.02(b)</u>;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(e) Investments acquired in connection with the settlement of delinquent Accounts in the Ordinary Course of Business or in connection with the bankruptcy or reorganization of suppliers or customers;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(f) Investments consisting of loans made by Holdings to officers, directors and employees which are used by such Persons to purchase simultaneously Stock (including phantom stock) or Stock Equivalents of Holdings in an amount not to exceed $10,000,000 in the aggregate at any time outstanding;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(g) Investments existing on the <u>Second Amendment</u> Effective Date and set forth on <u>Schedule 7.04</u>;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(h) Permitted Acquisitions;

------

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(i) Steinway Dealer Loans in an aggregate amount not to exceed $5,000,000 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;(j) Dealer Notes;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(k) other Investments in the aggregate at any time outstanding not to exceed the sum of $10,000,000 (in the case of this clause (k), other than for the purposes described in <u>Sections 7.04(i)</u> and <u>7.04(j)</u>) plus any returns (including dividends, interest, distributions, returns of principal, profits on sale, repayments, income and similar amounts) actually received by the Parent Borrower or any Subsidiary in cash in respect of any Investments made pursuant to this <u>Section 7.04(k)(i)</u>;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(l) other Investments so long as either (i) the Permitted Transaction Conditions are satisfied at the time of such Investment or (ii) the aggregate amount of all such Investments made in reliance on this <u>clause (l)</u> shall not exceed the sum of (x) $10,000,000 and (y) the cumulative amount of Net Issuance Proceeds of all Qualifying Equity Issuances (other than any Specified Equity Contribution) made after the Closing<u>Second Amendment Effective</u> Date and Not Otherwise Applied;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<u>(m)</u> <u>intercompany loans between Subsidiaries that are not Loan Parties;</u>

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<u>(n)</u> <u>Guarantees by Subsidiaries that are not Loan Parties permitted by Section 7.05(b);</u>

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<u>(o)</u> <u>Guarantees by the Borrower or any Subsidiary of operating leases (other than Capital Lease Obligations) or of other obligations that do not constitute Indebtedness, in each case entered into by the Borrower or any Subsidiary in the ordinary course of business;</u>

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<u>(p)</u> <u>Guarantees permitted under Section 7.05 (except to the extent such Guarantee is expressly subject to this Section 7.04)</u>; and

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<u>(q)</u> (m) purchase or acquisition of inventory of Steinway dealers in the Ordinary Course of Business.

**Section 7.05 <u>Limitation on Indebtedness</u>.** No Loan Party shall, and no Loan Party shall suffer or permit any of its Subsidiaries to, create, incur, assume, permit to exist, or otherwise become or remain directly or indirectly liable with respect to, any Indebtedness, except:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a) Indebtedness incurred pursuant to this Agreement;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b) Indebtedness consisting of Contingent Obligations described in clause (i) of the definition thereof and permitted pursuant to Section 7.09;<u>Guarantees (i) by any Loan Party of any Indebtedness of the Borrowers or any other Loan Party permitted to be incurred under this Agreement, (ii) by the Borrowers or any other Loan Party of Indebtedness otherwise permitted hereunder of any Subsidiary that is not a Loan Party to the extent such Guarantees are permitted by Section 7.04 (other than Section 7.04(p)), (iii) by any Subsidiary that is not a Loan Party of Indebtedness of another Subsidiary that is not a Loan Party, and (iv) by the Borrowers of Indebtedness of Subsidiaries that are not Loan Parties incurred for working capital purposes in the</u> 

------

<u>Ordinary Course of Business on ordinary business terms so long as such Indebtedness is permitted to be incurred under Sections 7.05(i) or (l) to the extent such Guarantees are permitted by Section 7.04 (other than Section 7.04(p)): provided, that Guarantees by the Borrowers or any other Loan Party under this Section 7.05(b) of any other Indebtedness of a person that is subordinated to other Indebtedness of such person (I) shall be expressly subordinated to the Finance Obligations under this Agreement to at least the same extent as such underlying Indebtedness is subordinated and (II) shall not be guaranteed by any Subsidiary (other than a Borrower) unless such Subsidiary has also provided a Guarantee of the Finance Obligations pursuant to the Guaranty;</u>

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c) Indebtedness existing on the <u>Second Amendment</u> Effective Date and set forth in <u>Schedule 7.05</u> including Permitted Refinancings thereof;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(d) i) Indebtedness not to exceed $5,000,000 in the aggregate at any time outstanding, consisting of Capital Lease Obligations or secured by Liens permitted by <u>Section 7.01(h)</u> and Permitted Refinancings thereof and (ii) additional Capital Lease Obligations as a result of the sale and leasebacks permitted pursuant to <u>Section 7.02(h)</u>;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(e) Indebtedness consisting of the financing of insurance premiums 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;(f) unsecured intercompany Indebtedness permitted pursuant to <u>Section 7.04(b)</u> or otherwise described in the Structure Memorandum;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(g) subject to the Intercreditor Agreements, <u>(i)</u> Indebtedness under (i) the Term Credit Agreement; <u>provided</u>, that such Indebtedness shall not exceed the Senior Term Debt Cap (as defined in the ABL/Term Intercreditor Agreement) and (ii) the Second Lien Credit Agreement<u>Indebtedness</u>; <u>provided</u>, that such Indebtedness shall not exceed the Junior Term Debt Cap (as defined in the ABL/Term Intercreditor Agreement), in each case, including Permitted Refinancings thereof;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(h) other unsecured subordinated debt issued after the <u>Second Amendment</u> Effective Date by Holdings to former employees for the repurchase of their Holdings Stock so long as such debt is subject to a subordination agreement in favor of the Administrative Agent and which permit no payments of any kind other than those permitted by <u>Section 7.11(b)</u> until the Finance Obligations are paid in full and all Commitments are terminated and contain such other terms and conditions as shall be 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;(i) other unsecured Indebtedness not exceeding in the aggregate at any time outstanding $15,000,000; <u>provided</u> that such unsecured Indebtedness (i) shall not have scheduled amortization payments of principal or be subject to mandatory redemption, repurchase, prepayment or sinking fund obligations (except for customary asset sale or change of control provisions that provide for the prior repayment in full of the Loans, the satisfaction of all Letters of Credit (either Cash Collateralized or backstopped on terms reasonably satisfactory to the Administrative Agent) and all other Finance Obligations), in each case prior to the latest Maturity Date at the time such Indebtedness is incurred and (ii) shall not be scheduled to mature or mature prior to the date that is one hundred and eighty (180) days after the latest Maturity Date at the time such Indebtedness is incurred;

------

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(j) Indebtedness incurred by Foreign Subsidiaries (including Steinway and Sons, but only for so long as it is not a Loan Party hereunder) in an aggregate principal amount not to exceed $20,000,000 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;(k) Indebtedness that is in existence when a Person becomes a Subsidiary or that is secured by an asset when acquired by Holdings or a Subsidiary thereof, as long as such Indebtedness was not incurred in contemplation of such Person becoming a Subsidiary or such acquisition, and does not exceed $5,000,000 in the aggregate at any time<u>;</u>

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<u>(l)</u> <u>Indebtedness incurred</u> <u>by Foreign Subsidiaries (including Steinway and Sons, but only for so long as it is not a Loan Party hereunder)</u> <u>consisting of lines of credit or ordinary course working capital facilities; and</u>

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<u>(m)</u> <u>the Specified German Mortgage Debt</u>.

**Section 7.06 <u>Employee Loans and Transactions with Affiliates</u>.** No Loan Party shall, and no Loan Party shall suffer or permit any of its Subsidiaries to, enter into any transaction with any Affiliate of the Parent Borrower or of any such Subsidiary, except:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a) as expressly permitted by this Agreement;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b) in the Ordinary Course of Business and pursuant to the reasonable requirements of the business of such Loan Party or such Subsidiary upon fair and reasonable terms no less favorable to such Loan Party or such Subsidiary than would be obtained in a comparable arm's length transaction with a Person not an Affiliate of the Parent Borrower or such Subsidiary;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c) loans and advances to employees of Loan Parties to the extent permitted by <u>Section 7.04(c)</u>; and

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(d) non-cash loans or advances made by Holdings to employees of Loan Parties that are simultaneously used by such Persons to purchase Stock or Stock Equivalents of Holdings.

All such transactions existing as of the <u>Second Amendment</u> Effective Date are described in <u>Schedule 7.06</u>.

**Section 7.07 <u>Management Fees and Compensation</u>.** No Loan Party shall, and no Loan Party shall permit any of its Subsidiaries to, pay any management, consulting or similar fees to any Affiliate of any Loan Party or to any officer, director or employee of any Loan Party or any Affiliate of any Loan Party or pay or reimburse Sponsor or any of its Affiliates (other than a Loan Party) for any costs, expenses and similar items except:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a) Payment of any management, consulting or similar fees to any Loan Party;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b) payment of reasonable compensation to officers and employees for actual services rendered to the Loan Parties and their Subsidiaries 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;(c) payment of directors' fees and reimbursement of actual out-of-pocket expenses incurred in connection with attending board of director meetings not to exceed in the aggregate, with respect to all such items, $1,500,000 in any fiscal Year of the Parent Borrower; and

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(d) reimbursement of reasonable out-of-pocket costs and expenses to Sponsor.

**Section 7.08 <u>Use of Proceeds</u>.** No Loan Party shall, and no Loan Party shall suffer or permit any of its Subsidiaries to, use any portion of the Loan proceeds, directly or indirectly, to purchase or carry Margin Stock in a manner that would result in a violation of Regulation U of the federal Reserve Board, or repay or otherwise refinance Indebtedness of any Loan Party or others incurred to purchase or carry Margin Stock, or otherwise in any manner which is in contravention of any Requirement of Law or in violation of this Agreement.

**Section 7.09 <u>Reserved</u>.** Contingent Obligations. No Loan Party shall, and no Loan Party shall suffer or permit any of its Subsidiaries to, create, incur, assume or suffer to exist any Contingent Obligations except in respect of the finance Obligations and except:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a) endorsements for collection or deposit 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;(b) Rate Contracts entered into in the Ordinary Course of Business for bona fide hedging purposes and not for speculation with the Administrative Agent's prior written consent;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c) Contingent Obligations of the Loan Parties and their Subsidiaries existing as of the Effective Date and listed in Schedule 7.09, including extension and renewals thereof which do not increase the amount of such Contingent Obligations as of the date of such extension or renewal;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(d) Contingent Obligations incurred in the Ordinary Course of Business with respect to surety and appeal bonds, performance bonds and other similar obligations;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(e) Contingent Obligations arising under indemnity agreements to title insurers to cause such title insurers to issue to the Administrative Agent title insurance policies;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(f) Contingent Obligations arising with respect to customary indemnification obligations in favor of (i) sellers in connection with Acquisitions permitted hereunder and (ii) purchasers in connection with dispositions permitted under Section 7.02(b);

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(g) Reserved;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(h) Contingent Obligations arising under guarantees made in the Ordinary Course of Business of obligations of any Loan Party (other than Holdings), which obligations are otherwise permitted hereunder: provided that if such obligation is subordinated to the Finance Obligations, such guarantee shall be subordinated to the same extent;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(i) unsecured Contingent Obligations of Holdings with respect to Indebtedness of Foreign Subsidiaries (including Steinway and Sons, but only for so long as it is not a Loan party hereunder) permitted pursuant to Section 7.05(j) or 7.05(c) in an aggregate amount not to exceed $5,000,000 at any time outstanding;

------

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(j) other Contingent Obligations not exceeding $4,000,000 in the aggregate 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;(k) Contingent Obligations of Parent Borrower or any of its Subsidiary arising under guarantees of the Indebtedness of the Parent Borrower or any of its Subsidiaries permitted pursuant to Sections 7.05 (only to the extent that Parent Borrower or any of its Subsidiary that are guarantors of such Indebtedness would be permitted to incur such Indebtedness as primary obligors pursuant to Section-7.05) and 7.04(b).

**Section 7.10 <u>Reserved</u>.**

**Section 7.11 <u>Restricted Payments</u>.** No Loan Party shall, and no Loan Party shall suffer or permit any of its Subsidiaries to, (i) declare or make any dividend payment or other distribution of assets, properties, cash, rights, obligations or securities on account of any Stock or Stock Equivalent, (ii) purchase, redeem or otherwise acquire for value any Stock or Stock Equivalent now or hereafter outstanding or (iii) make any payment or prepayment of principal of, premium, if any, interest, fees, redemption, exchange, purchase, retirement, defeasance, sinking fund or similar payment with respect to, Subordinated Indebtedness or Indebtedness permitted pursuant to <u>Section 7,05(g)(ii)</u> (the items described in clauses (i), (ii) and (iii) above are referred to as "<u>Restricted Payments</u>"); except that any Subsidiary of the Parent Borrower may declare and pay dividends to the Parent Borrower or any Wholly-Owned Subsidiary of the Parent Borrower, and except that:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a) Holdings may declare and make dividend payments or other distributions payable solely in its Stock or Stock Equivalent; and

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b) the Parent Borrower may make distributions to Holdings which are immediately used by Holdings to redeem from officers, directors and employees whose employment by the Loan Parties has been terminated, Stock and Stock Equivalents (or to repay subordinated notes issued in redemption of such Stock or Stock Equivalents) provided all of the following conditions are satisfied:

&nbsp;&nbsp;&nbsp;&nbsp;&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) no Default or Event of Default has occurred and is continuing or would arise as a result of such Restricted 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;&nbsp;&nbsp;&nbsp;&nbsp;(ii) after giving effect to such Restricted Payment, the Loan Parties are in compliance on a pro forma basis with the covenant set forth in <u>Section 7.19</u>, recomputed for the most recent fiscal month for which financial statements have been delivered;

&nbsp;&nbsp;&nbsp;&nbsp;&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) the aggregate Restricted Payments permitted (x) in any Fiscal Year of the Parent Borrower shall not exceed the sum of $3,000,000 and the aggregate amount of such Restricted Payments permitted (but not made) in prior years pursuant to this clause (iii) under this clause and (y) during the term of this Agreement shall not exceed $15,000,000;

------

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(iv) after giving effect to such Restricted Payment, Availability is not less than the greater of $15,000,000 and 20% of the Revolving Facility Commitment;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c) in the event the Parent Borrower files a consolidated, combined, unitary or similar type income Tax return with Holdings and/or the direct or indirect parent or parents of Holdings, the Parent Borrower may make distributions to Holdings and/or the direct or indirect parent or parents of Holdings to permit Holdings and/or the direct or indirect parent or parents of Holdings to pay federal and state income Taxes then due and payable, <u>provided,</u> that (i) the amount of such distribution shall not be greater than the amount of such Taxes or expenses that would have been due and payable by the Parent Borrower and its relevant Subsidiaries had the Parent Borrower not filed a consolidated, combined, unitary or similar type return with Holdings and/or the direct or indirect parent or parents of Holdings and (ii) Holdings and/or the direct or indirect parent or parents of Holdings uses such distribution promptly to pay its Taxes;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(d) the Loan Parties may make (i) payments with respect to Indebtedness permitted pursuant to <u>Section 7.05(g)(ii)</u> (A) to the extent not prohibited by the Intercreditor Agreements, (B) in respect of payments of regularly scheduled interest or (C) in respect of Permitted Refinancings thereof permitted pursuant to <u>Section 7.05(g)(ii)</u> and (ii) Restricted Payments in the amount of Waivable Mandatory Prepayments <u>(as defined in the Term Credit Agreement)</u> applied in accordance with clauses (iii) and (iv<u>clause (ii</u>) of the last sentence of <u>Section 2.0</u><u>5(e)</u><u>3(e) of the Term Credit Agreement</u>;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(e) the Parent Borrower may make distributions to Holdings to permit Holdings to pay amounts required to maintain its corporate or other legal existence and for other customary overhead expenses; and

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(f) the Parent Borrower may make other Restricted Payments so long as either (i) the Permitted Transaction Conditions are satisfied at the time of such Restricted Payment or (ii) the aggregate amount of all such Restricted Payments made in reliance on this <u>clause (f)</u> shall not exceed the cumulative amount of Net Issuance Proceeds of all Qualifying Equity Issuances (other than any Specified Equity Contribution) made after the Closing<u>Second Amendment Effective</u> Date and Not Otherwise Applied.

**Section 7.12 <u>Change in Business</u>.**

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a) No Loan Party shall, and no Loan Party shall permit any of its Subsidiaries to, engage in any material line of business substantially different from those lines of business carried on by it on the <u>Second Amendment</u> Effective Date.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b) Holdings shall not (i) incur, directly or indirectly, any Indebtedness or any other obligation or liability whatsoever other than the Indebtedness and obligations under this Agreement, the other Loan Documents, the Term Loan Documents and the Second Lien Loan Documents and Contingent Obligations<u>Indebtedness</u> permitted pursuant to <u>Section 7.0</u><u>9</u><u>5</u> (i<u>b</u>); (ii) create or suffer to exist any Lien upon any property or assets now owned or hereafter acquired, leased or licensed by it other than the Liens created under the Collateral Documents, <u>the</u> Term Loan Documents and <u>the</u> Second Lien Loan Documents to which it is a party; (iii) engage in any business or activity or own any assets other than (A) holding shares in the Stock of the Parent

------

Borrower; (B) performing its obligations and activities related thereto under the Loan Documents and the Related Agreements and the documents, agreements and other instruments entered into in connection therewith; (C) participating in tax, accounting and other administrative activities as the parent of the consolidated group of Holdings, the Parent Borrower and the Parent Borrower's direct and indirect Subsidiaries, and other activities relating to the maintenance of its legal existence, including paying Taxes; (D) holding any cash or property received in connection with Restricted Payments permitted pursuant to <u>Section 7.11</u> pending prompt application thereof in accordance with such Section; (E) providing reasonable and customary indemnification to officers and directors; (F) issuing and offering its Stock, and incurring and paying the costs, fees and expenses in connection therewith, except to the extent any such transaction would result in an Event of Default under <u>Section 8.01</u>; (G)(x) incurring and paying fees, costs and expenses related to the transactions permitted by this paragraph (b), (y) paying management fees and transaction fees to the extent permitted pursuant to <u>Section 7.07</u> and (z) otherwise incurring ordinary overhead costs and expenses (including administrative, legal, account and similar expenses); and (H) other activities incidental to the foregoing; (iv) consolidate with or merge with or into, or convey, transfer, lease or license all or substantially all its assets to, any Person; (v) sell or otherwise dispose of any Stock of the Parent Borrower; (vi) create or acquire any Subsidiary or make or own any Investment in any Person other as set forth in clause (iii)(A) above; or (vii) fail to hold itself out to the public as a legal entity separate and distinct from all other Persons.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c) Steinway and Sons shall not own any Property located in the United States other than (i) Property that shall become inventory of a Loan Party within 90 days after its presence in the United States and (ii) Property that (at fair market value) does not exceed $2,000,000 in the aggregate for all such Property described in this clause (ii).

**Section 7.13** <u>**Reserved**</u>.

**Section 7.14 <u>Changes in Accounting, Name or Jurisdiction of Organization</u>**. No Loan Party shall, and no Loan Party shall suffer or permit any of its Subsidiaries to, (i) make any significant change in accounting treatment or reporting practices, except as required by GAAP, (ii) change the Fiscal Year or method for determining Fiscal Quarters of any Loan Party or of any consolidated Subsidiary of any Loan Party, (iii) change its name as it appears in official filings in its jurisdiction of organization or (iv) change its jurisdiction of organization, in the case of clauses (iii) and (iv), without at least 20 days' prior written notice to the Administrative Agent and after all actions necessary to continue the perfection of the Collateral Agent's Liens have been completed.

**Section 7.15 <u>Amendments to Related Agreements</u>**. No Loan Party shall and no Loan Party shall permit any of its Subsidiaries to (i) amend, supplement, waive or otherwise modify any provision of any Related Agreement in a manner adverse to the Administrative Agent or the Lenders or which would reasonably be expected to have a Material Adverse Effect; provided that any amendment, supplement, waiver or modification of any provision of any Related Agreement permitted pursuant to the terms of the Intercreditor Agreements shall not be considered adverse to the Administrative Agent or the Lenders or an amendment, supplement, waiver or other modification which would reasonably be expected to have a Material Adverse Effect, or (ii) take or fail to take any action under any Related Agreement that would reasonably be expected to have a Material Adverse Effect.

------

**Section 7.16 <u>No Negative Pledges</u>**.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a) No Loan Party shall, and no Loan Party shall permit any of its Subsidiaries to, directly or indirectly, create or otherwise cause or suffer to exist or become effective any consensual restriction or encumbrance of any kind on the ability of any such Subsidiary to pay dividends or make any other distribution on any of such Subsidiary's Stock or Stock Equivalents or to pay fees, including management fees, or make other payments and distributions to the Parent Borrower or any of its Subsidiaries other than those that exist by reason of any restriction existing under the Loan Documents, <u>or</u> the Term Loan Documents or the Second Lien Loan Documents as in effect on the date hereof; <u>provided</u>, <u>however</u>, that <u>(i) Second Lien Documents may contain restrictions on terms and conditions reasonably acceptable to the Collateral Agent and (ii)</u> agreements governing Indebtedness incurred by Foreign Subsidiaries permitted hereby may contain customary restrictions on the assets of such Foreign Subsidiaries. No Loan Party shall, and no Loan Party shall permit any of its Subsidiaries to, directly or indirectly, enter into, assume or become subject to any Contractual Obligation prohibiting or otherwise restricting the existence of any Lien upon any of its assets in favor of the Administrative Agent, whether now owned or hereafter acquired except (i) in connection with any document or instrument governing (A) Liens permitted pursuant to <u>Section 7.01(h)</u>, <u>7.01(i)</u> or <u>7.01(w) provided</u> that any such restriction contained therein relates only to the asset or assets subject to such permitted Liens or (B) Indebtedness permitted pursuant to <u>Section 7.05(d)</u> or <u>7.05(g)</u>, (ii) customary provisions restricting subletting or assignment of any lease governing a leasehold interest, (iii) restrictions and conditions applicable to customer deposits imposed by customers of the Loan Parties under contracts entered into the Ordinary Course of Business, (iv) restrictions and conditions contained in agreements relating to the sale of assets permitted hereunder; provided such restrictions are limited to the assets being sold and (v) customary provisions in joint venture agreements relating to purchase options, rights of first refusal or call or similar rights of a third party that owns Stock or Stock Equivalents in such joint venture (excluding for greater certainty, provisions that relate to the pledge of any such Stock or Stock Equivalents in such joint venture which shall be permitted to be made in favor of the Administrative Agent); <u>provided</u> that such restrictions and conditions were not entered into in contemplation or in connection with such Person becoming a Subsidiary.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b) No Loan Party shall issue any Stock or Stock Equivalents (i) if such Issuance would result in an Event of Default under <u>Section 8.01(k)</u> and (ii) unless such Stock and Stock Equivalents are pledged to the Collateral Agent, for the benefit of the Secured Parties, as security for the Finance Obligations, on substantially the same terms and conditions as the Stock and Stock Equivalents of the Loan Parties owned by Holdings were pledged to the Collateral Agent as of the Effective<u>Original Closing</u> Date.

**Section 7.17 <u>Sale-Leasebacks</u>.** Except as permitted under <u>Section 7.02(h)</u>, no Loan Party shall, and no Loan Party shall permit any of its Subsidiaries to, engage in a sale leaseback, synthetic lease or similar transaction involving any of its assets.

**Section 7.18 <u>Amendment of Organization Documents</u>**. The Loan Parties shall not amend any of its Organization Documents to (i) place any restrictions on the transfer or assignability of its Stock which would be materially adverse to the interests of the Lenders, (ii) place any limitations, directly or indirectly, on the exercise of the Administrative Agent's remedies set forth in the Pledge and Security Agreement, (iii) "opt-out" of Article 8 of the UCC for its state of organization with respect to its Stock or (iv) take any action otherwise prohibited by the Pledge and Security Agreement.

------

**Section 7.19 <u>Fixed Charge Coverage Ratio</u>**. If a Covenant Triggering Event occurs, Holdings shall not permit the Fixed Charge Coverage Ratio on a pro forma basis to be less than 1.00 to 1.00 for (i) the Measurement Period ended immediately prior to the Fiscal Quarter in which the Covenant Triggering Event occurs and for which financial statements have been (or are required to be) delivered under <u>Section 6.01(a)</u> or <u>(b)</u>, as applicable and (ii) each Measurement Period ending on the last day of any Fiscal Quarter while such Covenant Triggering Event is continuing and until the Fiscal Quarter during which no Default or Event of Default shall have existed and Availability shall have first exceeded 17.5<u>.0</u> % of the Revolving Facility Commitment, in each case, at all times during a period of 30 consecutive days.

**ARTICLE VIII** 

**DEFAULTS** 

**Section 8.01 <u>Events of Default</u>**. An Event of Default shall exist upon the occurrence of any of the following specified events or conditions (each an "<u>Event of Default</u>"):

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a) *<u>Non-Payment</u>*. Any Borrower or any other Loan Party fails to (i) pay when and as required to be paid herein, any amount of principal of any Loan, or (ii) pay within three Business Days after the same becomes due, any interest on any Loan, or any fee due hereunder, or (iii) pay within three Business Days after the same becomes due, any other amount payable hereunder or under any other Loan Document.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b) <u>*Covenants*</u>. Any Loan Party 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;&nbsp;&nbsp;&nbsp;&nbsp;(i) default in the due performance or observance of any term, covenant or agreement contained in <u>Section 6.02(j)</u>, <u>6.03(a)</u>, <u>6.04(a)</u> (but only to the extent that such Section relates to the maintenance of the organization or existence of any Loan Party or any of its Subsidiaries), <u>6.06</u>, <u>6.09</u>, <u>6.10</u>, <u>6.11</u> or <u>Article VII</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;&nbsp;&nbsp;&nbsp;&nbsp;(ii) default in the due performance or observance of any term, covenant or agreement contained in (A) <u>Section 6.01</u>, <u>6.02(a)</u> or <u>6.02(b)</u> and such default shall continue unremedied for a period of five Business Days after the earlier of a Responsible Officer of a Loan party becoming aware of such default or notice thereof given by the Administrative Agent or (B) <u>Section 6.02(d)</u> and such default shall continue unremedied for a period of two Business Days after the earlier of a Responsible Officer of a Loan Party becoming aware of such default or notice thereof given by the Administrative Agent; 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;(iii) default in the due performance or observance by it of any term, covenant or agreement (other than those referred to in <u>subsection (a)</u>, <u>(b)(i)</u> or <u>(b)(ii)</u> of this <u>Section 8.01</u>) contained in this Agreement and such default shall continue unremedied for a period of 30 days after the earlier of a Responsible Officer of a Loan Party becoming aware of such default or notice thereof given by the Administrative Agent.

------

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c) <u>*Other Loan Documents*</u>. Any Loan Party shall default in the due performance or observance of any term, covenant or agreement (other than those referred to in <u>subsection (a)</u> or <u>(b)</u> of this <u>Section 8.01)</u> in any of the other Loan Documents and such default shall continue unremedied for a period of 30 days after the earlier of the chief executive officer or chief financial officer of a Loan Party becoming aware of such default or notice thereof given by the Administrative Agent.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(d) <u>*Representations and Warranties*</u>. Any representation, warranty or statement made or deemed to be made by any Loan Party herein, in any of the other Loan Documents, or in any statement or certificate delivered or required to be delivered pursuant hereto or thereto shall prove to have been incorrect in any material respect on the date as of which it was made or deemed to have been made.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(e) <u>*Cross-Default*</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;&nbsp;&nbsp;&nbsp;&nbsp;(i) any Loan Party or any Subsidiary thereof (A) fails to make payment within five days of the due date thereof (whether by scheduled maturity, required prepayment, acceleration, demand or otherwise), regardless of amount, in respect of the Term Credit Agreement, the Second Lien Credit Agreement<u>Documents</u> or any other Indebtedness or Guarantee (other than in respect of (x) Indebtedness outstanding under the Loan Documents and (y) Rate Contracts) having an aggregate principal amount (including undrawn committed or available amounts and including amounts owing to all creditors under any combined or syndicated credit arrangement) of more than the Threshold Amount, (B) fails to perform or observe any other condition or covenant, or any other event shall occur or condition shall exist, under the Term Credit Agreement, the Second Lien Credit Agreement<u>Documents</u> or any agreement or instrument relating thereto or such other Indebtedness or Guarantee having an aggregate principal amount (including undrawn committed or available amounts and including amounts owing to all creditors under any combined or syndicated credit arrangement) of more than the Threshold Amount, if the effect of such failure, event or condition is to cause, or to permit the holder or holders or beneficiary or beneficiaries of such Indebtedness or Guarantee (or a trustee or agent on behalf of such holder or holders or beneficiary or beneficiaries) to cause, the Term Credit Agreement or such other Indebtedness to be declared to be due and payable prior to its stated maturity, or such Guarantee to become payable, or cash collateral in respect thereof to be demanded or (C) shall be required by the terms of the Term Credit Agreement, the Second Lien Credit Agreement<u>Documents</u> or such other Indebtedness or Guarantee having an aggregate principal amount (including undrawn committed or available amounts and including amounts owing to all creditors under any combined or syndicated credit arrangement) of more than the Threshold Amount to offer to prepay or repurchase such Indebtedness or the primary Indebtedness underlying such Guarantee (or any portion thereof) prior to the stated maturity thereof; 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;(ii) there occurs under any Rate Contract an Early Termination Date (as defined in such Rate Contract) resulting from (A) any event of default under such Rate Contract as to which Holdings or any of its Subsidiaries is the Defaulting Party (as defined in such Rate Contract) or (B) any Termination Event (as so defined) as to which Holdings or any of its Subsidiaries is an Affected Party (as so defined), and, in either event, the Swap Termination Value owed by Holdings or any of its Subsidiaries as a result thereof is greater than the Threshold Amount.

------

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(f) <u>*Insolvency Proceedings*</u>. Any Loan Party or any Subsidiary thereof institutes or consents to the institution of any proceeding under any Debtor Relief Law, or makes an assignment for the benefit of creditors; or applies for or consents to the appointment of any receiver, interim receiver, trustee, custodian, conservator, monitor, administrator, sequestrator, liquidator, rehabilitator or similar officer for it or for all or any material part of its property; or any receiver, interim receiver, trustee, custodian, conservator, monitor, administrator, sequestrator, liquidator, rehabilitator or similar officer is appointed without the application or consent of such Person and the appointment continues undischarged or unstayed for 60 calendar days; or any proceeding under any Debtor Relief Law relating to any such Person or to all or any material part of its property is instituted without the consent of such Person and continues undismissed or unstayed for 60 calendar days, or an order for relief is entered in any such proceeding.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(g) <u>*Inability to Pay Debts; Attachment*</u>. (i) Any Loan Party or any Subsidiary thereof becomes unable or admits in writing its inability or fails generally to pay its debts as they become due, or (ii) any writ or warrant of attachment or execution or similar process is issued or levied against all or any material part of the property of any such Person and is not released, vacated or fully bonded within 45 days after its issue or levy.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(h) <u>*Judgments*</u>. There is entered against any Loan Party or any Subsidiary thereof (i) one or more final judgments or orders for the payment of money in an aggregate amount (as to all such judgments and orders) exceeding the Threshold Amount (to the extent not covered by independent third-party insurance as to which the insurer is rated at least "A" by A.M. Best Company, has been notified of the potential claim and does not dispute coverage), or (ii) any one or more non-monetary final judgments that have, or could reasonably be expected to have, individually or in the aggregate, a Material Adverse Effect and, in either case of (i) and (ii), (A) enforcement proceedings are commenced by any creditor upon such judgment or order, or (B) there is a period of 20 consecutive days during which a stay of enforcement of such judgment, by reason of a pending appeal or otherwise, is not in effect.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(i) <u>*ERISA*</u>. One or more ERISA Events occur that individually or in the aggregate result in Liability to any Loan Party in an aggregate amount that would 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;(j) <u>*Invalidity of Loan Documents*</u>. Any material provision of any Loan Document, at any time after its execution and delivery and for any reason other than as expressly permitted hereunder or thereunder or satisfaction in full of all the ABL Credit Obligations, ceases to be in full force and effect; or any Loan Party or any of its controlled Affiliates contests in any manner the validity or enforceability of any provision of any Loan Document; or any Loan Party denies that it has any or further liability under any provision of any Loan Document (other than as result of the repayment in full of the Finance Obligations), or purports to revoke, terminate or rescind any provision of any Loan Document.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(k) <u>*Change of Control*</u>. A Change of Control shall occur.

------

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(l) <u>*Collateral Documents*</u>. Any Collateral Document after delivery thereof <u>including</u> pursuant to <u>Section 4.01</u>, <u>6.11</u> or <u>6.13</u> shall for any reason (other than pursuant to the terms thereof) cease to create a valid and perfected first priority Lien (subject to Liens permitted by <u>Section 7.01</u>) on the Collateral with an aggregate fair market value in excess of $5,000,000 purported to be covered thereby, except to the extent that any such loss of perfection or priority results from the failure of the Term Collateral Agent (subject to the ABL/Term Intercreditor Agreement) to maintain possession of certificates actually delivered to it representing securities pledged under the Pledge and Security Agreements and except to the extent that such loss is covered by a Lender's title insurance policy and the Administrative Agent shall be reasonably satisfied with the credit of such insurer.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(m) <u>*Invalidity of Subordination Provisions*</u>. The subordination provisions of either Intercreditor Agreement or any agreement or instrument governing any Subordinated Indebtedness shall for any reason be revoked or invalidated, or otherwise cease to be in full force and effect, or any Person shall contest in any manner the validity or enforceability thereof or deny that it has any further liability or obligation thereunder, or the ABL Credit Obligations, for any reason shall not have the priority contemplated by this Agreement, the Intercreditor Agreements or such subordination provisions.

**Section 8.02 <u>Remedies upon Event of Default</u>**. If any Event of Default occurs and is continuing, the Administrative Agent shall, at the request of, or may, with the consent of, the Required Lenders, take any or all of the following actions:

&nbsp;&nbsp;&nbsp;&nbsp;&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) declare the commitment of each Lender to make Loans and of the L/C Issuer to issue Letters of Credit to be terminated, whereupon such commitments and obligation shall be terminated;

&nbsp;&nbsp;&nbsp;&nbsp;&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) declare the unpaid principal amount of all outstanding Loans and L/C Obligations, all interest accrued and unpaid thereon, and all other amounts owing or payable hereunder or under any other Loan Document to be immediately due and payable, without presentment, demand, protest or other notice of any kind, all of which are hereby expressly waived by the Borrowers;

&nbsp;&nbsp;&nbsp;&nbsp;&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) require the Borrowers to Cash Collateralize the L/C Obligations (in an amount equal to the Minimum Collateral Amount 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;&nbsp;&nbsp;&nbsp;&nbsp;(iv) exercise on behalf of itself and the Lenders and the L/C Issuer all rights and remedies available to it and the Lenders under the Loan Documents;

<u>provided</u>, <u>however</u>, that upon the occurrence of an actual or deemed entry of an order for relief with respect to any Borrower or any other Loan Party under the Bankruptcy Code or any other Debtor Relief Law, the obligation of each Lender to make Loans and of the L/C Issuer to issue Letters of Credit shall automatically terminate, the unpaid principal amount of all outstanding Loans and L/C Obligations and all interest and other amounts as aforesaid shall automatically become due and payable, in each case without further act of the Administrative Agent, the L/C Issuer or any Lender.

------

**Section 8.03 <u>Application of Funds</u>**. After the exercise of remedies provided for in Section 8.02 (or after the Loans and L/C Obligations have automatically become immediately due and payable as set forth in the proviso to <u>Section 8.02</u>), any amounts received on account of the Finance Obligations shall, subject to the provisions of <u>Section 2.15</u>, be applied by the Administrative Agent in the following order:

FIRST, to payment of that portion of the Finance Obligations constituting fees, indemnities, expenses and other amounts (including fees, charges and disbursements of counsel to the Administrative Agent and amounts payable under <u>Article III</u>) payable to the Administrative Agent in its capacity as such;

SECOND, to payment of that portion of the Finance Obligations constituting accrued and unpaid Letter of Credit Fees and unpaid principal of the Letter of Credit Borrowings, ratably among the L/C Issuers in proportion to the respective amounts described in this <u>clause Second</u> held by them;

THIRD, to payment of that portion of the Finance Obligations constituting fees, indemnities and other amounts (other than principal and interest) payable to the Lenders and L/C Issuer(s) (including fees, charges and disbursements of counsel to the respective Lenders (including fees and time charges for attorneys who may be employees of any Lender or L/C Issuer)) arising under the Loan Documents and amounts payable under <u>Article III,</u> ratably among them in proportion to the respective amounts described in this <u>clause Third</u> payable to them;

FOURTH, to the Administrative Agent for the account of the L/C Issuers, to Cash Collateralize that portion of L/C Obligations comprised of the aggregate undrawn amount of Letters of Credit to the extent not otherwise Cash Collateralized by the Borrowers pursuant to <u>Sections 2.03</u> and <u>2.16</u>;

FIFTH, to payment of that portion of the Finance Obligations constituting accrued and unpaid interest on the Loans, L/C Obligations and other ABL Credit Obligations, ratably among the Lenders and L/C Issuer(s) in proportion to the respective amounts described in this <u>clause Fifth</u> payable to them;

SIXTH, to payment of that portion of the Finance Obligations constituting unpaid principal of the Loans and L/C Obligations and amounts then owing under Secured Cash Management Agreements and Secured Hedge Agreements, ratably among the Lenders and L/C Issuer(s) and Cash Management Banks and the Hedge Banks in proportion to the respective amounts described in this <u>clause Sixth</u> held by<u>payable to</u> them;

SEVENTH, <u>to payment of amounts then owing under Secured Hedge Agreements, ratably among the Hedge Banks in proportion to the respective amounts described in this clause Seventh payable to them;</u>

------

<u>EIGHTH,</u> to the Term Finance Obligations, if any, as and to the extent required by the ABL/Term Intercreditor Agreement; and LAST, the balance, if any, after all of the Finance Obligations have been indefeasibly paid in full, to the Borrowers or as otherwise required by law.

Subject to <u>Sections 2.03(c)</u> and <u>2.16</u>, amounts used to Cash Collateralize the aggregate undrawn amount of Letters of Credit pursuant to <u>clause Fourth</u> above shall be applied to satisfy drawings under such Letters of Credit as they occur. If any amount remains on deposit as Cash Collateral after all Letters of Credit have either been fully drawn or expired, such remaining amount shall be applied to the other Finance Obligations, if any, in the order set forth above.

Notwithstanding the foregoing, Finance Obligations arising under Secured Cash Management Agreements and Secured Hedge Agreements shall be excluded from the application described above if the Administrative Agent has not received written notice thereof, together with such supporting documentation as the Administrative Agent may request, from the applicable Cash Management Bank or Hedge Bank, as the case may be. Each Cash Management Bank or Hedge Bank not a party to this Agreement that has given the notice contemplated by the preceding sentence shall, by such notice, be deemed to have acknowledged and accepted the appointment of the Administrative Agent pursuant to the terms of <u>Article IX</u> hereof for itself and its Affiliates as if a "Lender" party hereto.

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

**Section 8.04 <u>Equity Cure</u>**. (a) In the event the Loan Parties fail to comply with the financial covenant set forth in <u>Section 7.19</u> as of the last day of any applicable Fiscal Quarter, any cash equity contribution to the Parent Borrower (funded with proceeds of common equity issued by Holdings or other equity issued by Holdings having terms reasonably acceptable to the Administrative Agent and in any case, not constituting Disqualified Stock) on or prior to the day that is fifteen Business Days after the day on which financial statements are required to be delivered for that Fiscal Quarter (such fifteen Business Day period, the "<u>Standstill Period</u>") will, at the irrevocable election of the Parent Borrower, be included in the calculation of Consolidated EBITDA solely for the purposes of determining compliance with the Fixed Charge Coverage Ratio for the relevant Measurement Period and any portion of subsequent period that includes such Fiscal Quarter (any such equity contribution so included in the calculation of Consolidated EBITDA, a "<u>Specified Equity Contribution</u>"); <u>provided</u> that (a) notice of the Parent Borrower's intent to make a Specified Equity Contribution shall be delivered no later than the day on which financial statements are required to be delivered for the applicable Fiscal Quarter, (b) in each consecutive four Fiscal Quarter period, there shall be at least two Fiscal Quarters in which no Specified Equity Contribution is made and there shall be no more than five Specified Equity Contributions made in the aggregate after the Effective<u>Original Closing</u> Date, (c) the amount of any Specified Equity Contribution shall be no greater than the amount required to cause the Loan Parties to be in pro forma compliance with the Fixed Charge Coverage Ratio, (d) all Specified Equity Contributions shall be disregarded for purposes of the calculation of Consolidated EBITDA for all other

------

purposes, including calculating basket levels, pricing and other items governed by reference to Consolidated EBITDA, (e) any Indebtedness prepaid with the proceeds of Specified Equity Contributions shall be deemed outstanding for purposes of determining compliance with the Fixed Charge Coverage Ratio for the current Fiscal Quarter and the next three Fiscal Quarters thereafter and (f) during the Standstill Period, no Borrowing shall be permitted to be made, and no Letter of Credit may be issued, amended, extended or renewed.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b) If, after giving effect to the adjustment referred to in <u>clause (a)</u> above, the Borrowers shall then be in compliance with the requirements of the financial covenant set forth in <u>Section 7.19</u>, the Borrowers shall be deemed to have satisfied such requirements as of the relevant date of determination with the same effect as though there had been no failure to comply therewith at such date, and the applicable breach or default of the financial covenant set forth in <u>Section 7.19</u> that had occurred shall be deemed cured for the purposes of this Agreement.

**ARTICLE IX** 

**AGENCY PROVISIONS** 

**Section 9.01 <u>Appointment and Authority</u>.**

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a) <u>*Administrative Agent*</u>. Each of the Lenders and L/C Issuer(s) hereby irrevocably appoints Bank of America to act on its behalf as the Administrative Agent hereunder and under the other Loan Documents and authorizes the Administrative Agent to take such actions on its behalf and to exercise such powers as are delegated to the Administrative Agent by the terms hereof or thereof, together with such actions and powers as are reasonably incidental thereto including, without limitation, the making of one or more Agent Advances or Overadvances; <u>provided</u> that (i) the Administrative Agent agrees, solely for the benefit of the Secured Parties, to exercise its rights and privileges under the ABL/Term Intercreditor Agreement after, and in accordance with, any direction to do so given by the Required Lenders and (ii) the Administrative Agent will not amend, waive or otherwise modify any provision of the ABL/Term Intercreditor Agreement without the prior consent of the Required Lenders. The provisions of this Article are solely for the benefit of the Administrative Agent, L/C Issuer(s) and the Lenders, and the Borrowers 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" herein or in any other Loan Documents (or any other 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 Requirement of Law. Instead such term is used as a matter of market custom, and is intended to create or reflect only an administrative relationship between contracting parties.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b) <u>*Collateral Agent*</u>. The Administrative Agent shall also act as the "collateral agent" under the Loan Documents, and each of the Lenders (including in its capacities as a potential Hedge Bank, Cash Management Bank and L/C Issuer) hereby irrevocably appoints and authorizes the Administrative Agent to act as the agent of such Lender and L/C Issuer for purposes of acquiring, holding and enforcing any and all Liens on Collateral granted by any of the Loan Parties to secure any of the Finance Obligations, together with such powers and discretion as are reasonably incidental thereto.

------

In this connection, the Administrative Agent, as "collateral agent" and any co-agents, sub-agents and attorneys-in-fact appointed by the Administrative Agent pursuant to <u>Section 9.05</u> for purposes of holding or enforcing any Lien on the Collateral (or any portion thereof) granted under the Collateral Documents, or for exercising any rights and remedies thereunder at the direction of the Administrative Agent), shall be entitled to the benefits of all provisions of this <u>Article IX</u> and <u>Article X</u> (including <u>Section 10.04(c),</u> as though such co-agents, sub-agents and attorneys-in-fact were the "collateral agent" under the Loan Documents) as if set forth in full herein with respect thereto.

**Section 9.02 <u>Rights as a Lender</u>**. The Person serving as the Administrative Agent hereunder shall, to the extent holding Revolving Facility Commitments or Loans hereunder, 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 the term "Lender" or "Lenders" shall, unless otherwise expressly indicated or unless the context otherwise requires, include the Person serving as the Administrative Agent hereunder in its individual capacity as a holder of Revolving Facility Commitments or Loans hereunder. Such Person and its Affiliates may accept deposits from, lend money to, own securities of, act as the financial advisor or in any other advisory capacity for and generally engage in any kind of business with the Borrowers or any Subsidiary or other Affiliate thereof as if such Person were not the Administrative Agent hereunder and without any duty to account therefor to the Lenders.

**Section 9.03 <u>Exculpatory Provisions</u>**. The Administrative Agent shall not have any duties or obligations except those expressly set forth herein and in the other Loan Documents, and its duties hereunder shall be administrative in nature. Without limiting the generality of the foregoing, 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;(i) shall not be subject to any fiduciary or other implied duties, regardless of whether a Default has occurred and is 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;&nbsp;&nbsp;&nbsp;&nbsp;(ii) shall not have any duty to take any discretionary action or exercise any discretionary powers, except discretionary rights and powers expressly contemplated hereby or by the other Loan Documents that the 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 expressly provided for herein or in the other Loan Documents); <u>provided</u> that the Administrative Agent shall not be required to take any action that, in its opinion or the opinion of its counsel, may expose the Administrative Agent to liability or that is contrary to any Loan Document or applicable law, including for the avoidance of doubt any action that may be in violation of the automatic stay under any Debtor Relief Law or that may effect a forfeiture, modification or termination of property of a Defaulting Lender in violation of any Debtor Relief Law; 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;(iii) shall not, except as expressly set forth herein and in the other Loan Documents, have any duty to disclose, and shall not be liable for the failure to disclose, any information relating to the Borrowers or any of its Affiliates that is communicated to or obtained by the Person serving as the 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 (i) with the consent or at the request of the Required Lenders (or such other number or percentage of the Lenders as shall be necessary, or as the Administrative Agent shall believe in good faith shall be necessary, under the circumstances as provided in <u>Sections 10.01</u> and <u>8.02</u>) or (ii) in the absence of its own gross negligence or willful misconduct, as determined by a court of competent jurisdiction by a final and nonappealable judgment. The Administrative Agent shall be deemed not to have knowledge of any Default unless and until notice describing such Default is given in writing to the Administrative Agent by the Parent Borrower, a Lender or an L/C Issuer.

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 this Agreement or any other Loan Document, (ii) the contents of any certificate, report or other document delivered hereunder or thereunder or in connection herewith or therewith, (iii) the performance or observance of any of the covenants, agreements or other terms or conditions set forth herein or therein or the occurrence of any Default, (iv) the validity, enforceability, effectiveness or genuineness of this Agreement, any other Loan Document or any other agreement, instrument or document, (v) the value or the sufficiency of any Collateral or (vi) the satisfaction of any condition set forth in <u>Article IV</u> or elsewhere herein, other than to confirm receipt of, and (in the case of items referred to in <u>Section 4.01)</u> whether or not it is reasonably satisfied with, items expressly required to be delivered to the Administrative Agent.

**Section 9.04 <u>Reliance by Administrative Agent</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 (including any electronic message, Internet or intranet website posting or other distribution) believed by it to be genuine and to have been signed, sent or otherwise authenticated by the proper Person. The Administrative Agent also may rely upon any statement made to it orally or by telephone or e-mail and believed by it to have been made by the proper Person, and shall not incur any liability for relying thereon. In determining compliance with any condition hereunder to the making of a Loan or the issuance, extension, renewal or increase of a Letter of Credit that by its terms must be fulfilled to the satisfaction of a Lender or an L/C Issuer, the Administrative Agent may presume that such condition is satisfactory to such Lender or L/C Issuer unless the Administrative Agent shall have received notice to the contrary from such Lender or L/C Issuer prior to the making of such Loan or the issuance, extension, renewal or increase of a Letter of Credit. 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 9.05 <u>Delegation of Duties</u>**. The Administrative Agent may perform any and all of its duties and exercise its rights and powers hereunder or under any other Loan Document by or through any one or more sub-agents appointed by the Administrative Agent. The Administrative Agent and any such sub-agent may perform any and all of its duties and exercise its rights and powers by or through their respective Related Parties. The exculpatory provisions of this <u>Article IX</u> 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 Administrative Agent. The Administrative Agent shall not be responsible for the negligence or misconduct of any sub-agents except to the extent that a court of competent jurisdiction determines in a final and non appealable judgment that the Administrative Agent acted with gross negligence or willful misconduct in the selection of such sub-agents.

------

**Section 9.06 <u>Resignation of Administrative Agent</u>**.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a) The Administrative Agent may at any time, upon 30 days' notice to the Borrowers, the Lenders and the L/C Issuer(s), resign as the Administrative Agent. Upon receipt of any such notice of resignation, the Required Lenders shall have the right, in consultation with the Parent Borrower, to appoint a successor, which shall be a bank with an office in the United States, or an Affiliate of any such bank with an office in the United States. If no such successor shall have been so appointed by the Required Lenders and shall have accepted such appointment within 30 days after the retiring Administrative Agent gives notice of its resignation, then the retiring Administrative Agent may on behalf of the Lenders and the L/C Issuer(s), appoint a successor Administrative Agent meeting the qualifications set forth above; <u>provided</u> that if the Administrative Agent shall notify the Parent Borrower, the Lenders and each L/C Issuer that no qualifying Person has accepted such appointment, then such resignation shall nonetheless become effective in accordance with such notice and (i) the retiring Administrative Agent shall be discharged from its duties and obligations hereunder and under the other Loan Documents (except that in the case of any collateral security held by the Administrative Agent on behalf of the Lenders and each L/C Issuer under any of the Loan Documents, the retiring Administrative Agent shall continue to hold such collateral security until such time as a successor Administrative Agent is appointed) and (ii) all payments, communications and determinations provided to be made by, to or through the Administrative Agent shall instead be made by or to each Lender or L/C issuer directly, until such time as the Required Lenders appoint a successor Administrative Agent as provided for above in this <u>Section 9.06</u>. Upon the acceptance of a successor's appointment as Administrative Agent hereunder, such successor shall succeed to and become vested with all of the rights, powers, privileges and duties of the retiring (or retired) Administrative Agent, and the retiring Administrative Agent shall be discharged from all of its duties and obligations hereunder or under the other Loan Documents (if not already discharged therefrom as provided above in this <u>Section 9.06</u>). After the retiring Administrative Agent's resignation hereunder and under the other Loan Documents, the provisions of this Article and <u>Section 10.04</u> 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 the retiring Administrative Agent was acting as Administrative Agent.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b) Any resignation by Bank of America as Administrative Agent pursuant to this <u>Section 9.06</u> shall also constitute its resignation as L/C Issuer and Swing Line Lender. If Bank of America resigns as an L/C Issuer, it shall retain all the rights, powers, privileges and duties of an L/C Issuer hereunder with respect to all Letters of Credit issued by it which are outstanding as of the effective date of its resignation as an L/C Issuer and all L/C Obligations with respect thereto, including the right to require the Lenders to make Base Rate Loans or fund risk participations in Unreimbursed Amounts pursuant to <u>Section 2.03(c)</u>. If Bank of America resigns as Swing Line Lender, it shall retain all the rights of the Swing Line Lender provided for hereunder with respect to Swing Line Loans made by it and outstanding as of the effective date of such resignation, including the right to require the Lenders to make Base Rate Loans or fund risk participations in outstanding Swing Line Loans pursuant to <u>Section 2.04(c)</u>. Upon the appointment by the Parent

------

Borrower of a successor L/C Issuer or Swing Line Lender hereunder (which successor shall in all cases be a Lender other than a Defaulting Lender), (a) such successor shall succeed to and become vested with all of the rights, powers, privileges and duties of the retiring L/C Issuer or Swing Line Lender, as applicable, (b) the retiring L/C Issuer and Swing Line Lender shall be discharged from all of its duties and obligations hereunder or under the other Loan Documents, and (c) the successor L/C Issuer shall issue letters of credit in substitution for the Letters of Credit, if any, issued by the retiring L/C Issuer which are outstanding at the time of such succession or make other arrangements satisfactory to Bank of America to effectively assume the obligations of Bank of America with respect to such Letters of Credit.

**Section 9.07 <u>Non-Reliance on Administrative Agent and Other Lenders</u>**. Each Lender and L/C Issuer acknowledges that it has, independently and without reliance upon the Administrative Agent or any other Lender or any of their Related Parties and based on such documents and information as it has deemed appropriate, made its own credit analysis and decision to enter into this Agreement. Each Lender and L/C Issuer also acknowledges that it will, independently and without reliance upon the Administrative Agent or any other Lender or any of their Related Parties and based on such documents and information as it shall from time to time deem appropriate, continue to make its own decisions in taking or not taking action under or based upon this Agreement, any other Loan Document or any related agreement or any document furnished hereunder or thereunder.

**Section 9.08 <u>No Other Duties, Etc</u>.** Anything herein to the contrary notwithstanding, none of the Joint Lead Arrangers, the Syndication Agent or any agent listed on the cover page hereof shall have any powers, duties or responsibilities under this Agreement or any of the other Loan Documents, except in its capacity, as applicable, as the Administrative Agent, the Collateral Agent, a Lender or L/C Issuer hereunder, or as expressly set forth herein.

**Section 9.09 <u>Administrative Agent May File Proofs of Claim</u>**. In case of the pendency of any proceeding under any Debtor Relief Law or any other judicial proceeding relative to any Loan Party, the Administrative Agent (irrespective of whether the principal of any Loan or L/C Obligation shall then be due and payable as herein expressed or by declaration or otherwise and irrespective of whether the Administrative Agent shall have made any demand on the Borrowers) shall be entitled and empowered, by intervention in such proceeding or otherwise, in each case, subject to the ABL/Term Intercreditor 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;&nbsp;&nbsp;&nbsp;&nbsp;(i) to file and prove a claim for the whole amount of the principal and interest owing and unpaid in respect of the Loans, L/C Obligations and all other ABL Credit Obligations that are owing and unpaid and to file such other documents as may be necessary or advisable in order to have the claims of the Lenders, the L/C Issuers and the Administrative Agent (including any claim for the reasonable compensation, expenses, disbursements and advances of the Lenders, the L/C Issuers and the Administrative Agent and their respective agents and counsel and all other amounts due the Lenders and the Administrative Agent under <u>Sections 2.03(h)</u> and <u>(i)</u>, <u>2.09</u> and <u>10.04)</u> allowed in such judicial proceeding; 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;(ii) to collect and receive any monies or other property payable or deliverable on any such claims and to distribute the same;

------

and any custodian, receiver, assignee, trustee, liquidator, sequestrator or other similar official in any such judicial proceeding is hereby authorized by each Lender to make such payments to the Administrative Agent and, in the event that the Administrative Agent shall consent to the making of such payments directly to the Lenders, to pay to the Administrative Agent any amount due for the reasonable compensation, expenses, disbursements and advances of the Administrative Agent and its agents and counsel, and any other amounts due the Administrative Agent under <u>Sections 2.03(h)</u> and <u>(i)</u>, <u>2.09</u> and <u>10.04</u>.

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

**Section 9.10 <u>Collateral and Guaranty Matters</u>**. Each of the Lenders (including in its capacities as a potential Hedge Bank and a potential Cash Management Bank) and the L/C Issuers irrevocably authorize either or both of the Administrative Agent and the Collateral Agent, at its or their option and in its or their 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;&nbsp;&nbsp;&nbsp;&nbsp;(i) to release any Lien on any property granted to or held by the Administrative Agent under any Loan Document (A) upon termination of the Aggregate Commitments and payment in full of all Finance Obligations (other than (x) contingent indemnification obligations and the expiration or termination of all Letters of Credit (other than Letters of Credit as to which other arrangements, including cash collateralization or backstopping, reasonably satisfactory to the Administrative Agent and the L/C Issuers shall have been made), and (y) obligations and liabilities under Secured Hedge Agreements and Secured Cash Management Agreements as to which arrangements satisfactory to the applicable Hedge Bank or Cash Management Bank, as applicable, shall have been made), (B) that is sold or to be sold as part of or in connection with any sale permitted hereunder or under any other Loan Document or (C) if approved, authorized or ratified in writing in accordance with <u>Section 10.01</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;&nbsp;&nbsp;&nbsp;&nbsp;(ii) to release any Guarantor from its obligations under the Guaranties if such Person ceases to be a Subsidiary or becomes an Excluded Subsidiary as a result of a transaction permitted hereunder; 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;(iii) to subordinate any Lien on any property granted to or held by the Administrative Agent under any Finance Document to the holder of any Lien on such property that is permitted by <u>Section 7.01(h)</u>.

Upon request by the Administrative Agent at any time, the Required Lenders will confirm in writing the Administrative Agent's and/or the Collateral Agent's authority to release or subordinate its interest in particular types or items of property, or to release any Guarantor from its obligations under the Guaranties pursuant to this <u>Section 9.10</u>. In each case as specified in this <u>Section 9.10</u>, the Administrative Agent or the Collateral Agent, as applicable, will, at the Borrowers' expense, execute and deliver to the applicable Loan Party such documents as such Loan Party may reasonably request to evidence the release of such item of Collateral from the assignment and security interest granted under the Collateral Documents or to subordinate its interest in such item, or to release such Guarantor from its obligations under the Guaranties, in each case in accordance with the terms of the Loan Documents and this <u>Section 9.10</u>.

------

The Administrative Agent shall not be responsible for or have a duty to ascertain or inquire into any representation or warranty regarding the existence, value or collectability of the Collateral, the existence, priority or perfection of the Administrative Agent's Lien thereon, or any certificate prepared by any Loan Party in connection therewith, nor shall the Administrative Agent be responsible or liable to the Lenders for any failure to monitor or maintain any portion of the Collateral.

**Section 9.11 <u>Secured Hedge Agreements and Secured Cash Management Agreements</u>.** Except as otherwise expressly set forth herein or in any Guaranty or any Collateral Document, no Hedge Bank or Cash Management Bank that obtains the benefits of <u>Section 8.03</u>, any Guaranty or any Collateral by virtue of the provisions hereof or of any Guaranty or any Collateral Document shall have any right to notice of any action or to consent to, direct or object to any action hereunder or under any other Loan Document or otherwise in respect of the Collateral (including the release or impairment of any Collateral) other than in its capacity as a Lender and, in such case, only to the extent expressly provided in the Loan Documents. Notwithstanding any other provision of this <u>Article IX</u> to the contrary, the Administrative Agent shall not be required to verify the payment of, or that other satisfactory arrangements have been made with respect to, Finance Obligations arising under Secured Hedge Agreements and Secured Cash Management Agreements unless the Administrative Agent has received written notice of such Finance Obligations, together with such supporting documentation as the Administrative Agent may request, from the Hedge Bank or Cash Management Bank, as applicable.

<u>**Section 9.12** Certain Representations.</u>

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<u>(a)</u> <u>Each Lender (x) represents and warrants, as of the date such Person became a Lender party hereto, to, and (y) covenants, from the date such Person became a Lender party hereto to the date such Person ceases being a Lender party hereto, for the benefit of, the Administrative Agent, and each other Lead Arranger and their respective Affiliates, and not, for the avoidance of doubt, to or for the benefit of the Borrower or any other Loan Party, that at least one of the following is and will be true:</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;&nbsp;&nbsp;&nbsp;&nbsp;(i) <u>such Lender is not using "plan assets" (within the meaning of 29 CFR § 2510.3-101, as modified by Section 3(42) of ERISA) of one or more Employee Benefit Plans in connection with the Loans, the Letters of Credit or the Revolving Facility Commitments,</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;&nbsp;&nbsp;&nbsp;&nbsp;(ii) <u>the transaction exemption set forth in one or more PTEs, such as PTE 84-14 (a class exemption for certain transactions determined by independent qualified professional asset managers), PTE 95-60 (a class exemption for certain transactions involving insurance company general accounts), PTE 90-1 (a class exemption for certain transactions involving insurance company pooled separate accounts), PTE 91-38 (a class exemption for certain transactions involving bank collective investment funds) or PTE 96-23 (a class exemption for certain transactions determined by in-house asset</u> <u>managers), is applicable with respect to such Lender's entrance into, participation in. administration of and performance of the Loans, the Letters of Credit, the Revolving Facility Commitments and this Agreement.</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;&nbsp;&nbsp;&nbsp;&nbsp;(iii) <u>A) such Lender is an investment fund managed by a "Qualified Professional Asset Manager" (within the meaning of Part VI of PTE 84-141, (B) such Qualified Professional Asset Manager made the investment decision on behalf of such Lender to enter into, participate in, administer and perform the Loans, the Letters of Credit, the Revolving Facility Commitments and this Agreement, (C) the entrance into, participation in. administration of and performance of the Loans, the Letters of Credit, the Revolving Facility Commitments and this Agreement satisfies the requirements of sub-sections (b) through (g) of Part I of PTE 84-14 and 1D1 to the best knowledge of such Lender, the requirements of subsection (a) of Part I of PTE 84-14 are satisfied with respect to such Lender's entrance into, participation in, administration of and performance of the Loans, the Letters of Credit, the Revolving Facility Commitments and this Agreement, 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;&nbsp;&nbsp;&nbsp;&nbsp;(iv) <u>such other representation, warranty and covenant as may be agreed in writing between the Administrative Agent, in its sole discretion, and such Lender.</u>

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<u>(b)</u> <u>In addition, unless sub-clause (i) in the immediately preceding clause (a) is true with respect to a Lender or such Lender has not provided another representation, warranty and covenant as provided in sub-clause (iv) in the immediately preceding clause tai, such Lender further (x) represents and warrants, as of the date such Person became a Lender party hereto, to, and (y) covenants, from the date such Person became a Lender party hereto to the date such Person ceases being a Lender party hereto, for the benefit of the Administrative Agent, and each other Lead Arranger and their respective Affiliates, and not, for the avoidance of doubt, to or for the benefit of the Borrower or any other Loan Party, that:</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;&nbsp;&nbsp;&nbsp;&nbsp;(i) <u>none of the Administrative Agent, or any other Lead Arranger or any of their respective Affiliates is a fiduciary with respect to the assets of such Lender (including in connection with the reservation or exercise of any rights by the Administrative Agent under this Agreement, any Loan Document or any documents related to hereto or thereto),</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;&nbsp;&nbsp;&nbsp;&nbsp;(ii) <u>the Person making the investment decision on behalf of such Lender with respect to the entrance into, participation in. administration of and performance of the Loans, the Letters of Credit, the Revolving Facility Commitments and this Agreement is independent (within the meaning of 29 CFR § 2510.3-211 and is a bank, an insurance carrier, an investment adviser, a broker-dealer or other person that holds, or has under management or control, total assets of at least $50 million, in each case as described in 29 CFR § 2510.3-21(c)(l)(i)(A)-(E),</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;&nbsp;&nbsp;&nbsp;&nbsp;(iii) <u>the Person making the investment decision on behalf of such Lender with respect to the entrance into, participation in, administration of and performance of the Loans, the Letters of Credit, the Revolving Facility Commitments and this Agreement is capable of evaluating investment risks independently, both in general and with regard to particular transactions and investment strategies (including in respect of the 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;&nbsp;&nbsp;&nbsp;&nbsp;(iv) <u>the Person making the investment decision on behalf of such Lender with respect to the entrance into, participation in, administration of and performance of the Loans, the Letters of Credit, the Revolving Facility Commitments and this Agreement is a fiduciary under ERISA or the Code, or both, with respect to the Loans, the Letters of Credit, the Revolving Facility Commitments and this Agreement and is responsible for exercising independent judgment in evaluating the transactions hereunder, and</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;&nbsp;&nbsp;&nbsp;&nbsp;(v) <u>no fee or other compensation is being paid directly to the Administrative Agent, or any other Lead Arranger or any their respective Affiliates for investment advice (as opposed to other services') in connection with the Loans, the Letters of Credit, the Revolving Facility Commitments or this Agreement.</u>

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<u>(c)</u> <u>The Administrative Agent and each other Lead Arranger hereby informs the Lenders that each such Person is not undertaking to provide impartial investment advice, or to give advice in a fiduciary capacity, in connection with the transactions contemplated hereby, and that such Person has a financial interest in the transactions contemplated hereby in that such Person or an Affiliate thereof (i) may receive interest or other payments with respect to the Loans, the Letters of Credit, the Revolving Facility Commitments and this Agreement, (ii) may recognize a gain if it extended the Loans, the Letters of Credit or the Revolving Facility Commitments for an amount less than the amount being paid for an interest in the Loans, the Letters of Credit or the Revolving Facility Commitments by such Lender or (iii) may receive fees or other payments in connection with the transactions contemplated hereby, the Loan Documents or otherwise, including structuring fees, commitment fees, arrangement fees, facility fees, upfront fees, underwriting fees, ticking fees, agency fees, administrative agent or collateral agent fees, utilization fees, minimum usage fees, letter of credit fees, fronting fees, deal-away or alternate transaction fees, amendment fees, processing fees, term out premiums, banker's acceptance fees, breakage or other early termination fees or fees similar to the foregoing.</u>

**ARTICLE X** 

**MISCELLANEOUS** 

**Section 10.01 <u>Amendments, Etc.</u>** No amendment or waiver of any provision of this Agreement or any other Loan Document, and no consent to any departure by the Borrowers or any other Loan Party therefrom, shall be effective unless in writing signed by the Required Lenders (or by the Administrative Agent with the consent or ratification of the Required Lenders or such other number or percentage of Lenders as may be specified herein) and the Borrowers or the applicable Loan Party, as the case may be, and acknowledged by the Administrative Agent, and each such waiver or consent shall be effective only in the specific instance and for the specific purpose for which given; provided that (x) the Administrative Agent and the Borrowers may, with the consent of the other, amend, modify or supplement this Agreement and any other Loan Document to cure any ambiguity, omission, typographical error, mistake, defect or inconsistency if such amendment, modification or supplement does not adversely affect the rights of any Agent, any Lender or any L/C Issuer and (y) no such amendment, waiver or consent 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;&nbsp;&nbsp;&nbsp;&nbsp;(i) A) waive any condition set forth in <u>Section 4.01</u> without the written consent of each Lender or (B) without limiting the generality of the preceding <u>clause (A)</u>, waive any condition set forth in <u>Section 4.02</u> as to any Credit Event under the Facility (it being understood that the waiver of any Default or Event of Default or the amendment or waiver of any covenant or representation contained herein shall not constitute a waiver of any condition set forth in <u>Section 4.01</u> or <u>Section 4.02</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;&nbsp;&nbsp;&nbsp;&nbsp;(ii) extend or increase the Revolving Facility Commitment of any Lender (or reinstate any Revolving Facility Commitment terminated pursuant to <u>Section 8.02</u>) without the written consent 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;&nbsp;&nbsp;&nbsp;&nbsp;(iii) postpone any date fixed by this Agreement or any other Loan Document for any payment (excluding mandatory prepayments) of principal, interest, fees or other amounts due to the Lenders (or any of them) hereunder or under such other Loan Document without the written consent of each Lender entitled to 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;&nbsp;&nbsp;&nbsp;&nbsp;(iv) reduce the principal of, or the rate of interest specified herein on, any Loan or Letter of Credit Borrowing, or (subject to <u>clause (ii)</u> of the second proviso to this <u>Section 10.01</u>) any fees or other amounts payable hereunder or under any other Loan Document without the written consent of each Lender entitled to such amount; <u>provided</u>, <u>however</u>, that only the consent of the Required Lenders shall be necessary to amend the definition of "Default Rate" or to waive any obligation of the Borrowers to pay interest or Letter of Credit Fees at the Default 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;&nbsp;&nbsp;&nbsp;&nbsp;(v) change <u>Section 2.13</u> or <u>Section 8.03</u> in a manner that would alter the pro rata sharing of payments required thereby without the written consent of each Lender (it being agreed that fees in connection with Permitted Amendments do not constitute non-pro rata payments under <u>Sections 2.13</u> or <u>8.03</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;&nbsp;&nbsp;&nbsp;&nbsp;(vi) change any provision of this <u>Section 10.01</u> or the definition of "Required Lenders" or any other provision hereof specifying the number or percentage of Lenders required to amend, waive or otherwise modify any rights hereunder or make any determination or grant any consent hereunder, without the written consent of each Lender;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(vii) release all or substantially all of the Collateral in any transaction or series of related transactions, without the written consent of each Lender; <u>provided</u> that the Collateral Agent may, without consent from any other Lender, release any Collateral that is sold or transferred by a Loan Party in compliance with <u>Section 7.05</u> or released in compliance with <u>Section 9.10(i)</u> or <u>(ii)</u> or otherwise as expressly provided in 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;&nbsp;&nbsp;&nbsp;&nbsp;(viii) release all or substantially all of the value of the Guaranties, without the written consent of each Lender, except to the extent the release of any Subsidiary from the Guaranties is permitted pursuant to <u>Section 9.10</u> (in which case such release may be made by the Administrative Agent acting alone) or as otherwise expressly provided in the Loan Documents, or release any Borrower without the written consent of each 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;&nbsp;&nbsp;&nbsp;&nbsp;(ix) increase the advance rates set forth in the definition of Borrowing Base without the consent of each Lender; 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;(x) except as otherwise set forth in the definitions of Eligible Accounts and Eligible Inventory, modify the eligibility criteria in respect of the Borrowing Base, or add new asset categories to the Borrowing Base, or otherwise cause the Borrowing Base availability under the Facility to be increased beyond the level permissible under this Agreement as then in effect, in each case without the written consent of each Lender.

and <u>provided</u>, <u>further</u>, that: (i) no amendment, waiver or consent shall, unless in writing and signed by each applicable L/C Issuer in addition to the Lenders required above, affect the rights or duties of such L/C Issuer under this Agreement or any Issuer Document relating to any Letter of Credit issued or to be issued by it; (ii) no amendment, waiver or consent shall, unless in writing and signed by the Swing Line Lender in addition to the Lenders required above, affect the rights or duties of the Swing Line Lender under this Agreement; (iii) no amendment, waiver or consent shall, unless in writing and signed by the Administrative Agent in addition to the Lenders required above, affect the rights or duties of the Administrative Agent under this Agreement or any other Loan Document; and (iii) the <u>Fee Letter and the Closing</u> Fee Letter may be amended, or rights or privileges thereunder waived, in a writing executed only by the parties thereto. Notwithstanding anything to the contrary herein, no Defaulting Lender shall have any right to approve or disapprove any amendment, waiver or consent hereunder (and any amendment, waiver or consent which by its terms requires the consent of all Lenders or each affected Lender may be effected with the consent of the applicable Lenders other than Defaulting Lenders), except that (x) the Revolving Facility Commitment of any Defaulting Lender may not be increased or extended without the consent of such Lender and (y) any waiver, amendment or modification requiring the consent of all Lenders or each affected Lender that by its terms affects any Defaulting Lender more adversely than other affected Lenders shall require the consent of such Defaulting Lender.

Notwithstanding any provision herein to the contrary, the Borrowers may, by written notice by the Parent Borrower to the Administrative Agent from time to time, make one or more offers (each, a "<u>Loan Modification Offer</u>") to all the Lenders to make one or more Permitted Amendments (as defined below) pursuant to procedures reasonably specified by the Administrative Agent and reasonably acceptable to the Parent Borrower. Such notice shall set forth (i) the terms and conditions of the requested Permitted Amendment and (ii) the date on which such Permitted Amendment is requested to become effective (which shall not be less than 10 Business Days nor more than 30 Business Days after the date of such notice) (or such shorter periods as are acceptable to the Administrative Agent). Permitted Amendments shall become effective only with respect to the Loans of those Lenders that accept the applicable Loan Modification Offer (such Lenders, the "<u>Accepting Lenders</u>"). Each Borrower and each Accepting Lender shall execute and deliver to the Administrative Agent an agreement in form and substance satisfactory to the Administrative Agent giving effect to the Permitted Amendment (a "<u>Loan Modification Agreement</u>") and such other documentation as the Administrative Agent shall reasonably specify to evidence the acceptance of the Permitted Amendments and the terms and conditions thereof. The Administrative Agent shall promptly notify each Lender as to the effectiveness of each Loan Modification Agreement. Each of the parties hereto hereby agrees that, upon the effectiveness of any Loan Modification Agreement, this Agreement shall be deemed amended to the extent (but only to the extent) necessary to reflect the existence and terms of the Permitted Amendment evidenced thereby and only with respect to the Loans and Revolving Facility Commitment of the Accepting Lenders. Notwithstanding the foregoing, no Permitted Amendment shall become effective under this paragraph unless the Administrative Agent, to the extent so reasonably

------

requested by the Administrative Agent, shall have received corporate documents, officers' certificates or legal opinions consistent with those delivered on the <u>Original</u> Closing Date under <u>Section 4.01</u>. As used in this paragraph, "<u>Permitted Amendments</u>" shall be limited to (i) an extension of the final maturity date of the Loans of the Accepting Lenders (<u>provided</u> that such extension may not result in having more than two additional final maturity dates in any year, or more than three additional final maturity dates at any time, under this Agreement without the consent of the Administrative Agent), (ii) a reduction, elimination or extension, of the scheduled amortization of the applicable Loans of the Accepting Lenders, (iii) a change in rate of interest (including a change to the Applicable Rate and any provision establishing a minimum rate), premium, or other amount with respect to the applicable Loans of the Accepting Lenders and/or a change in the payment of fees to the Accepting Lenders and/or a change in the payment of fees to the Accepting Lenders (such change and/or payments to be in the form of cash, Stock or other property to the extent not prohibited by this Agreement) and (iv) any other amendment to a Loan Document required to give effect to the Permitted Amendments described in <u>clauses (i)</u> through <u>(iii)</u> of this sentence.

If any Lender does not consent to a proposed amendment, waiver, consent or release with respect to any Loan Document that requires the consent of each Lender and that has been approved by the Required Lenders, the Parent Borrower may replace such non-consenting Lender in accordance with <u>Section 10.13</u>; <u>provided</u> that such amendment, waiver, consent or release can be effected as a result of the assignment contemplated by such Section (together with all other such assignments required by the Parent Borrower to be made pursuant thereto).

**Section 10.02 <u>Notices; Effectiveness; Electronic Communication</u>.**

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

&nbsp;&nbsp;&nbsp;&nbsp;&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) if to a Borrower, the Administrative Agent, L/C Issuer or Swing Line Lender, to the address, telecopier number, electronic mail address or telephone number specified for such Person on <u>Schedule 10.02</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;&nbsp;&nbsp;&nbsp;&nbsp;(ii) if to any other Lender, to the address, telecopier number, electronic mail address or telephone number specified in its Administrative Questionnaire (including, as appropriate, notices delivered solely to the Person designated by a lender on its Administrative Questionnaire then in effect for the delivery of notices that may contain non-public information relating to the Borrowers).

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

------

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b) <u>*Electronic Communications*</u>. Notices and other communications to the Lenders and L/C Issuers hereunder may be delivered or furnished by electronic communication (including e-mail and Internet or intranet websites) pursuant to procedures approved by the Administrative Agent; <u>provided</u> that the foregoing shall not apply to notices to any Lender or L/C Issuer pursuant to <u>Article II</u> if such Lender or L/C Issuer has notified the Administrative Agent that it is incapable of receiving notices under such Article by electronic communication. The Administrative Agent or the Parent Borrower may, in its discretion, agree to accept notices and other communications to it hereunder by electronic communications 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 prescribes, (i) notices and other communications sent to an e-mail address shall be deemed received upon the sender's receipt of an acknowledgement from the intended recipient (such as by the "return receipt requested" function, as available, return e-mail or other written acknowledgement); <u>provided</u> that if such notice or other communication is not sent during the normal business hours of the recipient, such notice or communication shall be deemed to have been sent at the opening of business on the next business day for the recipient, and (ii) notices or communications posted to an Internet or intranet website shall be deemed received upon the deemed receipt by the intended recipient at its e-mail address as described in the foregoing <u>clause (i)</u> of notification that such notice or communication is available and identifying the website address therefor.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c)*<u>The Platform</u>*. THE PLATFORM IS PROVIDED "AS IS" AND "AS AVAILABLE." THE AGENT PARTIES (AS DEFINED BELOW) DO NOT WARRANT THE ACCURACY OR COMPLETENESS OF THE BORROWER MATERIALS OR THE ADEQUACY OF THE PLATFORM AND EXPRESSLY DISCLAIM LIABILITY FOR ERRORS IN OR OMISSIONS FROM THE BORROWER MATERIALS. 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 BORROWER MATERIALS OR THE PLATFORM. In no event shall the Administrative Agent or any of its Related Parties (collectively, "<u>Agent Parties</u>") have any liability to Holdings, any Borrower, any Lender, any L/C Issuer or any other Person for losses, claims, damages, liabilities or expenses of any kind (whether in tort, contract or otherwise) arising out of any Loan Party's or the Administrative Agent's transmission of Borrower Materials through<u>or notices through the Platform, any other electronic platform, electronic messaging service, or</u> electronic telecommunications or other information transmission systems, except for direct or "economic" (as such term is used in Title 18, United States Code, Section 1030(g)) (as opposed to special, indirect, consequential or punitive) losses, claims, damages, liabilities or expenses to the extent that such losses, claims, damages, liabilities or expenses (x) are determined by a court of competent jurisdiction by a final an nonappealable judgment to have resulted from the gross negligence or willful misconduct of such Agent Party or (y) result from a claim brought by Holdings, any Borrower or any other Loan Party against an Indemnitee for material breach of such Indemnitee's

------

obligations hereunder or under any other Loan Document in respect of Borrower Materials made available through electronic telecommunications or other information transmission systems, if Holdings, such Borrower or such Loan Party has obtained a final and nonappealable judgment in its favor on such claim as determined by a court of competent jurisdiction; <u>provided</u>, <u>however</u>, that in no event shall any Agent Party have any liability to Holdings any Borrower, any Lender or any other Person for indirect, special, incidental, consequential or punitive damages (as opposed to such direct or "economic" damages).

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(d) <u>*Change of Address, Etc*</u>. Each of the Borrowers and the Administrative Agent may change its address, telecopier or telephone number for notices and other communications hereunder by notice to the other parties hereto. Each other Lender and L/C Issuer may change its address, telecopier or telephone number for notices and other communications hereunder by notice to the Parent Borrower and the Administrative Agent. In addition, each Lender and L/C Issuer agrees to notify the Administrative Agent from time to time to ensure that the Administrative Agent has on record (i) an effective address, contact name, telephone number, telecopier number and electronic mail address to which notices and other communications may be sent and (ii) accurate wire instructions for such Lender or L/C Issuer. Furthermore, each Public Lender agrees to cause at least one individual at or on behalf of such Public Lender to at all times have selected the "Private Side Information" or similar designation on the content declaration screen of the Platform in order to enable such Public Lender or its delegate, in accordance with such Public Lender's compliance procedures and applicable Requirement of Law, including United States Federal and state securities Requirements of Law, to make reference to Borrower Materials that are not made available through the "Public Side Information" portion of the Platform and that may contain MNPI with respect to the Borrowers or their securities for purposes of United States federal or state securities laws.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(e)*<u>Reliance by Administrative Agent, Lenders and L/C Issuer</u>*. The Administrative Agent, the L/C Issuers and the Lenders shall be entitled to rely and act upon any notices (including telephonic notices) purportedly given by or on behalf of the Borrowers or any other Loan Party even if (i) such notices were not made in a manner specified herein, were incomplete or were not preceded or followed by any other form of notice specified herein or (ii) the terms thereof, as understood by the recipient, varied from any confirmation thereof. The Borrowers shall, jointly and severally, indemnify the Administrative Agent, each L/C Issuer, each Lender and the Related Parties of each of them from all losses, costs, expenses and liabilities resulting from the reliance by such Person on each notice purportedly given by or on behalf of the Borrowers. All telephonic notices to and other communications with the Administrative Agent may be recorded by the Administrative Agent, and each of the parties hereto hereby consents to such recording.

**Section 10.03 <u>No Waiver; Cumulative Remedies; Enforcement</u>**. No failure by any Lender, L/C Issuer or by the Administrative Agent to exercise, and no delay by any such Person in exercising, any right, remedy, power or privilege hereunder shall operate as a waiver thereof; nor shall any single or partial exercise of any right, remedy, power or privilege hereunder preclude any other or further exercise thereof or the exercise of any other right, remedy, power or privilege. The rights, remedies, powers and privileges herein provided are cumulative and not exclusive of any rights, remedies, powers and privileges provided by Requirement of Law.

------

Notwithstanding anything to the contrary contained herein or in any other Loan Document, the authority to enforce rights and remedies hereunder and under the other Loan Documents against the Loan Parties or any of them shall be vested exclusively in, and all actions and proceedings at law in connection with such enforcement shall be instituted and maintained exclusively by, the Administrative Agent in accordance with <u>Section 8.02</u> for the benefit of all the Lenders and the L/C Issuers; <u>provided</u>, <u>however</u>, that the foregoing shall not prohibit (i) the Administrative Agent from exercising on its own behalf the rights and remedies that inure to its benefit (solely in its capacity as Administrative Agent) hereunder and under the other Loan Documents, (ii) any L/C Issuer or the Swing Line Lender from exercising the rights and remedies that inure to its benefit (solely in its capacity as L/C Issuer or Swing Line Lender, as the case may be) hereunder and under the other Loan Documents, (iii) subject in all cases to the ABL/Term Intercreditor Agreement, any Lender from exercising setoff rights in accordance with <u>Section 10.08</u> (subject to the terms of <u>Section 2.10)</u>, (iv) subject in all cases to the ABL/Term Intercreditor Agreement, any Lender from filing proofs of claim or appearing and filing pleadings on its own behalf during the pendency of a proceeding relative to any Loan Party under any Debtor Relief Law or (v) any L/C Issuer from exercising the rights and remedies that inure to its benefit solely in its capacity as L/C Issuer hereunder and under the other Loan Documents; <u>provided</u>, <u>further</u>, that if at any time there is no Person acting as Administrative Agent hereunder and under the other Loan Documents, then (x) the Required Lenders shall have the rights otherwise ascribed to the Administrative Agent pursuant to <u>Section 8.02</u> and (y) in addition to the matters set forth in <u>clauses (ii)</u>, <u>(iii)</u>, <u>(iv)</u> and <u>(v)</u> of the preceding proviso and subject to <u>Section 2.10</u>, any Lender may, with the consent of the Required Lenders, enforce any rights and remedies available to it and as authorized by the Required Lenders.

**Section 10.04 <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;(a) <u>*Costs and Expenses*</u>. Holdings and each of the Borrowers, jointly and severally, agree to pay (i) all reasonable and invoiced 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 of the credit facilities provided for herein, the preparation, negotiation, execution, delivery and administration of this Agreement and the other Loan Documents or any amendments, modifications or waivers (including any proposed amendments, modifications or waivers) of the provisions hereof or thereof (whether or not the transactions contemplated hereby or thereby shall be consummated), (ii) all reasonable and documented out-of-pocket expenses incurred by any L/C Issuer in connection with the issuance, amendment, renewal or extension of any Letter of Credit or any demand for payment thereunder and (iii) all reasonable and invoiced out-of-pocket expenses incurred by the Administrative Agent, any Lead Arranger, any Lender or any L/C Issuer (including the fees, charges and disbursements of any counsel for the Administrative Agent, any Lender or any L/C Issuer), in connection with the enforcement or protection of its rights (A) in connection with this Agreement and the other Loan Documents, including its rights under this <u>Section 10.04</u>, or (B) in connection with the Loans and Letters of Credit made hereunder, including all such invoiced out-of-pocket expenses incurred during any workout, restructuring or negotiations in respect of such Loans or Letters of Credit; <u>provided</u> that Holdings and the Borrowers shall not be required to reimburse the legal fees and expenses of more than one outside counsel (in addition to any special counsel and up to one local counsel in each applicable local jurisdiction) for all Persons indemnified under this <u>subsection (a)</u> unless, in the reasonable opinion of those indemnified

------

Persons seeking reimbursement of such legal fees and expenses under this <u>subsection (a)</u>, representation of all such indemnified persons would be inappropriate due to the existence of an actual or potential conflict of interest, in which case Holdings and the Borrowers shall only be required to reimburse the invoiced out-of-pocket legal fees and expenses of no more than such minimum number of additional outside counsel for the indemnified persons as is necessary to avoid any actual or potential conflict of interest.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b)*<u>Indemnification</u>*. Holdings and each Borrower, jointly and severally, shall indemnify the Administrative Agent (and any sub-agent thereof), the Lead Arranger, each Lender, each L/C Issuer and each Related Party of any of the foregoing Persons (each such Person being called an "<u>Indemnitee</u>") against, and hold each Indemnitee harmless from, any and all actual losses, claims, damages, liabilities and related expenses (including the reasonable fees, out-of-pocket charges and disbursements of any outside counsel for any Indemnitee), incurred by any Indemnitee or asserted against any Indemnitee by any third party or by any Borrower or any other Loan Party arising out of, in connection with, or as a result of (i) the execution or delivery of this Agreement, any other Loan Document or any agreement or instrument contemplated hereby or thereby, the performance by the parties hereto of their respective obligations hereunder or thereunder or the consummation of the transactions contemplated hereby or thereby or, in the case of the Administrative Agent (and any sub-agent thereof) and its Related Parties only, the administration of this Agreement and the other Loan Documents, (ii) any Loan or Letter of Credit or the use or proposed use of the proceeds therefrom (including any refusal by an L/C Issuer 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), (iii) any actual or alleged presence or release of Hazardous Materials on or from any property owned or operated by any Borrower or any of its Subsidiaries, or any liability under Environmental Laws related in any way to any Borrower or any of its Subsidiaries, or (iv) any actual or prospective claim, litigation, investigation or proceeding brought by a third party or by any Borrower or any other Loan Party or any Borrower's or such Loan Party's directors, shareholders or creditors, and regardless of whether any Indemnitee is a party thereto; <u>provided</u> that such indemnity shall not, as to any Indemnitee, be available to the extent that such losses, claims, damages, liabilities or related expenses are determined by a court of competent jurisdiction by final and non-appealable judgment to have resulted from the gross negligence or willful misconduct of such Indemnitee; <u>provided further</u> that Holdings, the Borrowers and the other Loan Parties shall not be required to reimburse the legal fees and expenses of more than one outside counsel (in addition to any reasonably necessary special counsel and up to one local counsel in each applicable local jurisdiction) for all Indemnitees unless, in the reasonable opinion of such indemnified Persons seeking indemnity under this <u>subsection (b)</u>, representation of all such Indemnitees would be inappropriate due to the existence of an actual or potential conflict of interest, in which case Holdings and the Borrowers shall only be required to reimburse the invoiced out-of-pocket fees and expenses of no more than such minimum number of additional outside counsel for the Indemnitees as is necessary to avoid any actual or potential conflict of interest.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c) <u>*Reimbursement by Lenders*</u>. To the extent that Holdings and the Borrowers for any reason fail indefeasibly to pay any amount required under <u>subsection (a)</u> or <u>(b)</u> of this <u>Section 10.04</u> to be paid by it or them to the Administrative Agent (or any sub-agent thereof), any L/C Issuer, the Swing Line Lender or any Related Party of any of the foregoing, each Lender and each L/C Issuer severally agrees to pay to the Administrative Agent (or any such sub-agent), the

------

Swing Line Lender or such Related Party, as the case may be, such Lender's Revolving Facility Percentage (determined as of the time that the applicable unreimbursed expense or indemnity payment is sought) of such unpaid amount; <u>provided</u> that the unreimbursed expense or indemnified loss, claim, damage, liability or related expense, as the case may be, was incurred by or asserted against the Administrative Agent (or any such sub-agent), an L/C Issuer or the Swing Line Lender in its capacity as such, or against any Related Party of any of the foregoing acting for the Administrative Agent (or any such sub-agent) in connection with such capacity. The obligations of the Lenders under this <u>subsection (c)</u> are subject to the provisions of <u>Section 2.12(d)</u>.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(d) <u>*Waiver of Consequential Damages*</u>. To the fullest extent permitted by applicable Requirement of Law, Holdings and the Borrowers shall not assert, and hereby waives, and acknowledges that no other Person shall have, any claim against any Indemnitee, on any theory of liability, for special, indirect, consequential or punitive damages (as opposed to direct or actual damages) arising out of, in connection with, or as a result of, this Agreement, any other Loan Document or any agreement or instrument contemplated hereby, the transactions contemplated hereby or thereby, any Loan or Letter of Credit or the use of the proceeds thereof. No Indemnitee referred to in <u>subsection (b)</u> above shall be liable for any damages arising from the use by unintended recipients of any information or other materials distributed by it through telecommunications, electronic or other information transmission systems in connection with this Agreement or the other Loan Documents or the transactions contemplated hereby or thereby other than for direct or actual damages resulting from the gross negligence or willful misconduct of such Indemnitee as determined by a final and nonappealable judgment of a court of competent jurisdiction.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(e)*<u>Payments</u>*. All amounts due under this <u>Section 10.04</u> shall be payable not later than fifteen Business Days after written demand therefor, including a reasonable detail of such amount to be paid.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(f)*<u>Survival</u>*. The agreements in this <u>Section 10.04</u> and the indemnity provisions of <u>Section 10.02(e)</u> shall survive the resignation of the Administrative Agent, any L/C Issuer and the Swing Line Lender, the replacement of any Lender, the termination of the Aggregate Commitments and the repayment, satisfaction or discharge of all the other ABL Credit Obligations.

**Section 10.05 <u>Payments Set Aside</u>**. To the extent that any payment by or on behalf of the Borrowers or any other Loan Party is made to the Administrative Agent, any L/C Issuer or any Lender, or the Administrative Agent, L/C Issuer or any Lender exercises its right of set-off, and such payment or the proceeds of such set-off or any part thereof is subsequently invalidated, declared to be fraudulent or preferential, set aside or required (including pursuant to any settlement entered into by the Administrative Agent, such L/C Issuer or such Lender in its discretion) to be repaid to a trustee, receiver or any other party, in connection with any proceeding under any Debtor Relief Law or otherwise, then (i) to the extent of such recovery, the obligation or part thereof originally intended to be satisfied shall be revived and continued in full force and effect as if such payment had not been made or such set-off had not occurred, and (ii) each Lender and L/C Issuer severally agrees to pay to the Administrative Agent upon demand its applicable share of any amount so recovered from or repaid by the Administrative Agent, plus interest thereon from the date of such demand to the date such payment is made at a rate per annum equal to the Federal Funds Rate from time to time in effect. The obligations of the Lenders under clause (ii) of the preceding sentence shall survive the payment in full of the ABL Credit Obligations and the termination of this Agreement.

------

**Section 10.06 <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;(a) <u>*Successors and Assigns Generally*</u>. The provisions of this Agreement shall be binding upon and inure to the benefit of the parties hereto and their respective successors and assigns permitted hereby, except that neither the Borrowers nor any other Loan Party may assign or otherwise transfer any of its rights or obligations hereunder without the prior written consent of the Administrative Agent and each Lender and no Lender may assign or otherwise transfer any of its rights or obligations hereunder except (i) to an assignee in accordance with the provisions of <u>Section 10.06(b)</u>, (ii) by way of participation in accordance with the provisions of <u>Section 10.06(d)</u>, or (iii) by way of pledge or assignment of a security interest subject to the restrictions of <u>Section 10.06(e)</u> (and any other attempted assignment or transfer by any party hereto shall be null and void). Nothing in this Agreement, expressed or implied, shall be construed to confer upon any Person (other than the parties hereto, their respective successors and assigns permitted hereby, Participants to the extent provided in <u>subsection (d)</u> of this <u>Section 10.06</u> and, to the extent expressly contemplated hereby, the Related Parties of each of the Administrative Agent 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;(b) <u>*Assignments by Lenders*</u>. Any Lender may at any time assign to one or more assignees all or a portion of its rights and obligations under this Agreement (including all or a portion of its Revolving Facility Commitment(s) and the Loans (including for purposes of this <u>Section 10.06(b)</u>, participations in L/C Obligations) at the time owing to it); <u>provided</u> that any such assignment shall be subject to 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;&nbsp;&nbsp;&nbsp;&nbsp;(i) <u>*Minimum Amounts*</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;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(A) in the case of an assignment of the entire remaining amount of the assigning Lender's Revolving Facility Commitment and the Loans at the time owing to it or in the case of an assignment to a Lender, an Affiliate of a Lender or an Approved Fund, no minimum amount need be assigned; 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;(B) in any case not described in <u>subsection (b)(i)(A)</u> of this <u>Section 10.06</u>, the aggregate amount of the Revolving Facility Commitment (which for this purpose includes Loans outstanding thereunder) or, if the Revolving Facility Commitment is not then in effect, the principal outstanding balance of the Loans of the assigning Lender subject to each such assignment, determined as of the date the Assignment and Assumption with respect to such assignment is delivered to the Administrative Agent or, if "Trade Date" is specified in the Assignment and Assumption, as of the Trade Date, shall not be less than $1,000,000, unless each of the Administrative Agent and, so long as no Event of Default has occurred and is continuing, the Parent Borrower otherwise consents (each such consent not to be unreasonably withheld or delayed); <u>provided</u>, <u>however,</u> that concurrent assignments to members of an Assignee Group and concurrent assignments from members of an Assignee Group to a single Eligible Assignee (or to an Eligible Assignee and members of its Assignee Group) will be treated as a single assignment for purposes of determining whether such minimum amount has been met;

------

&nbsp;&nbsp;&nbsp;&nbsp;&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) *<u>Proportionate Amounts</u>*. 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 with respect to the Revolving Facility Loans or the Revolving Facility Commitment assigned, except that this clause (ii) shall not (A) apply to the Swing Line Lender's rights and obligations in respect of Swing Line Loans or (B) prohibit any Lender from assigning all or a portion of its rights and obligations among separate Facilities and any facilities provided pursuant the second paragraph of <u>Section 10.01</u> on a non-pro rata basis.

&nbsp;&nbsp;&nbsp;&nbsp;&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)*<u>Required Consents</u>*. No consent shall be required for any assignment except to the extent required by <u>subsection (b)(i)(B)</u> of this <u>Section 10.06</u> and, in addition:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&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 consent of the Parent Borrower (such consent not to be unreasonably withheld or delayed) shall be required unless (1) an Event of Default has occurred and is continuing at the time of such assignment or (2) such assignment is to a Lender, an Affiliate of a Lender or an Approved Fund; <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 Business Days after having received notice thereof; and <u>provided</u>, <u>further,</u> that the Parent Borrower's consent shall not be required during the primary syndication of the Facility;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&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 consent of the Administrative Agent (such consent not to be unreasonably withheld or delayed) shall be required for assignments in respect of (i) any Revolving Facility Commitment if such assignment is to a Person that is not a Lender with a Revolving Facility Commitment, an Affiliate of such Lender or an Approved Fund with respect to such Lender or (ii) any Loan to a Person that is not a Lender, an Affiliate of a Lender or an Approved Fund; 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;(C) the consent of each L/C Issuer and the Swing Line Lender (such consent not to be unreasonably withheld or delayed) shall be required for any assignment in respect of the Facility.

&nbsp;&nbsp;&nbsp;&nbsp;&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) <u>*Assignment and Assumption*</u>. The parties to each assignment shall execute and deliver to the Administrative Agent an Assignment and Assumption, together with a processing and recordation fee in the amount of $3,500 (treating multiple, simultaneous assignments within an Assignee Group as a single assignment); <u>provided</u>, <u>however,</u> that the Administrative Agent may, in its sole discretion, elect to waive such processing and recordation fee in the case of any assignment. The assignee, if it is not a Lender, shall deliver to the Administrative Agent an Administrative Questionnaire.

------

&nbsp;&nbsp;&nbsp;&nbsp;&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) *<u>No Assignment to Certain Persons</u>*. No such assignment shall be made (i) to any Borrower or any of the Borrowers' Affiliates or Subsidiaries (other than as set forth in <u>Section 10.06(g)</u>), (ii) to any Defaulting Lender or any of its Subsidiaries, or any Person who, upon becoming a Lender hereunder, would constitute any of the foregoing Persons described in this <u>clause (ii)</u> or (iii) to a natural 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;(vi) *<u>Certain Additional Payments</u>*. In connection with any assignment of rights and obligations of any Defaulting Lender hereunder, no such assignment shall be effective unless and until, in addition to the other conditions thereto set forth herein, the parties to the assignment shall make such additional payments to the Administrative Agent in an aggregate amount sufficient, upon distribution thereof as appropriate (which may be outright payment, purchases by the assignee of participations or subparticipations, or other compensating actions, including funding, with the consent of the Parent Borrower and the Administrative Agent, the applicable pro rata share of Loans previously requested but not funded by the Defaulting Lender, to each of which the applicable assignee and assignor hereby irrevocably consent), to (x) pay and satisfy in full all payment liabilities then owed by such Defaulting Lender to the Administrative Agent or any Lender hereunder (and interest accrued thereon) and (y) acquire (and fund as appropriate) its full pro rata share of all Loans and participations in Letters of Credit and Swing Line Loans in accordance with its Revolving Facility Percentage. Notwithstanding the foregoing, in the event that any assignment of rights and obligations of any Defaulting Lender hereunder shall become effective under applicable Requirement of Law without compliance with the provisions of this paragraph, then the assignee of such interest shall be deemed to be a Defaulting Lender for all purposes of this Agreement until such compliance occurs.

Subject to acceptance and recording thereof by the Administrative Agent pursuant to <u>subsection (c)</u> of this <u>Section 10.06</u>, from and after the effective date specified in each Assignment and Assumption, the assignee thereunder shall be a party to this Agreement and, to the extent of the interest assigned by such Assignment and Assumption, have the rights and obligations of a Lender under this Agreement, and the assigning Lender thereunder shall, to the extent of the interest assigned by such Assignment and Assumption, be released from its obligations under this Agreement (and, in the case of an Assignment and Assumption covering all of the assigning Lender's rights and obligations under this Agreement, such Lender shall cease to be a party hereto but shall continue to be entitled to the benefits of <u>Sections 3.01</u>, <u>3.04</u>, <u>3.05</u> and <u>10.04</u> with respect to facts and circumstances occurring prior to the effective date of such assignment); <u>provided</u>, 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. Upon request to the Parent Borrower, the Borrowers (at their expense) shall execute and deliver a Note to the assignee Lender. Any assignment or transfer by a Lender of rights or obligations under this Agreement that does not comply with this subsection shall be treated for purposes of this Agreement as a sale by such Lender of a participation in such rights and obligations in accordance with <u>Section 10.06(d)</u>.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c) *<u>Register</u>*. The Administrative Agent, acting solely for this purpose as an agent of the Borrowers (and such agency being solely for Tax purposes), shall maintain at the Administrative Agent's Office a copy of each Assignment and Assumption delivered to it (or the equivalent thereof in electronic form) and a register for the recordation of the names and addresses

------

of the Lenders and L/C Issuers, and the Revolving Facility Commitment of, and principal amounts (and stated interest) of the Loans and Letter of Credit Borrowings owing to, each Lender and L/C Issuer pursuant to the terms hereof from time to time (the "<u>Register</u>"). The entries in the Register shall be conclusive absent manifest error, and the Borrowers, the Administrative Agent, the Lenders and the L/C Issuer may treat each Person whose name is recorded in the Register pursuant to the terms hereof as a Lender or L/C Issuer hereunder for all purposes of this Agreement, notwithstanding notice to the contrary. In addition, the Administrative Agent shall maintain on the Register information regarding the designation, and revocation of designation, of any Lender as a Defaulting Lender. The Register shall be available for inspection by the Borrowers and any Lender, at any reasonable time and from time to time upon reasonable prior notice.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(d)*<u>Participations</u>*. Any Lender may at any time, without the consent of, or notice to, any Borrower or the Administrative Agent, sell participations to any Person (other than a natural person, a Defaulting Lender, any Borrower or any of the Borrowers' Affiliates or Subsidiaries) (each, a "<u>Participant</u>") in all or a portion of such Lender's rights and/or obligations under this Agreement (including all or a portion of its Revolving Facility Commitment and/or the Loans (including such Lender's participation in L/C Obligations and/or Swing Line 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 Lenders and the L/C Issuer 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, waiver or other modification described in <u>clause (y)</u> of the first proviso to <u>Section 10.01</u> that affects such Participant. Subject to subsection (c) of this Section, the Borrowers agree that each Participant shall be entitled to the benefits and subject to the requirements of <u>Sections 3.01</u>, <u>3.04</u> and <u>3.05</u> to the same extent as if it were a Lender and had acquired its interest by assignment pursuant to <u>Section 10.06(b)</u> (it being understood that the documentation required under <u>Section 3.01(e)</u> shall be delivered to the Lender who sells the participation) to the same extent as if it were a Lender and had acquired its interest by assignment pursuant to <u>paragraph (b)</u> of this Section; <u>provided</u> that such Participant agrees to be subject to the provisions of <u>Sections 3.06</u> and <u>10.13</u> as if it were an assignee under <u>paragraph (b)</u> of this Section. Each Lender that sells a participation agrees, at the Parent Borrower's request and expense, to use reasonable efforts to cooperate with the Parent Borrower to effectuate the provisions of <u>Section 3.06</u> with respect to any Participant. To the extent permitted by law, each Participant also shall be entitled to the benefits of <u>Section 10.08</u> as though it were a Lender, <u>provided</u> such Participant agrees to be subject to <u>Section 2.11</u> 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 the Loan Documents (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 any 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 under Section 5f.103-1(c) of the United States Treasury Regulations. The entries in the Participant Register shall be conclusive absent manifest error, and such Lender shall treat each Person whose name is recorded in the Participant Register as the owner of such participation for all purposes of this Agreement notwithstanding any notice to the contrary. For the avoidance of doubt, the 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;(e) <u>*Limitation Upon Participant Rights*</u>. A Participant shall not be entitled to receive any greater payment under <u>Section 3.01</u> or <u>3.04</u> than the applicable Lender would have been entitled to receive with respect to the participation sold to such Participant, unless the sale of the participation to such Participant is made with the Parent Borrower's prior written consent. A Participant that would be a Foreign Lender if it were a Lender shall not be entitled to the benefits of <u>Section 3.01</u> unless the Parent Borrower is notified of the participation sold to such Participant and such Participant agrees, for the benefit of the Borrowers, to comply with <u>Section 3.01(e)</u> as though it were a Lender.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(f) <u>*Certain Pledges*</u>. Any Lender may at any time pledge or assign a security interest in all or any portion of its rights under this Agreement (including under its Note, if any) to secure obligations of such Lender, including any pledge or assignment to secure obligations to a Federal Reserve Bank; <u>provided</u> that no such pledge or assignment shall release such Lender from any of its obligations hereunder or substitute any such pledgee or assignee for such Lender as a party hereto.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(g)*<u>Resignation as an L/C Issuer or Swing Line Lender after Assignment</u>*. Notwithstanding anything to the contrary contained herein, if at any time Bank of America assigns all of its Revolving Facility Commitment and Loans pursuant to <u>Section 10.06(b)</u>, Bank of America may, (i) upon 30 days' notice to the Parent Borrower and the Lenders, resign as an L/C Issuer and/or (ii) upon 30 days' notice to the Parent Borrower, resign as Swing Line Lender. In the event of any such resignation as an L/C Issuer or Swing Line Lender, the Parent Borrower shall be entitled to appoint from among the Lenders a successor L/C Issuer or Swing Line Lender hereunder; <u>provided</u>, <u>however</u>, that no failure by the Parent Borrower to appoint any such successor shall affect the resignation of Bank of America as an L/C Issuer or Swing Line Lender. If Bank of America resigns as an L/C Issuer, it shall retain all the rights, powers, privileges and duties of an L/C Issuer hereunder with respect to all Letters of Credit issued by it which remain outstanding as of the effective date of its resignation as an L/C Issuer and all L/C Obligations with respect thereto (including the right to require the Lenders to make Base Rate Loans or fund risk participations in Unreimbursed Amounts pursuant to <u>Section 2.03(c)</u>). If Bank of America resigns as the Swing Line Lender, it shall retain all the rights of the Swing Line Lender provided for hereunder with respect to Swing Line Loans made by it and outstanding as of the effective date of such resignation, including the right to require the Lenders to make Base Rate Loans or fund risk participations in outstanding Swing Line Loans pursuant to <u>Section 2.04(c)</u>. Upon the appointment of a successor L/C Issuer and/or Swing Line Lender, (i) such successor shall succeed to and become vested with all of the rights, powers, privileges and duties of the retiring L/C Issuer or Swing Line Lender, as the case may be, and (ii) the successor L/C Issuer shall issue letters of credit in substitution for the Letters of Credit, if any, issued by the retiring L/C Issuer and remaining outstanding at the time of such succession or make other arrangements satisfactory to Bank of America to effectively assume the obligations of Bank of America with respect to such Letters of Credit.

------

**Section 10.07 <u>Treatment of Certain Information; Confidentiality</u>**. Each of the Administrative Agent, the L/C Issuers and the Lenders agrees to maintain the confidentiality of the Information, except that Information (as defined below) may be disclosed: (i) to its Affiliates and to it and its Affiliates' respective partners, directors, officers, employees, agents, trustees, advisors and representatives (it being understood that the Persons to whom such disclosure is made will be informed of the confidential nature of such Information and instructed to keep such Information confidential); (ii) to the extent required or requested by any regulatory authority purporting to have jurisdiction over it (including any self-regulatory authority, such as the National Association of Insurance Commissioners) in which case the Administrative Agent, L/C Issuer or such Lender, as applicable, shall use reasonable efforts ((x) to the extent legally permissible but (y) not in the case of any such requests which are part of, or arise out of, normal reporting or review procedures to, or examination by, any such regulatory authority) to notify the Parent Borrower prior to such disclosure; (iii) to the extent required by applicable Laws or regulations or by any subpoena or similar legal process in which case the Administrative Agent, such L/C Issuer or such Lender, as applicable, shall use reasonable efforts (to the extent permitted) to notify the Parent Borrower prior to such disclosure; (iv) to any other party hereto; (v) in connection with the exercise of any remedies hereunder or under any other Loan Document or any action or proceeding relating to this Agreement or any other Loan Document or the enforcement of rights hereunder or thereunder, (vi) subject to an agreement containing provisions substantially the same as those of this <u>Section 10.07</u>, to (A) any assignee of or Participant in, or any prospective assignee of or Participant in, any of its rights or obligations under this Agreement or (B) any actual or prospective counterparty (or its advisors) to any swap or derivative transaction relating to the Borrowers and their obligations, (vii) on a confidential basis to (A) any ratings agency in connection with rating Holdings, the Borrowers or their Subsidiaries or the credit facilities provided hereunder or (B) the CUSIP Service Bureau or any similar agency in connection with the issuance and monitoring of CUSIP numbers or other market identifiers with respect to the credit facilities provided hereunder, (viii) with the consent of the Parent Borrower or (ix) to the extent such Information (A) becomes publicly available other than as a result of a breach of this <u>Section 10.07</u> or (B) becomes available to the Administrative Agent, any Lender or any of their respective Affiliates on a nonconfidential basis (to their knowledge) from a source other than the Borrowers. For purposes of this <u>Section 10.07</u>, "<u>Information</u>" means all information received from Holdings or any of its Subsidiaries relating to any of them or any of their respective businesses, other than any such information that is available to the Administrative Agent or any Lender on a nonconfidential basis prior to disclosure by Holdings or any of its Subsidiaries; provided that, in the case of information received from Holdings or any of its Subsidiaries after the date hereof, such information is clearly identified at the time of delivery as confidential or delivered pursuant to <u>Section 6.01</u>, <u>6.02</u> or <u>6.03</u> hereof. Any Person required to maintain the confidentiality of Information as provided in this <u>Section 10.07</u> 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. Notwithstanding the foregoing, any Agent and any Lender may place advertisements in financial and other newspapers and periodicals or on a home page or similar place for dissemination of information on the Internet or worldwide web as it may choose, and circulate similar promotional materials, after the closing of the transactions contemplated by this Agreement in the form of a "tombstone" or otherwise describing the names of the Loan Parties, or any of them, and the amount, type and closing date of such transactions, all at their sole expense.

------

Each of the Administrative Agent, L/C Issuer and the Lenders acknowledges that (i) the Information may include MNPI concerning Holdings, the Borrowers or one or more Subsidiaries, as the case may be, (ii) it has developed compliance procedures regarding the use of MNPI and (iii) it will handle such MNPI in accordance with applicable Requirements of Law, including federal and state securities Requirements of Law.

**Section 10.08 <u>Right of Setoff</u>**. If an Event of Default shall have occurred and be continuing, each Lender and each L/C Issuer and each of their respective Affiliates is hereby authorized at any time and from time to time, to the fullest extent permitted by applicable Requirement of Law (subject to the provisions of the ABL/Term Intercreditor Agreement, if applicable) to set off and apply any and all deposits (general or special, time or demand, provisional or final, in whatever currency) at any time held and other obligations (in whatever currency) at any time owing by such Lender or L/C Issuer or any such Affiliate to or for the credit or the account of the Borrowers or any other Loan Party against any and all of the obligations of the Borrowers or such Loan Party now or hereafter existing under this Agreement or any other Loan Document to such Lender or L/C Issuer, irrespective of whether or not such Lender shall have made any demand under this Agreement or any other Loan Document and although such obligations of the Borrowers or such Loan Party may be contingent or unmatured or are owed to a branch or office of such Lender or L/C Issuer different from the branch or office holding such deposit or obligated on such indebtedness; <u>provided</u>, that in the event that any Defaulting Lender shall exercise any such right of setoff, (x) all amounts so set off shall be paid over immediately to the Administrative Agent for further application in accordance with the provisions of <u>Section 2.15</u> and, pending such payment, shall be segregated by such Defaulting Lender from its other funds and deemed held in trust for the benefit of the Administrative Agent, the L/C Issuers and the Lenders, and (y) the Defaulting Lender shall provide promptly to the Administrative Agent a statement describing in reasonable detail the Finance Obligations owing to such Defaulting Lender as to which it exercised such right of setoff. The rights of each Lender, each L/C Issuer and their respective Affiliates under this <u>Section 10.08</u> are in addition to other rights and remedies (including other rights of setoff) that such Lender, L/C Issuer or their respective Affiliates may have. Each Lender and each L/C Issuer agrees to notify the Parent Borrower and the Administrative Agent promptly after any such setoff and application; <u>provided</u> that the failure to give such notice shall not affect the validity of such setoff and application.

**Section 10.09 <u>Interest Rate Limitation</u>**. Notwithstanding anything to the contrary contained in any Loan Document, the interest paid or agreed to be paid under the Loan Documents shall not exceed the maximum rate of non-usurious interest permitted by applicable Requirements of Law (the "<u>Maximum Rate</u>"). If the Administrative Agent or any Lender shall receive interest in an amount that exceeds the Maximum Rate, the excess interest shall be applied to the principal of the Loans or, if it exceeds such unpaid principal, refunded to the Borrowers. In determining whether the interest contracted for, charged, or received by the Administrative Agent or a Lender exceeds the Maximum Rate, such Person may, to the extent permitted by applicable Requirement of Law, (i) characterize any payment that is not principal as an expense, fee, or premium rather than interest, (ii) exclude voluntary prepayments and the effects thereof and (iii) amortize, prorate, allocate, and spread in equal or unequal parts the total amount of interest throughout the contemplated term of the ABL Credit Obligations hereunder.

------

**Section 10.10 <u>Counterparts; Integration; Effectiveness</u>**. This Agreement may be executed in counterparts (and by different parties hereto in different counterparts), each of which shall constitute an original, but all of which when taken together shall constitute a single contract. This Agreement and the other Loan Documents constitute the entire contract among the parties relating to the subject matter hereof and supersede any and all previous agreements and understandings, oral or written, relating to the subject matter hereof. Except as provided in <u>Section 4.01</u>, 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 that, when taken together, bear the signatures of each of the other parties hereto. Delivery of an executed counterpart of a signature page of this Agreement by telecopy or other electronic imaging means shall be effective as delivery of a manually executed counterpart of this Agreement.

**Section 10.11 <u>Survival of Representations and Warranties</u>**. All representations and warranties made hereunder and in any other Loan Document or other document delivered pursuant hereto or thereto or in connection herewith or therewith shall survive the execution and delivery hereof and thereof. Such representations and warranties have been or will be relied upon by the Administrative Agent, each Lender and each L/C Issuer, regardless of any investigation made by any Agent, any Lender or any L/C Issuer or on their behalf and notwithstanding that the Administrative Agent, any Lender or any L/C Issuer may have had notice or knowledge of any Default or Event of Default at the time of any Borrowing, and shall continue in full force and effect as long as any Loan or any other ABL Credit Obligation shall remain unpaid or unsatisfied or any Letter of Credit shall remain outstanding.

**Section 10.12 <u>Severability</u>**. If any provision of this Agreement or the other Loan Documents is held to be illegal, invalid or unenforceable, (i) the legality, validity and enforceability of the remaining provisions of this Agreement and the other Loan Documents shall not be affected or impaired thereby and (ii) the parties shall endeavor in good faith negotiations to replace the illegal, invalid or unenforceable provisions with valid provisions the economic effect of which comes as close as possible to that of the illegal, invalid or unenforceable provisions. The invalidity of a provision in a particular jurisdiction shall not invalidate or render unenforceable such provision in any other jurisdiction. Without limiting the foregoing provisions of this <u>Section 10.12</u>, if and to the extent that the enforceability of any provisions in this Agreement relating to Defaulting Lenders shall be limited by Debtor Relief Laws, as determined in good faith by the Administrative Agent, then such provisions shall be deemed to be in effect only to the extent not so limited.

**Section 10.13 <u>Replacement of Lenders</u>**. If any Lender requests compensation under Section 3.04, or if the Borrowers are required to pay any additional amount to any Lender or any Governmental Authority for the account of any Lender pursuant to Sections 3.06 or 3.01, <u>or</u> if any Lender is a Defaulting Lender<u>, or if any Lender is a non-consenting Lender that may be replaced pursuant to the final paragraph of Section 10.01</u> or if any other circumstance exists hereunder that gives the Parent Borrower the right to replace a Lender as a party hereto, then the Parent Borrower may, at its sole expense and effort, upon notice to such Lender and the Administrative Agent, require such Lender to assign and delegate, without recourse (in accordance

------

with and subject to the restrictions contained in, and consents required by, <u>Section 10.06</u>), all of its interests, rights (other than its existing rights to payments pursuant to <u>Sections 3.01</u> and <u>3.04</u>) and obligations under this Agreement and the related Loan Documents to an assignee that shall assume such obligations (which assignee may be another Lender, if a Lender accepts such assignment), <u>provided</u> that:

&nbsp;&nbsp;&nbsp;&nbsp;&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) the Parent Borrower shall have paid to the Administrative Agent the assignment fee specified in <u>Section 10.06(b)</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;&nbsp;&nbsp;&nbsp;&nbsp;(ii) such Lender shall have received payment of an amount equal to 100% of the outstanding principal of its Loans, accrued interest thereon, accrued fees and all other amounts payable to it hereunder and under the other Loan Documents (including any amounts under <u>Section 3.05)</u> from the assignee (to the extent of such outstanding principal and accrued interest and fees) or the Parent Borrower (in the case of all other amounts);

&nbsp;&nbsp;&nbsp;&nbsp;&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) in the case of any assignment resulting from a claim for compensation under <u>Section 3.04</u> or payments required to be made pursuant to <u>Section 3.01</u>, such assignment will result in a reduction in such compensation or payments thereafter; 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;(iv) such assignment does not conflict with applicable Requirements of Law.

A Lender shall not be required to make any such assignment or delegation if, prior thereto, as a result of a waiver by such Lender or otherwise, the circumstances entitling the Borrowers to require such assignment and delegation cease to apply. Each Lender agrees that, if the Borrowers elect to replace such Lender in accordance with this Section, it shall promptly execute and deliver to the Administrative Agent an Assignment and Assumption to evidence such sale and purchase and shall deliver to the Administrative Agent any Note (if Notes have been issued in respect of such Lender's Loans) subject to such Assignment and Assumption; <u>provided</u> that the failure of any such non-consenting Lender to execute an Assignment and Assumption shall not render such sale and purchase (and the corresponding assignment) invalid and such assignment shall be recorded in the Register.

**Section 10.14 <u>Governing Law; Jurisdiction Etc</u>**.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a) <u>*Governing Law*</u>. THIS AGREEMENT AND THE OTHER LOAN DOCUMENTS AND THE RIGHTS AND OBLIGATIONS OF THE PARTIES HEREUNDER AND THEREUNDER SHALL BE GOVERNED BY AND CONSTRUED AND INTERPRETED IN ACCORDANCE WITH THE INTERNAL LAWS OF THE STATE OF NEW YORK (INCLUDING, WITHOUT LIMITATION, SECTION 5-1401 OF THE GENERAL OBLIGATIONS LAW OF THE STATE OF NEW YORK); <u>PROVIDED</u>, <u>HOWEVER,</u> THAT IF THE LAWS OF ANY JURISDICTION OTHER THAN NEW YORK SHALL GOVERN IN REGARD TO THE VALIDITY, PERFECTION OR EFFECT OF PERFECTION OF ANY LIEN OR IN REGARD TO PROCEDURAL MATTERS AFFECTING ENFORCEMENT OF ANY LIENS IN COLLATERAL, SUCH LAWS OF SUCH OTHER JURISDICTIONS SHALL CONTINUE TO APPLY TO THAT EXTENT.

------

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b)*<u>Submission to Jurisdiction</u>*. HOLDINGS, EACH BORROWER, EACH AGENT, EACH LENDER AND EACH L/C ISSUER EACH IRREVOCABLY AND UNCONDITIONALLY SUBMITS, FOR ITSELF AND ITS PROPERTY, TO THE EXCLUSIVE JURISDICTION OF THE COURTS OF THE STATE OF NEW YORK SITTING IN NEW YORK CITY IN THE BOROUGH OF MANHATTAN AND OF THE UNITED STATES DISTRICT COURT OF THE SOUTHERN DISTRICT OF NEW YORK, AND ANY APPELLATE COURT FROM ANY THEREOF, IN ANY ACTION OR PROCEEDING ARISING OUT OF OR RELATING TO THIS AGREEMENT OR ANY OTHER LOAN DOCUMENT, OR FOR RECOGNITION OR ENFORCEMENT OF ANY JUDGMENT, AND EACH OF THE PARTIES HERETO IRREVOCABLY AND UNCONDITIONALLY AGREES THAT ALL CLAIMS IN RESPECT OF ANY SUCH ACTION OR PROCEEDING MAY BE HEARD AND DETERMINED IN SUCH NEW YORK STATE COURT OR, TO THE FULLEST EXTENT PERMITTED BY APPLICABLE 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. EACH PARTY HERETO AGREES THAT THE AGENTS, THE JOINT LEAD ARRANGERS, L/C ISSUERS AND LENDERS RETAIN THE RIGHT TO SERVE PROCESS IN ANY OTHER MANNER PERMITTED BY LAW OR TO BRING PROCEEDINGS AGAINST ANY LOAN PARTY IN THE COURTS OF ANY OTHER JURISDICTION IN CONNECTION WITH THE EXERCISE OF ANY RIGHTS HEREUNDER OR UNDER ANY COLLATERAL DOCUMENT OR ANY OTHER LOAN DOCUMENT OR THE ENFORCEMENT OF ANY JUDGMENT.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c) <u>*Waiver of Venue*</u>. EACH BORROWER AND EACH OTHER LOAN PARTY 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 <u>PARAGRAPH (B)</u> OF THIS <u>SECTION 10.14</u>. 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;(d) <u>*Service of Process*</u>. EACH PARTY HERETO IRREVOCABLY CONSENTS TO SERVICE OF PROCESS IN THE MANNER PROVIDED FOR NOTICES IN <u>SECTION 10.02</u>. NOTHING IN THIS AGREEMENT WILL AFFECT THE RIGHT OF ANY PARTY HERETO TO SERVE PROCESS IN ANY OTHER MANNER PERMITTED BY APPLICABLE LAW.

------

**Section 10.15 <u>Waiver of Jury Trial</u>**. EACH PARTY HERETO HEREBY IRREVOCABLY 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 OR 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, AGENT OR ATTORNEY OF ANY OTHER PERSON HAS REPRESENTED, EXPRESSLY OR OTHERWISE, THAT SUCH OTHER PERSON WOULD NOT, IN THE EVENT OF LITIGATION, SEEK TO ENFORCE THE FOREGOING WAIVER AND (B) ACKNOWLEDGES THAT IT AND THE OTHER PARTIES HERETO HAVE BEEN INDUCED TO ENTER INTO THIS AGREEMENT AND THE OTHER LOAN DOCUMENTS BY, AMONG OTHER THINGS, THE MUTUAL WAIVERS AND CERTIFICATIONS IN THIS <u>SECTION 10.15</u>.

**Section 10.16 <u>No Advisory or Fiduciary Responsibility</u>**. In connection with all aspects of each transaction contemplated hereby (including in connection with any amendment, waiver or other modification hereof or of any other Loan Document), the Borrowers acknowledge and agree, and acknowledge their respective Affiliates' understanding, that: (i) (A) the arranging and other services regarding this Agreement provided by the Administrative Agent, the Syndication Agent and the Joint Lead Arrangers are arm's-length commercial transactions between the Borrowers and their respective Affiliates, on the one hand, and the Administrative Agent, the Syndication Agent and the Joint Lead Arrangers, on the other hand, (B) the Borrowers have consulted their own legal, accounting, regulatory and tax advisors to the extent they have deemed appropriate, and (C) the Borrowers are capable of evaluating, and understand and accept, the terms, risks and conditions of the transactions contemplated hereby and by the other Loan Documents; (ii) (A) the Administrative Agent, the Syndication Agent and the Joint Lead Arrangers each is and has been acting solely as a principal and, except as expressly agreed in writing by the relevant parties, has not been, is not, and will not be acting as an advisor, agent or fiduciary for the Borrowers or any of their Affiliates, or any other Person and (B) none of the Administrative Agent, the Syndication or the Joint Lead Arrangers has any obligation to the Borrowers or any of their respective Affiliates with respect to the transactions contemplated hereby except those obligations expressly set forth herein and in the other Loan Documents; and (iii) the Administrative Agent, the Syndication Agent and the Joint Lead Arrangers and their respective Affiliates may be engaged in a broad range of transactions that involve interests that differ from those of the Borrowers and their Affiliates, and none of the Administrative Agent, the Syndication Agent or the Joint Lead Arrangers has any obligation to disclose any of such interests to the Borrowers or their respective Affiliates. To the fullest extent permitted by Law, the Borrowers hereby waive and release any claims that it may have against the Administrative Agent, the Syndication Agent and the Joint Lead Arrangers with respect to any breach or alleged breach of agency or fiduciary duty in connection with any aspect of any transaction contemplated hereby.

**Section 10.17 <u>Electronic Execution of Assignments and Certain Other Documents</u>**. The words "execution," "signed," "signature," and words of like import in any Assignment and Assumption or in any amendment or other modification hereof (including<u>or related to any document to be signed in connection with this Agreement and the transactions contemplated hereby (including without limitation Assignment and Assumptions, amendments or</u> 

------

<u>other modifications. Committed Loan Notices. Swingline Loan Notices,</u> waivers and consents) shall be deemed to include electronic signatures, the electronic matching of assignment terms and contract formations on electronic platforms approved by the Administrative Agent or the keeping of records in electronic form, each of which shall be of the same legal effect, validity or enforceability as a manually executed signature or the use of a paper-based recordkeeping system, as the case may be, to the extent and as provided for in any applicable law, including the Federal Electronic Signatures in Global and National Commerce Act, the New York State Electronic Signatures and Records Act, or any other similar state laws based on the Uniform Electronic Transactions Act<u>; provided that notwithstanding anything contained herein to the contrary the Administrative Agent is under no obligation to agree to accept electronic signatures in any form or in any format unless expressly agreed to by the Administrative Agent pursuant to procedures approved by it</u>.

**Section 10.18 <u>Patriot Act Notice</u>**. Each Lender that is subject to the Patriot Act and the Administrative Agent (for itself and not on behalf of any Lender) hereby notifies the Borrowers that pursuant to the requirements of the Patriot Act, it is required to obtain, verify and record information that identifies each Borrower, which information includes the name and address of each Borrower and other information that will allow such Lender or the Administrative Agent, as applicable, to identify each Borrower in accordance with the Patriot Act. The Borrowers shall, promptly following a request by the Administrative Agent or any Lender, provide all documentation and other information that the Administrative Agent or such Lender requests in order to comply with its ongoing obligations under applicable "know your customer" an anti-money laundering rules and regulations, including the Patriot Act.

**Section 10.19 <u>ABL/Term</u> <u>Intercreditor</u> <u>Agreements</u><u>Agreement</u>**. Each Lender party hereto understands, acknowledges and agrees that it is the intention of the parties hereto that each of the Finance Obligations, <u>and</u> the Term Finance Obligations and the Second Lien Obligations are intended to constitute a distinct and separate class from the other, and, as between each of the ABL Credit Parties, <u>and</u> the Term Secured Parties and the Second Lien Secured Parties, it is the intention of the parties that <u>so long as there is no Second Lien Indebtedness outstanding,</u> (i) the Finance Obligations (including all post-petition interest with respect thereto) have a first priority security interest in all ABL Priority Collateral, <u>and</u> the Term Finance Obligations (including all post-petition interest with respect thereto) have a second priority security interest in all ABL Priority Collateral and the Second Lien Obligations (including all post-petition interest with respect thereto) have a third priority security interest in all ABL Priority Collateral and (ii) the Term Finance Obligations (including all post-petition interest with respect thereto) have a first priority security interest in all Term Priority Collateral, <u>and that</u> the Second Lien<u>Finance</u> Obligations (including all post-petition interest with respect thereto) have a second priority security interest in all Term Priority Collateral and that the Finance Obligations (including all post-petition interest with respect thereto) have a third priority security interest in all Term Priority Collateral. Each Lender further understands, acknowledges and agrees that (i) the provisions setting forth the priorities as between the ABL Credit Parties and the Term Secured Parties (as representative for themselves and the Second Lien Secured Parties) are set forth in the ABL/Term Intercreditor Agreement and (ii) the provisions setting forth the priorities as between the Term Secured Parties and the Second Lien Secured Parties are set forth in the Term Intercreditor Agreement.

------

Each Lender agrees that it will be bound by, and will take no actions contrary to, the provisions of the ABL/Term Intercreditor Agreement. Each Lender authorizes and instructs the Administrative Agent and the Collateral Agent to enter into the Collateral Documents and the ABL/Term Intercreditor Agreement on behalf of such Lender and to take all actions (and execute all documents) required (or deemed advisable) by the Administrative Agent or the Collateral Agent in accordance with the terms of the Collateral Documents and the ABL/Term Intercreditor Agreement.

The provisions of this <u>Section 10.19</u> are not intended to summarize all relevant provisions of the <u>ABL/Term</u> Intercreditor Agreements<u>Agreement</u> . Reference must be made to the <u>ABL/Term</u> Intercreditor Agreements<u>Agreement</u> to understand all terms and conditions thereof. Each Lender is responsible for making its own analysis and review of the ABL/Term Intercreditor Agreement and the terms and provision thereof, and neither the Administrative Agent nor the Collateral Agent or any of their respective affiliates, representatives, advisors, attorneys or other Person makes any representation to any Lender as to the sufficiency or advisability of the provisions contained in the ABL/Term Intercreditor Agreement.

**Section 10.20 <u>Judgment Currency</u>**. If for the purpose of obtaining judgment in any court it is necessary to convert an amount due hereunder in the currency in which it is due (the "<u>Original Currency</u>") into another currency (the "<u>Second Currency</u>"), the rate of exchange applied shall be that at which, in accordance with normal banking procedures, the Administrative Agent could purchase in the New York foreign exchange market, the Original Currency with the Second Currency on the date two Business Days preceding that on which judgment is given. Each Loan Party agrees that its obligation in respect of any Original Currency due from it hereunder shall, notwithstanding any judgment or payment in such other currency, be discharged only to the extent that, on the Business Day following the date the Agent receives payment of any sum so adjudged to be due hereunder in the Second Currency, the Administrative Agent may, in accordance with normal banking procedures, purchase, in the New York foreign exchange market, the Original Currency with the amount of the Second Currency so paid; and if the amount of the Original Currency so purchased or could have been so purchased is less than the amount originally due in the Original Currency, each Loan Party agrees as a separate obligation and notwithstanding any such payment or judgment to indemnify the Administrative Agent against such loss. The term "rate of exchange" in this Section 10,20 means the spot rate at which the Administrative Agent, in accordance with normal practices, is able on the relevant date to purchase the Original Currency with the Second Currency, and includes any premium and costs of exchange payable in connection with such purchase.

**Section 10.21 <u>Field Audit and Examination Reports; Disclaimer by Lenders</u>**. By signing this Agreement, each Lender: (i) is deemed to have requested that the Administrative Agent furnish such Lender, promptly after it becomes available, a copy of each field audit or examination report (each a "<u>Report</u>" and collectively, "<u>Reports</u>") prepared by or on behalf of the Administrative Agent; (ii) expressly agrees and acknowledges that neither Bank of America nor the Administrative Agent (A) makes any representation or warranty as to the accuracy of any Report, or (B) shall be liable for any information contained in any Report; (iii) expressly agrees and acknowledges that the Reports are not comprehensive audits or examinations, that the Administrative Agent, Bank of America or other party performing any audit or examination will inspect only specific information regarding the Borrowers and will rely significantly upon the

------

Borrowers' books and records, as well as on representations of the Borrowers' personnel; (iv) agrees to keep all Reports confidential and strictly for its internal use, and not to distribute except to its participants, or use any Report in any other manner; and (v) without limiting the generality of any other indemnification provision contained in this Agreement, agrees: (A) to hold the Administrative Agent and any such other Lender preparing a Report harmless from any action the indemnifying Lender may take or conclusion the indemnifying Lender may reach or draw from any Report in connection with any loans or other credit accommodations that the indemnifying Lender has made or may make to the Borrowers, or the indemnifying Lender's participation in, or the indemnifying Lender's purchase of, a loan or loans of the Borrowers; and (B) to pay and protect, and indemnify, defend, and hold the Administrative Agent and any such other Lender preparing a Report harmless from and against, the claims, actions, proceedings, damages, costs, expenses, and other amounts incurred by or on behalf of the Administrative Agent and any such other Lender preparing a Report as the direct or indirect result of any third parties who might obtain all or part of any Report through the indemnifying Lender.

**Section 10.22 <u>Additional Borrowers</u>**. Subject to any applicable limitations set forth in the other Loan Documents and notwithstanding anything to the contrary herein, upon the request of the Parent Borrower from time to time, any direct or indirect Wholly Owned Subsidiary that is a Domestic Subsidiary may become a Borrower hereunder, effective upon the execution and delivery to the Administrative Agent (a) by such Subsidiary, of (i) an instrument of accession or joinder and amendments or joinders to any outstanding Notes issued under <u>Section 2.11</u> and (ii) any other Collateral Documents and other documents that such Domestic Subsidiary would be required to deliver pursuant to <u>Section 6.13</u> if it were becoming a guarantor (with such modifications thereto as are reasonably necessary to accommodate such Subsidiary becoming a Borrower and not a guarantor), and (b) by Holdings and each Subsidiary Guarantor, reaffirmations from each of their respective Guaranties under the Loan Documents.

**Section 10.23 <u>Acknowledgement and Consent to Bail-In of EEA Financial 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 Lender that is an EEA Financial Institution arising under any Loan Document, to the extent such liability is unsecured, 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;(a) 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 Lender 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;(b) 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;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(i) 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;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(ii) a conversion of all, or a portion of, such liability into shares or other instruments of ownership in such EEA Financial Institution, its parent undertaking, 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;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(iii) 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.

[Signature Pages Follow]

------

IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be duly executed by their respective authorized officers as of the day and year first above written.

---

| | |
|:---|:---|
| PIANISSIMO HOLDINGS CORP. | PIANISSIMO HOLDINGS CORP. |
| By: |  |
|  | Name: |
|  | Title: |
| PIANISSIMO ACQUISITION CORP. | PIANISSIMO ACQUISITION CORP. |
| By: |  |
|  | Name: |
|  | Title: |
| The undersigned hereby acknowledges and agrees that upon the effectiveness of the Closing Date Acquisition it will succeed by operation of law to all of the rights and obligations of AcquisitionCo set forth herein or in any other Loan Document and that all references herein and therein to the "Parent Borrower" and the "Borrower" shall thereupon be deemed to be references to the undersigned, as applicable: | The undersigned hereby acknowledges and agrees that upon the effectiveness of the Closing Date Acquisition it will succeed by operation of law to all of the rights and obligations of AcquisitionCo set forth herein or in any other Loan Document and that all references herein and therein to the "Parent Borrower" and the "Borrower" shall thereupon be deemed to be references to the undersigned, as applicable: |
| STEINWAY MUSICAL INSTRUMENTS, INC. | STEINWAY MUSICAL INSTRUMENTS, INC. |
| By: |  |
|  | Name: |
|  | Title: |
| STEINWAY, INC. | STEINWAY, INC. |
| By: |  |
|  | Name: |
|  | Title: |
| CONN-SELMER, INC. | CONN-SELMER, INC. |
| By: |  |
|  | Name: |
|  | Title: |

---

*[Signature Page to the ABL Credit Agreement]*

------

---

| | |
|:---|:---|
| BANK OF AMERICA, N.A., | BANK OF AMERICA, N.A., |
| as Administrative Agent | as Administrative Agent |
| By: |  |
|  | Name: |
|  | Title: |
| DEUTSCHE BANK SECURITIES INC., | DEUTSCHE BANK SECURITIES INC., |
| as Syndication Agent | as Syndication Agent |
| By: |  |
|  | Name: |
|  | Title: |
| BANK OF AMERICA, N.A., | BANK OF AMERICA, N.A., |
| as Lender | as Lender |
| By: |  |
|  | Name: |
|  | Title: |
| DEUTSCHE BANK AG NEW YORK BRANCH, | DEUTSCHE BANK AG NEW YORK BRANCH, |
| as Lender | as Lender |
| By: |  |
|  | Name: |
|  | Title: |

---

*[Signature Page to the ABL Credit Agreement]*

------

**EXHIBIT A-1** 

------

SCHEDULES

---

| | |
|:---|:---|
| Schedule 2.01 | Commitments and Revolving Facility Percentage |
| Schedule 2.03 | Existing Letters of Credit |
| Schedule 5.05 | Litigation; Tax Matters |
| Schedule 5.07 | ERISA |
| Schedule 5.09 | Ownership of Property; Liens |
| Schedule 5.10 | Taxes |
| Schedule 5.11(a) | Historical Financial Statements |
| Schedule 5.12 | Environmental |
| Schedule 5.15 | Labor Relations |
| Schedule 5.16 | Intellectual Property |
| Schedule 5.17 | Brokers' and Transaction Fees |
| Schedule 5.18 | Insurance |
| Schedule 5.19 | Ventures, Subsidiaries and Affiliates; Outstanding Stock |
| Schedule 5.20 | Jurisdiction of Organization; Chief Executive Office |
| Schedule 5.26(c) | Mortgaged Properties |
| Schedule 6.13 | Guarantors |
| Schedule 6.15 | Post-Closing Obligations |
| Schedule 7.01 | Liens |
| Schedule 7.04 | Investments |
| Schedule 7.05 | Continuing Indebtedness |
| Schedule 7.06 | Transactions with Affiliates |
| Schedule 10.02 | Administrative Agent's Office; Certain Addresses for Notices |

---

## Exhibit 10.15

**Exhibit 10.15** 

**EXECUTION VERSION** 

**THIRD AMENDMENT** 

**TO ABL CREDIT AGREEMENT** 

**THIRD AMENDMENT**, dated as of June 27, 2022 (this "<u>Third Amendment</u>"), to the Credit Agreement (as defined below), is entered into among STEINWAY MUSICAL INSTRUMENTS, INC., a Delaware corporation (the "<u>Parent Borrower</u>"), STEINWAY, INC., a Delaware corporation ("<u>Steinway</u>"), CONN-SELMER, INC., a Delaware corporation ("<u>Conn-Selmer</u>" and, together with the Parent Borrower and Steinway, each a "<u>Borrower</u>" and, collectively and jointly and severally, the "<u>Borrowers</u>"), Steinway Musical Instruments Holdings, Inc. (f/k/a Pianissimo Holdings Corp.), a Delaware corporation ("<u>Holdings</u>"), The O.S. Kelly Company, an Ohio corporation ("<u>O.S. Kelly</u>"), each Lender party hereto and the Administrative Agent (as defined below) and amends the ABL Credit Agreement dated as of September 19, 2013 (as amended by that certain First Amendment, dated as of October 31, 2017, and by that certain Second Amendment, dated as of February 16, 2018, the "<u>Existing Credit Agreement</u>"; the Existing Credit Agreement as amended hereby and as further amended, restated, modified and supplemented from time to time, the "<u>Amended Credit Agreement</u>"), among Holdings, the Borrowers, each Lender from time to time party thereto, Bank of America, N.A., as Administrative Agent (in such capacity, the "<u>Administrative Agent</u>"), L/C Issuer and Swing Line Lender and Deutsche Bank Securities Inc., as Syndication Agent. Capitalized terms used and not otherwise defined herein shall have the meanings assigned to such terms in the Amended Credit Agreement.

WHEREAS, in accordance with Section 10.1 of the Existing Credit Agreement, the Borrowers have requested that the Lenders agree to amend certain provisions of the Existing Credit Agreement, and each of the Lenders signatory hereto constituting all Lenders have agreed, subject to the terms and conditions set forth herein, to amend certain provisions of the Existing Credit Agreement as herein provided;

NOW, THEREFORE, in consideration of the promises contained herein and for other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the parties hereto, intending to be legally bound hereby, agree as follows:

SECTION 1. **<u>Amendments to the Existing Credit Agreement</u>**. On and after the Third Amendment Effective Date (as defined below):

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a) the Existing Credit Agreement shall be amended to delete the stricken text (indicated textually in the same manner as the following example: stricken text) and to add the double-underlined text (indicated textually in the same manner as the following example: <u>double-underlined text</u>) as set forth in the pages of the Credit Agreement attached hereto as <u>Exhibit A</u>;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b) the applicable schedules to the Existing Credit Agreement shall be amended in their entirety as set forth in the corresponding numbered schedules in <u>Exhibit A-1</u> attached hereto; and

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c) the applicable exhibits to the Existing Credit Agreement shall be amended in their entirety as set forth in the corresponding numbered exhibits in <u>Exhibit A-2</u> attached hereto.

------

SECTION 2. **<u>Effectiveness</u>**. This Third Amendment shall become effective on the date (the "<u>Third Amendment Effective Date</u>") on which the following conditions precedent are satisfied (or waived):

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a) <u>Execution and Delivery of this Third Amendment</u>. The Administrative Agent shall have received counterparts of this Third Amendment duly executed by the Borrowers, Holdings, O.S. Kelly, the Administrative Agent and all Lenders.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b) <u>Payment of Fees and Accrued 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;&nbsp;&nbsp;&nbsp;&nbsp;(1) All fees required to be paid and costs and expenses, in each case, due to the Administrative Agent and its affiliates and the Lenders under Section 10.04 of the Existing Credit Agreement shall have been paid (including (i) the fees referred to in that certain Third Amendment Fee Letter dated as of June 27, 2022, between the Parent Borrower and the Administrative Agent and (ii) invoiced fees, charges and disbursements of Fried, Frank, Harris, Shriver & Jacobson LLP ("<u>Fried Frank</u>"), described in <u>Section 9</u> of this Third Amendment to the extent such invoice is provided to the Parent Borrower at least two (2) Business Days prior to the Third 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;&nbsp;&nbsp;&nbsp;&nbsp;(2) The Borrower shall have paid to the Administrative Agent for the account of the Lenders all accrued and unpaid interest on the Loans to, but not including, the Third Amendment Effective Date.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c) <u>Termination of Intercreditor Agreement</u>. On or prior to the Third Amendment Effective Date, Holdings and the Borrowers shall have delivered evidence of the termination of that certain Intercreditor Agreement dated as of September 19, 2013 (as amended by the Reaffirmation of and Amendment No. 1 to Intercreditor Agreement dated as of May 23, 2014 and the Reaffirmation of and Amendment No. 2 to Intercreditor Agreement dated as of February 16, 2018, the "<u>Intercreditor Agreement</u>") in form and substance 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;(d) <u>Patriot Act and Beneficial Ownership Certification</u>. The Administrative Agent and the Lenders (to the extent reasonably requested in writing at least ten days prior to the Third Amendment Effective Date) shall have received, at least three Business Days prior to the Third Amendment Effective Date, all documentation and other information that the Administrative Agent reasonably determines to be required by Governmental Authorities under applicable "know your customer", "beneficial ownership" and anti-money-laundering rules and regulations, including the Patriot Act.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(e) <u>Deliverables</u>. The Parent Borrower will, on the Third Amendment Effective Date, deliver to the Administrative Agent the following, each of which shall be originals or pursuant to electronic transmission (followed promptly by originals) unless otherwise specified, each properly executed by a Responsible Officer of the signing Loan Party, each dated the Third Amendment Effective Date (or, in the case of certificates of governmental officials, a recent date before the Third Amendment Effective Date) and each in form and substance reasonably satisfactory to the Administrative Agent:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(i) a Committed Loan Notice providing for conversion of all Revolving Facility Loans outstanding on the Third Amendment Effective Date into Term SOFR Loans with an Interest Period ending as provided in the last proviso to the definition of "Interest Period";

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(ii) a certificate as to the good standing (to the extent such concept or a similar concept exists under the laws of each applicable jurisdiction) of each Loan Party in the jurisdiction of incorporation, formation or organization of such Loan Party as of a recent date;

------

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(iii) a certificate of the Secretary or Assistant Secretary or similar officer of each Loan Party dated the Third Amendment Effective Date and certifying:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&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) that either (1) attached thereto is a true, correct and complete copy of the certificate or articles of incorporation, certificate of formation or articles of association (to the extent such concept or a similar concept exists under the laws of each applicable jurisdiction), including all amendments thereto, of such Loan Party, or (2) such Loan Party's certificate or articles of incorporation, certificate of formation or articles of association (to the extent such concept or a similar concept exists under the laws of each applicable jurisdiction), which was previously delivered to the Administrative Agent, continues to be in full force and effect and has not been rescinded, amended, repealed or otherwise modified since such delivery 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;(B) that either (1) attached thereto is a true, correct and complete copy of the by-laws (or limited liability company agreement or other equivalent governing documents) of such Loan Party which were at the time of adoption of the resolutions described in (C) below and are in full force and effect or (2) such Loan Party's by-laws (or limited liability company agreement or other equivalent governing documents) which were previously delivered to the Administrative Agent continues to be in full force and effect and has not been rescinded, amended, repealed or otherwise modified since such delivery 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;(C) that attached thereto is a true and complete copy of resolutions duly adopted by the board of directors or managers (or equivalent governing body) of such Loan Party (or its managing general partner or managing member) authorizing and/or ratifying the execution, delivery and performance of the Third Amendment Documents (as defined in <u>Section 3</u>) to which such Loan Party is a party, and that such resolutions have not been modified, rescinded or amended and are in full force and effect on the Third Amendment Effective Date; 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) as to the incumbency and specimen signature of each officer, manager or other representative executing any Third Amendment Document or any other document delivered in connection herewith on behalf of such Loan Party;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(iv) (A) a certificate of another officer or manager as to the incumbency and specimen signature of the Secretary or Assistant Secretary or similar officer or manager executing the certificate pursuant to clause (iii) above (which may, for the avoidance of doubt, be included as a part of such certificate delivered pursuant to clause (iii) above) or (B) or a certification from a Responsible Officer of such Loan Party that the Secretary or Assistant Secretary or similar officer listed on the incumbency certificate delivered as a part of the Secretary's or Assistant Secretary's certificate of such Loan Party previously delivered to the Administrative Agent prior to the Third Amendment Effective Date are and continue to be authorized to act on behalf of such Loan Party in connection with this Third Amendment and the other Loan Documents to which such Loan Party is a party;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(v) a Perfection Certificate from each Loan Party, dated as of the Third Amendment Effective Date;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(vi) a favorable written opinion from special Ohio counsel to O.S. Kelly, (A) dated the Third Amendment Effective Date, (B) addressed to the Administrative Agent and the Lenders and (C) in form and substance satisfactory to the Administrative Agent and covering such matters as the Administrative Agent shall reasonably request;

------

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(vii) a favorable written opinion of Paul, Weiss, Rifkind, Wharton & Garrison LLP, special counsel to the Loan Parties (A) dated the Third Amendment Effective Date, (B) addressed to the Administrative Agent and the Lenders and (C) in form and substance reasonable satisfactory to the Administrative Agent and covering such matters as the Administrative Agent shall reasonably request; and

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(vi) a certificate from the chief financial officer of the Parent Borrower addressed to the Administrative Agent and the Lenders, reasonably satisfactory in form and substance to the Administrative Agent and substantially in the form and substance of <u>Exhibit G</u> to the Existing Credit Agreement, demonstrating the financial condition and Solvency of Holdings, the Parent Borrower and their Subsidiaries on a consolidated basis after giving effect to the transactions to occur on the Third Amendment Effective Date;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(f) a certificate signed by a Responsible Officer of the Parent Borrower certifying that, after giving effect to this Third Amendment the representations and warranties set forth in <u>Section 3</u> of this Third Amendment and any other Loan Document were (as of the Third Amendment Effective Date) and are (as of the Third Amendment Effective Date) true and correct in all material respects as of such date, as applicable, with the same effect as though made on and as of such date, except to the extent such representations and warranties expressly relate to an earlier date (in which case such representations and warranties shall be true and correct in all material respects as of such earlier date); and

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(g) with respect to each of the Mortgaged Properties, on or before a date at least 15 days prior to the Third Amendment Effective Date, a completed standard "life of loan" flood hazard determination form, and if the area in which the buildings and other improvements (as described in the applicable Mortgage) are located is designated a Special Flood Hazard Area, (A) on or before a date at least five days prior to the Third Amendment Effective Date, a notification to the Borrower and documentation evidencing the Borrower's receipt of such notice (e.g., countersigned notice, return receipt of certified U.S. Mail, or overnight delivery), and (B) on or before the Third Amendment Effective Date, evidence of Flood Insurance with respect to such buildings and other improvements located in a Special Flood Hazard Area, as reasonably acceptable to Administrative Agent and each Lender.

SECTION 3. **<u>Representations and Warranties</u>**. In order to induce the Administrative Agent and the Lenders to enter into this Third Amendment, each Borrower represents and warrants, as of the Third Amendment Effective Date, that: (a) each Loan Party party hereto or thereto has all requisite power and authority to enter into each of the documents required to be delivered under clauses (a), (e)(i), (iii), (iv) (if applicable) (v) and (vi) and (f) to Section 2 above (collectively, the "<u>Third Amendment Documents</u>") to which it is a party and to carry out the transactions contemplated thereby; (b) the execution, delivery and performance of each of the Third Amendment Documents have been duly authorized by all necessary action on the part of each Loan Party that is a party thereto and, to the extent applicable, on the part of the respective shareholders, members or other equity security holders of each Loan Party; (c) the execution, delivery and performance by the Loan Parties of the Third Amendment Documents to which they are parties and the consummation of the transactions contemplated thereby do not and shall not require any registration with, consent or approval of, or notice to, or other action to, with or by, any Governmental Authority (other than any filings or reports required under the securities laws) except as otherwise set forth in the Third Amendment Documents and except for filings and recordings with respect to the Collateral to be made, or otherwise delivered to the Collateral Agent for filing and/or recordation; (d) each Third Amendment Document has been duly executed and delivered by each Loan Party that is a party thereto and is the legally valid and binding obligation of such Loan Party, enforceable against such Loan Party in accordance with its respective terms, except as may be limited by bankruptcy, insolvency, reorganization, moratorium or similar laws of general applicability relating to or limiting creditors' rights or by equitable principles relating to enforceability; and (e) at the time of and immediately after the Third Amendment Effective Date, no Default or Event of Default has occurred and is continuing or would result from the Third Amendment.

------

SECTION 4. **<u>Reaffirmation</u>**. Each of the Loan Parties hereby confirms that each Loan Document to which it is a party or otherwise bound and all Collateral encumbered thereby will continue to guarantee or secure, as the case may be, to the fullest extent possible in accordance with the Loan Documents, the payment and performance of all "Finance Obligations" under each of the Loan Documents to which it is a party (in each case as such terms are defined in the applicable Loan Document). Each of the Loan Parties acknowledges and agrees that (i) any of the Loan Documents to which it is a party or is otherwise bound shall continue in full force and effect and that all of its obligations thereunder shall continue to be valid, enforceable, ratified and confirmed in all respects and shall not be impaired or limited by the execution or effectiveness of this Third Amendment or the modification of the Existing Credit Agreement and (ii) all security interests created under any of the Collateral Documents shall continue in full force and effect pursuant to the terms of such Collateral Document.

SECTION 5. **<u>No Novation</u>**. Neither this Third Amendment nor the effectiveness of the Amended Credit Agreement shall extinguish the Finance Obligations for the payment of money outstanding under the Existing Credit Agreement (except as otherwise expressly provided herein) or discharge or release the Lien or priority of any Loan Document or any other security therefor or any guarantee thereof, and the liens and security interests in favor of the Collateral Agent for the benefit of the Secured Parties securing payment of the Finance Obligations are in all respects continuing and in full force and effect with respect to all Finance Obligations. Nothing herein contained shall be construed as a substitution or novation, or a payment and reborrowing, or a termination, of the Finance Obligations outstanding under the Existing Credit Agreement or instruments guaranteeing or securing the same (except as otherwise expressly provided herein), which shall remain in full force and effect, except as modified hereby or by instruments executed concurrently herewith. Nothing expressed or implied in this Third Amendment, the Amended Credit Agreement or any other document contemplated hereby or thereby shall be construed as a release or other discharge of the Borrowers under the Existing Credit Agreement or of the Borrowers or any other Loan Party under any other Loan Document from any of its obligations and liabilities thereunder, and such obligations are in all respects continuing with only the terms being modified as provided in this Third Amendment and in the Amended Credit Agreement (except as otherwise expressly provided herein). The Existing Credit Agreement and each of the other Loan Documents shall remain in full force and effect, until and except as modified hereby. This Third Amendment shall constitute a Loan Document for all purposes of the Existing Credit Agreement and the Amended Credit Agreement.

SECTION 6. **<u>Counterparts</u>**. This Third Amendment may be executed in any number of counterparts and by different parties hereto on separate counterparts, each of which when so executed and delivered shall be deemed to be an original, but all of which when taken together shall constitute a single instrument. Delivery of an executed counterpart of a signature page of this Third Amendment by facsimile or any other electronic transmission shall be effective as delivery of a manually executed counterpart hereof.

SECTION 7. <u>**Governing Law; Jurisdiction, Etc**.</u> 

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a)*<u>Governing Law</u>.* THIS THIRD AMENDMENT AND THE OTHER THIRD AMENDMENT DOCUMENTS AND THE RIGHTS AND OBLIGATIONS OF THE PARTIES HEREUNDER AND THEREUNDER SHALL BE GOVERNED BY AND CONSTRUED AND INTERPRETED IN ACCORDANCE WITH THE INTERNAL LAWS OF THE STATE OF NEW YORK (INCLUDING, WITHOUT LIMITATION, SECTION 5-1401 OF THE GENERAL OBLIGATIONS LAW OF THE STATE OF NEW YORK); <u>PROVIDED</u>, <u>HOWEVER</u>, THAT IF THE LAWS OF ANY JURISDICTION OTHER THAN NEW YORK SHALL GOVERN IN REGARD TO THE VALIDITY, PERFECTION OR EFFECT OF PERFECTION OF ANY LIEN OR IN REGARD TO PROCEDURAL MATTERS AFFECTING ENFORCEMENT OF ANY LIENS IN COLLATERAL, SUCH LAWS OF SUCH OTHER JURISDICTIONS SHALL CONTINUE TO APPLY TO THAT EXTENT.

------

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b)*<u>Submission to Jurisdiction</u>.* HOLDINGS, THE BORROWERS, EACH OTHER LOAN PARTY, THE ADMINISTRATIVE AGENT AND EACH LENDER PARTY HERETO IRREVOCABLY AND UNCONDITIONALLY SUBMITS, FOR ITSELF AND ITS PROPERTY, TO THE EXCLUSIVE JURISDICTION OF THE COURTS OF THE STATE OF NEW YORK SITTING IN NEW YORK CITY IN THE BOROUGH OF MANHATTAN AND OF THE UNITED STATES DISTRICT COURT OF THE SOUTHERN DISTRICT OF NEW YORK, AND ANY APPELLATE COURT FROM ANY THEREOF, IN ANY ACTION OR PROCEEDING ARISING OUT OF OR RELATING TO THIS THIRD AMENDMENT OR ANY THIRD AMENDMENT DOCUMENT, OR FOR RECOGNITION OR ENFORCEMENT OF ANY JUDGMENT, AND EACH OF THE PARTIES HERETO IRREVOCABLY AND UNCONDITIONALLY AGREES THAT ALL CLAIMS IN RESPECT OF ANY SUCH ACTION OR PROCEEDING MAY BE HEARD AND DETERMINED IN SUCH NEW YORK STATE COURT OR, TO THE FULLEST EXTENT PERMITTED BY APPLICABLE 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. EACH PARTY HERETO AGREES THAT THE AGENTS, JOINT LEAD ARRANGERS AND LENDERS RETAIN THE RIGHT TO SERVE PROCESS IN ANY OTHER MANNER PERMITTED BY LAW OR TO BRING PROCEEDINGS AGAINST ANY LOAN PARTY IN THE COURTS OF ANY OTHER JURISDICTION IN CONNECTION WITH THE EXERCISE OF ANY RIGHTS HEREUNDER OR UNDER ANY COLLATERAL DOCUMENT OR ANY OTHER LOAN DOCUMENT OR THE ENFORCEMENT OF ANY JUDGMENT.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c)*<u>Waiver of Venue</u>*. THE BORROWERS AND EACH OTHER LOAN PARTY PARTY HERETO 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 THIRD AMENDMENT OR ANY THIRD AMENDMENT 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;(d)*<u>Service of Process</u>.* EACH PARTY HERETO IRREVOCABLY CONSENTS TO SERVICE OF PROCESS IN THE MANNER PROVIDED FOR NOTICES IN <u>SECTION 10.02</u> OF THE AMENDED CREDIT AGREEMENT. NOTHING IN THIS THIRD AMENDMENT OR ANY OTHER THIRD AMENDMENT DOCUMENT WILL AFFECT THE RIGHT OF ANY PARTY HERETO TO SERVE PROCESS IN ANY OTHER MANNER PERMITTED BY APPLICABLE LAW.

SECTION 8. **<u>Waiver of Jury Trial</u>.** EACH PARTY HERETO HEREBY IRREVOCABLY 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 THIRD AMENDMENT OR ANY OTHER THIRD AMENDMENT 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, AGENT OR ATTORNEY OF ANY OTHER PERSON HAS REPRESENTED, EXPRESSLY OR OTHERWISE, THAT SUCH OTHER PERSON WOULD NOT, IN THE EVENT OF LITIGATION, SEEK TO ENFORCE THE FOREGOING WAIVER AND (B) ACKNOWLEDGES THAT IT AND THE OTHER PARTIES HERETO HAVE BEEN INDUCED TO ENTER INTO THIS THIRD AMENDMENT BY, AMONG OTHER THINGS, THE MUTUAL WAIVERS AND CERTIFICATIONS IN THIS SECTION.

------

SECTION 9. **<u>Fees and Expenses</u>**. The Parent Borrower agrees to pay all reasonable and documented out-of-pocket expenses incurred by the Administrative Agent and its affiliates (including the reasonable and invoiced fees, charges and disbursements of Fried Frank, as counsel for the Administrative Agent) in connection with the preparation, negotiation, execution, delivery, administration and enforcement of this Third Amendment and the other documents and instruments referred to herein or contemplated hereby, whether incurred prior to, on or after the Third Amendment Effective Date.

SECTION 10. **<u>Loan Document Pursuant to Credit Agreement</u>**. This Third Amendment is a Loan Document executed pursuant to the Existing Credit Agreement and shall be construed, administered and applied in accordance with all of the terms and provisions of the Existing Credit Agreement (and, following the effectiveness hereof, the Amended Credit Agreement).

SECTION 11. **<u>Taxes</u>**. For purposes of determining withholding Taxes imposed under the Foreign Account Tax Compliance Act (FATCA), from and after the effective date of this Third Amendment, the Borrowers and the Administrative Agent shall treat (and the Lenders hereby authorize the Administrative Agent to treat) the Loans and Letter of Credit Borrowings as not qualifying as "grandfathered obligations" within the meaning of Treasury Regulation Section 1.1471-2(b)(2)(i).

SECTION 12. **<u>Headings</u>**. The headings of this Third Amendment are for purposes of reference only and shall not limit or otherwise affect the meaning hereof.

SECTION 13. **<u>Effect of Amendment</u>**. Except as expressly set forth herein, this Third Amendment shall not alter, modify, amend or in any way affect any of the terms, conditions, obligations, covenants or agreements contained in the Existing Credit Agreement or any other provision of the Existing Credit Agreement or any other Loan Document. Each and every term, condition, obligation, covenant and agreement contained in the Existing Credit Agreement or any other Loan Document is hereby ratified and re-affirmed in all respects and shall continue in full force and effect and nothing herein can or may be construed as a novation thereof.

[*Remainder of Page Intentionally Left Blank*]

------

IN WITNESS WHEREOF, the parties hereto have caused this Third Amendment to be duly executed by their respective authorized officers as of the day and year first above written.

---

| | | |
|:---|:---|:---|
| STEINWAY MUSICAL INSTRUMENTS HOLDINGS, INC., | STEINWAY MUSICAL INSTRUMENTS HOLDINGS, INC., | STEINWAY MUSICAL INSTRUMENTS HOLDINGS, INC., |
| as Holdings | as Holdings | as Holdings |
| By: | /s/ Jennifer Wang | /s/ Jennifer Wang |
|  | Name: | Jennifer Wang |
|  | Title: | Chief Legal Officer |
| STEINWAY MUSICAL INSTRUMENTS, INC., | STEINWAY MUSICAL INSTRUMENTS, INC., | STEINWAY MUSICAL INSTRUMENTS, INC., |
| as Parent Borrower | as Parent Borrower | as Parent Borrower |
| STEINWAY, INC., as Borrower | STEINWAY, INC., as Borrower | STEINWAY, INC., as Borrower |
| CONN-SELMER, INC., as Borrower | CONN-SELMER, INC., as Borrower | CONN-SELMER, INC., as Borrower |
| THE O.S. KELLY COMPANY, as O.S. Kelly | THE O.S. KELLY COMPANY, as O.S. Kelly | THE O.S. KELLY COMPANY, as O.S. Kelly |
| By: | /s/ Jennifer Wang | /s/ Jennifer Wang |
|  | Name: | Jennifer Wang |
|  | Title: | Executive Vice President, Chief Legal Officer & Secretary |

---

[Third Amendment to Credit Agreement]

------

---

| | | |
|:---|:---|:---|
| BANK OF AMERICA, N.A., | BANK OF AMERICA, N.A., | BANK OF AMERICA, N.A., |
| as Administrative Agent | as Administrative Agent | as Administrative Agent |
| By: | /s/ Galina Evelson | /s/ Galina Evelson |
|  | Name: | Galina Evelson |
|  | Title: | Senior Vice President |

---

[Third Amendment to Credit Agreement]

------

---

| | | |
|:---|:---|:---|
| BANK OF AMERICA, N.A., | BANK OF AMERICA, N.A., | BANK OF AMERICA, N.A., |
| as Lender | as Lender | as Lender |
| By: | /s/ Galina Evelson | /s/ Galina Evelson |
|  | Name: | Galina Evelson |
|  | Title: | Senior Vice President |

---

[Third Amendment to Credit Agreement]

------

---

| | | |
|:---|:---|:---|
| BARCLAYS BANK PLC, | BARCLAYS BANK PLC, | BARCLAYS BANK PLC, |
| as Lender | as Lender | as Lender |
| By: | /s/ Craig Malfoy | /s/ Craig Malfoy |
|  | Name: | Craig Malfoy |
|  | Title: | Director |
| GOLDMAN SACHS BANK USA, | GOLDMAN SACHS BANK USA, | GOLDMAN SACHS BANK USA, |
| as Lender | as Lender | as Lender |
| By: | /s/ Ananda Deroche | /s/ Ananda Deroche |
|  | Name: | Ananda Deroche |
|  | Title: | Authorized Signatory |

---

[Third Amendment to Credit Agreement]

------

**EXHIBIT A** 

------

**EXECUTION VERSION<u>VERSION</u>** 

**COMPOSITE COPY REFLECTING** 

**FIRST AMENDMENT DATED AS OF OCTOBER 31, 2017 AND** 

**SECOND AMENDMENT DATED AS OF FEBRUARY 16, 2018 <u>AND</u>** 

**<u>THIRD AMENDMENT DATED AS OF JUNE 27, 2022</u>** 

**$110,000,000 ABL CREDIT AGREEMENT** 

**dated as of September 19, 2013** 

**among** 

**STEINWAY MUSICAL INSTRUMENTS, INC.,** 

**as Parent Borrower,** 

**STEINWAY, INC.,** 

**CONN-SELMER, INC.,** 

**as Borrowers,** 

**PIANISSIMO <u>STEINWAY MUSICAL INSTRUMENTS HOLDINGS, INC.</u>** 

**<u>(f/k/a PIANISSIMO</u>** HOLDINGS CORP.,

**THE LENDERS FROM TIME TO TIME PARTY HERETO,** 

**BANK OF AMERICA, N.A.,** 

**as Administrative Agent, Swing Line Lender and L/C Issuer,** 

**and** 

**DEUTSCHE BANK SECURITIES INC.,** 

**as Sole Syndication Agent** 

------

**BANK OF AMERICA, N.A.** 

**and** 

**DEUTSCHE BANK SECURITIES INC.,** 

**as Joint Lead Arrangers and Joint Book Managers** 

**<u> </u>** 

------

**TABLE OF CONTENTS**

---

| | | |
|:---|:---|:---|
| | | **Page** |
|  **ARTICLE I DEFINITIONS AND ACCOUNTING TERMS** | **ARTICLE I DEFINITIONS AND ACCOUNTING TERMS** | **1** |
|  **Section 1.01** | **Defined Terms** | **1** |
|  **Section 1.02** | **Other Interpretative Provisions** | **54** |
|  **Section 1.03** | **Accounting Terms and Determinations** | **55** |
|  **Section 1.04** | **Rounding** | **55** |
|  **Section 1.05** | **Times of Day; Rates** | **56** |
|  **Section 1.06** | **Currency Equivalents Generally** | **56** |
|  **Section 1.07** | **Letter of Credit Amounts** | **56** |
|  **<u>Section 1.08</u>** | **<u>Divisions</u>** | **<u>56</u>** |
|  **ARTICLE II THE COMMITMENTS AND LOANS** | **ARTICLE II THE COMMITMENTS AND LOANS** | **56** |
|  **Section 2.01** | **Commitments** | **56** |
|  **Section 2.02** | **Borrowings, Conversions and Continuations of Loans** | **57** |
|  **Section 2.03** | **Letters of Credit** | **49<u>60</u>** |
|  **Section 2.04** | **Swing Line Loans** | **55<u>67</u>** |
|  **Section 2.05** | **Prepayments** | **58<u>71</u>** |
|  **Section 2.06** | **Scheduled Repayment of Loans** | **60<u>73</u>** |
|  **Section 2.07** | **Termination and Reduction of Revolving Facility Commitments** | **60<u>73</u>** |
|  **Section 2.08** | **Interest** | **61<u>74</u>** |
|  **Section 2.09** | **Fees** | **62<u>74</u>** |
|  **Section 2.10** | **Computation of Interest and Fees** | **63<u>76</u>** |
|  **Section 2.11** | **Evidence of Debt** | **63<u>77</u>** |
|  **Section 2.12** | **Payments Generally; Administrative Agent's Clawback** | **64<u>77</u>** |
|  **Section 2.13** | **Sharing of Payments by Lenders** | **65<u>79</u>** |
|  **Section 2.14** | **Incremental Loans** | **66<u>80</u>** |
|  **Section 2.15** | **Defaulting Lenders** | **68<u>83</u>** |
|  **Section 2.16** | **Cash Collateral** | **71<u>85</u>** |
|  **Section 2.17** | **Agent Advances; Overadvances** | **72<u>87</u>** |
|  **Section 2.18** | **Settlement** | **72<u>87</u>** |
|  **ARTICLE III TAXES, YIELD PROTECTION AND ILLEGALITY** | **ARTICLE III TAXES, YIELD PROTECTION AND ILLEGALITY** | **74<u>89</u>** |
|  **Section 3.01** | **Taxes** | **74<u>89</u>** |
|  **Section 3.02** | **Illegality** | **77<u>93</u>** |
|  **Section 3.03** | **Inability to Determine Rates** | **78<u>94</u>** |
|  **Section 3.04** | **Increased Costs** | **79<u>97</u>** |
|  **Section 3.05** | **Compensation for Losses** | **80<u>98</u>** |
|  **Section 3.06** | **Mitigation Obligations; Replacement of Lenders** | **80<u>99</u>** |
|  **Section 3.07** | **<u>LIBOR Amendment</u>** | **81** |
|  **Section 3.08<u>3.07</u>** | **Survival** | **82<u>100</u>** |

---

i

------

---

| | | |
|:---|:---|:---|
|  **ARTICLE IV CONDITIONS PRECEDENT** | **ARTICLE IV CONDITIONS PRECEDENT** | **82<u>100</u>** |
|  **Section 4.01** | **Conditions to Original Closing Date Borrowing** | **82<u>101</u>** |
|  **Section 4.02** | **All Credit Events** | **88<u>108</u>** |
|  **Section 4.03** | **Amendment** | **88<u>108</u>** |
|  **ARTICLE V REPRESENTATIONS AND WARRANTIES** | **ARTICLE V REPRESENTATIONS AND WARRANTIES** | **82<u>108</u>** |
|  **Section 5.01** | **Corporate Existence and Power; Compliance with Laws** | **89<u>108</u>** |
|  **Section 5.02** | **Corporate Authorization; No Contravention** | **89<u>109</u>** |
|  **Section 5.03** | **Governmental Authorization** | **89<u>109</u>** |
|  **Section 5.04** | **Binding Effect** | **90<u>110</u>** |
|  **Section 5.05** | **Litigation** | **90<u>110</u>** |
|  **Section 5.06** | **No Default** | **90<u>110</u>** |
|  **Section 5.07** | **ERISA Compliance** | **91<u>111</u>** |
|  **Section 5.08** | **Use of Proceeds; Margin Regulations** | **91<u>111</u>** |
|  **Section 5.09** | **Ownership of Property; Liens** | **91<u>111</u>** |
|  **Section 5.10** | **Taxes** | **91<u>111</u>** |
|  **Section 5.11** | **Financial Condition** | **92<u>112</u>** |
|  **Section 5.12** | **Environmental Matters** | **92<u>113</u>** |
|  **Section 5.13** | **Regulated Entities** | **93<u>113</u>** |
|  **Section 5.14** | **Solvency** | **93<u>113</u>** |
|  **Section 5.15** | **Labor Relations** | **93<u>114</u>** |
|  **Section 5.16** | **Intellectual Property** | **93<u>114</u>** |
|  **Section 5.17** | **Brokers' Fees; Transaction Fees** | **94<u>114</u>** |
|  **Section 5.18** | **Insurance** | **94<u>114</u>** |
|  **Section 5.19** | **Ventures, Subsidiaries and Affiliates; Outstanding Stock** | **94<u>114</u>** |
|  **Section 5.20** | **Jurisdiction of Organization; Chief Executive Office** | **94<u>115</u>** |
|  **Section 5.21** | **Status of Steinway and Sons** | **95<u>115</u>** |
|  **Section 5.22** | **Full Disclosure** | **95<u>115</u>** |
|  **Section 5.23** | **Foreign Assets Control Regulations, Export Controls and Anti-Money Laundering** | **95<u>115</u>** |
|  **Section 5.24** | **Patriot Act** | **95<u>116</u>** |
|  **Section 5.25** | **Reserved** | **96<u>116</u>** |
|  **Section 5.26** | **Collateral Documents** | **96<u>116</u>** |
|  **ARTICLE VI AFFIRMATIVE COVENANTS** | **ARTICLE VI AFFIRMATIVE COVENANTS** | **97<u>118</u>** |
|  **Section 6.01** | **Financial Statements** | **97<u>118</u>** |
|  **Section 6.02** | **Certificates; Other Information** | **97<u>118</u>** |
|  **Section 6.03** | **Notices** | **100<u>121</u>** |
|  **Section 6.04** | **Preservation of Corporate Existence, Etc.** | **101<u>123</u>** |
|  **Section 6.05** | **Maintenance of Property** | **102<u>123</u>** |
|  **Section 6.06** | **Insurance** | **102<u>124</u>** |
|  **Section 6.07** | **Payment of Obligations** | **103<u>125</u>** |
|  **Section 6.08** | **Compliance with Laws** | **104<u>125</u>** |

---

ii

------

---

| | | |
|:---|:---|:---|
|  **Section 6.09** | **Inspection of Property and Books and Records; Quarterly Management Calls** | **104<u>125</u>** |
|  **Section 6.10** | **Use of Proceeds** | **104<u>126</u>** |
|  **Section 6.11** | **Collection of Accounts; Management of Collateral** | **104<u>126</u>** |
|  **Section 6.12** | **Landlord Agreements** | **107<u>129</u>** |
|  **Section 6.13** | **Further Assurances** | **107<u>129</u>** |
|  **Section 6.14** | **Environmental Matters** | **109<u>131</u>** |
|  **Section 6.15** | **Post-Closing Obligations** | **109<u>131</u>** |
|  **Section 6.16** | **Material Contracts** | **109<u>131</u>** |
|  **Section 6.17** | **Designation as Senior Debt** | **109<u>132</u>** |
|  **Section 6.18** | **Change in Collateral; Collateral Records; Account Documentation** | **109<u>132</u>** |
|  **Section 6.19** | **Mortgage Amendments** | **110<u>132</u>** |
|  **ARTICLE VII NEGATIVE COVENANTS** | **ARTICLE VII NEGATIVE COVENANTS** | **111<u>133</u>** |
|  **Section 7.01** | **Limitation on Liens** | **111<u>133</u>** |
|  **Section 7.02** | **Disposition of Assets** | **113<u>136</u>** |
|  **Section 7.03** | **Consolidations and Mergers** | **114<u>137</u>** |
|  **Section 7.04** | **Acquisitions; Loans and Investments** | **114<u>137</u>** |
|  **Section 7.05** | **Limitation on Indebtedness** | **116<u>139</u>** |
|  **Section 7.06** | **Employee Loans and Transactions with Affiliates** | **117<u>141</u>** |
|  **Section 7.07** | **Management Fees and Compensation** | **118<u>141</u>** |
|  **Section 7.08** | **Use of Proceeds** | **118<u>142</u>** |
|  **Section 7.09** | **Reserved** | **118<u>142</u>** |
|  **Section 7.10** | **Reserved** | **118<u>142</u>** |
|  **Section 7.11** | **Restricted Payments** | **118<u>142</u>** |
|  **Section 7.12** | **Change in Business** | **119<u>143</u>** |
|  **Section 7.13** | **Reserved** | **120<u>144</u>** |
|  **Section 7.14** | **Changes in Accounting, Name or Jurisdiction of Organization** | **120<u>144</u>** |
|  **Section 7.15** | **Amendments to Related Agreements** | **120<u>144</u>** |
|  **Section 7.16** | **No Negative Pledges** | **120<u>145</u>** |
|  **Section 7.17** | **Sale-Leasebacks** | **121<u>145</u>** |
|  **Section 7.18** | **Amendment of Organization Documents** | **121<u>145</u>** |
|  **Section 7.19** | **Fixed Charge Coverage Ratio** | **121<u>146</u>** |
|  **ARTICLE VIII DEFAULTS** | **ARTICLE VIII DEFAULTS** | **122<u>146</u>** |
|  **Section 8.01** | **Events of Default** | **122<u>146</u>** |
|  **Section 8.02** | **Remedies upon Event of Default** | **124<u>149</u>** |
|  **Section 8.03** | **Application of Funds** | **125<u>150</u>** |
|  **Section 8.04** | **Equity Cure** | **126<u>151</u>** |
|  **ARTICLE IX AGENCY PROVISIONS** | **ARTICLE IX AGENCY PROVISIONS** | **127<u>152</u>** |
|  **Section 9.01** | **Appointment and Authority** | **127<u>152</u>** |
|  **Section 9.02** | **Rights as a Lender** | **128<u>153</u>** |

---

iii

------

---

| | | |
|:---|:---|:---|
|  **Section 9.03** | **Exculpatory Provisions** | **128<u>153</u>** |
|  **Section 9.04** | **Reliance by Administrative Agent** | **129<u>155</u>** |
|  **Section 9.05** | **Delegation of Duties** | **129<u>155</u>** |
|  **Section 9.06** | **Resignation of Administrative Agent** | **129<u>155</u>** |
|  **Section 9.07** | **Non-Reliance on Administrative Agent and Other Lenders** | **130<u>156</u>** |
|  **Section 9.08** | **No Other Duties, Etc.** | **130<u>157</u>** |
|  **Section 9.09** | **Administrative Agent May File Proofs of Claim** | **130<u>157</u>** |
|  **<u>Section 9.13</u>** | **<u>Recovery of Erroneous Payments</u>** | **<u>161</u>** |
|  **ARTICLE X MISCELLANEOUS** | **ARTICLE X MISCELLANEOUS** | **134<u>162</u>** |
|  **Section 10.01** | **Amendments, Etc.** | **134<u>162</u>** |
|  **Section 10.02** | **Notices; Effectiveness; Electronic Communication** | **137<u>165</u>** |
|  **Section 10.03** | **No Waiver; Cumulative Remedies; Enforcement** | **139<u>167</u>** |
|  **Section 10.04** | **Expenses; Indemnity; Damage Waiver** | **139<u>168</u>** |
|  **Section 10.05** | **Payments Set Aside** | **141<u>170</u>** |
|  **Section 10.06** | **Successors and Assigns** | **141<u>170</u>** |
|  **Section 10.07** | **Treatment of Certain Information; Confidentiality** | **146<u>175</u>** |
|  **Section 10.08** | **Right of Setoff** | **147<u>177</u>** |
|  **Section 10.09** | **Interest Rate Limitation** | **147<u>177</u>** |
|  **Section 10.10** | **Counterparts; Integration; Effectiveness** | **147<u>177</u>** |
|  **Section 10.11** | **Survival of Representations and Warranties** | **148<u>178</u>** |
|  **Section 10.12** | **Severability** | **148<u>178</u>** |
|  **Section 10.13** | **Replacement of Lenders** | **148<u>178</u>** |
|  **Section 10.14** | **Governing Law; Jurisdiction Etc.** | **149<u>179</u>** |
|  **Section 10.15** | **Waiver of Jury Trial** | **150<u>180</u>** |
|  **Section 10.16** | **No Advisory or Fiduciary Responsibility** | **150<u>181</u>** |
|  **Section 10.17** | **Electronic Execution of Assignments and Certain Other Documents** | **151<u>181</u>** |
|  **Section 10.18** | **Patriot Act Notice** | **151<u>182</u>** |
|  **Section 10.19** | **<u>ABL/Term</u> Intercreditor Agreement** | **151<u>182</u>** |
|  **Section 10.20** | **Judgment Currency** | **152<u>183</u>** |
|  **Section 10.21** | **Field Audit and Examination Reports; Disclaimer by Lenders** | **152<u>183</u>** |
|  **Section 10.22** | **Additional Borrowers** | **153<u>183</u>** |
|  **Section 10.23** | **Acknowledgement and Consent to Bail-In of EEA Financial Institutions** | **153<u>184</u>** |
|  **<u>Section 10.24</u>** | **<u>Acknowledgement Regarding Any Supported QFCs</u>** | **<u>184</u>** |

---

**Schedules:** 

---

| |
|:---|
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Schedule 2.01<br> – Commitments and Revolving Facility Percentage |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Schedule 2.03<br> – Existing Letters of Credit |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Schedule 5.05<br> – Litigation; Tax Matters |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Schedule 5.07<br> – ERISA |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Schedule 5.09<br> – Ownership of Property; Liens |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Schedule 5.10<br> – Taxes |

---

iv

------

---

| |
|:---|
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Schedule 5.11(a)<br> – Financial Statements |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Schedule 5.12<br> – Environmental |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Schedule 5.15<br> – Labor Relations |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Schedule 5.16<br> – Intellectual Property |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Schedule 5.17<br> – Brokers' and Transaction Fees |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Schedule 5.18<br> – Insurance |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Schedule 5.19<br> – Ventures, Subsidiaries and Affiliates; Outstanding Stock |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Schedule 5.20<br> – Jurisdiction of Organization; Chief Executive Office |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Schedule 5.26(c)<br> – Mortgaged Properties |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Schedule 6.13<br> – Guarantors |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Schedule 6.15<br> – Post-Closing Obligations |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Schedule 7.01<br> – Liens |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Schedule 7.04<br> – Investments |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Schedule 7.05<br> – Continuing Indebtedness |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Schedule 7.06<br> – Transactions with Affiliates |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Schedule 10.02<br> – Administrative Agent's Office; Certain Addresses for Notices |

---

**Exhibits:** 

---

| |
|:---|
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Exhibit A-1<br> – Form of Committed Loan Notice |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Exhibit A-2<br> – Form of Swing Line Loan Notice |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Exhibit A-3<br> – Form of Prepayment Notice |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Exhibit B<br> – Form of Note |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Exhibit C-1<br> – Form of Assignment and Assumption |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Exhibit C-2<br> – Form of Administrative Questionnaire |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Exhibit D<br> – Form of Compliance Certificate |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Exhibit E<br> – Form of Guaranty |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Exhibit F-1<br> – Form of Pledge and Security Agreement |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Exhibit F-2<br> – Form of Perfection Certificate |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Exhibit G<br> – Form of Solvency Certificate |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Exhibit H-1<br> – Form of ABL/Term Intercreditor Agreement |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Exhibit H-2<br> – Form of Term Intercreditor Agreement |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Exhibit I<br> – Form of Borrowing Base Certificate |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Exhibit J<br> – Form of Loan Party Accession Agreement |

---

v

------

ABL CREDIT AGREEMENT

ABL CREDIT AGREEMENT (this "<u>Agreement</u>") dated as of September 19, 2013, by and among STEINWAY MUSICAL INSTRUMENTS, INC., a Delaware corporation (the "<u>Company</u>" and the "<u>Parent Borrower</u>" hereunder), STEINWAY, INC., a Delaware corporation ("<u>Steinway</u>"), CONN-SELMER, INC., a Delaware corporation ("<u>Conn-Selmer</u>" and, together with the Parent Borrower and Steinway, each a "<u>Borrower</u>" and, collectively and jointly and severally, the "<u>Borrowers</u>"), <u>STEINWAY MUSICAL INSTRUMENTS HOLDINGS, INC. (f/k/a</u> PIANISSIMO HOLDINGS CORP.<u>)</u>, a Delaware corporation ("<u>Holdings</u>"), each other Person party hereto that is designated as a "Loan Party", each lender from time to time party hereto (collectively, the "<u>Lenders</u>" and individually each a "<u>Lender</u>"), BANK OF AMERICA, N.A., as Administrative Agent, L/C Issuer and Swing Line Lender and DEUTSCHE BANK SECURITIES INC., as Syndication Agent.

Holdings and the Borrowers are party to the ABL Credit Agreement, dated as of September 19, 2013 (as amended by First Amendment to ABL Credit Agreement, dated as of October 31, 2017, and as further amended, supplemented or otherwise modified from time to time prior to the date hereof<u>Third Amendment Effective Date</u>, the "<u>Existing Credit Agreement</u>").

Holdings and the Borrowers have requested the Lenders to amend the Existing Credit Agreement to increase the aggregate principal amount of the asset-based revolving credit facility from $75,000,000 to $110,000,000 and to make certain other modifications. The Lenders have agreed to so amend the Existing Credit Agreement on the terms and conditions set forth herein. Accordingly, in consideration of the mutual covenants and agreements herein contained, the parties hereto covenant and agree as follows:

ARTICLE I

DEFINITIONS AND ACCOUNTING TERMS

Section 1.01 <u>Defined Terms</u>. As used in this Agreement, the following terms have the meanings set forth below:

<u>"2022 Joint Lead Arrangers</u><u>" means Bank of America, N.A.</u> <u>or its designated affiliate, Barclays Bank PLC or its designated affiliate, and Goldman Sachs Bank USA or its designated affiliate, in their capacities as joint lead arrangers and joint book running managers.</u>

"<u>ABL Credit Obligations</u>" means, with respect to each Loan Party, without duplication:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(i) in the case of each Borrower, all principal of, premium, if any, and interest (including, without limitation,
any interest which accrues after the commencement of any proceeding under any Debtor Relief Law with respect to such Borrower, whether or not allowed or allowable as a claim in any such proceeding) on, any Loan or L/C Obligation under, or any Note
issued pursuant to, this Agreement or any other Loan Document;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(ii) Bank Product Debt;

------

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(iii) all fees, expenses, indemnification obligations and other amounts of whatever nature now or hereafter payable
by such Loan Party (including, without limitation, any amounts which accrue after the commencement of any proceeding under any Debtor Relief Law with respect to such Loan Party, whether or not allowed or allowable as a claim in any such proceeding)
pursuant to this Agreement or any other Loan Document;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(iv) all expenses of the Agents as to which one or more of such Agents have a right to reimbursement by such Loan
Party under <u>Section 10.04(a)</u> of this Agreement or under any other similar provision of any other Loan Document, including, without limitation, any and all sums advanced by the Collateral Agent to preserve the Collateral or preserve its
security interests in the Collateral to the extent permitted under any Loan Document or applicable Requirements of Law;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(v) all amounts paid by any Indemnitee as to which such Indemnitee has the right to reimbursement by such Loan
Party under <u>Section 10.04(b)</u> of this Agreement or under any other similar provision of any other Loan Document; and

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(vi) in the case of Holdings and each Subsidiary Guarantor, all amounts now or hereafter payable by Holdings or such
Subsidiary Guarantor and all other obligations or liabilities now existing or hereafter arising or incurred (including, without limitation, any amounts which accrue after the commencement of any proceeding under any Debtor Relief Law with respect to
any Loan Party, whether or not allowed or allowable as a claim in any such proceeding) on the part of Holdings or such Subsidiary Guarantor pursuant to this Agreement, the Guaranties or any other Loan Document;

together in each case with all renewals, modifications, consolidations or extensions thereof.

"<u>ABL Credit Party</u>" means each Lender, each L/C Issuer, the Administrative Agent, each co-agent or sub-agent appointed by the Administrative Agent from time to time pursuant to this Agreement, the Collateral Agent and each Indemnitee, and "<u>ABL Credit Parties</u>" means any two or more of them, collectively.

"<u>ABL Priority Collateral</u>" has the meaning given to the term in the ABL/Term Intercreditor Agreement.

"<u>ABL/Term</u> <u>Intercreditor Agreement</u>" means the Intercreditor Agreement, substantially in the form of <u>Exhibit H-1</u> hereto, dated as of the Original Closing Date, among the Agent, the Term Administrative Agent, Holdings, the Borrowers, the Term Borrower and the other Loan Parties and Term Loan Parties party thereto, as the same may be amended, modified or supplemented from time to time.

------

"<u>Accession Agreement</u>" means a Loan Party Accession Agreement, substantially in the form of Exhibit J hereto, executed and delivered by each Person that becomes a Subsidiary Guarantor after the Original Closing Date in accordance with <u>Section 6.13</u>.

"<u>Accepting Lenders</u>" has the meaning specified in <u>Section 10.01</u>.

"<u>Account</u>" means, as at any date of determination, all "accounts" (as such term is defined in the UCC) of the Loan Parties, including, without limitation, the unpaid portion of the obligation of a customer of a Loan Party in respect of Inventory purchased by and shipped to such customer and/or the rendition of services by a Loan Party, as stated on the respective invoice of a Loan Party, net of any credits, rebates or offsets owed to such customer.

"<u>Account Debtor</u>" means each debtor, customer or obligor in any way obligated on or in connection with any Account.

"<u>Acquisition</u>" means any transaction or series of related transactions for the purpose of or resulting, directly or indirectly, in (a) the acquisition of all or substantially all of the assets of a Person (other than the acquisition of inventory from any Steinway dealer), or of any business or division of a Person, (b) the acquisition of in excess of fifty percent (50%) of the Stock and Stock Equivalents of any Person or otherwise causing any Person to become a Subsidiary of the Parent Borrower, or (c) a merger or consolidation or any other combination with another Person.

"<u>AcquisitionCo</u>" means Pianissimo Acquisition Corp.

"<u>Adjusted Eurodollar Rate</u>" means, for any Interest Period with respect to a Eurodollar Rate Loan, the quotient obtained (expressed as a decimal, carried out to four decimal places) by dividing (i) the applicable Eurodollar Rate for such Interest Period by (ii) 1.00 minus the Eurodollar Reserve Percentage.

"<u>Administrative Agent</u>" means Bank of America, N.A. in its capacity as administrative agent under any of the Loan Documents, or any successor administrative agent.

"<u>Administrative Agent's Office</u>" means the Administrative Agent's address and, as appropriate, account as set forth on <u>Schedule 10.02</u>, or such other address or account as the Administrative Agent may from time to time notify the Parent Borrower and the Lenders.

"<u>Administrative Questionnaire</u>" means an Administrative Questionnaire substantially in the form of <u>Exhibit C-2</u> or in any other form approved by the Administrative Agent.

<u>"Affected Financial Institution" means (a) any EEA Financial Institution or (b) any UK Financial Institution.</u>

"<u>Affiliate</u>" means, as to any Person, any other Person which, directly or indirectly, is in control of, is controlled by, or is under common control with, such Person. A Person shall be deemed to control another Person if the controlling Person possesses, directly or indirectly, the power to direct or cause the direction of the management and policies of the other Person, whether through the ownership of voting securities, by contract or otherwise. Without limitation, any Affiliated Party of a Person shall for the purposes of this Agreement, be deemed to control the other Person. Notwithstanding the foregoing, neither Agent nor any Lender shall be deemed an "Affiliate" of any Loan Party or of any Subsidiary of any Loan Party.

------

"<u>Affiliated Party</u>" means, as to any Person, any director, executive officer, beneficial owner of five percent (5%) or more of the Stock (either directly or through ownership of Stock Equivalents), general partner, investment advisor or investment manager, of a Person.

"<u>Agent</u>" means the Administrative Agent or the Collateral Agent and any successors and assigns in such capacity, and "<u>Agents</u>" means any two or more of them.

"<u>Agent Party</u>" has the meaning specified in <u>Section 10.02(c)</u>.

"<u>Agent Advances</u>" has the meaning assigned to such term in <u>Section 2.17(a)</u>.

"<u>Aggregate Commitments</u>" means at any time the Revolving Facility Commitments of all the Lenders.

"<u>Agreement</u>" means this ABL Credit Agreement, as amended by the First Amendment and<u>,</u> the Second Amendment, <u>and the Third Amendment</u> and as further amended, amended and restated, supplemented or otherwise modified from time to time in accordance with the terms hereof.

"<u>Alternate Interest Period</u>" has the meaning specified in Section 2.02(a).

"<u>Anti-Money Laundering Laws, Export Controls, and Economic Sanctions</u>" has the meaning specified in <u>Section 5.23</u>.

"<u>Applicable Rate</u>" means:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a) with respect to Revolving Facility Loans, Agent Advances and Overadvances, (i) for the period ending on the date that the third monthly Borrowing Base Certificate is delivered to the Collateral Agent after the Original Closing Date, 1.75% per annum, in the case of Eurodollar Rate<u>Term SOFR</u> Loans, and 0.75% per annum, in the case of Base Rate Loans, and (ii) thereafter, as of any date of determination, a percentage per annum equal to the rate set forth below opposite the then-applicable Average Quarterly Availability for the Fiscal Quarter immediately preceding the Fiscal Quarter in which the date of determination falls:

---

| | | | |
|:---|:---|:---|:---|
| Applicable Rate | Applicable Rate | Applicable Rate | Applicable Rate |
| Pricing Level | Average Quarterly Availability | Eurodollar<br>Rate<u>Term SOFR</u><br>Loans | Base Rate Loans |
| I | Greater than or equal to 66% | 1.50% | 0.50% |

---

------

---

| | | | |
|:---|:---|:---|:---|
| II | Less than 66% but greater than or equal to 33% | 1.75% | 0.75% |
| III | Less than 33% | 2.0% | 1.0% |

---

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b) With respect to Incremental Loans, as of and following the effective date of any Incremental Commitment, a percentage per annum as agreed upon among the Administrative Agent, the Parent Borrower and the applicable Incremental Lenders at the time such Incremental Commitments become effective.

For the avoidance of doubt, (a) Agent Advances and Overadvances shall bear interest as Base Rate Loans, and (b) changes in the Applicable Rate resulting from a change in the Average Quarterly Availability, as calculated in a Compliance Certificate delivered pursuant to <u>Section 6.02(b)</u>, for any Fiscal Quarter shall become effective as to all applicable Revolving Facility Loans and Letter of Credit Fees on the first day of the next Fiscal Quarter following delivery of such Compliance Certificate; <u>provided, however,</u> that if a Compliance Certificate is not delivered when required to be delivered in accordance with such <u>Section 6.02(b)</u>, then Pricing Level III shall apply from the first day of the next Fiscal Quarter following the date on which such Compliance Certificate was required to be delivered through the date on which such Compliance Certificate is delivered, after which the pricing level corresponding to the Average Quarterly Availability set forth in such Compliance Certificate shall apply. Notwithstanding the calculation of the Applicable Rate for any period as set forth above, if, as a result of any error in the calculation of the Average Quarterly Availability for any quarter or for any other reason, the Parent Borrower or the Required Lenders determine that (i) the Average Quarterly Availability as calculated for such quarter was inaccurate and (ii) a proper calculation of the Average Quarterly Availability for such quarter would have resulted in higher pricing for such period, each applicable Borrower shall immediately and retroactively be obligated to pay to the Administrative Agent for the account of the applicable Lenders or L/C Issuers, as the case may be, promptly on demand by the Administrative Agent (or, after the occurrence of an actual or deemed entry of an order for relief with respect to any Borrower under the Bankruptcy Code of the United States, automatically and without further action by the Administrative Agent, any Lender or any L/C Issuer), an amount equal to the excess of the amount of interest and fees that should have been paid for such period over the amount of interest and fees actually paid for such period. This paragraph shall not limit the rights of the Administrative Agent, any Lender or any L/ C Issuer, as the case may be, under <u>Section 2.08(a), 2.04(c)</u> or <u>2.03(h)</u> or under <u>Article VIII</u>.

"<u>Appraisal</u>" means an appraisal of the Borrowers' Inventory conducted by appraisers selected by the Collateral Agent, including any such appraisal conducted as part of the initial Field Survey and Audit obtained by the Collateral Agent prior to the Original Closing Date and any such appraisal obtained by the Agents pursuant to <u>Section 6.09(a)</u>.

"<u>Approved Fund</u>" means any Fund that is administered or managed by (i) a Lender, (ii) an Affiliate of a Lender or (iii) an entity or an Affiliate of an entity that administers or manages a Lender.

------

"<u>Assignee Group</u>" means two or more Eligible Assignees that are Affiliates of one another or two or more Approved Funds managed by the same investment advisor.

"<u>Assignment and Assumption</u>" means an assignment and assumption entered into by a Lender and an Eligible Assignee (with the consent of any party whose consent is required by <u>Section 10.06(b))</u>, and accepted by the Administrative Agent, in substantially in the form of <u>Exhibit C-1</u> hereto or any other form approved by the Administrative Agent.

"<u>Audited Financial Statements</u>" means the audited consolidated balance sheets of the Company and its subsidiaries as of December 31, 2012, 2011 and 2010, and the related consolidated statements of operations and comprehensive income (loss), equity, and cash flows for the years ended December 31, 2012, 2011 and 2010, in each case, including the notes thereto, audited by KPMG LLP.

"<u>Availability</u>" means, at any time, (a) the Borrowing Base <u>minus</u> (b) the aggregate Outstanding Amounts under the Facility.

"<u>Availability Period</u>" shall mean the period from and including the Original Closing Date to but excluding the earlier of the Revolving Facility Maturity Date and the date of termination of the Revolving Facility Commitments.

"<u>Availability Reserve</u>" means the sum (without duplication) of (a) the Inventory Reserve; (b) the Rent and Charges Reserve; (c) the Bank Product Reserve; (d) all accrued Royalties, whether or not then due and payable by a Borrower or Subsidiary Guarantor; (e) the aggregate amount of liabilities secured by Liens upon Collateral that are senior to Agent's Liens (but imposition of any such reserve shall not waive an Event of Default arising therefrom); and (f) such additional reserves, in such amounts and with respect to such matters, as the Administrative Agent in its Credit Judgment may elect to impose from time to time.

"<u>Average Quarterly Availability</u>" means, for any Fiscal Quarter, an amount (expressed as a percentage) equal to the quotient of (A) the average daily Availability during such Fiscal Quarter <u>divided by</u> (B) the daily average Borrowing Base for such Fiscal Quarter.

"<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<u>Affected</u> Financial Institution.

"<u>Bail-In Legislation</u>" means, <u>(a)</u> 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<u>, rule, regulation or requirement</u> for such EEA Member Country from time to time which is described in the EU Bail-In Legislation Schedule.<u>, and (b) with respect to the United Kingdom, Part I of the United Kingdom Banking Act 2009 (as amended from time to time) and any other law, regulation or rule applicable in the United Kingdom relating to the resolution of unsound or failing banks, investment firms or other financial institutions or their affiliates (other than through liquidation, administration or other insolvency proceedings).</u>

"<u>Bank of America</u>" means Bank of America, N.A., and its successors.

------

"<u>Bank Product</u>" means any of the following products, services or facilities extended to any Borrower or Subsidiary by a Lender or any of its Affiliates: (a) services under any Cash Management Agreement; (b) products under Rate Contracts; (c) commercial credit card and merchant card services; and (d) leases and other banking products or services as may be requested by any Borrower or Subsidiary, other than Letters of Credit; <u>provided</u>, <u>however</u>, that for any of the foregoing to be included as a "Finance Obligation" for purposes of a distribution under Section 8.03, the applicable Secured Party and Loan Party must have previously provided written notice to the Administrative Agent of (i) the existence of such Bank Product, (ii) the maximum dollar amount of obligations arising thereunder to be included as a Bank Product Reserve ("<u>Bank Product Amount</u>"), and (iii) the methodology to be used by such parties in determining the Bank Product Debt owing from time to time. The Bank Product Amount may be changed from time to time upon written notice to the Administrative Agent by the applicable Secured Party and Loan Party. No Bank Product Amount may be established or increased at any time that a Default or Event of Default exists, or if a reserve in such amount would cause an Overadvance.

"<u>Bank Product Amount</u>" is defined in the definition of Bank Product.

"<u>Bank Product Debt</u>" means Indebtedness and other obligations of a Loan Party relating to Bank Products.

"<u>Bank Product Reserve</u>" means the aggregate amount of reserves established by the Administrative Agent from time to time in its discretion in respect of Bank Product Debt (other than for Indebtedness and other obligations arising from Secured Hedge Agreements so long as Section 8.03 specifies that the payment of amounts owing under such Secured Hedge Agreements are to be made after the payment of all Finance Obligations constituting the Loans and L/C Obligations and amounts then owing under Secured Cash Management Agreements), which shall be at least equal to the sum of all Bank Product Amounts.

"<u>Bankruptcy Code</u>" means the Federal Bankruptcy Reform Act of 1978.

"<u>Base Rate</u>" means, for any day, a rate per annum equal to the highest of (i) the Prime Rate for such day, (ii) the sum of 0.50% plus the Federal Funds Rate for such day and (iii) the Eurodollar Rate<u>Term SOFR</u> for a one-month Interest Period (determined by reference to <u>clause (</u>ii<u>b</u>) of the definition thereof) plus 1.00%; and if Base Rate shall be less than zero, such rate shall be deemed zero for purposes of this Agreement.

"<u>Base Rate Loan</u>" means a Loan that bears interest based on the Base Rate.

"<u>Benefit Plan</u>" means any employee benefit plan as defined in Section 3(3) of ERISA (whether governed by the laws of the United States or otherwise) to which any Loan Party incurs or otherwise has any obligation or liability, contingent or otherwise.

"<u>Borrower</u>" has the meaning specified in the introductory statement to this Agreement.

"<u>Borrower Materials</u>" has the meaning specified in <u>Section 6.02</u>.

------

"<u>Borrowing</u>" means the borrowing consisting of simultaneous Loans of the same Type and, in the case of Eurodollar Rate<u>Term SOFR</u> Loans, having the same Interest Period made by each of the Lenders.

"<u>Borrowing Base</u>" means, on any date of determination, an amount equal to the lesser of (a) the Aggregate Commitments; or (b) the sum of:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(i) up to 80% of the then Eligible Accounts of the Borrowers and Subsidiary Guarantors, other than Accounts
constituting Dealer Notes; plus

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(ii) up to the lesser of (A) 50% of the then Eligible Accounts of the Borrowers and Subsidiary Guarantors,
constituting Dealer Notes and (B) $5,000,000; plus

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(iii) up to the sum of (A) in the case of Steinway grand pianos, the sum of (1) 85% of the Current
Wholesale Value of all finished and near-finished pianos, (2) 75% of the Current Wholesale Value of Concert and Artist Bank Pianos, and (3) 70% of the Current Wholesale Value of all Factory Returns; (B) in the case of Steinway upright
pianos, the sum of (1) 65% of the Current Wholesale Value of all finished and near-finished pianos, and (2) 50% of the Current Wholesale Value of all Factory Returns; (C) in the case of Boston and Essex grand pianos, the sum of
(1) 65% of the Standard Cost Value of all finished pianos, and (2) 50% of the Standard Cost Value of all Factory Returns; and (D) in the case of Boston and Essex upright pianos, the sum of (1) 50% of the Standard Cost Value of
all finished pianos, and (2) 40% of the Standard Cost Value of all Factory Returns; plus

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(iv) up to 50% of the cost of the Eligible Inventory of Steinway constituting raw materials; plus

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(v) up to 65% of the cost of Eligible Inventory of the Borrowers and Subsidiary Guarantors (other than Steinway)
constituting finished goods; plus

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(vi) up to 25% of the cost of Eligible Inventory of the Borrowers and Subsidiary Guarantors (other than Steinway)
constituting raw materials; plus

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(vii) up to the lesser of (A) $7,500,000 and (B) 25% of the cost of Eligible Inventory of the Borrowers and
Subsidiary Guarantors (other than Steinway) constituting work-in-process; minus

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(viii) $5,000,000; and minus

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(ix) the Availability Reserve.

The Borrowing Base in effect at any time shall be the Borrowing Base as shown on the Borrowing Base Certificate and the reconciliation reports delivered by the Parent Borrower pursuant to <u>Section 6.2(j)</u> of this Agreement; <u>provided</u>, <u>however</u>, that if Parent Borrower shall fail to deliver a Borrowing Base Certificate when required pursuant to <u>Section 6.02(j)</u>, the amounts calculated with respect to the Eligible Accounts and the Eligible Inventory shall be zero until such Borrowing Base Certificate is delivered.

------

For the avoidance of doubt, none of the assets being acquired in an Acquisition nor the assets of the Person whose Equity Interests are being acquired in an Acquisition shall be included in any calculation of the Borrowing Base (whether or not such assets meet the eligibility criteria hereunder) until such time as a Field Survey and Audit of the assets and/or Person(s) being acquired with results reasonably acceptable to the Administrative Agent has been completed; it being agreed that the Administrative Agent shall use commercially reasonable efforts to commence a Field Survey and Audit promptly following the Parent Borrower's request therefor which may be requested prior to consummation of such Acquisition.

"<u>Borrowing Base Certificate</u>" means a certificate signed by a Responsible Officer of the Parent Borrower and setting forth the calculation of the Borrowing Base in compliance with <u>Section 6.02(j)</u>, substantially in the form of <u>Exhibit I</u>.

"<u>Boston Pianos</u>" means pianos designed by Steinway, manufactured by an OEM and marketed under the Boston piano line.

"<u>Business Day</u>" means any day other than a Saturday, Sunday or other day on which commercial banks are authorized to close under the Requirements of Law of, or are in fact closed in, the state where the Administrative Agent's Office is located, except that if such day relates to any Eurodollar Rate<u>Term SOFR</u> Loan, such day shall be a day that is also a London Banking<u>US Government Securities Business</u> Day.

"<u>Capital Lease</u>" means, with respect to any Person, any lease of, or other arrangement conveying the right to use, any Property by such Person as lessee that has been or should be accounted for as a capital lease on a balance sheet of such Person prepared in accordance with GAAP.

"<u>Capital Lease Obligations</u>" means, at any time, with respect to any Capital Lease, any lease entered into as part of any sale leaseback transaction of any Person or any synthetic lease, the amount of all obligations of such Person that is (or that would be, if such synthetic lease or other lease were accounted for as a Capital Lease) capitalized on a balance sheet of such Person prepared in accordance with GAAP.

"<u>Cash Collateralize</u>" or "<u>Cash Collateralization</u>" means to deliver to the Administrative Agent an amount (whether in cash or in the form of a backstop letter of credit in form and substance reasonably satisfactory to, and issued by a U.S. commercial bank reasonably acceptable to, the Administrative Agent in its commercially reasonable discretion) equal to 105.0% of the sum of (a) the Maximum Undrawn Amount plus the aggregate amount of all unreimbursed payments and disbursements under each Letter of Credit which have not been converted to Revolving Facility Loans plus (b) the amount of unpaid Letter of Credit Fees then accrued.

"<u>Cash Dominion Period</u>" has the meaning specified in <u>Section 6.11(b)</u>.

------

"<u>Cash Equivalents</u>" means (a) any readily-marketable securities (i) issued by, or directly, unconditionally and fully guarantied or insured by the United States federal government or (ii) issued by any agency of the United States federal government the obligations of which are fully backed by the full faith and credit of the United States federal government, (b) any readily-marketable direct obligations issued by any other agency of the United States federal government, any state of the United States or any political subdivision of any such state or any public instrumentality thereof, in each case having a rating of at least "A-1" from S&P or at least "P-1" from Moody's, (c) any commercial paper rated at least "A-1" by S&P or "P-1" by Moody's and issued by any Person organized under the laws of any state of the United States, (d) any Dollar-denominated time deposit, insured certificate of deposit, overnight bank deposit or bankers' acceptance issued or accepted by (i) any Lender or (ii) any commercial bank that is (A) organized under the laws of the United States, any state thereof or the District of Columbia, (B) "adequately capitalized" (as defined in the regulations of its primary federal banking regulators) and (C) has Tier 1 capital (as defined in such regulations) in excess of $250,000,000 and (e) shares of any United States money market fund that (i) has substantially all of its assets invested continuously in the types of investments referred to in <u>clauses (a)</u>, <u>(b)</u>, <u>(c)</u> or <u>(d)</u> above with maturities as set forth in the proviso below, (ii) has net assets in excess of $500,000,000 and (iii) has obtained from either S&P or Moody's the highest rating obtainable for money market funds in the United States; provided, however, that the maturities of all obligations specified in any of <u>clauses (a)</u>, <u>(b)</u>, <u>(c)</u> or <u>(d)</u> above shall not exceed 365 days.

"<u>Cash Management Accounts</u>" means the bank deposit accounts or securities accounts of each Loan Party other than Excluded Accounts, which (i) shall be subject to one or more Cash Management Agreements and (ii) at the option of the applicable Loan Party, may be maintained at one or more Cash Management Banks.

"<u>Cash Management Agreement</u>" means any agreement to provide cash management services, including treasury, depository, overdraft, credit or debit card, electronic funds transfer and other cash management arrangements.

"<u>Cash Management Bank</u>" means any Person, that, at the time it enters into a Cash Management Agreement, is a Lender or an Affiliate of a Lender, in its capacity as a party to such Cash Management Agreement.

"<u>Cash Management Collections Accounts</u>" has the meaning specified in <u>Section 6.11(a)</u>.

"<u>Cash Management Obligations</u>" means, as applied to any Cash Management Bank, any direct or indirect liability, contingent or otherwise, of such Person under or in respect of a Cash Management Agreement.

"<u>Cash Management Triggering Event</u>" has the meaning specified in <u>Section 6.11(b)</u>.

"<u>Change in Law</u>" means the occurrence, after the date of this Agreement, of any of the following: (i) the adoption or taking effect of any law, rule, regulation or treaty; (ii) any change in any law, rule, regulation or treaty or in the administration, interpretation, implementation or application thereof by any Governmental Authority; or (iii) the making or issuance of any request, rule, guideline or directive (whether or not having the force of law) by any Governmental Authority; <u>provided</u> that notwithstanding anything herein to the contrary, (x) the Dodd-Frank Wall Street Reform and Consumer Protection Act (Pub.L. 111-203, H.R. 4173) and all requests, rules,

------

guidelines or directives thereunder or issued in connection therewith and (y) all requests, rules, guidelines or directives promulgated by the Bank for International Settlements, the Basel Committee on Banking Supervision (or any successor or similar authority) or the United States or foreign regulatory authorities, in each case pursuant to Basel III, shall in each case be deemed to be a "Change in Law", regardless of the date enacted, adopted or issued.

"<u>Change of Control</u>" means the occurrence of any of the following events:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(i) Permitted Holders at any time cease to own, on a fully diluted basis, at least fifty-one percent (51%) of
the issued and outstanding Stock of Holdings owned by the Permitted Holders on the Second <u>Third</u> Amendment Effective
Date (as the same may be adjusted for any combination, recapitalization or reclassification into a greater or smaller number of shares, interests or other unit of equity security) or, in any event, Stock representing voting control of Holdings;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(ii) Holdings ceases to own, on a fully diluted basis, one hundred percent (100%) of the issued and outstanding
Stock and Stock Equivalents of the Parent Borrower;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(iii) the Parent Borrower ceases to have beneficial ownership (as defined in Rule 13d-3 under the Exchange Act), on a
fully diluted basis, of one hundred percent (100%) of the Stock and Stock Equivalents of each other Borrower (except as a result of any merger, consolidation, conveyance or transfer permitted under <u>Section 7.03(a)</u> hereof) ; or

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(iv) a " Change of Control " (as
defined in any Term Loan Document) shall occur. <u>change of control" (or similar event) occurs under any Permitted Term Debt;</u> 

"<u>Closing Fee Letter</u>" means the Fee Letter dated as of February 16, 2018 among the Parent Borrower and Bank of America, N.A. and Merrill Lynch, Pierce, Fenner & Smith Incorporated.

<u>"CME" means CME Group Benchmark Administration Limited.</u>

"<u>Closing Date Acquisition</u>" means the merger of AcquisitionCo with and into the Company, with (i) the Company surviving as a Wholly-Owned Subsidiary of Holdings and (ii) the Company assuming by operation of law all of the obligations of AcquisitionCo under this Agreement and the other Loan Documents.

"<u>Code</u>" means the Internal Revenue Code of 1986.

"<u>Collateral</u>" means all of the "Collateral" referred to in the Collateral Documents and all of the other property and assets that are or are required under the terms hereof or of the Collateral Documents to be subject to Liens in favor of the Collateral Agent for the benefit of the Secured Parties.

------

"<u>Collateral Access Agreement</u>" means a landlord waiver, bailee letter or acknowledgment agreement of any lessor, warehouseman, processor, consignee, mortgagee or other Person (other than any Loan Party) in possession of, having a Lien upon, or having rights or interests in the equipment or inventory (or any books or records relating thereto) of any Loan Party, in each case in the form attached as an exhibit to the Pledge and Security Agreement or otherwise in form and substance reasonably satisfactory to the Collateral Agent.

"<u>Collateral Agent</u>" means Bank of America, in its capacity as collateral agent for the Secured Parties under the Collateral Documents, and its successor or successors in such capacity.

"<u>Collateral Documents</u>" means, collectively, the Pledge and Security Agreement, the Depositary Bank Agreements, each Mortgage, any additional pledges, security agreements, patent, trademark or copyright filings or mortgages that create or purport to create a Lien in favor of the Collateral Agent for the benefit of the Secured Parties and any instruments of assignment, control agreements, lockbox letters or other instruments or agreements executed pursuant to the foregoing.

"<u>Collections</u>" means all cash, checks, notes, instruments, and other items of payment (including insurance proceeds, proceeds of cash sales, rental proceeds, and tax refunds).

"<u>Commitment Fee</u>" has the meaning specified in <u>Section 2.09(a)</u>.

"<u>Committed Loan Notice</u>" means a notice of (i) a Borrowing, (ii) a conversion of Loans from one Type to the other or (iii) a continuation of Eurodollar Rate<u>Term SOFR</u> Loans, pursuant to <u>Section 2.02(a)</u>, which shall be substantially in the form of <u>Exhibit A-1</u> or such other form as may be approved by the Administrative Agent (including any form on an electronic platform or electronic transmission system as shall be approved by the Administrative Agent), appropriately completed and signed by a Responsible Officer of the Parent Borrower.

"<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>Company</u>" means Steinway Musical Instruments, Inc.

"<u>Compliance Certificate</u>" has the meaning specified in <u>Section 6.02(b)</u>.

"<u>Computer Hardware</u>" means all computer and other electronic data processing hardware of a Loan Party, whether now or hereafter owned, licensed or leased by such Loan Party, including, without limitation, all integrated computer systems, central processing units, memory units, display terminals, printers, features, computer elements, card readers, tape drives, hard and soft disk drives, cables, electrical supply hardware, generators, power equalizers, accessories, peripheral devices and other related computer hardware, all documentation, flowcharts, logic diagrams, manuals, specifications, training materials, charts and pseudo codes associated with any of the foregoing and all options, warranties, services contracts, program services, test rights, maintenance rights, support rights, renewal rights and indemnifications relating to any of the foregoing.

------

"<u>Concert and Artist Bank Pianos</u>" means all pianos held by Steinway or a Steinway dealer, including without limitation, those located at a performance venue, which are available for use by performers.

<u>"</u><u>Conforming Changes" means, with respect to</u> <u>the use, administration of or any conventions associated with SOFR or any proposed Successor Rate or Term SOFR, as applicable</u><u>, any conforming changes to the</u> <u>definitions of "Base Rate", "SOFR", "Term SOFR" and "Interest Period"</u><u>, timing and frequency of determining rates and making payments of interest and other</u> <u>technical, administrative or operational matters (including, for the avoidance of doubt, the definitions of "Business Day" and "U.S. Government Securities Business Day", timing of borrowing requests or prepayment, conversion or continuation notices and length of lookback periods)</u> <u>as may be appropriate, in the discretion of the Administrative Agent, to reflect the adoption</u> <u>and implementation of such applicable rate(s)</u> <u>and to permit the administration thereof by the Administrative Agent in a manner substantially consistent with market practice (or, if the Administrative Agent determines that adoption of any portion of such market practice is not administratively feasible or that no market practice for the administration of such</u> <u>rate</u> <u>exists, in such other manner of administration as the Administrative Agent determines</u> <u>is reasonably necessary in connection with the administration of this</u> <u>Agreement and any other</u> <u>Loan Document).</u>

"<u>Conn-Selmer</u>" has the meaning specified in the introductory statement to this Agreement.

"<u>Conn-Selmer Dealer Notes</u>" means notes made by Conn-Selmer dealers in favor of Conn-Selmer or any Subsidiary thereof, that evidence indebtedness owing by such dealers to Conn-Selmer or such Subsidiary for extensions of credit made by Conn-Selmer or such Subsidiary to dealers to acquire Conn-Selmer's musical instruments in an amount not to exceed $3,000,000 in the aggregate for all such note installments with a due date more than one year after the date of issuance.

"<u>Consolidated Capital Expenditures</u>" means, with respect to any Person, for any period, the aggregate amount incurred that would, in accordance with GAAP, be classified as capital expenditures on the consolidated balance sheet of such Person and its Subsidiaries for such period.

"<u>Consolidated Cash Interest Expense</u>" means, with respect to Holdings and its Subsidiaries, gross interest expense for such period paid or required to be paid in cash (including all commissions, discounts, fees and other charges in connection with letters of credit and similar instruments, but excluding (i) commitment fees and other upfront fees payable in connection with the Related Transactions, (ii) net of amounts paid or payable and/or received or receivable under permitted Rate Contracts in respect of interest rates, (iii) the amortized amount of debt discount and debt issuance costs, (iv) interest paid or payable by the issuance of payment-in-kind notes and (v) other non-cash interest) minus interest income for such period.

"<u>Consolidated EBITDA</u>" means the net income (or loss) for the applicable period of measurement of Holdings and its Subsidiaries on a consolidated basis determined in accordance with GAAP,

------

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(A) but excluding: (a) the income (or loss) of any Person in which any other Person (other than the Parent Borrower or any of its Wholly-Owned Subsidiaries) has an ownership interest, except to the extent that any such income has been actually received in cash by a Loan Party or a Subsidiary during such period; (b) the income (or loss) of any Person accrued prior to the date it becomes a Subsidiary of Holdings or is merged into or consolidated with Holdings or any of its Subsidiaries or that Person's assets are acquired by Holdings or any of its Subsidiaries; (c) the proceeds of any life insurance policy; (d) the impact of any foreign currency valuation or settlement adjustments; (e) non-cash gains or losses from the sale, exchange, transfer or other disposition of Property or assets not in the Ordinary Course of Business of Holdings and its Subsidiaries, and related tax effects in accordance with GAAP; (f) any other extraordinary, unusual or non-recurring gains or losses of Holdings or its Subsidiaries and related tax effects in accordance with GAAP; and (g) gains or losses (whether or not realized) with respect to obligations under Term Secured Hedge Agreements and Secured Hedge Agreements,

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(B) <u>plus</u>, without duplication and to the extent reflected as a charge in the statement of such net income for such period: (a) all amounts deducted in calculating net income (or loss) for depreciation or amortization for such period; (b) gross interest expense (less interest income) deducted in calculating net income (or loss) for such period; (c) all accrued taxes on or measured by income to the extent deducted in calculating net income (or loss) for such period; (d) all non-cash losses or expenses (or minus non-cash income or gain) included or deducted in calculating net income (or loss) for such period, including, without limitation, (i) non-cash compensation expense, (ii) non-cash charges arising from the conversion of last-in, first-out accounting to first-in, first-out accounting, (iii) write-offs and write-downs (other than in respect of Accounts or Inventory), (iv) gains or losses from early extinguishment of debt or other infrequent and unusual items and (v) non-cash pension expense; (e) fees and expenses incurred in connection with the closing of<u>, or subsequent amendments relating to,</u> the Related Transactions <u>or any Permitted Term Debt, in each case</u> to the extent deducted in calculating net income (or loss) for such period; (f) all proceeds of business interruption insurance to the extent not already included in determining net income (or loss) for such period; (g) losses from retail locations incurred during the first 12 months following the acquisition or opening of such location in an aggregate amount not to exceed the greater of (x) $2,000,000 and (y) 5.0% of Consolidated EBITDA for such period; (h)(i) one-time costs associated with the development and opening of replacement locations for Steinway Hall New York in an aggregate amount not to exceed $8,000,000 and (ii) costs associated with the development and opening of other new retail locations; (i) any reduction in net income arising from any purchase accounting adjustments arising as a result of any Permitted Acquisition to the extent deducted in calculating net income (or loss) for such period; (j) upfront fees and expenses payable in connection with the issuance of any Stock or Stock Equivalents permitted hereunder, any Permitted Acquisition or the incurrence of debt permitted hereunder (in each case whether or not consummated) to the extent deducted in calculating net income (or loss) for such period; (k) consulting and director fees paid to directors, board consultant's fees, salaries and bonuses payable to directors and reimbursement of actual out-of-pocket expenses incurred in connection with attending board of director meetings, in each case, to the extent permitted under <u>Section 7.07</u>; (l) reimbursement of reasonable out-of-pocket costs and expenses to Sponsor to the extent permitted under <u>Section 7.07</u>; (m) one-time expenses related to (i) any management changes and reductions in work force, including, without limitation, severance and related outplacement service fees, search fees, related hiring costs and relocation costs, (ii) cash expenses and charges relating to restructuring of the Loan Parties' operations, transition costs and corporate offsets, (iii) one-time cash expenses and charges arising from other restructuring activities and (iv) consulting fees paid to third party non-Affiliates in connection with marketing, sales and related initiatives, including,

------

without limitation, any consulting fees associated with the assessment or implementation of such activities, in an aggregate amount for this clause (m) not to exceed 15% of Consolidated EBITDA for such period (before giving effect to such addback and the pro forma effect pursuant to clause (e) of the definition of "pro forma basis"); and (n) any expenses and charges of a type set forth in the Adjusted EBITDA Reconciliation contained in the Company's Lender Presentation dated February 6, 2018 delivered to prospective lenders under the <u>Original</u> Term Credit Agreement,

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(C) <u>plus</u>, with respect to Targets owned by the Holdings or any of its Subsidiaries for which the Administrative Agent has received financial statements pursuant to <u>Section 6.01(b)</u> for less than twelve months, the Consolidated EBITDA calculated on a pro forma basis and allocated to each month prior to the acquisition thereof included in the trailing twelve month period for which Consolidated EBITDA is being calculated, and

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(D) <u>minus</u>, with respect to any Disposition by Holdings or any of its Subsidiaries consummated within the period in question, Consolidated EBITDA attributable to Holdings, the Subsidiary or profit center which is the subject of such Disposition from the beginning of such period until the date of consummation of such Disposition.

For purposes of calculating Consolidated EBITDA as of any date of measurement ending on or before June 30, 2014, Consolidated EBITDA for: (a) the calendar quarter ending December, 31, 2012 shall be deemed to equal $18,400,000, (b) the calendar quarter ending March, 31, 2013 shall be deemed to equal $9,600,000, (c) the calendar quarter ending June, 30, 2013 shall be deemed to equal $14,600,000 and (d) the calendar months ending July 31, 2013, August 31, 2013 and September 30, 2013 shall be calculated in a manner consistent with the calculation of Consolidated EBITDA for the preceding periods.

"<u>Consolidated Total Debt</u>" of Holdings and its Subsidiaries means, as of any date of determination, the aggregate principal amount of all Indebtedness of Holdings and its Subsidiaries (other than Indebtedness in respect of any undrawn acceptance, letter of credit or similar facilities, hedging obligations, surety bonds, permitted earn-outs or non-compete payments).

"<u>Consolidating</u>" means, with respect to balance sheets, statements of income, operations, shareholders' equity and cash flows, that such financial statements present consolidating information with regard to each of the piano and band business divisions and the consolidating financial statements of Holdings and its Subsidiaries.

"<u>Contractual Obligation</u>" means, as to any Person, any provision of any security (whether in the nature of Stock, Stock Equivalents or otherwise) issued by such Person or of any agreement, undertaking, contract, indenture, mortgage, deed of trust or other instrument, document or agreement (other than a Loan Document) to which such Person is a party or by which it or any of its Property is bound or to which any of its Property is subject.

"<u>Controlled Account</u>" means each Deposit Account that is subject to a Deposit Account Control Agreement in form and substance satisfactory to the Administrative Agent and the L/C Issuer.

"<u>Copyrights</u>" means all rights, title and interests (and all related IP Ancillary Rights) arising under any Requirement of Law in or relating to copyrights and all mask work, database and design rights, whether or not registered or published, all registrations and recordations thereof and all applications in connection therewith.

------

"<u>Covenant Triggering Event</u>" shall occur at any time that (i) an Event of Default has occurred and is continuing or (ii) Availability is less than 15.0% of the Revolving Facility Commitment.

"<u>Credit Event</u>" has the meaning specified in <u>Article IV</u>.

"<u>Credit Judgment</u>" means the Administrative Agent's credit judgment exercised in good faith, based upon its consideration of any factor that it believes (a) could adversely affect the quantity, quality, mix or value of Collateral (including any Requirement of Law that may inhibit collection of an Account), the enforceability or priority of Collateral Agent's Liens, or the amount that Agents and Lenders could receive in liquidation of any Collateral; (b) suggests that any collateral report or financial information delivered by any Loan Party is incomplete, inaccurate or misleading in any material respect; (c) materially increases the likelihood of any proceeding under Debtor Relief Law involving a Loan Party; or (d) creates or could result in a Default or Event of Default. In exercising such judgment with respect to (a) through (d) hereof, Administrative Agent may consider any factors that could increase the credit risk of lending to Borrowers on the security of the Collateral (other than such factors that are attributable to general economic conditions).

"<u>Current Wholesale Value</u>" means, for any piano at any time, the wholesale price of such piano as published in good faith by Holdings or its Subsidiaries at such time, or if such price is not so published, the wholesale price of such piano as reasonably determined by the Administrative Agent.

<u>"Daily Simple SOFR" with respect to any applicable determination date means the SOFR published on such date on the Federal Reserve Bank of New York's website (or any successor source).</u>

"<u>Dealer Notes</u>" means, collectively, the Conn-Selmer Dealer Notes and the Steinway Dealer Notes.

"<u>Debtor Relief Laws</u>" means the Bankruptcy Code and all other liquidation, conservatorship, bankruptcy, assignment for the benefit of creditors, moratorium, rearrangement, receivership, insolvency, reorganization, or similar debtor relief laws of the United States or other applicable jurisdictions from time to time in effect and affecting the rights of creditors generally.

"<u>Default</u>" means any event or condition that constitutes an Event of Default or that, with the giving of any notice, the passage of time, or both, would be an Event of Default.

"<u>Default Rate</u>" means an interest rate equal to (A) the Base Rate plus (B) the Applicable Rate, if any, applicable to Base Rate Loans plus (C) 2.00% per annum; <u>provided</u>, <u>however</u>, that with respect to a Eurodollar Rate<u>Term SOFR</u> Loan, the Default Rate shall be an interest rate equal to the interest rate (including any Applicable Rate) otherwise applicable to such Loan plus 2.00% per annum.

------

"<u>Defaulting Lender</u>" means, subject to <u>Section 2.15(b),</u> any Lender that, as determined by the Administrative Agent, (i) has failed to perform any of its funding obligations hereunder, including in respect of its Loans, L/C Obligations or Swing Line Loans, within three Business Days of the date required to be funded by it hereunder, (ii) has notified the Parent Borrower, the Administrative Agent, an L/C Issuer or the Swing Line Lender that it does not intend to comply with its funding obligations or has made a public statement to that effect with respect to its funding obligations hereunder or under other agreements generally in which it commits to extend credit, (iii) has failed, within three Business Days after request by the Administrative Agent or the Parent Borrower, to confirm in a manner satisfactory to the Administrative Agent or the Parent Borrower that it will comply with its funding obligations or (iv) has, or has a direct or indirect parent company that has, (A) become the subject of a proceeding under any Debtor Relief Law, (B) had a receiver, conservator, trustee, administrator, assignee for the benefit of creditors or similar Person charged with reorganization or liquidation of its business or a custodian appointed for it, (C) taken any action in furtherance of, or indicated its consent to, approval of or acquiescence in any such proceeding or appointment or (D) become the subject of a Bail-in Action; <u>provided</u> that a Lender shall not be a Defaulting Lender solely by virtue of the ownership or acquisition of any equity interest in that Lender or any direct or indirect parent company thereof by a Governmental Authority.

"<u>Deposit Account</u>" means a "<u>deposit account</u>" (as defined in the UCC) and also means and includes all demand, time, savings, passbook or similar accounts maintained by a Loan Party with a bank or other financial institution, whether or not evidenced by an instrument, all cash and other funds held therein and all passbooks related thereto and all certificates and instruments, if any, from time to time representing, evidencing or deposited into such deposit accounts.

"<u>Depositary Bank Agreement</u>" means an agreement among a Loan Party, a bank or other depositary institution and the Collateral Agent, in form and substance reasonably satisfactory to the Collateral Agent.

"<u>Disposition</u>" means (i) the sale, lease, conveyance or other disposition of Property, other than sales or other dispositions expressly permitted under Section <u>7.02(a)</u>, <u>7.02(c), 7.02(d)</u> and 7.02(j) and (ii) the sale or transfer by the Parent Borrower or any Subsidiary of the Parent Borrower of any Stock or Stock Equivalent issued by any Subsidiary of the Parent Borrower and held by such transfer Person.

"<u>Disqualified Stock</u>" means any Stock that, by its terms (or by the terms of any security into which it is convertible or for which it is exchangeable in each case, at the option of the holder of the Stock), or upon the happening of any event, matures or is mandatorily redeemable, pursuant to a sinking fund obligation or otherwise, or is redeemable at the option of the holder thereof, in whole or in part, in each case at any time on or prior to the date that is 91 days after the Revolving Facility Maturity Date. Notwithstanding the preceding sentence, any Stock that would constitute Disqualified Stock solely because the holders of the Stock have the right to require the issuer to repurchase such Stock upon the occurrence of a change of control or an asset sale will not constitute Disqualified Stock if the terms of such Stock provide that the issuer may not repurchase or redeem any such Stock pursuant to such provisions unless such repurchase or redemption complies with <u>Section 7.11</u>. The amount of Disqualified Stock deemed to be outstanding at any time for purposes of this Agreement will be the maximum amount that Holdings and its Subsidiaries may become obligated to pay upon the maturity of, or pursuant to any mandatory redemption provisions of, such Disqualified Stock, exclusive of accrued dividends.

------

"<u>Dollars</u>", "<u>dollars</u>" and "<u>$</u>" means lawful money of the United States.

"<u>Domestic Subsidiary</u>" means, with respect to any Person, a Subsidiary of such Person that is incorporated or otherwise organized under the laws of the United States, any state thereof or the District of Columbia.

"<u>Drawing Date</u>" has the meaning specified in <u>Section 2.03(d)(ii)</u>.

"<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<u>Person</u> entrusted with public administrative authority of any EEA Member Country (including any delegee) having responsibility for the resolution of any EEA Financial Institution.

"<u>Electronic Transmission</u>" means each document, instruction, authorization, file, information and any other communication transmitted, posted or otherwise made or communicated by e-mail or E-Fax, or otherwise to or from a Platform or other equivalent service.

"<u>Eligible Accounts</u>" means all Accounts of a Borrower or Subsidiary Guarantor, arising in the ordinary course of business, evidencing the sale of goods and services by such Borrower or Subsidiary Guarantor and which the Administrative Agent, in its Credit Judgment, shall deem to be an Eligible Account, based upon such considerations as the Administrative Agent may from time to time deem appropriate. Without in any way limiting the foregoing, (i) in general, unless otherwise determined by the Administrative Agent as aforesaid, an Account shall not constitute an Eligible Account unless it is subject to a perfected, first priority Lien in favor of the Administrative Agent for the ratable benefit of the Lenders, is free and clear of all Liens other than Permitted Liens and is evidenced by an invoice or other document satisfactory to the Administrative Agent, and (ii) no Account of an Account Debtor shall be an Eligible Account if:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(i) such Account arises out of a sale made by a Borrower or Subsidiary Guarantor to an Affiliate of such Borrower
or Subsidiary Guarantor or to a Person controlled by an Affiliate of such Borrower or Subsidiary Guarantor or such Account Debtor is such Borrower's or Subsidiary Guarantor's creditor or supplier;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(ii) more than 60 days have elapsed from the due date of such Account;

------

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(iii) (i) with respect to Accounts of a Borrower or Subsidiary Guarantor other than Conn-Selmer, more than ninety
days have elapsed from the invoice date of each such Account, and (ii) solely with respect to Accounts of Conn-Selmer, more than three hundred and five days have elapsed from the invoice date of each such Account;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(iv) 50% or more of the aggregate account balance of Accounts due from such Account Debtor is more than 60 days past
due;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(v) any covenant, representation or warranty contained in this Agreement or any Loan Documents with respect to such
Account has been breached in a material manner;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(vi) the Administrative Agent is not and continues not to be satisfied with the credit standing of such Account
Debtor, or the Administrative Agent otherwise believes, in its Credit Judgment, that collection of such Account is insecure or that such Account may not be paid by reason of such Account Debtor's financial inability to pay (and in the absence
of an Event of Default which is continuing, at Borrowers' request therefor, Agent agrees to advise Borrowers of the reasons for its making any such judgment);

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(vii) such Account Debtor has asserted any dispute, offset or counterclaim against the related Borrower or Subsidiary
Guarantor, such Account or any other Account due from such Account Debtor to such Borrower or Subsidiary Guarantor, or such Account is or could reasonably be expected to become subject to any offset, deduction, defense, dispute, or counterclaim, or
is contingent in any respect or for any reason, but only to the extent of the amount in dispute;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(viii) such Account Debtor resides outside the continental United States, Alaska, Hawaii, the U.S. Virgin Islands
and/or Puerto Rico, unless the sale is covered by a letter of credit or credit insurance in form and substance acceptable to the Agent in its Credit Judgment, or unless such Account (in U.S. Dollars) is due from an entity located in Canada or a
territory of the United States;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(ix) the sale to such Account Debtor is on a bill-and-hold, guaranteed sale, sale-and-return, sale on approval,
consignment or any other repurchase or return basis or is evidenced by chattel paper;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(x) such Account Debtor is the United States of America, any state or any department, agency or instrumentality of
any of them, unless the related Borrower or Subsidiary Guarantor assigns its right to payment of such Account to the Agent for the ratable benefit of the Lenders pursuant to the Federal Assignment of Claims Act of 1940, as amended, or has otherwise
complied with all other applicable statutes or ordinances;

------

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(xi) any of the following events occur or conditions exist with respect to the goods giving rise to such Account:
(i) if such goods have not been shipped to such Account Debtor, or (ii) if so shipped, have subsequently not been delivered to such Account Debtor, or (iii) if so delivered, have not been accepted by such Account Debtor, or
(iv) if such Account otherwise does not represent a final sale, or (v) such goods have been repossessed;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(xii) the amount of all Accounts of such Account Debtor exceeds any credit limit determined by the Administrative
Agent, in its Credit Judgment, to the extent that the amount of such Account exceeds such limit;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(xiii) such Account Debtor has commenced or has had commenced against it a case under any federal, state or other
bankruptcy or insolvency laws, as now constituted or hereafter amended, or made an assignment for the benefit of creditors, or if a decree or order for relief has been entered by a court having jurisdiction in the premises in respect of such Account
Debtor in an involuntary case under any state or federal bankruptcy laws, as now constituted or hereafter amended, or if any other petition or other application for relief under any state or federal bankruptcy law has been filed against such Account
Debtor, or if such Account Debtor has failed, suspended business, ceased to be solvent, called a meeting of its creditors (in order to discuss financial insolvency or lack of liquidity), or consented to or suffered a receiver, trustee, liquidator or
custodian to be appointed for it or for all or a significant portion of its assets or affairs;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(xiv) the related Borrower or Subsidiary Guarantor has made any agreement with such Account Debtor for any deduction
therefrom, except for discounts or allowances made in the ordinary course of business for prompt payment, all of which discounts or allowances shall be reflected in the calculation of the face value of each respective invoice related thereto; or

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(xv) such Account is not payable to the related Borrower or Subsidiary Guarantor;

notwithstanding the foregoing, Eligible Accounts may include in addition to any Account of any Borrower or Subsidiary Guarantor constituting an Eligible Account hereunder, Dealer Notes pledged to the Administrative Agent, satisfactory to the Administrative Agent in its Credit Judgment, and otherwise qualifying as Eligible Accounts hereunder having an aggregate outstanding principal amount at any time of up to $20,000,000, that mature up to two years from the execution thereof. Notwithstanding anything to the contrary herein, the Steinway Dealer Notes shall not constitute Eligible Accounts until such time that such notes are deemed Eligible Accounts by the Administrative Agent, in its Credit Judgment. The Administrative Agent shall require that the Steinway Dealer Notes, among other things, be subject to a field examination and audit (and such examination and audit be reasonably acceptable to the Required Lenders) in order to determine whether such notes shall be considered Eligible Accounts.

------

"<u>Eligible Assignee</u>" means any Person that meets the requirements to be an assignee under <u>Section 10.06(b)(iii)</u> and <u>(v)</u> (subject to such consents, if any, as may be required under <u>Section 10.06(b)(iii)</u>).

"<u>Eligible Inventory</u>" means all Inventory of a Borrower or Subsidiary Guarantor consisting of (i) Boston Pianos, Essex Pianos, Steinway Pianos, Factory Returns, Concert and Artist Bank Pianos, near-finished pianos, and raw materials of Steinway, and (ii) raw materials, work-in-process and finished goods of any Borrower or Subsidiary Guarantor, in each case which is in good and saleable condition and located at such Borrower's or Subsidiary Guarantor's places of business or at the Collateral locations described on <u>Schedule I</u> to the Pledge and Security Agreement (except when in transit to or from such locations) and which is not, in the Administrative Agent's Credit Judgment, obsolete, damaged, slow-moving or unmerchantable, and which the Administrative Agent, in its Credit Judgment, shall deem Eligible Inventory, based upon such considerations as the Administrative Agent may from time to time deem appropriate. In general, unless otherwise determined by the Administrative Agent as referenced above, Inventory shall not constitute Eligible Inventory unless it is subject to a perfected, first priority Lien in favor of the Administrative Agent for the ratable benefit of the Lenders, is free and clear of all Liens other than Permitted Liens and conforms to all standards imposed by any Governmental Authority, division or department thereof which has regulatory authority over such goods or the use or sale thereof.

"<u>Employee Benefit Plan</u>" means any of (a) an "employee benefit plan" (as defined in ERISA) that is subject to Title I of ERISA, (b) a "plan" as defined in Section 4975 of the Code or (c) any Person whose assets include (for purposes of ERISA Section 3(42) or otherwise for purposes of Title I of ERISA or Section 4975 of the Code) the assets of any such "employee benefit plan" or "plan".

"<u>Environmental Laws</u>" means all Requirements of Law and Permits imposing liability or standards of conduct for or relating to the regulation and protection of human health, safety, the workplace, the environment and natural resources, and including public notification requirements and environmental transfer of ownership, notification or approval statutes.

"<u>Environmental Liabilities</u>" means all Liabilities (including costs of Remedial Actions, natural resource damages and costs and expenses of investigation and feasibility studies, including the cost of environmental consultants and the cost of attorney's fees) that may be imposed on, incurred by or asserted against any Loan Party or any Subsidiary of any Loan Party as a result of, or related to, any claim, suit, action, investigation, proceeding or demand by any Person, whether based in contract, tort, implied or express warranty, strict liability, criminal or civil statute or common law or otherwise, arising under any Environmental Law or in connection with any environmental, health or safety condition or with any Release and resulting from the ownership, lease, sublease or other operation or occupation of property by any Loan Party or any Subsidiary of any Loan Party, whether on, prior or after the date hereof.

"<u>Equity Contribution</u>" has the meaning specified in <u>Section 4.01(f)</u>.

------

"<u>Equity Issuance</u>" means (i) any sale or issuance by Holdings or any of its Subsidiaries to any Person other than Holdings or a Subsidiary of Holdings of any Stock or any Stock Equivalents (other than Disqualified Stock) and (ii) the receipt by Holdings or any of its Subsidiaries of any cash capital contributions, whether or not paid in connection with any issuance of Stock of Holdings or any of its Subsidiaries, from any Person other than Holdings or a Subsidiary of Holdings.

"<u>ERISA</u>" means the Employee Retirement Income Security Act of 1974, as amended, and the rules and regulations promulgated thereunder.

"<u>ERISA Affiliate</u>" means, collectively, any Loan Party and any Person under common control or treated as a single employer with, any Loan Party, within the meaning of Section 414(b), (c), (m) or (o) of the Code.

"<u>ERISA Event</u>" means any of the following: (a) a reportable event described in Section 4043(c) of ERISA (or, unless the 30-day notice requirement has been duly waived under the applicable regulations, Section 4043(c) of ERISA) with respect to a Title IV Plan; (b) the withdrawal of any ERISA Affiliate from a Title IV Plan subject to Section 4063 of ERISA during a plan year in which it was a substantial employer, as defined in Section 4001(a)(2) of ERISA; (c) the complete or partial withdrawal of any ERISA Affiliate from any Multiemployer Plan; (d) with respect to any Multiemployer Plan, the filing of a notice of reorganization, insolvency or termination (or treatment of a plan amendment as termination) under Section 4041A of ERISA; (e) the filing of a notice of intent to terminate a Title IV Plan (or treatment of a plan amendment as termination) under Section 4041(c) of ERISA; (f) the institution of proceedings to terminate a Title IV Plan or Multiemployer Plan by the PBGC; (g) the failure to make any required contribution to any Title IV Plan or Multiemployer Plan when due; (h) the imposition of a Lien under Section 412 or 430(k) of the Code or Section 303 or 4068 of ERISA on any property (or rights to property, whether real or personal) of any ERISA Affiliate; (i) the failure of a Benefit Plan or any trust thereunder intended to qualify for tax exempt status under Section 401 or 501 of the Code or other Requirements of Law to qualify thereunder; (j) a Title IV plan is in "at risk" status within the meaning of Code Section 430(i) or Section 303 of ERISA; (k) a Multiemployer Plan is in "endangered status" or "critical status" within the meaning of Section 432(b) of the Code or Section 305 of ERISA; and (l) any other event or condition that would reasonably be expected to constitute grounds under Section 4042 of ERISA for the termination of, or the appointment of a trustee to administer, any Title IV Plan or Multiemployer Plan or for the imposition of any material liability upon any ERISA Affiliate under Title IV of ERISA other than for PBGC premiums due but not delinquent.

"<u>Essex Pianos</u>" means pianos designed by Steinway, manufactured by an OEM and marketed under the Essex piano line all of which are finished goods or Factory Returns.

"<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.

------

"Eurodollar Rate" means:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(i) for any Interest Period with respect to a Eurodollar Rate Loan, the rate per annum equal to the London Interbank Offered Rate ("LIBOR"), or a comparable or successor rate, which rate is approved by the Administrative Agent, as published on the applicable Reuters screen page (or such other commercially available source providing such quotations as may be designated by the Administrative Agent from time to time), at approximately 11:00 a.m., London time, two Business Days prior to the commencement of such Interest Period, for Dollar deposits (for delivery on the first day of such Interest Period) with a term equivalent to such Interest Period; and

(ii) for any interest calculation with respect to a Base Rate Loan on any date, the rate per annum equal to LIBOR, at approximately 11:00 a.m., London time determined two Business Days prior to such date for Dollar deposits with a term of one month commencing on the date of determination; <u>provided</u> that (x) to the extent a comparable or successor rate is approved by the Administrative Agent in connection herewith, the approved rate shall be applied to the applicable Interest Period in a manner consistent with market practice and (y) if the Eurodollar Rate shall be less than zero, such rate shall be deemed zero for purposes of this Agreement; <u>provided</u>, <u>further</u> that to the extent such market practice is not administratively feasible for the Administrative Agent, such approved rate shall be applied to the applicable Interest Period as otherwise reasonably determined by the Administrative Agent.

"<u>Eurodollar Rate Loan</u>" means at any date a Loan which bears interest at a rate based on clause (i) of the definition of "Eurodollar Rate".

"<u>Eurodollar Reserve Percentage</u>" means for any day during any Interest Period, the reserve percentage (expressed as a decimal, carried out to four decimal places) in effect on such day, whether or not applicable to any Lender, under regulations issued from time to time by the Federal Reserve Board for determining the maximum reserve requirement (including any emergency, supplemental or other marginal reserve requirement) with respect to Eurocurrency funding (currently referred to "Eurocurrency liabilities"). The Adjusted Eurodollar Rate for each outstanding Eurodollar Rate Loan shall be adjusted automatically on and as of the effective date of any change in the Eurodollar Reserve Percentage.

"<u>Event of Default</u>" has the meaning specified in <u>Section 8.01</u>.

"<u>Event of Loss</u>" means, with respect to any Property, any of the following: (i) any loss, destruction or damage of such Property; or (ii) any actual condemnation, seizure or taking, by exercise of the power of eminent domain or otherwise, of such Property, or confiscation of such Property or the requisition of the use of such Property.

"<u>Exchange Act</u>" means the Securities Exchange Act of 1934, as amended, and the rules and regulations promulgated thereunder.

"<u>Excluded Accounts</u>" means (i) Deposit Accounts used solely for funding payroll or segregating payroll taxes or segregating 401k contribution or contributions to an employee stock purchase plan and other health and benefit plans, (ii) Deposit Accounts or securities accounts, amounts on deposit or value of the securities held in which the seven-day average balance does not exceed $2,000,000 in the aggregate at any one time, (iii) zero balance disbursement accounts, (iv) deposit or securities accounts located outside the United States, (v) subject to the ABL/Term<u>terms of any</u> Intercreditor Agreement, the <u>"</u>Term Priority Collateral Asset Disposition Account<u>"</u> (as defined in the ABL/Term Intercreditor Agreement),<u>or any similar concept) described</u> <u>therein</u> and (vi) Deposit Accounts or securities accounts maintained in connection with pledges of cash or cash equivalents permitted under <u>Section 7.01(e)</u>.

------

"<u>Excluded Domestic Holdco</u>" means a Domestic Subsidiary substantially all of the assets of which consist of Stock of one or more Excluded Domestic Holdcos or Foreign Subsidiaries.

"<u>Excluded Domestic Subsidiary</u>" means any Domestic Subsidiary that is (a) a Subsidiary of a Foreign Subsidiary, (b) an Excluded Domestic Holdco or (c) an indirect Domestic Subsidiary of an Excluded Domestic Holdco.

"<u>Excluded Subsidiary</u>" means any Subsidiary of Holdings (a) for which the joining in, or becoming a party to, a Guaranty (i) would be prohibited by applicable law or regulation existing as of the Original Closing<u>Third Amendment Effective</u> Date or on the date that such Subsidiary was acquired by a Loan Party (so long as such prohibition is not incurred in contemplation of such acquisition), (ii) would require governmental (including regulatory) consent, approval, license or authorization or (iii) would result in material adverse tax consequences as reasonably determined by the Parent Borrower, (b) that is an Excluded Domestic Subsidiary, (c) that is a Non-Material Subsidiary, (d) to the extent the burden or cost of obtaining a Guaranty outweighs the benefit afforded to the Lenders thereby, as reasonably determined by the Administrative Agent and the Parent Borrower and (e) Steinway and Sons.

"<u>Excluded Swap Obligation</u>" means, with respect to any Loan Party, any Swap Obligation if, and to the extent that, all or a portion of the Guaranty of such Loan Party of, or the grant by such Loan Party of a security interest to secure, such Swap Obligation (or any Guaranty 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 Loan Party's failure for any reason to constitute an "eligible contract participant" as defined in the Commodity Exchange Act (determined after giving effect to Section 2.10 of the Guaranty and other "keepwell, support or other agreement" for the benefit of such Loan Party and any and all guarantees of such Loan Party's Swap Obligations by other Loan Parties) at the time the Guaranty of such Loan Party, or a grant by such Loan Party of a security interest, becomes effective with respect to such Swap Obligation. If a Swap Obligation arises under a master agreement governing more than one swap, such exclusion shall apply only to the portion of such Swap Obligation that is attributable to swaps for which such Guaranty or security interest is or becomes excluded in accordance with the first sentence of this definition.

"<u>Excluded Taxes</u>" means, with respect to the Administrative Agent, any Lender, any L/C Issuer or any other recipient of any payment to be made by or on account of any obligation of the Borrowers hereunder, (i) taxes imposed on or measured by its overall net income (however denominated), and franchise taxes imposed on it (in lieu of net income taxes), by the jurisdiction (or any political subdivision thereof) under the laws of which such recipient is organized or in which its principal office is located or, in the case of any Lender, in which its Lending Office is located, (ii) any branch profits taxes imposed by the United States or any similar tax imposed by any other jurisdiction in which any Borrower is located, (iii) any backup withholding tax that is required by the Code to be withheld from amounts payable to a Lender that has failed to comply with <u>clause (A)</u> of <u>Section 3.01(e)(ii)</u>, (iv) in the case of a Foreign Lender (other than an assignee pursuant to a request by the Parent Borrower under <u>Section 10.13</u>), any United States withholding

------

tax that is (A) required to be imposed on amounts payable to such Foreign Lender pursuant to the Requirements of Law in force at the time such Foreign Lender becomes a party hereto (or designates a new Lending Office) or (B) is attributable to such Foreign Lender's failure or inability (other than as a result of a Change in Law) to comply with <u>clause (B)</u> of <u>Section 3.01(e)(ii)</u>, except to the extent that such Foreign Lender (or its assignor, if any) was entitled, at the time of designation of a new Lending Office (or assignment), to receive additional amounts from the Borrowers with respect to such withholding tax pursuant to <u>Section 3.01(a)</u> and (v) any United States withholding tax that is imposed as a result of such recipient's failure to comply with the requirements to establish an exemption from such withholding tax pursuant to FATCA.

"<u>Existing Credit Agreement</u>" has the meaning set forth in the recitals hereto.

"<u>Existing Letters of Credit</u>" means the letters of credit issued before the Original Closing Date and described by date of issuance, letter of credit number, undrawn amount, name of beneficiary and date of expiry on <u>Schedule 2.03</u> hereto, and "<u>Existing Letter of Credit</u>" means any one of them.

"<u>E-Fax</u>" means any system used to receive or transmit faxes electronically.

"<u>Facility</u>" means at any time, the aggregate amount of the Revolving Facility Commitments at such time, which as of the Second<u>Third</u> Amendment Effective Date is $110,000,000, and any Incremental Commitments or Incremental Loans.

"<u>Factory Returns</u>" means pianos bearing the Steinway, Steinway and Sons, Essex or Boston name brands that have been returned to Steinway and are in near-new, good and merchantable condition.

"<u>FASB ASC</u>" means the Accounting Standards Codification of the Financial Accounting Standards Board.

"<u>FATCA</u>" means Sections 1471 through 1474 of the Code as of the date of this Agreement (or any amended or successor provisions that are substantively similar and not materially more onerous to comply with), any regulations thereunder or official interpretations thereof and any agreements entered into pursuant to Section 1471(b)(1) of the Code and any fiscal or regulatory legislation, rules or practices adopted pursuant to any intergovernmental agreement, treaty or convention among Governmental Authorities and implementing such Sections of the Code.

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

------

"<u>Federal Reserve Board</u>" means the Board of Governors of the Federal Reserve System, or any entity succeeding to any of its principal functions.

"<u>Fee Letter</u>" means the Fee Letter dated as of February 5, 2018 among the Parent Borrower, Bank of America, N.A. and Merrill Lynch, Pierce, Fenner & Smith Incorporated.

"<u>FEMA</u>" means the Federal Emergency Management Agency, a component of the U.S. Department of Homeland Security that administers the National Flood Insurance Program.

"<u>First Amendment</u>" means that certain First Amendment, dated as of October 31, 2017, among the Borrowers, Holdings, the Administrative Agent and the Lenders party thereto.

"<u>First Amendment Effective Date</u>" means October 31, 2017.

"<u>Field Survey and Audit</u>" means a field survey and audit of the Loan Parties and an appraisal of the Collateral performed by auditors, examiners and/or appraisers selected by any Agent, at the sole cost and expense of the Borrowers.

"<u>Finance Document</u>" means (i) each Loan Document, (ii) each Secured Hedge Agreement and (iii) each Secured Cash Management Agreement, and "<u>Finance Documents</u>" means all of them, collectively.

"<u>Finance Obligations</u>" means, at any date, (i) all ABL Credit Obligations, (ii) all Cash Management Obligations then owing under any Secured Cash Management Agreement to a Cash Management Bank and (iii) all Swap Obligations (other than Excluded Swap Obligations) of a Loan Party permitted hereunder then owing under any Secured Hedge Agreement to any Hedge Bank and all costs and expenses incurred in connection with enforcement and collection of the obligations described in this clause (ii), including the fees, charges and disbursement of counsel (it being understood, for avoidance of doubt, that obligations of a Loan Party of or owed to (i) Bank of America or its affiliates or (ii) a Person that is both a Term Finance Party<u>lender, agent or other representative of lenders under the Permitted Term Debt</u> and a Lender at the time such Rate Contract or Cash Management Agreement was entered into by such Loan Party shall be considered Finance Obligations); <u>provided</u> that the Finance Obligations shall exclude any Excluded Swap Obligation.

"<u>Fiscal Quarter</u>" means any of the quarterly accounting periods of the Loan Parties, ending on March 31, June 30, September 30 and December 31 of each year.

"<u>Fiscal Year</u>" means any of the annual accounting periods of the Loan Parties ending on December 31 of each year.

"<u>Fixed Charge Coverage Ratio</u>" means, with respect to any Person for any period, the ratio of (a) Consolidated EBITDA of such Person and its Subsidiaries for such period minus the sum of (i) Consolidated Capital Expenditures paid or payable in cash by such Person and its Subsidiaries during such period (except those financed with borrowed money other than under the Facility) plus (ii) income taxes paid or payable by such Person and its Subsidiaries in cash during such period, to (b) the sum of (i) all scheduled payments of principal of Funded Debt and Capital Lease Obligations paid or payable in cash during such period, plus (ii) Consolidated Cash Interest

------

Expense of such Person and its Subsidiaries paid or payable in cash during such period, plus (iii) dividends or distributions paid or payable in cash by such Person or any of its Subsidiaries, in respect of the Equity Interests of such Person or any of its Subsidiaries (other than (A) dividends or distributions paid by a Loan Party to any other Loan Party and (B) dividends paid in connection with any recapitalization of the Parent Borrower or any of its Subsidiaries, but only to the extent not financed with proceeds of Loans) during such period.

Notwithstanding the foregoing, for purposes of determining the Fixed Charge Coverage Ratio as of or for the periods ended September 30, 2013, December 31, 2013 and March 31, 2014, the fixed charges will be deemed to be equal to, for the Fiscal Quarter ended (i) March 31, 2013, $5,467,075, (ii) June 30, 2013, $5,459,888, and (iii) September 30, 2013, $5,452,718, as each such amount may be adjusted by an amount described in clause (b)(iii) of this definition and paid during the period after the Original Closing Date and on or before September 30, 2013.

"<u>Flood Insurance</u>" means, for any Real Estate located in a Special Flood Hazard Area, federal Flood Insurance or private insurance reasonably satisfactory to the Administrative Agent, in either case, that (a) meets the requirements set forth by FEMA in its Mandatory Purchase of Flood Insurance Guidelines, (b) shall include a deductible not to exceed $50,000 and (c) shall have a coverage amount equal to the lesser of (i) the "replacement cost value" of the buildings and any personal property Collateral located on the Real Estate as determined under the National Flood Insurance Program or (ii) the maximum policy limits set under the National Flood Insurance Program.

"<u>Foreign Lender</u>" means any Lender or L/C Issuer which, for U.S. federal tax purposes (i) is regarded as a separate entity and is not a "United States person" within the meaning of Section 7701(a)(30) of the Code or (ii) is disregarded as separate from an entity that is not a "United States person" within the meaning of Section 7701(a)(30) of the Code.

"<u>Foreign Subsidiary</u>" means, with respect to any Person, a Subsidiary of such Person that is not a Domestic Subsidiary.

"<u>Fronting Exposure</u>" means, at any time there is a Defaulting Lender, (i) with respect to any L/C Issuer, such Defaulting Lender's Revolving Facility Percentage of the outstanding L/C Obligations arising in respect of Letters of Credit issued by such L/C Issuer other than L/C Obligations as to which such Defaulting Lender's participation obligation has been reallocated to other Lenders or Cash Collateralized in accordance with the terms hereof, and (ii) with respect to the Swing Line Lender, such Defaulting Lender's Revolving Facility Percentage of Swing Line Loans other than Swing Line Loans as to which such Defaulting Lender's participation obligation has been reallocated to other Lenders in accordance with the terms hereof.

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

------

"<u>Funded Debt</u>" means all Indebtedness of Holdings and its Subsidiaries for borrowed money that matures more than one year from the date of its creation or matures within one year from such date that is renewable or extendable, at the option of such Person, to a date more than one year from such date or arises under a revolving credit or similar agreement that obligates the lender or lenders to extend credit during a period of more than one year from such date, including Indebtedness in respect of the Loans.

"<u>GAAP</u>" means generally accepted accounting principles in the United States, as in effect from time to time, set forth in the opinions and pronouncements of the Accounting Principles Board and the American Institute of Certified Public Accountants, in the statements and pronouncements of the Financial Accounting Standards Board (or agencies with similar functions and comparable stature and authority within the accounting profession) that are applicable to the circumstances as of the date of determination. Subject to <u>Section 1.03</u>, all references to "GAAP" shall be to GAAP applied consistently with the principles used in the preparation of the financial statements described in <u>Section 5.11(a)</u>.

"<u>Governmental Authority</u>" means any nation or government, any state or other political subdivision thereof, any central bank (or similar monetary or regulatory authority) thereof, any entity exercising executive, legislative, judicial, regulatory or administrative functions of or pertaining to government, and any corporation or other entity owned or controlled, through stock or capital ownership or otherwise, by any of the foregoing.

"<u>Guarantee</u>" means, with respect to any Person, without duplication, any obligation (other than endorsements in the ordinary course of business of negotiable instruments for deposit or collection) guaranteeing, intended to guarantee, or having the economic effect of guaranteeing, any Indebtedness of any other Person in any manner, whether direct or indirect, and including, without limitation, any obligation, whether or not contingent, (i) to purchase any such Indebtedness or any property constituting security therefor, (ii) to advance or provide funds or other support for the payment or purchase of such Indebtedness or to maintain working capital, solvency or other balance sheet condition of such other Person (including, without limitation, maintenance agreements, comfort letters, take or pay arrangements, put agreements or similar agreements or arrangements) for the benefit of the holder of Indebtedness of such other Person, (iii) to lease or purchase property, securities or services primarily for the purpose of assuring the owner of such Indebtedness of the ability of the primary obligor to make payments on such Indebtedness or (iv) to otherwise assure or hold harmless the owner of such Indebtedness against loss in respect thereof. The amount of any Guarantee hereunder shall (subject to any limitations set forth therein) be deemed to be an amount equal to the outstanding principal amount (or maximum principal amount, if larger) of the Indebtedness in respect of which such Guarantee is made.

"<u>Guarantors</u>" means, (i) collectively, Holdings, the Subsidiaries of the Borrowers listed on <u>Schedule 6.13</u> and each other Subsidiary of any Borrower that shall be required to execute and deliver an Accession Agreement or other guaranty or guaranty supplement pursuant to <u>Section 6.13</u> and (ii) with respect to (A) Finance Obligations owing by any Loan Party or any Subsidiary of a Loan Party (other than the Borrowers) under any Secured Hedge Agreement and (B) the payment and performance by each Specified Loan Party of its obligations under its Guaranty with respect to all obligations under Secured Hedge Agreements, the Borrowers.

"<u>Guaranty</u>" means, collectively, the Guaranty made by Holdings and the Subsidiary Guarantors in favor of the Secured Parties, substantially in the form of <u>Exhibit E</u>, together with each other guaranty and guaranty supplement delivered pursuant to <u>Section 6.13</u>.

------

"<u>Hazardous Materials</u>" means any substance, material or waste that is classified, regulated or otherwise characterized under any Environmental Law as hazardous, toxic, a contaminant or a pollutant or by other words of similar meaning or regulatory effect, including petroleum or any fraction thereof, asbestos, polychlorinated biphenyls and radioactive substances.

"<u>Hedge Bank</u>" means any Person that, at the time it enters into a Rate Contract required or permitted under <u>Article VI</u> or <u>VII</u>, is a Lender or an Affiliate of a Lender, in its capacity as a party to such Rate Contract.

"<u>Holdings</u>" means Pianissimo Holdings Corp., a Delaware corporation, and its successors.

"<u>Impacted Loans</u>" has the meaning specified in <u>Section 3.03(a)</u>.

"<u>Incremental Commitment</u>" has the meaning specified in <u>Section 2.14(a)</u>.

"<u>Incremental Commitments Amendment</u>" has the meaning specified in <u>Section 2.14(d)</u>.

"<u>Incremental Commitments Effective Date</u>" has the meaning specified in <u>Section 2.14(e)</u>.

"<u>Incremental Lender</u>" has the meaning specified in <u>Section 2.14(c)</u>.

"<u>Incremental Loans</u>" has the meaning specified in <u>Section 2.14(a)</u>.

"<u>Indebtedness</u>" means, as to any Person at a particular time, without duplication: (a) all indebtedness for borrowed money; (b) all obligations issued, undertaken or assumed as the deferred purchase price of Property or services (other than trade payables entered into in the Ordinary Course of Business); (c) the face amount of all letters of credit issued for the account of such Person and without duplication, all drafts drawn thereunder and all reimbursement or payment obligations with respect to letters of credit, surety bonds and other similar instruments issued by such Person; (d) all obligations evidenced by notes, bonds, debentures or similar instruments, including obligations so evidenced incurred in connection with the acquisition of Property, assets or businesses; (e) all indebtedness created or arising under any conditional sale or other title retention agreement, or incurred as financing, in either case with respect to Property acquired by such Person (even though the rights and remedies of the seller or lender under such agreement in the event of default are limited to repossession or sale of such Property); (f) all Capital Lease Obligations; (g) the principal balance outstanding under any synthetic lease, off-balance sheet loan or similar off balance sheet financing product; (h) all obligations of such Person, whether or not contingent, to purchase, redeem, retire, defease or otherwise acquire for value any of its own Stock or Stock Equivalents (or any Stock or Stock Equivalent of a direct or indirect parent entity thereof) prior to the date that is at least 180 days after the Revolving Facility Maturity Date, valued at, in the case of redeemable preferred Stock, the greater of the voluntary liquidation preference and the involuntary liquidation preference of such Stock plus accrued and unpaid dividends, excluding any Stock or Stock Equivalents held by officers, directors and employees required to be repurchased upon termination of employment; (i) all indebtedness referred to in clauses (a) through (h) above secured by (or for which the holder of such Indebtedness has an existing right, contingent or otherwise, to be secured by) any Lien upon or in Property (including accounts and contracts rights) owned by such Person, even though such Person has not assumed or become liable for the payment of such indebtedness; and (j) all Guarantees by such Person of Indebtedness described in clauses (a) through (i) above.

------

"<u>Indemnified Taxes</u>" means Taxes, other than Excluded Taxes.

"<u>Indemnitees</u>" has the meaning specified in <u>Section 10.04(b)</u>.

"<u>Information</u>" has the meaning specified in <u>Section 10.07</u>.

"<u>Inspection Triggering Event</u>" means (i) a Default or Event of Default has occurred and is continuing or (ii) Availability is less than 35.0% of the Revolving Facility Commitment for five consecutive Business Days.

"<u>Inspection Trigger Period</u>" means the period commencing on the day that a<u>an</u> Inspection Triggering Event has occurred and is continuing until, during the preceding 30 day consecutive period, no Default or Event of Default has existed and Availability is greater than 35.0% of the Revolving Facility Commitment.

"<u>Intellectual Property</u>" means all rights, title and interests in or relating to intellectual property and industrial property arising under any Requirement of Law and all IP Ancillary Rights relating thereto, including all Copyrights, Patents, Software, Trademarks, Internet Domain Names, Trade Secrets and IP Licenses.

"<u>Intercompany Note</u>" has the meaning specified in <u>Section 7.04(b)</u>.

"<u>Intercreditor Agreements</u>" means, collectively, the ABL/Term Intercreditor Agreement and any Term Intercreditor Agreement.

<u>"Intercreditor Agreement" means an intercreditor agreement</u> <u>substantially in the form of Exhibit</u> <u>H-1 hereto or otherwise in form and substance reasonably satisfactory to the Administrative Agent,</u> <u>the Borrowers and the</u> <u>Lenders, as the same may be amended, modified or supplemented</u> <u>from time to time.</u>

"<u>Interest Payment Date</u>" means, (i) as to any Eurodollar Rate<u>Term SOFR</u> Loan, the last day of each Interest Period applicable to such Loan and the Revolving Facility Maturity Date; <u>provided</u>, <u>however</u>, that if any Interest Period for a Eurodollar Rate<u>Term SOFR</u> Loan exceeds three months, the respective dates that fall every three months after the beginning of such Interest Period shall also be Interest Payment Dates; and (ii) as to any Base Rate Loan or Swing Line Loan, the first calendar day of January, April, July and October and the Revolving Facility Maturity Date.

"<u>Interest Period</u>" means, as to each Eurodollar Rate<u>Term SOFR</u> Loan, the period commencing on the date such Eurodollar Rate<u>Term SOFR</u> Loan is disbursed or converted to or continued as a Eurodollar Rate<u>Term SOFR</u> Loan and ending on the date one, three or six months or, to the extent available to, and agreed to by, all Lenders, twelve months thereafter (in each case, subject to availability), as selected by the Parent Borrower in its Committed Loan Notice or such other period that is twelve months or less requested by the Parent Borrower and consented to by all the Lenders; <u>provided</u> that:

------

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(i) any Interest Period which <u>that</u> would otherwise end on a day which <u>that</u> is not a Business Day shall, subject to <u>clause (iii)</u> below, be extended to the next
succeeding Business Day unless such Business Day falls in another calendar month, in which case such Interest Period shall end on the next preceding Business Day;

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

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(iii) no Interest Period shall extend beyond the Revolving Facility Maturity
Date . <u>;</u> 

<u>and, provided, further, that the Interest Period applicable to all Revolving Facility Loans outstanding on the Third Amendment Effective Date shall begin on the Third Amendment Effective Date and end on July 27, 2022.</u>

"<u>Internet Domain Name</u>" means all right, title and interest (and all related IP Ancillary Rights) arising under any Requirement of Law in or relating to internet domain names.

"<u>Inventory</u>" means all of the "inventory" (as such term is defined in the UCC) of the Loan Parties, including, but not limited to, all merchandise, raw materials, parts, supplies, work in process and finished goods intended for sale, together with all the containers, packing, packaging, shipping and similar materials related thereto, and including such inventory as is temporarily out of a Loan Party's custody or possession, including inventory on the premises of others and items in transit.

"<u>Inventory Reserve</u>" means reserves established by the Administrative Agent to reflect factors that may negatively impact the Value of Inventory, including change in salability, obsolescence, seasonality, theft, shrinkage, imbalance, change in composition or mix, markdowns and vendor chargebacks.

"<u>IP Ancillary Rights</u>" means, with respect to any other Intellectual Property, as applicable, all foreign counterparts to, and all divisionals, reversions, continuations, continuations-in-part, reissues, reexaminations, renewals and extensions of, such Intellectual Property and all income, royalties, proceeds and Liabilities at any time due or payable or asserted under or with respect to any of the foregoing or otherwise with respect to such Intellectual Property, including all rights to sue or recover at law or in equity for any past, present or future infringement, misappropriation, dilution, violation or other impairment thereof, and, in each case, all rights to obtain any other IP Ancillary Right.

"<u>IP License</u>" means all Contractual Obligations (and all related IP Ancillary Rights), whether written or oral, granting any right, title and interest in or relating to any Intellectual Property.

"<u>IRS</u>" means the Internal Revenue Service of the United States and any successor thereto.

------

"<u>ISP98 Rules</u>" has the meaning specified in <u>Section 2.03(b)(ii)</u>.

"<u>Issuer Document</u>" means with respect to any Letter of Credit, the Letter of Credit Application, and any other document, agreement and instrument entered into by the applicable L/C Issuer and the applicable Borrower (or any Subsidiary) or in favor of the L/C Issuer and relating to such Letter of Credit.

"<u>Joint Lead Arrangers</u>" means Bank of America, N.A. or its designated affiliate and Deutsche Bank Securities Inc. or its designated affiliate, in their capacities as joint lead arrangers and joint book running managers.<u>either the Original Joint Lead Arrangers or the 2022 Joint Lead Arrangers, as the context requires.</u>

"<u>L/C Credit Extension</u>" means, with respect to any Letter of Credit, the issuance thereof or extension of the expiry date thereof, or the increase of the amount thereof.

"<u>L/C Issuer</u>" means Bank of America or such other Lender as designated by the Administrative Agent to the Parent Borrower and reasonably acceptable to the Parent Borrower from time to time.

"<u>L/C Issuer Fees</u>" has the meaning specified in <u>Section 2.03(i)</u>.

"<u>L/C Obligations</u>" means, as at any date of determination, the aggregate amount available to be drawn under all outstanding Letters of Credit plus the aggregate of all Unreimbursed Amounts, including all Letter of Credit Borrowings. For purposes of computing the amount available to be drawn under any Letter of Credit, the amount of such Letter of Credit shall be determined in accordance with <u>Section 1.06</u>. For all purposes of this Agreement, if on any date of determination a Letter of Credit has expired by its terms but any amount may still be drawn thereunder by reason of the operation of Rule 3.14 of the ISP98 Rules, such Letter of Credit shall be deemed to be "outstanding" in the amount so remaining available to be drawn.

"<u>Lender</u>" means each bank or other lending institution listed on <u>Schedule 2.01</u>, each Eligible Assignee that becomes a Lender pursuant to <u>Section 10.06(b)</u>, each Incremental Lender, and their respective successors and shall include, as the context may require, the Swing Line Lender in such capacity.

"<u>Lending Office</u>" means with respect to any Lender and for each Type of Loan, the "Lending Office" of such Lender (or of an Affiliate of such Lender) designated for such Type of Loan in such Lender's Administrative Questionnaire or in any applicable Assignment and Assumption pursuant to which such Lender became a Lender hereunder or such other office of such Lender (or of an Affiliate of such Lender) as such Lender may from time to time specify to the Administrative Agent and the Parent Borrower as the office by which its Loans of such Type are to be made and maintained.

"<u>Letter of Credit</u>" has the meaning specified in <u>Section 2.03(a)</u>, and shall include the Existing Letters of Credit.

"<u>Letter of Credit Application</u>" has the meaning specified in <u>Section 2.03(b)(i)</u>.

------

"<u>Letter of Credit Borrowing</u>" has the meaning specified in <u>Section 2.03(d)(iv)</u>.

"<u>Letter of Credit Expiration Date</u>" means the day that is seven days prior to the Revolving Facility Maturity Date then in effect (or, if such day is not a Business Day, the next preceding Business Day).

"<u>Letter of Credit Fee</u>" has the meaning specified in <u>Section 2.09(b)</u>.

"<u>Letter of Credit Sublimit</u>" means an amount equal to $15,000,000. The Letter of Credit Sublimit is part of, and not in addition to, the Facility.

"<u>Liabilities</u>" means all claims, actions, suits, judgments, damages, losses, liability, obligations, responsibilities, fines, penalties, sanctions, costs, fees, Taxes, commissions, charges, disbursements and expenses (including, without limitation, those incurred upon any appeal or in connection with the preparation for and/or response to any subpoena or request for document production relating thereto), in each case of any kind or nature (including interest accrued thereon or as a result thereto and fees, charges and disbursements of financial, legal and other advisors and consultants), whether joint or several, whether or not indirect, contingent, consequential, actual, punitive, treble or otherwise.

"<u>LIBOR</u>" has the meaning specified in the definition of "Eurodollar Rate".

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

"<u>LIBOR Successor Rate</u>" has the meaning specified in Section 3.07.

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

------

"<u>Loan</u>" means an extension of credit by a Lender to the Borrowers under <u>Article II</u> in the form of a Revolving Facility Loan, an Incremental Loan or a Swing Line Loan.

"<u>Loan Documents</u>" means, collectively, this Agreement, the First Amendment, the Second Amendment, the <u>Third Amendment, the</u> Letters of Credit, the Notes, the Guaranties, the Collateral Documents, the ABL/Term<u>any</u> Intercreditor Agreement, each Perfection Certificate, each Accession Agreement, the <u>Third Amendment Fee Letter, the</u> Fee Letter and the Closing Fee Letter.

"<u>Loan Modification Agreement</u>" has the meaning specified in <u>Section 10.01</u>. "<u>Loan Modification Offer</u>" has the meaning specified in <u>Section 10.01</u>.

"<u>Loan Party</u>" means each of Holdings, the Borrowers, and each Subsidiary Guarantor, and "<u>Loan Parties</u>" means any combination of the foregoing.

"<u>London Banking Day</u>" means any day on which dealings in Dollar deposits are conducted by and between banks in the London interbank eurodollar market.

"<u>Margin Stock</u>" means "margin stock" as such term is defined in Regulation T, U or X of the Federal Reserve Board.

"<u>Material Adverse Effect</u>" means (a) a material adverse change in, or a material adverse effect upon, the operations, business, Properties, condition (financial or otherwise) of any Loan Party or the Loan Parties and the Subsidiaries taken as a whole; (b) a material impairment of the ability of any Loan Party, any Subsidiary of any Loan Party or any other Person (other than the Agents or Lenders) to perform in any material respect its obligations under any Loan Document; or (c) a material adverse effect upon (i) the legality, validity, binding effect or enforceability of any Loan Document, or (ii) the perfection or priority of any Lien granted to the Lenders or to the Collateral Agent for the benefit of the Secured Parties under any of the Collateral Documents.

"<u>Material Contract</u>" means, with respect to any Person, any Contractual Obligation of such Person that would reasonably be expected to result in a Material Adverse Effect.

"<u>Material Environmental Liabilities</u>" means Environmental Liabilities exceeding $3,000,000 in the aggregate.

"<u>Maximum Rate</u>" has the meaning specified in <u>Section 10.09</u>.

"<u>Merger Agreement</u>" means the Agreement and Plan of Merger, dated as of August 14, 2013, by and among Holdings, AcquisitionCo and the Company.

"<u>Maximum Face Amount</u>" means, with respect to any outstanding Letter of Credit, the face amount of such Letter of Credit including all automatic increases provided for in such Letter of Credit, whether or not such automatic increase has become effective.

"<u>Maximum Undrawn Amount</u>" means, with respect to any outstanding Letter of Credit, the amount of such Letter of Credit that is or may become available to be drawn, including all automatic increases provided for in such Letter of Credit, but only to the extent that any such automatic increase has become effective.

------

"<u>Measurement Period</u>" means, at any date of determination, the four consecutive Fiscal Quarters of Holdings ending on, or most recently preceding, such date.

"<u>Minimum Collateral Amount</u>" means, at any time, (i) with respect to Cash Collateral consisting of cash or deposit account balances provided to reduce or eliminate Fronting Exposure during the existence of a Defaulting Lender, an amount equal to 105% of the Fronting Exposure of an L/C Issuer with respect to Letters of Credit issued and outstanding at such time, (ii) with respect to Cash Collateral consisting of cash or deposit account balances provided in accordance with the provisions of Section <u>2.16(a)(i), (a)(ii) or (a)(iii)</u>, an amount equal to 105% of the Outstanding Amount of all L/C Obligations, and (iii) otherwise, an amount determined by the Administrative Agent and the applicable L/C Issuer in their sole discretion.

"<u>MNPI</u>" means material non-public information (or, if Holdings is not at the time a public reporting company, material information of a type that would not reasonably be expected to be publicly available if Holdings were a public reporting company).

"<u>Moody's</u>" means Moody's Investors Service, Inc., a Delaware corporation, and any successor thereto.

"<u>Mortgage</u>" means any deed of trust, leasehold deed of trust, mortgage, leasehold mortgage, deed to secure debt, leasehold deed to secure debt or other document creating a Lien on Real Estate or any interest in Real Estate, in each case in favor of the Collateral Agent.

"<u>Mortgage Policies</u>" has the meaning specified in <u>Section 6.13(a)</u>.

"<u>Mortgaged Properties</u>" means the Properties of the Loan Parties described in <u>Schedule 5.26(c)</u> hereto.

"<u>Multiemployer Plan</u>" means any multiemployer plan, as defined in Section 3(37) or 4001(a)(3) of ERISA, as to which any ERISA Affiliate incurs or otherwise has any obligation or liability, contingent or otherwise.

"<u>Net Issuance Proceeds</u>" means, in respect of any issuance of equity or incurrence of Indebtedness, cash proceeds (including cash proceeds as and when received in respect of non-cash proceeds received or receivable in connection with such issuance), net of underwriting discounts and reasonable out-of-pocket costs and expenses paid or incurred in connection therewith in favor of any Person not an Affiliate of the Parent Borrower.

------

"<u>Net Proceeds</u>" means proceeds in cash, checks or other cash equivalent financial instruments (including Cash Equivalents) as and when received by the Person making a Disposition, as well as insurance proceeds and condemnation and similar awards received on account of an Event of Loss, net of: (a) in the event of a Disposition (i) the direct costs relating to such Disposition excluding amounts payable to the Borrowers or any Affiliate of the Borrowers, (ii) Taxes paid or reasonably estimated to be payable, directly or indirectly, as a result thereof or any transactions occurring or deemed to occur to effectuate a payment under this Agreement and (iii) amounts required to be applied to repay principal, interest and prepayment premiums and penalties on Indebtedness secured by a Lien on the asset which is the subject of such Disposition and (b) in the event of an Event of Loss, (i) all money actually applied to repair or reconstruct the damaged Property or Property affected by the condemnation or taking, (ii) all of the costs and expenses reasonably incurred in connection with the collection of such proceeds, award or other payments, and (iii) any amounts retained by or paid to parties having superior rights to such proceeds, awards or other payments.

"<u>Non-Material Subsidiary</u>" means any Subsidiary that is not a Loan Party whose assets (at fair market value) do not exceed $500,000 and in which the net investment of Holdings and its Subsidiaries is less than $500,000.

"<u>Note</u>" means a promissory note, substantially in the form of <u>Exhibit B</u>, evidencing the obligation of the Borrowers to repay outstanding Loans made by a Lender, as such note may be amended, modified or supplemented from time to time.

"<u>Not Otherwise Applied</u>" means, with reference to any amount Net Issuance Proceeds of any Qualifying Equity Issuance, that such amount (directly or indirectly) was not (and is not concurrently being) used for any purpose referred to in <u>clause (ii)</u> of the definition of "Qualifying Equity Issuance" or otherwise applied in determining the permissibility of a transaction under the Loan Documents where such permissibility was (or may have been) contingent on receipt of such amount or utilization of such amount for a specified purpose.

"<u>NYCIDA</u>" means the New York City Industrial Development Agency.

"<u>OEM</u>" means an original equipment manufacturer.

"<u>OFAC</u>" has the meaning specified in <u>Section 5.23</u>.

"<u>Ordinary Course of Business</u>" means, in respect of any transaction involving any Loan Party or any Subsidiary of any Loan Party, the ordinary course of such Person's business, as conducted by any such Person in accordance with past practice (including any business that is a reasonable extension, development or expansion of the foregoing or is reasonably related, complementary, ancillary or incidental to any such business) and undertaken by such Person in good faith and not for purposes of evading any covenant or restriction in any Loan Document.

"<u>Organization Documents</u>" means, (a) for any corporation, the certificate or articles of incorporation, the bylaws, any certificate of determination or instrument relating to the rights of preferred shareholders of such corporation, any shareholder rights agreement, (b) for any partnership, the partnership agreement and, if applicable, certificate of limited partnership, (c) for any limited liability company, the operating agreement and articles or certificate of formation or (d) any other document setting forth the manner of election or duties of the officers, directors, managers or other similar persons, or the designation, amount or relative rights, limitations and preference of the Stock of a Person.

------

<u>"Original</u> <u>Intercreditor Agreement" means the Intercreditor Agreement, dated as of the Original Closing Date, among the Agent, the Term Administrative Agent, Holdings, the Borrowers, the</u> <u>Original</u> <u>Term Borrower and the other Loan Parties party thereto, as the same may be amended, modified or supplemented from time to time.</u>

"<u>Original Closing Date</u>" means September 19, 2013.

"<u>Original Currency</u>" has the meaning specified in <u>Section 10.20</u>.

<u>"Original Joint Lead Arrangers" means</u> <u>Bank of America, N.A. or its designated affiliate and Deutsche Bank Securities Inc. or its designated affiliate, in their capacities as joint lead arrangers and joint book running managers.</u>

<u>"Original</u> <u>Term Borrower" means the Parent Borrower in its capacity as the borrower under the</u> <u>Original</u> <u>Term Credit Agreement.</u>

<u>"Original</u> <u>Term Credit Agreement" means</u> <u>that certain</u> <u>Amended and Restated First Lien Credit Agreement dated as of February 16, 2018 among the</u> <u>Original</u> <u>Term Borrower, Holdings, the banks and other lending institutions party thereto from time to time,</u> <u>and the agents named therein.</u>

<u>"Original Term Finance Documents</u><u>" has the meaning given to</u> <u>"Term Finance Documents" in the Original</u> <u>Term Credit Agreement.</u>

<u>"Original Second Lien Credit Agreement" means that certain the Second Lien</u> <u>Credit Agreement, dated as of</u> <u>September 19, 2013, by and among the Loan Parties, the banks and other lending institutions party thereto from time to time, and the agents named therein.</u>

<u>"Original Second Lien Loan Documents</u><u>" has the meaning given to</u> <u>"Loan Documents" in the Original Second Lien Credit Agreement.</u>

"<u>Other Taxes</u>" means all present or future stamp or documentary taxes or any other excise or property taxes, charges or similar levies arising from any payment made hereunder or under any other Loan Document or from the execution, delivery or enforcement of, or otherwise with respect to, this Agreement or any other Loan Document.

"<u>Outstanding Amount</u>" means (i) with respect to Revolving Facility Loans and Swing Line Loans on any date, the aggregate outstanding principal amount thereof after giving effect to any borrowings and prepayments or repayments of Revolving Facility Loans, and Swing Line Loans, as the case may be, occurring on such date; and (ii) with respect to any L/C Obligations on any date, the amount of such L/C Obligations on such date after giving effect to any L/C Credit Extension occurring on such date and any other changes in the aggregate amount of the L/C Obligations as of such date, including as a result of any reimbursements by the Borrowers of Unreimbursed Amounts or any reductions in the maximum amount available for drawing under Letters of Credit taking effect on such date.

------

"<u>Overadvance</u>" has the meaning specified in <u>Section 2.17(b)</u>.

"<u>Parent Borrower</u>" has the meaning specified in the preamble hereto, and its successor or successors in its capacity as the borrowing agent and attorney-in-fact for the Borrowers.

"<u>Participant</u>" has the meaning specified in <u>Section 10.06(d)</u>.

"<u>Participant Register</u>" has the meaning specified in <u>Section 10.06(d)</u>.

"<u>Patents</u>" means all rights, title and interests (and all related IP Ancillary Rights) arising under any Requirement of Law in or relating to letters patent and applications therefor.

"<u>Participation Commitment</u>" means each Lender's obligation to buy a participation of the Letters of Credit issued hereunder.

"<u>Participation Revolving Loan</u>" has the meaning specified in <u>Section 2.03(d)(v)</u>.

"<u>Patriot Act</u>" means the Uniting and Strengthening America by Providing Appropriate Tools Required to Intercept and Obstruct Terrorism Act of 2001 (Title III of Pub. L. 107-56 (signed into Law October 26, 2001)).

"<u>PBGC</u>" means the United States Pension Benefit Guaranty Corporation or any successor thereto.

"<u>Perfection Certificate</u>" means with respect to any Loan Party a certificate, substantially in the form of <u>Exhibit F-2</u> to this Agreement, completed and supplemented with the schedules and attachments contemplated thereby to the reasonable satisfaction of the Collateral Agent and duly executed by the president and/or chief executive officer or the chief financial officer of such Loan Party.

"<u>Permit</u>" means, with respect to any Person, any permit, approval, authorization, license, registration, certificate, concession, grant, franchise, variance or permission from, and any other Contractual Obligations with, any Governmental Authority, in each case whether or not having the force of law and 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>Permitted Acquisition</u>" means any Acquisition by (i) a Loan Party (other than Holdings) or a Subsidiary of a Loan Party of all or substantially all of the assets of a Target, or any line of business, unit or division of a Target or (ii) a Loan Party (other than Holdings) or a Subsidiary of a Loan Party of all or substantially all of the Stock and Stock Equivalents of a Target not previously held by the Borrower and its Subsidiaries (except for directors' and foreign national qualifying shares in accordance with Requirements of Law) to the extent that each of the following conditions shall have been satisfied:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a) to the extent the Acquisition will be financed in whole or in part with the proceeds of any Loan, the conditions set forth in <u>Section 4.02</u> shall have been satisfied;

------

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b) to the extent required by <u>Section 6.13</u>, any person acquired in the Acquisition, if acquired by the Borrower or a Loan Party, shall be merged into the Borrower or a Loan Party or become upon the consummation of such acquisition a Loan Party;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c) such Acquisition shall not be hostile and shall have been approved by the board of directors (or other similar governing body) and/or the stockholders or other equity holders of the Target; and

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(d) the Permitted Transaction Conditions are satisfied at the time of such Permitted Acquisition.

"<u>Permitted Amendments</u>" has the meaning specified in <u>Section 10.01</u>.

"<u>Permitted Holders</u>" means (a) Sponsor and its Affiliates, and (b) any investment funds or accounts advised or managed by any of the foregoing (but not including, however, any of their respective portfolio companies).

"<u>Permitted Liens</u>" has the meaning specified in <u>Section 7.01</u>.

"<u>Permitted Refinancing</u>" means Indebtedness issued in exchange for, or the net proceeds of which are used to extend, refinance, renew, replace, defease or refund Indebtedness permitted under subsection<u>subsections</u> 7.05(c) or<u>,</u> (d<u>) or (g</u>) that (a) has an aggregate outstanding principal amount not greater than the aggregate principal amount of the Indebtedness being refinanced or extended, plus any premium or similar amount required to be paid, and fees and expenses, including in the form of original issue discount, incurred, in connection with any of the foregoing, (b) has a Weighted Average Life to Maturity (measured as of the date of such refinancing or extension) and maturity no shorter than that of the Indebtedness being refinanced or extended, (c) is not entered into as part of a sale leaseback transaction, (d) is not secured by a Lien on any assets other than the collateral securing the Indebtedness being refinanced or extended, (e) the obligors of which are the same as the obligors of the Indebtedness being refinanced or extended and<u>,</u> (f) <u>in the case of</u> <u>a Permitted Refinancing of any Permitted Term Debt, such Indebtedness shall be subject to the Intercreditor Agreement and (g)</u> is otherwise on terms no less favorable to the Loan Parties, taken as a whole, than those of the Indebtedness being refinanced or extended.

<u>"Permitted Term Debt" means Indebtedness incurred</u> <u>pursuant to Section 7.05(g)</u> <u>or any Permitted Refinancing thereof.</u>

<u>Permitted Term Debt Documents" means any "loan documents," "collateral documents," or any similarly described agreements and documents, governing and/or securing Permitted Term Debt; provided that such Permitted Term Debt Documents comply with the Intercreditor Agreement and Section 7.05(g).</u>

"<u>Permitted Transaction Conditions</u>" means the following conditions:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a) with respect (x) to a Permitted Acquisition and any Investment made pursuant to Section 7.04(l) or (y) a Restricted Payment described in clause (iii) of the definition thereof and made pursuant to <u>Section 7.11(f)</u> and, in each case, after giving effect to such Permitted Acquisition or Restricted Payment: (i) (I) with respect to a Permitted Acquisition or any

------

Investment made pursuant to <u>Section 7.04(l)</u>, no Event of Default under clause <u>(a)</u>, <u>(f)</u> or <u>(g)</u> of <u>Section 8.01</u> shall then exist or would exist after giving effect thereto; <u>provided</u> that, with respect to a proposed Acquisition pursuant to an executed acquisition agreement, at the option of the Borrower, the determination of whether such an Event of Default shall exist shall be made solely at the time of the execution of the acquisition agreement related to such Permitted Acquisition and (II) with respect to a Restricted Payment described in clause (iii) of the definition thereof and made pursuant to <u>Section 7.11(f)</u>, no Default or Event of Default has occurred or is continuing or will result from any such Restricted Payment; (ii) the Fixed Charge Coverage Ratio (calculated on the pro forma basis) shall not be less than 1.00:1.00 for the Measurement Period ended immediately prior to the Fiscal Quarter in which such Permitted Acquisition or such Restricted Payment would occur and for which financial statements have been (or are required to be) delivered under <u>Section 6.01(a)</u> or <u>(b)</u>, as applicable; and (iii) at all times during the 30 calendar days immediately prior to such Permitted Acquisition or such Restricted Payment and on the date of such Permitted Acquisition or such Restricted Payment, Availability has not been less than 17.5% of the Revolving Facility Commitment; in each case under clauses (i), (ii) and (iii), as certified by the Parent Borrower in writing to the Administrative Agent, with supporting calculations in reasonable detail; and

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b) with respect to a Restricted Payment described in clauses (i) and (ii) of the definition thereof and made pursuant to <u>Section 7.11(f)</u> and after giving effect to such Restricted Payment: (i) no Default or Event of Default has occurred or is continuing or will result from any such Restricted Payment; (ii) the Fixed Charge Coverage Ratio (calculated on the pro forma basis) shall not be less than 1.10:1.00 for the Measurement Period ended immediately prior to the Fiscal Quarter in which such Restricted Payment would occur and for which financial statements have been (or are required to be) delivered under <u>Section 6.01(a)</u> or <u>(b)</u>, as applicable; and (iii) at all times during the 30 calendar days immediately prior to such Restricted Payment and on the date of such Restricted Payment, Availability has not been less than 22.5% of the Revolving Facility Commitment; in each case under clauses (i), (ii) and (iii), as certified by the Parent Borrower in writing to the Administrative Agent, with supporting calculations in reasonable detail.

"<u>Person</u>" means any individual, partnership, corporation (including a business trust and a public benefit corporation), joint stock company, estate, association, firm, enterprise, trust, limited liability company, unincorporated association, joint venture and any other entity or Governmental Authority.

"<u>Platform</u>" has the meaning specified in <u>Section 6.02</u>.

"<u>Pledge and Security Agreement</u>" means the ABL Pledge and Security Agreement, substantially in the form of <u>Exhibit F-1</u> hereto, dated as of the date hereof<u>Original Closing Date</u> among Holdings, the Borrowers, the Subsidiary Guarantors and the Collateral Agent, as the same may be amended, modified or supplemented from time to time.

"<u>Pledged Collateral</u>" means, collectively, the "Pledged Debt", "Pledged Equity Interests", "Pledged LLC Interests", "Pledged Partnership Interests", "Pledged Stock" and "Pledged Trust Interests", all as defined in the Pledge and Security Agreement.

------

"<u>Prepayment Notice</u>" means a notice of prepayment of Loans pursuant to <u>Section 2.05(c)</u>, which, if in writing, shall be substantially in the form of <u>Exhibit A-3</u>.

"<u>Prime Rate</u>" means, for any day, the rate of interest in effect for such day as publicly announced from time to time by Bank of America as its "prime rate". The "prime rate" is a rate set by Bank of America based upon various factors including Bank of America's costs and desired return, general economic conditions and other factors, and is used as a reference point for pricing some loans, which may be priced at, above or below such announced rate. Any change in such rate announced by Bank of America shall take effect at the opening of business on the day specified in the public announcement of such change.

"<u>pro forma basis</u>" means, with respect to compliance with any test or covenant hereunder, compliance with such covenant or test after giving effect to (a) the Related Transactions, (b) any Permitted Acquisition (to the extent not subsequently Disposed of during such period), (c) the borrowing of any Incremental Loans, (d) any sales or other Dispositions expressly permitted under Section <u>7.02(b), 7.02(d)</u>, <u>7.02(f)</u>, <u>7.02(g)</u>, <u>7.02(h</u>) or <u>7.02(i)</u> or (e) any restructuring of the business of the Parent Borrower or any of its Subsidiaries that the Parent Borrower or any of its Subsidiaries has made and/or has determined to made during the applicable period or subsequent to such application period and on or prior to or simultaneously with the date of calculation of Consolidated EBITDA and which are expected to have a continuing impact and are factually supportable and quantifiable and which are reasonably expected to be realized within the succeeding 1 year period following such relevant transaction (as defined below), including cost savings resulting from head count reduction, closure of facilities and similar operational and other cost savings, which adjustments the Parent Borrower determines are reasonable as set forth in a certificate of a Responsible Officer of the Parent Borrower (the foregoing (a) through (e), together with any transaction related thereto or in connection therewith, the "relevant transactions"), as if the relative relevant transaction consummated or occurred during the applicable period had been consummated and occurred at the beginning of such period; <u>provided</u> that (i) the effect on any test or covenant from the aggregate amount of the adjustments under clause (e) of this definition and clause (B)(m) of the definition of "Consolidated EBITDA" shall not exceed, for any four consecutive fiscal quarter period, 15% of Consolidated EBITDA for such period (before giving effect to the addback under clause (B)(l) of the definition of "Consolidated EBITDA" and the pro forma effect under this clause (e)) and (ii) on and after the date that is one year after any such relevant transaction, such pro forma calculations shall not give effect to any such cost savings to the extent the steps necessary for realization were not taken during such 1 year period.

"<u>Property</u>" means any interest in any kind of property or asset, whether real, personal or mixed, and whether tangible or intangible.

"<u>PTE</u>" means a prohibited transaction class exemption issued by the U.S. Department of Labor, as any such exemption may be amended from time to time.

"<u>Public Lender</u>" has the meaning specified in <u>Section 6.02</u>.

------

"<u>Qualifying Equity Issuance</u>" means any Equity Issuance, the Net Issuance Proceeds of which are contributed promptly to the common equity of the Parent Borrower if: (i) after giving effect thereto, no Change of Control shall have occurred; and (ii) the Net Issuance Proceeds thereof shall be used (without duplication and only to the extent Not Otherwise Applied (as defined in the Term Credit Agreement)) only to (A) make (x) Consolidated Capital Expenditures, (y) Permitted Acquisitions and other Investments and (z) Restricted Payments and (D) repay Indebtedness of the Parent Borrower and its Subsidiaries.

"<u>Rate Contracts</u>" means <u>(a) any and all rate swap transactions, basis swaps, credit derivative transactions, forward rate transactions, commodity swaps, commodity options, forward commodity contracts, equity or equity index swaps or options, bond or bond price or bond index swaps or options or forward bond or forward bond price or forward bond index transactions, interest rate options, forward foreign exchange transactions, cap transactions, floor transactions, collar transactions, currency swap transactions, cross-currency rate swap transactions, currency options, spot contracts, or any other similar transactions or any combination of any of the foregoing (including any options to enter into any of the foregoing), whether or not any such transaction is governed by or subject to any master agreement, and (b) any and all transactions of any kind, and the related confirmations, which are</u> <u>subject to the terms</u> <u>and conditions of, or governed by, any form of master agreement published by the International Swaps and Derivatives Association, Inc., any International Foreign Exchange Master Agreement, or any other master agreement (any such master agreement, together with any related schedules, a "Master Agreement"), including any such obligations or liabilities under any Master Agreement. Without limiting the generality of the foregoing, Rate Contracts shall include</u> swap agreements (as such term is defined in Section 101 of the Bankruptcy Code) and any other agreements or arrangements designed to provide protection against fluctuations in interest, currency exchange rates or commodities prices.

"<u>Real Estate</u>" means any real estate owned, leased, subleased or otherwise operated or occupied by any Loan Party or any Subsidiary of any Loan Party.

"<u>Register</u>" has the meaning specified in <u>Section 10.06(c)</u>.

"<u>Reimbursement Obligations</u>" has the meaning specified in <u>Section 2.03(d)(ii)</u>.

"<u>Related Agreements</u>" means the Merger Agreement, the <u>Original</u> Term Finance Documents, the Loan Documents and the Structure Memorandum.

"<u>Related Parties</u>" means, with respect to any Person, such Person's Affiliates and the partners, directors, officers, employees, agents, trustees and advisors of such Person and of such Person's Affiliates.

"<u>Related Transactions</u>" means the transactions contemplated by the Related Agreements.

"<u>Releases</u>" means any release, threatened release, spill, emission, leaking, pumping, pouring, emitting, emptying, escape, injection, deposit, disposal, discharge, dispersal, dumping, leaching or migration of Hazardous Material into or through the environment.

"<u>Remedial Action</u>" means all actions required to (a) clean up, remove, treat or in any other way address any Hazardous Material in the indoor or outdoor environment, (b) prevent or minimize any Release so that a Hazardous Material does not migrate or endanger or threaten to endanger public health or welfare or the indoor or outdoor environment or (c) perform pre remedial studies and investigations and post-remedial monitoring and care with respect to any Hazardous Material.

------

"<u>Rent and Charges Reserve</u>" means the aggregate of (a) all past due rent and other amounts owing by a Loan Party to any landlord, warehouseman, processor, repairman, mechanic, shipper, freight forwarder, broker or other Person who possesses any Collateral or could assert a Lien on any Collateral; and (b) a reserve equal to three months<u>'</u>rent and other charges that could be payable to any such Person, unless it has executed a Collateral Access Agreement.

"<u>Report</u>" has the meaning specified in <u>Section 10.21</u>.

"<u>Request for Credit Extension</u>" means (i) with respect to a Borrowing, conversion or continuation of Loans, a Committed Loan Notice, (ii) with respect to an L/C Credit Extension, a Letter of Credit Application and (iii) with respect to a Swing Line Loan, a Swing Line Loan Notice.

"<u>Required Lenders</u>" means, as of any date of determination, Lenders having (i) Loans outstanding, (ii) L/C Obligations outstanding (with the aggregate amount of each Lender's risk participation and funded participation in funded L/C Obligations being deemed "held" by such Lender), and (iii) Revolving Facility Commitments, that, taken together, represent more than 50% of the sum of all (A) Loans outstanding, (B) L/C Obligations outstanding, and (C) Revolving Facility Commitments at such time. The Loans of any Defaulting Lender shall be disregarded in determining Required Lenders at any time. If there is more than one Lender under this Agreement (other than Defaulting Lenders and Affiliates of such Lender), the Required Lenders must include at least two unaffiliated Lenders.

"<u>Requirement of Law</u>" means, with respect to any Person, the common law and any federal, state, local, foreign, multinational or international laws, statutes, codes, treaties, standards, rules and regulations, guidelines, ordinances, orders, judgments, writs, injunctions, decrees (including administrative or judicial precedents or authorities) and the interpretation or administration thereof by, and other determinations, directives, requirements or requests of, any Governmental Authority, in each case whether or not having the force of law and that are applicable to or binding upon such Person or any of its Property or to which such Person or any of its Property is subject. For the avoidance of doubt, the term "Requirement of Law" shall include FATCA and any intergovernmental agreements with respect thereto between the United States and another jurisdiction.

<u>"Resolution Authority" means an EEA Resolution Authority or, with respect to any UK Financial Institution, a UK Resolution Authority.</u>

"<u>Responsible Officer</u>" means the chief executive officer or the president of the Parent Borrower, or any other officer having substantially the same authority and responsibility or otherwise satisfactory to the Administrative Agent; or, with respect to compliance with financial covenants or delivery of financial information, the chief financial officer, chief accounting officer, the treasurer or controller of the Parent Borrower, any other officer or employee of the applicable Loan Party designated in or pursuant to an agreement between the applicable Loan Party and the Administrative Agent, or any other officer having substantially the same authority and responsibility or otherwise satisfactory to the Administrative Agent.

------

"<u>Restricted Payment</u>" has the meaning specified in <u>Section 7.11</u>.

"<u>Revolving Facility Borrowing</u>" means a Borrowing comprised of Revolving Facility Loans.

"<u>Revolving Facility Commitment</u>" means, with respect to each Revolving Facility Lender, the commitment of such Revolving Facility Lender to make Revolving Facility Loans pursuant to <u>Section 2.01</u>, expressed as an amount representing the maximum aggregate permitted amount of such Revolving Facility Lender's Revolving Facility Credit Exposure hereunder, as such commitment may be (i) reduced from time to time pursuant to <u>Section 2.07</u>, (ii) reduced or increased from time to time pursuant to assignments by or to such Lender under <u>Section 10.06</u>, and (iii) increased as provided under <u>Section 2.14</u>. The initial amount of each Lender's Revolving Facility Commitment is set forth on <u>Schedule 2.01</u>, or in the Assignment and Acceptance or Incremental Assumption Agreement pursuant to which such Lender shall have assumed its Revolving Facility Commitment (or Incremental Revolving Facility Commitment), as applicable. The aggregate amount of the Lenders' Revolving Facility Commitments on the Second<u>Third</u> Amendment Effective Date is $110,000,000.

"<u>Revolving Facility Credit Exposure</u>" means, at any time, the sum of (a) the aggregate principal amount of the Revolving Facility Loans outstanding at such time, and (b) the aggregate principal amount of L/C Obligations and Swing Line Loans outstanding at such time. The Revolving Facility Credit Exposure of any Revolving Facility Lender at any time shall be the product of (x) such Revolving Facility Lender's Revolving Facility Percentage and (y) the aggregate Revolving Facility Credit Exposure of all Revolving Facility Lenders, collectively, at such time.

"<u>Revolving Facility Lender</u>" means a Lender (including an Incremental Revolving Facility Lender) with a Revolving Facility Commitment or with outstanding Revolving Facility Loans.

"<u>Revolving Facility Loan</u>" means a Loan made by a Revolving Facility Lender pursuant to <u>Section 2.01</u>.

"<u>Revolving Facility Maturity Date</u>" means February 16, 2023<u>the fifth anniversary of the Third Amendment Effective Date (which shall be June 27, 2027)</u> and any later maturity date applicable to any Incremental Commitments or any Incremental Loans, in each case, as extended in accordance with this Agreement from time to time; <u>provided</u>, <u>however</u>, that if such date is not a Business Day, the Revolving Facility Maturity Date shall be the next preceding Business Day.

"<u>Revolving Facility Percentage</u>" means, with respect to any Lender, the percentage (carried out to the ninth decimal place) of such Lender's obligation to make<u>the total</u> Revolving Facility Loans<u>Commitment of all Lenders</u> represented by (i) on or prior to the Original Closing Date,<u>sum of</u> such Lender's Revolving Facility Commitment at such time and (ii) thereafter, the principal amount of such Lender's Loans <u>outstanding</u> at such time, in each case subject to adjustment as provided in <u>Section 2.05</u>, <u>2.07</u>, <u>2.14</u>, <u>2.15</u> or <u>2.16</u>. The initial Revolving Facility Percentage of each Lender is set forth opposite the name of such Lender on <u>Schedule 2.01</u> or in the Assignment and Assumption pursuant to which such Lender becomes a party hereto, as applicable. If the Revolving Facility Commitments have terminated or expired, the Revolving Facility Percentage shall be determined based upon the Revolving Facility Commitments most recently in effect, giving effect to any subsequent assignments pursuant to <u>Section 10.06</u>.

------

"<u>Royalties</u>" means all royalties, fees, expense reimbursement and other amounts payable by a Borrower under a License.

"<u>S&P</u>" means Standard & Poor's Financial Services LLC, a subsidiary of The McGraw Hill Companies, Inc. and any successor thereto.

"<u>Scheduled Unavailability Date</u>" has the meaning specified in <u>Section 3.07</u>.

"<u>SDN List</u>" has the meaning specified in <u>Section 5.23</u>.

"<u>SEC</u>" means the Securities and Exchange Commission, or any Governmental Authority succeeding to any of its principal functions.

"<u>Second Amendment</u>" means that certain Second Amendment, dated as of February 16, 2018, among the Loan Parties, the Administrative Agent and the Lenders party thereto.

"<u>Second Amendment Effective Date</u>" means February 16, 2018.

"<u>Second Currency</u>" has the meaning specified in <u>Section 10.20</u>.

"<u>Second Lien Documents</u>" means the agreements, documents and instruments providing for or evidencing any Second Lien Indebtedness, and any other document or instrument executed or delivered at any time in connection with any Second Lien Indebtedness, including any intercreditor, accession or joinder agreement among holders of Second Lien Indebtedness, to the extent such are effective at the relevant time.

"<u>Second Lien Indebtedness</u>" means the Indebtedness of the Loan Parties incurred under any New Second Lien Facility (as defined in the Term Credit Agreement), which Indebtedness is on terms and conditions consistent with the Intercreditor Agreements.

"<u>Secured Cash Management Agreement</u>" means any Cash Management Agreement that is entered into by and between any Loan Party and any Cash Management Bank.

"<u>Secured Hedge Agreement</u>" means any Rate Contract required or permitted under <u>Article VI</u> or <u>VII</u> that is entered into by and between any Loan Party and any Hedge Bank.

"<u>Secured Parties</u>" means, collectively, the ABL Credit Parties, the Hedge Banks, the Cash Management Banks, the providers of Bank Debt and the other Persons the Finance Obligations owing to which are or are purported to be secured by the Collateral under the terms of the Collateral Documents.

"<u>Securities Act</u>" means the Securities Act of 1933, as amended, and the rules and regulations promulgated thereunder.

"<u>Settlement</u>" has the meaning specified in <u>Section 2.18(a)</u>.

------

"<u>Settlement Date</u>" has the meaning specified in <u>Section 2.18(a)</u>.

<u>"SOFR" means the Secured Overnight Financing Rate as administered by the Federal Reserve Bank of New York (or a successor administrator).</u>

<u>"SOFR Adjustment" with respect to Daily Simple SOFR means 0.10% (10 basis points); and with respect to Term SOFR means 0.10% (10 basis points) for an Interest Period of one-month's duration, 0.15% (15 basis points) for an Interest Period of three-month's duration, 0.25% (25 basis points) for an Interest Period of six-months' duration.</u>

"<u>Software</u>" means all "software" (as defined in the UCC), and also means and includes all software programs, whether now or hereafter owned, licensed or leased by a Loan Party, designed for use on Computer Hardware, including, without limitation, all operating system software, utilities and application programs in whatever form and whether or not embedded in goods, all source code and object code in magnetic tape, disk or hard copy format or any other listings whatsoever, all firmware associated with any of the foregoing all documentation, flowcharts, logic diagrams, manuals, specifications, training materials, charts and pseudo codes associated with any of the foregoing, and all options, warranties, services contracts, program services, test rights, maintenance rights, support rights, renewal rights and indemnifications relating to any of the foregoing.

"<u>Solvent</u>" and "<u>Solvency</u>" mean, with respect to any Person on any date of determination, that on such date (a) the fair value of the assets of such Person and its subsidiaries, on a consolidated basis, at fair valuation, exceeds their debts and liabilities, subordinated, contingent, unliquidated, or otherwise, (b) the present fair saleable value of the property of such Person and its subsidiaries, on a consolidated basis, is greater than the amount that will be required to pay the total amount, on a consolidated basis, of their debts and other liabilities, subordinated, contingent, unliquidated, or otherwise, (c) such Person and its subsidiaries, on a consolidated basis, are able to pay their debts and liabilities, subordinated, contingent or otherwise, on a consolidated basis, as such liabilities become absolute and matured and (d) such Person and its subsidiaries, on a consolidated basis, do not have unreasonably small capital with which to conduct the business in which they are engaged as such business is conducted as of such date and as such business is proposed to be conducted following such date. The amount of any contingent liability at any time shall be computed as the amount that would reasonably be expected to become an actual and matured liability.

"<u>Special Flood Hazard Area</u>" an area identified by FEMA (or any successor agency) as a special flood hazard area with respect to which flood insurance has been made available under the National Flood Insurance Program.

"<u>Specified Equity Contribution</u>" has the meaning specified in <u>Section 8.04</u>.

"<u>Specified German Mortgage Debt</u>" means any Indebtedness that is secured by real property and related assets located in Germany.

"<u>Specified Loan Party</u>" means any Loan Party that is not an "eligible contract participant" under the Commodity Exchange Act (determined prior to giving effect to Section 2.10 of the Guaranty).

------

"<u>Specified Representations</u>" means the representations and warranties set forth in <u>Sections 5.01</u>, <u>5.02</u>, <u>5.04</u>, <u>5.05</u> (with respect to the absence of litigation seeking to enjoin or restrain the execution, delivery or performance of this Agreement, any other Loan Document or any Related Agreement, or directing that the transactions provided for herein or therein not be consummated only), <u>5.08</u>, <u>5.12</u>, <u>5.13</u>, <u>5.14</u>, <u>5.23</u>, <u>5.24</u> and <u>5.26</u>.

"<u>Sponsor</u>" means Paulson & Co. Inc.

"<u>Spot Rate</u>" has the meaning specified in <u>Section 1.06</u>.

"<u>Standard Cost Value</u>" means the standard invoice cost paid by any Borrower or Subsidiary Guarantor to an OEM for a Boston Piano and/or an Essex Piano, excluding (a) inventory revaluation, if any, and (b) freight and delivery charges.

"<u>Standstill Period</u>" has the meaning specified in <u>Section 8.04.</u>

"<u>Steinway</u>" has the meaning specified in the preamble hereto.

"<u>Steinway and Sons</u>" means Steinway and Sons, a New York corporation (including any division, branch or other unit thereof).

"<u>Steinway Dealer Loans</u>" means loans made by Steinway to Steinway dealers for startup costs or for other purposes (other than those of the type evidenced by the Steinway Dealer Notes).

"<u>Steinway Dealer Notes</u>" means notes made by Steinway dealers in favor of Steinway, that evidence the indebtedness owing by such dealer to Steinway, for extensions of credit made by Steinway to dealers in an amount not to exceed $7,500,000 in the aggregate at any time outstanding for all such Steinway dealers, to acquire Steinway's pianos and other musical instruments.

"<u>Steinway Pianos</u>" means all finished and near-finished Steinway pianos, which term shall exclude Factory Returns, Concert and Artist Bank Pianos, Boston Pianos and Essex Pianos.

"<u>Stock</u>" means all shares of capital stock (whether denominated as common stock or preferred stock), equity interests, beneficial, partnership or membership interests, joint venture interests, participations or other ownership or profit interests in or equivalents (regardless of how designated) of or in a Person (other than an individual), whether voting or non-voting.

"<u>Stock Equivalents</u>" means all securities convertible into or exchangeable for Stock or any other Stock Equivalent and all warrants, options or other rights to purchase, subscribe for or otherwise acquire any Stock or any other Stock Equivalent, whether or not presently convertible, exchangeable or exercisable.

"<u>Structure Memorandum</u>" means that certain structuring memorandum delivered to the Administrative Agent and the Lenders.

<u>"Successor Rate" has the meaning given to it in Section 3.07.</u>

------

"<u>Subordinated Indebtedness</u>" means any Indebtedness of any Loan Party or any Subsidiary of any Loan Party which is subordinated to the Finance Obligations as to right and time of payment and as to other rights and remedies thereunder and having such other terms as are, in each case, reasonably satisfactory to the Administrative Agent.

"<u>Subsidiary</u>" of a Person means any corporation, association, limited liability company, partnership, joint venture or other business entity of which more than fifty percent (50%) of the voting Stock (in the case of Persons other than corporations), is owned or controlled directly or indirectly by the Person, or one or more of the Subsidiaries of the Person, or a combination thereof. Unless otherwise specified, all references herein to a "Subsidiary" or to "Subsidiaries" shall refer to a Subsidiary or Subsidiaries of Holdings.

"<u>Subsidiary Guarantor</u>" means each Domestic Subsidiary (other than Excluded Subsidiaries) of the Parent Borrower on the Original Closing<u>Third Amendment Effective</u> Date and each Domestic Subsidiary (other than Excluded Subsidiaries) of the Parent Borrower that becomes a party to any<u>the</u> Guaranty after the Original Closing<u>Third Amendment Effective</u> Date by execution of an Accession Agreement, and "<u>Subsidiary Guarantors</u>" means any two or more of them. Notwithstanding the foregoing, the Facility will be Guaranteed by each person which is a guarantor under the Term Guaranty or a guarantor of the Second Lien Indebtedness.

"<u>Swap Obligations</u>" means with respect to any Loan Party any obligation to pay or perform under any agreement, contract or transaction that constitutes a "swap" within the meaning of section 1a(47) of the Commodity Exchange Act.

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

"<u>Swing Line Loan</u>" has the meaning specified in <u>Section 2.04(a)</u>.

"<u>Swing Line Loan Notice</u>" means a notice of a Swing Line Borrowing pursuant to <u>Section 2.04(b)</u>, which shall be substantially in the form of <u>Exhibit A-2</u> or such other form as approved by the Administrative Agent (including any form on an electronic platform or electronic transmission system as shall be approve by the Administrative Agent), appropriately completed and signed by a Responsible Officer of the Borrower.

"<u>Swing Line Sublimit</u>" means an amount equal to $7,500,000. The Swing Line Sublimit is part of, and not in addition to, the Facility.

"<u>Syndication Agent</u>" means Deutsche Bank Securities Inc., in its capacity as syndication agent.

------

"<u>Target</u>" means any other Person or business unit or asset group of any other Person acquired or proposed to be acquired in an Acquisition.

"<u>Taxes</u>" means all present or future taxes, levies, imposts, duties, deductions, withholdings (including backup withholding), assessments, fees or other charges imposed by any Governmental Authority, including any interest, additions to tax or penalties applicable thereto.

"<u>Tax Affiliate</u>" means (a) the Parent Borrower and its Subsidiaries, (b) each other Loan Party and (c) any Affiliate of the Parent Borrower with which the Parent Borrower files or is eligible to file consolidated, combined or unitary Tax returns.

"<u>Tax Return</u>" has the meaning specified in <u>Section 5.10</u>.

"<u>Term Administrative Agent</u>" means Bank of America, N.A., in its capacity as agent for the "Secured Parties" under (and as defined in) the Term Credit Agreement, and its successors and assigns in such capacity.

"<u>Term Agent</u>" means the Term Administrative Agent or the Term Collateral Agent and any successor and assigned in such capacity, and "Term Agents" means any two or more of them.

"<u>Term Borrower</u>" means the Parent Borrower in its capacity as the borrower under the Term Credit Agreement.

"<u>Term Collateral Agent</u>" means Bank of America, N.A., in its capacity as collateral agent for the benefit of the Term Finance Parties, and its successor or successors in such capacity.

"<u>Term Collateral Documents</u>" means the "Collateral Documents" (as defined in the Term Credit Agreement) and any other agreement, document or instrument pursuant to which a Lien is granted securing any Term Finance Obligations or under which rights or remedies with respect to such Liens are governed.

"<u>Term Credit Agreement</u>" means the Amended and Restated First Lien Credit Agreement dated as of February 16, 2018 among the Term Borrower, Holdings, the banks and other lending institutions party thereto from time to time, the Term Administrative Agent and the other agents named therein, as amended, modified or supplemented from time to time in accordance with the provisions thereof and of this Agreement.

"Term Credit Obligations" means, with respect to each Term Loan Party, without duplication:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(i) in the case of the Term Borrower, all principal of and interest on any Loan, or
any Note issued pursuant to, and as defined in, the Term Credit Agreement or any other Term Loan Document;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(ii) all fees, expenses, indemnification obligations and other amounts of whatever
nature now or hereafter payable by such Term Loan Party pursuant to the Term Credit Agreement or any other Term Loan Document;

------

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(iii) all expenses of the Term Administrative Agent, any syndication agents, any
documentation agents or the Term Collateral as to which one or more of such Persons have a right to reimbursement by such Term Loan Party pursuant to the Term Credit Agreement or any other Term Loan Document;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(iv) all amounts paid by any Indemnitee (as defined in the Term Credit Agreement) as
to which such Indemnitee has the right to reimbursement by such Term Loan Party under the Term Credit Agreement or under any other Term Loan Document; and

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(v) in the case of Holdings, and each Term Subsidiary Guarantor, all amounts now or hereafter payable by Holdings or such Term Subsidiary Guarantor under its guaranty of all obligations of the Term Borrower under the Term Credit Agreement and any other Term Loan Document;

together in each case with all renewals, modifications, consolidations or extensions thereof.

"<u>Term Finance Document</u>" means (i) each Term Loan Document and (ii) each Term Secured Hedge Agreement, and "<u>Term Finance Documents</u>" means all of them, collectively.

"<u>Term Finance Obligations</u>" means all obligations outstanding under (i) the Term Credit Agreement and the other Term Loan Documents (including all Term Credit Obligations) and (ii) any Term Secured Hedge Agreement (it being understood, for avoidance of doubt, that Swap Obligations of a Loan Party of or owed to a Person that is both an ABL Credit Party and a Term Lender at the time such Rate Contract was entered into by such Loan Party shall be considered Finance Obligations).

"<u>Term Finance Party</u>" means each Term Lender, the Term Administrative Agent, each co-agent or sub-agent appointed by the Term Administrative Agent from time to time pursuant to the Term Credit Agreement, the Term Collateral Agent and each Indemnitee (as defined in the Term Credit Agreement) and their respective successors and assigns, and "Term Finance Parties" means any two or more of them, collectively.

"<u>Term Guaranty</u>" means the Guaranty (as defined in the Term Credit Agreement) made by Holdings, and the Term Subsidiary Guarantors in favor of the Term Secured Parties, together with each other guaranty and guaranty supplement delivered in accordance with the terms thereof.

"<u>Term Hedge Bank</u>" means any Person that, at the time it enters into a Rate Contract required or permitted under the Term Credit Agreement, is a Term Lender or an Affiliate of a Term Lender, in its capacity as a party to such Rate Contract.

"<u>Term Intercreditor Agreement</u>" means the Intercreditor Agreement, substantially in the form of Exhibit I-2 hereto, dated as of the Original Closing Date, among the Term Agent, Holdings, the Borrowers and the Term Loan Parties party thereto, or such other intercreditor agreement in a form reasonably acceptable to the Agent and the Borrower, in each case, as such document may be amended, restated, supplemented or otherwise modified from time to time.

------

"<u>Term Lenders</u>" means the "Lenders" under and as defined in the Term Credit Agreement, in their respective capacities as such under, and as defined in, the Term Credit Agreement, and their respective successors and assigns.

"<u>Term Loan Documents</u>" means the Term Credit Agreement and the other Loan Documents (as defined in the Term Credit Agreement) and each of the other agreements, documents and instruments providing for or evidencing any other Term Credit Obligation, and any other document or instrument executed or delivered at any time in connection with any Term Credit Obligations, including any intercreditor, accession or joinder agreement among holders of Term Credit Obligations, to the extent such are effective at the relevant time.

"<u>Term Loan Party</u>" means Holdings, the Term Borrower and each Term Subsidiary Guarantor, and "Term Loan Parties" means all of them, collectively.

"<u>Term Loans</u>" has the meaning given to the term "Loans" in the Term Credit Agreement.

"<u>Term Priority Collateral</u>" means all Collateral other than ABL Priority Collateral.

"<u>Term Secured Hedge Agreement</u>" means any Rate Contract required or permitted under the <u>Permitted</u> Term Credit Agreement<u>Debt Documents</u> that is entered into by and between any Term Loan Party and any <u>lender, agent or other representative of such lender (or their respective Affiliates) under and</u> <u>with respect to the</u> <u>Permitted</u> Term Hedge Bank<u>Debt</u>.

"<u>Term Secured Parties</u>" has the meaning given to the term "Secured Parties" in the Term Credit Agreement.

"<u>Term Subsidiary Guarantor</u>" means at any time, each Subsidiary of Holdings which is a guarantor of the Term Finance Obligations pursuant to the Term Guaranties or any other Term Loan Document.

<u>"Term SOFR" means:</u>

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<u>(a)</u> <u>for any Interest Period with respect to a</u> <u>Term SOFR Loan, the rate per annum equal to the Term SOFR Screen Rate two U.S. Government Securities</u> <u>Business Days prior to the commencement of such Interest Period with a term equivalent to such Interest Period;</u> <u>provided that if the rate is not published prior to 11:00 a.m. on such determination date then Term SOFR means the Term SOFR Screen</u> <u>Rate for such Interest Period</u> <u>published on the first U.S. Government Securities Business Day immediately prior thereto, in each case, plus the SOFR Adjustment for such Interest Period; and</u>

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<u>(b)</u> <u>for any interest calculation with respect to a Base Rate Loan on any date, the rate per annum equal to</u> <u>the Term SOFR Screen Rate</u> <u>with a term of one month commencing</u> <u>that day;</u>

<u>provided that if the Term SOFR determined in accordance with either of the foregoing provisions (a) or (b) of this definition would otherwise</u> <u>be less than zero</u><u>, the Term SOFR shall be deemed zero</u> <u>for purposes of this Agreement.</u>

------

<u>"Term SOFR Loan" means a Loan that</u> <u>bears interest at a rate based on</u> <u>the definition of Term SOFR.</u>

<u>"Term SOFR Screen Rate" means the forward-looking SOFR term rate administered by CME (or any successor administrator satisfactory to the Administrative Agent) and</u> <u>published on the applicable Reuters screen page (or such other commercially available source providing such quotations as may be designated by the Administrative Agent from time to time)</u><u>.</u>

<u>"Third Amendment" means that certain Third Amendment, dated as of the Third Amendment Effective Date, among the Loan Parties, the Administrative Agent and the Lenders party thereto.</u>

<u>"Third Amendment Effective Date" means June 27, 2022.</u>

<u>"Third Amendment Fee Letter" means that certain Fee Letter dated as of the Third Amendment Effective Date, by and among the Parent Borrower,</u> <u>Bank of America, N.A.</u> <u>and Merrill Lynch, Pierce, Fenner & Smith Incorporated.</u>

"<u>Threshold Amount</u>" means $20,000,000.

"<u>Title IV Plan</u>" means a pension plan subject to Title IV of ERISA or Sections 412 and 430 of the Code or Section 302 of ERISA, other than a Multiemployer Plan, to which any ERISA Affiliate incurs or otherwise has any obligation or liability, contingent or otherwise.

"<u>Total Outstandings</u>" means the aggregate Outstanding Amount of all Loans and L/C Obligations.

"<u>Trade Secrets</u>" means all right, title and interest (and all related IP Ancillary Rights) arising under any Requirement of Law in or relating to trade secrets.

"<u>Trademark</u>" means all rights, title and interests (and all related IP Ancillary Rights) arising under any Requirement of Law in or relating to trademarks, trade names, corporate names, company names, business names, fictitious business names, trade styles, service marks, logos and other source or business identifiers and, in each case, all goodwill associated therewith, all registrations and recordations thereof and all applications in connection therewith.

"<u>Transaction</u>" means the events contemplated by this Agreement and the other Loan Documents and the Related Agreements.

"<u>Type</u>" means, with respect to a Loan, its character as a Base Rate Loan, a Eurodollar Rate<u>Term SOFR</u> Loan or a Swing Line Loan.

"<u>UCC</u>" means the Uniform Commercial Code of any applicable jurisdiction and, if the applicable jurisdiction shall not have any Uniform Commercial Code, the Uniform Commercial Code as in effect from time to time in the State of New York.

------

<u>"UK Financial Institution" means any BRRD Undertaking (as such term is defined under the PRA Rulebook (as amended form time to time) promulgated by the United Kingdom Prudential</u> <u>Regulation Authority) or any person subject to IFPRU 11.6 of the FCA Handbook (as amended from time to time) promulgated by the United Kingdom Financial Conduct Authority, which includes certain credit institutions and investment firms, and certain affiliates of such credit institutions or investment firms.</u>

<u>"UK Resolution Authority" means the Bank of England or any other public administrative authority having responsibility for the resolution of any UK Financial Institution.</u>

<u>"U.S. Government Securities Business Day" means any Business Day, except any Business Day on which any of the Securities Industry and Financial Markets Association, the New York Stock Exchange or the Federal Reserve Bank of New York is not open for business because such day is a legal holiday under the federal laws of the United States or the laws of the State of New York, as applicable.</u>

"<u>United States</u>" and "<u>U.S.</u>" mean the United States of America.

"<u>Unreimbursed Amount</u>" has the meaning specified in <u>Section 2.03(c)(i)</u>.

"<u>Value</u>" means (a) for Inventory, its value determined on the basis of the lower of cost or market, calculated on a first-in, first-out basis, and excluding any portion of cost attributable to intercompany profit among the Loan Parties and their Affiliates; and (b) for an Account, its face amount, net of any returns, rebates, discounts (calculated on the shortest terms), credits, allowances or Taxes (including sales, excise or other taxes) that have been or could be claimed by the applicable Account Debtor or any other Person.

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

"<u>Wholly-Owned Subsidiary</u>" means, with respect to any Person at any date, any Subsidiary of such Person all of the Stock and Stock Equivalents of which (except directors' qualifying shares and foreign national qualifying shares in connection with Requirements of Law) are at the time directly or indirectly owned by such Person.

"<u>Working Capital</u>" means at any date, Consolidated Current Assets of Holdings and its Subsidiaries at such date minus Consolidated Current Liabilities of Holdings and its Subsidiaries at such date, excluding any deferred assets and liabilities and purchase accounting adjustments.

------

"<u>Write-Down and Conversion Powers</u>" means, <u>(a)</u> 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.<u>, and (b) with respect</u> <u>to the United Kingdom, any powers of the applicable Resolution Authority under the Bail-In Legislation to cancel, reduce, modify or change the form of a liability of any UK Financial Institution or any contract or instrument under which that liability arises, to convert all or part of that liability into shares, securities or obligations of that person or any other person, to provide that any such contract or instrument is to have effect as if a right had been exercised under it or to suspend any obligation in respect of that liability or any of the powers under that Bail-In Legislation that are related to or ancillary to any of those powers.</u>

Section 1.02 <u>Other Interpretative Provisions</u>. With reference to this Agreement and each other Loan Document, unless otherwise specified herein or in such other Loan Document:

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

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b) In the computation of periods of time from a specified date to a later specified date, the word "<u>from</u>" means "<u>from and including</u>," the words "<u>to</u>" and "<u>until</u>" each mean "<u>to but excluding</u>," and the word "<u>through</u>" means "<u>to and including</u>."

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

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(d) References to a "Person and its Subsidiaries" or to a "Person or any Subsidiary" (or words of similar import) means to Holdings and its Subsidiaries, unless otherwise specified.

------

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(e) Any reference to "knowledge" of any Loan Party shall mean the knowledge of one or more of such Loan Party's Responsible Officers after reasonable investigation and inquiry with their direct reports.

Section 1.03 <u>Accounting Terms and Determinations</u>.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a)*<u>Generally</u>*. All accounting terms not specifically or completely defined herein shall be construed in conformity with, and all financial data (including financial ratios and other financial calculations) required to be submitted pursuant to this Agreement shall be prepared in conformity with, GAAP applied on a consistent basis, as in effect from time to time, applied in a manner consistent with that used in preparing the Audited Financial Statements (or, from and after delivery thereof to the Administrative Agent), except as otherwise specifically prescribed herein. Notwithstanding the foregoing, for purposes of determining compliance with any covenant (including the computation of any financial covenant) contained herein, Indebtedness of the Borrowers and their Subsidiaries shall be deemed to be carried at 100% of the outstanding principal amount thereof, and the effects of FASB ASC 825 and FASB ASC 470-20 on financial liabilities shall be disregarded. 

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b)*<u>Changes in GAAP</u>*. If at any time any change in GAAP or in the application thereof would affect the computation of any financial ratio or requirement set forth in any Loan Document, and either the Parent Borrower or the Required Lenders shall so request, the Administrative Agent, the Lenders and the Parent Borrower shall negotiate in good faith to amend such ratio or requirement to preserve the original intent thereof in light of such change in GAAP (subject to the approval of the Required Lenders); <u>provided</u> that, until so amended, (i) such ratio or requirement shall continue to be computed in accordance with GAAP prior to such change therein and (ii) the Parent Borrower shall provide to the Administrative Agent and the Lenders financial statements and any other documents required under this Agreement or as reasonably requested hereunder setting forth a reconciliation between calculations of such ratio or requirement made before and after giving effect to such change in GAAP. Without limiting the foregoing, leases shall continue to be classified (including, without limitation, for affirmative and negative covenant purposes) and accounted for on a basis consistent with that reflected in the Audited Financial Statements for all purposes of this Agreement, notwithstanding any change in GAAP relating thereto, unless the parties hereto shall enter into a mutually acceptable amendment addressing such changes, as provided for above.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c)*<u>Computation of Certain Financial Covenants</u>*. Unless otherwise specified herein, all defined financial terms (and all other definitions used to determine such terms) shall be to those determined and computed in respect of Holdings and its Subsidiaries. 

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

------

Section 1.05 <u>Times of Day; Rates</u>. Unless otherwise specified, all references herein to times of day shall be references to Eastern time (daylight or standard, as applicable). The Administrative Agent does not warrant, nor accept responsibility, nor shall the Administrative Agent have any liability with respect to the administration, submission or any other matter related to the rates in the definition of "Eurodollar Rate<u>Term SOFR</u>" or with respect to any comparable or successor rate thereto.

Section 1.06 <u>Currency Equivalents Generally</u>. Any amount specified in this Agreement (other than in <u>Articles II</u>, <u>IX</u> and <u>X</u>) or any of the other Loan Documents to be in Dollars shall also include the equivalent of such amount in any currency other than Dollars, such equivalent amount thereof in the applicable currency to be determined by the Administrative Agent at such time on the basis of the Spot Rate (as defined below) for the purchase of such currency with Dollars. For purposes of this <u>Section 1.06</u>, the "<u>Spot Rate</u>" for a currency means the rate determined by the Administrative Agent to be the rate quoted by the Person acting in such capacity as the spot rate for the purchase by such Person of such currency with another currency through its principal foreign exchange trading office at approximately 11:00 a.m. on the date two Business Days prior to the date of such determination; <u>provided</u> that the Administrative Agent may obtain such spot rate from another financial institution designated by the Administrative Agent if the Person acting in such capacity does not have as of the date of determination a spot buying rate for any such currency.

Section 1.07 <u>Letter of Credit Amounts</u>. Unless otherwise specified herein, the amount of a Letter of Credit at any time shall be deemed to be the Dollar stated amount of such Letter of Credit at such time; <u>provided</u>, <u>however</u>, that with respect to any Letter of Credit that, by its terms or the terms of any Issuer Document related thereto, provides for one or more automatic increases in the stated amount thereof, the amount of such Letter of Credit shall be deemed to be the Dollar 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 such time.

<u>Section 1.08 Divisions. 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): (a) 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, and (b) if any new Person comes into existence, such new Person shall be deemed to have been organized on the first date of its existence by the holders of its Equity Interests at such time.</u>

**ARTICLE II** 

**THE COMMITMENTS AND LOANS** 

Section 2.01 <u>Commitments</u>. Subject to the terms and conditions set forth herein, each Revolving Facility Lender severally agrees to make Revolving Facility Loans to the applicable Borrower from time to time on any Business Day during the Availability Period in an aggregate principal amount not to exceed at any time outstanding the amount of such Lender's Revolving Facility Commitment; <u>provided</u>, <u>however</u>, that after giving effect to any Revolving Facility Borrowing, (i) the Revolving Facility Credit Exposure shall not exceed the Revolving Facility Commitments, (ii) the Revolving Facility Credit Exposure of any Revolving Facility Lender shall not exceed such Lender's Revolving Facility Commitment and (iii) the Revolving Facility Credit Exposure shall not exceed the Borrowing Base. Within the limits of each Lender's Revolving Facility Commitment, and subject to the other terms and conditions hereof, the Borrowers may borrow under this <u>Section 2.01</u>, prepay under <u>Section 2.05</u> and reborrow under this <u>Section 2.01</u>. Revolving Facility Loans may be Base Rate Loans or Eurodollar Rate<u>Term SOFR</u> Loans as further provided herein.

------

Section 2.02 <u>Borrowings, Conversions and Continuations of Loans</u>.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a) Each Borrowing, each conversion of Loans from one Type to the other, and each continuation of Eurodollar Rate<u>Term SOFR</u> Loans shall be made upon the Parent Borrower's irrevocable notice to the Administrative Agent, which may be given by (A) telephone, or (B) a Committed Loan Notice; <u>provided</u> that any telephonic notice must be confirmed immediately by delivery to the Administrative Agent of a Committed Loan Notice. Each such Committed Loan Notice must be received by the Administrative Agent not later than 11:00 a.m. (i) three Business Days prior to the requested date of any Borrowing of, conversion to or continuation of Eurodollar Rate<u>Term SOFR</u> Loans or of any conversion of Eurodollar Rate<u>Term SOFR</u> Loans to Base Rate Loans, and (ii) on the requested date of any Borrowing of Base Rate Loans; provided, however, that if the Parent Borrower wishes to request Eurodollar Rate Loans having an Interest Period other than one, two, three or six (but not more than twelve) months in duration as provided in the definition of "Interest Period" (an "Alternate Interest Period"), the applicable notice must be received by the Administrative Agent not later than 11:00 a.m. four Business Days prior to the requested date of such Borrowing, conversion or continuation, whereupon the Administrative Agent shall give prompt notice to the Lenders of such request and determine whether the requested Interest Period is acceptable to all of them. Not later than 11:00 a.m., three Business Days before the requested date of such Borrowing, conversion or continuation, the Administrative Agent shall notify the Parent Borrower (which notice may be by telephone) whether or not the requested Alternate Interest Period has been consented to by all the Lenders.<u>.</u> Each Committed Loan Notice shall be appropriately completed and signed by a Responsible Officer of the Parent Borrower or any other Person designated by a Responsible Officer of the Parent Borrower in writing to the Administrative Agent; <u>provided</u> that such designation shall be accompanied by (i) a complete copy of resolutions duly adopted by the board of directors (or other similar governing body) of the Parent Borrower authorizing the applicable Responsible Officer to delegate his or her authority to submit such Committed Loan Notice and (ii) a certificate of such Responsible Officer as to the incumbency and specimen signature of the Person so designated. Each Borrowing of, conversion to or continuation of Eurodollar Rate<u>Term SOFR</u> Loans shall be in a principal amount of $5,000,000 or a whole multiple of $1,000,000 in excess thereof. Each Borrowing of or conversion to Base Rate Loans shall be in a principal amount of $500,000 or a whole multiple of $100,000 in excess thereof. Each Committed Loan Notice shall specify (i) whether the Parent Borrower (or any other Borrower) is requesting a Borrowing, a conversion of Loans from one Type to the other, or a continuation of Eurodollar Rate<u>Term SOFR</u> Loans, (ii) the requested date of the Borrowing, conversion or continuation, as the case may be (which shall be a Business Day), (iii) the principal amount of Loans to be borrowed, converted or continued, (iv) the Type of Loans to be borrowed or to which existing Loans are to be converted, (v) the aggregate amount of all Loans to be outstanding (after giving effect to the requested Borrowing), (vi) if applicable, the duration of the Interest Period with respect thereto and (vii) the location and number of the applicable Borrower's account to which such funds are due to be distributed. If the Parent Borrower fails to specify a Type of Loan in a Committed Loan Notice or if the Parent Borrower fails to give a timely notice requesting a conversion or continuation, then the applicable Loans shall be made as, or converted

------

to, Base Rate Loans. Any such automatic conversion to Base Rate Loans shall be effective as of the last day of the Interest Period then in effect with respect to the applicable Eurodollar Rate<u>Term SOFR</u> Loans. If the Parent Borrower requests a Borrowing of, conversion to, or continuation of Eurodollar Rate<u>Term SOFR</u> Loans in any such Committed Loan Notice, but fails to specify an Interest Period, it will be deemed to have specified an Interest Period of one month. Notwithstanding anything to the contrary herein, a Swing Line Loan may not be converted to a Eurodollar Rate<u>Term SOFR</u> Loan.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b) Following receipt of a Committed Loan Notice, the Administrative Agent shall promptly notify each Lender of the amount of its Revolving Facility Percentage of the applicable Loans, and if no timely notice of a conversion or continuation is provided by the Parent Borrower, the Administrative Agent shall notify each Lender of the details of any automatic conversion to Base Rate Loans described in <u>Section 2.02(a)</u>. In the case of a Borrowing, each Lender shall make the amount of its Loan available to the Administrative Agent in immediately available funds at the Administrative Agent's Office not later than 1:00 p.m. on the Business Day specified in the applicable Committed Loan Notice. Upon satisfaction or waiver of the applicable conditions set forth in <u>Section 4.01</u> with respect to a Borrowing on the Original Closing Date, the Administrative Agent shall make all funds so received available to the Parent Borrower in like funds as received by the Administrative Agent either by (i) crediting the account of the Parent Borrower on the books of Bank of America with the amount of such funds or (ii) wire transfer of such funds, in each case in accordance with instructions provided to (and reasonably acceptable to) the Administrative Agent by the Parent Borrower; <u>provided</u> that Base Rate Loans made to finance reimbursement in respect of Letters of Credit shall be remitted by the Administrative Agent to the applicable L/C Issuer.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c) Except as otherwise provided herein, a Eurodollar Rate<u>Term SOFR</u> Loan may be continued or converted only on the last day of an Interest Period for such Eurodollar Rate<u>Term SOFR</u> Loan. During the existence of a Default, no Loans may be requested as, converted to or continued as Eurodollar Rate<u>Term SOFR</u> Loans without the consent of the Required Lenders with respect to Eurodollar Rate<u>Term SOFR</u> Loans at any one time<u>. Notwithstanding anything herein to the contrary, all Loans outstanding on the Third Amendment Effective Date shall be, on the Third Amendment Effective Date, converted into Term SOFR Loans with the Interest Period ending as provided in the last proviso to the definition thereof.</u>

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(d) The Administrative Agent shall promptly notify the Parent Borrower and the Lenders of the interest rate applicable to any Interest Period for Eurodollar Rate<u>Term SOFR</u> Loans upon determination of such interest rate. At any time that Base Rate Loans are outstanding, the Administrative Agent shall notify the Parent Borrower and the Lenders of any change in Bank of America's prime rate used in determining the Base Rate promptly following the public announcement of such change.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(e) After giving effect to all Borrowings, all conversions of Loans from one Type to the other, and all continuations of Loans as the same Type, there shall not be more than five Interest Periods in effect.

------

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(f) Each Borrower hereby irrevocably appoints the Parent Borrower as the borrowing agent and attorney-in-fact for the Borrowers, which appointment shall remain in full force and effect unless and until the Administrative Agent shall have received prior written notice signed by all of the Borrowers that such appointment has been revoked and that another Borrower has been appointed Parent Borrower. Each Borrower hereby irrevocably appoints and authorizes the Parent Borrower (i) to provide to the Administrative Agent and receive from the Administrative Agent all notices with respect to Loans obtained for the benefit of any Borrower and all other notices and instructions under this Agreement and the other Loan Documents and (ii) to take such action as the Parent Borrower deems appropriate on its behalf to obtain Loans and to exercise such other powers as are reasonably incidental thereto to carry out the purposes of this Agreement. It is understood that the handling of the Collateral of the Borrowers in a combined fashion, as more fully set forth herein and in the Collateral Documents, is done solely as an accommodation to the Borrowers in order to utilize the collective borrowing powers of the Borrowers in the most efficient and economical manner and at their request, and that neither the Agents nor the Lenders shall incur liability to the Borrowers as a result hereof. Each of the Borrowers expects to derive benefit, directly or indirectly, from the handling of the Collateral in a combined fashion since the successful operation of each Borrower is dependent on the continued successful performance of the integrated group.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(g) <u>With respect to SOFR or Term SOFR, the Administrative Agent shall have the right to make Conforming Changes from time to time and, notwithstanding anything to the contrary herein or in any other Loan Document, any amendments implementing such Conforming Changes will become effective without any further action or consent of any other party to this Agreement or any other Loan Document; provided that, with respect to any such amendment effected, the Administrative Agent shall post each such amendment implementing such Conforming Changes to the Borrower and the Lenders</u> <u>reasonably promptly after such</u> <u>amendment becomes effective.</u>

Each Borrower hereby accepts joint and several liability hereunder and under the other Loan Documents in consideration of the financial accommodations to be provided by the Agents and the Lenders under this Agreement and the other Loan Documents, for the mutual benefit, directly and indirectly, of each of the Borrowers and in consideration of the undertakings of the other Borrowers to accept joint and several liability for the Finance Obligations. Each of the Borrowers, jointly and severally, hereby irrevocably and unconditionally accepts, not merely as a surety but also as a co-debtor, joint and several liability with the other Borrowers, with respect to the payment and performance of all of the Finance Obligations (including, without limitation, any Finance Obligations arising under this <u>Section 2.02(f)</u>), it being the intention of the parties hereto that all of the Finance Obligations shall be the joint and several obligations of each of the Borrowers without preferences or distinction among them. If and to the extent that any of the Borrowers shall fail to make any payment with respect to any of the Finance Obligations as and when due or to perform any of the Finance Obligations in accordance with the terms thereof, then in each such event, the other Borrowers will jointly and severally make such payment with respect to, or perform, such Finance Obligation. Subject to the terms and conditions hereof, the Finance Obligations of each of the Borrowers under the provisions of this <u>Section 2.02(f)</u> constitute the absolute and unconditional, full recourse Finance Obligations of each of the Borrowers, enforceable against each such Person to the full extent of its properties and assets, irrespective of the validity, regularity or enforceability of this Agreement, the other Loan Documents or any other circumstances whatsoever.

------

Section 2.03 <u>Letters of Credit</u>.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a)*<u>Letters of Credit</u>*. Subject to the terms and conditions hereof, the Administrative Agent shall issue or cause the issuance of standby and/or trade letters of credit (collectively, "<u>Letters of Credit</u>") for the account of the Borrowers. The Maximum Undrawn Amount of all outstanding Letters of Credit shall not exceed in the aggregate at any time the Letter of Credit Sublimit. All disbursements or payments related to Letters of Credit shall be deemed to be Revolving Facility Loans and shall bear interest at the applicable Revolving Facility Loans in accordance with <u>Section 2.08</u>. Letters of Credit that have not been drawn upon shall not bear interest. 

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b) <u>Issuance of Letters of Credit</u>.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(i) Subject to the terms hereof, the Parent Borrower may request the Administrative Agent to issue or cause the
issuance of a Letter of Credit by delivering to the Administrative Agent, at the Administrative Agent's Office, prior to 10:00 a.m. (New York time), at least three Business Days prior to the proposed date of issuance, the Administrative
Agent's form of letter of credit application (the " <u>Letter of Credit Application</u> ") completed to the reasonable satisfaction of the Administrative Agent and such other certificates, documents and other papers and information as
the Administrative Agent may reasonably request.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(ii) Each Letter of Credit shall, among other things, (i) provide for the payment of sight drafts, other
written demands for payment, or acceptances of drafts when presented for honor thereunder in accordance with the terms thereof and when accompanied by the documents described therein and (ii) have an expiry date not later than twelve months
after such Letter of Credit's date of issuance (subject to automatic renewals) and in no event later than the date that is fifteen days prior to the Revolving Facility Maturity Date. Each standby Letter of Credit shall be subject either to the
Uniform Customs and Practice for Documentary Credits (1993 Revision), International Chamber of Commerce Publication No. 600, and any amendments or revision thereof adhered to by the Issuer (" <u>UCP 600</u> ") or the International
Standby Practices (ISP98-International Chamber of Commerce Publication Number 590) (" <u>ISP98 Rules</u> "), as determined by the Administrative Agent, and each trade Letter of Credit shall be subject to UCP 600.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(iii) The Administrative Agent shall use its reasonable efforts to notify the Collateral Agent and the Lenders of the
request by the Borrowers for a Letter of Credit hereunder.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c)*<u>Requirements for Issuance of Letters of Credit</u>*. The Parent Borrower shall authorize and direct the L/C Issuer to name one or more Borrowers as the "Applicant" or "Account Party" of each Letter of Credit. If the Administrative Agent is not the L/C Issuer of any Letter of Credit, the Parent Borrower shall authorize and direct the L/C Issuer to deliver to the Administrative Agent all instruments, documents, and other writings and property received by the L/C Issuer pursuant to such Letter of Credit and to accept and rely upon the Administrative Agent's instructions and *agreements with respect to all matters arising in connection with such Letter of Credit or the application therefor.* 

------

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(d) <u>*Disbursements, Reimbursement*.</u>

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(i) Immediately upon the issuance of each Letter of Credit, each Lender shall be deemed to, and hereby irrevocably
and unconditionally agrees to, purchase from the Administrative Agent a participation in such Letter of Credit and each drawing thereunder in an amount equal to such Lender's pro rata of the Maximum Face Amount of such Letter of Credit and the
amount of such drawing, respectively.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(ii) In the event of any request for a drawing under a Letter of Credit by the beneficiary or transferee thereof,
the Administrative Agent will promptly notify the Parent Borrower. Provided that the Parent Borrower shall have received such notice by 1:00 pm (New York time), the Borrowers shall reimburse (such obligation to reimburse the Administrative Agent or
any Lender together with any interest thereon pursuant to <u>Section 2.08</u> shall sometimes be referred to as a " <u>Reimbursement Obligation</u> ") the Administrative Agent on behalf of the L/C Issuer and the Lenders prior to 1:00
p.m. (New York time) on such date that an amount is paid by the Administrative Agent on behalf of the L/C Issuer and the Lenders under any Letter of Credit (each such date, a " <u>Drawing Date</u> ") in an amount equal to the amount so paid
by the Administrative Agent. In the event the Borrowers fail to reimburse the Administrative Agent for the full amount of any drawing under any Letter of Credit by 1:00 p.m. (New York time) on the Drawing Date, the Administrative Agent will promptly
notify each Lender thereof, and the Borrowers shall be deemed to have requested that a Revolving Facility Loan that is a Base Rate Loan be made by the Lenders to be disbursed on the Drawing Date in respect of such Letter of Credit pursuant to <u>Section 2.01</u> and subject to <u>Article IV</u>. Any notice given by the Administrative Agent pursuant to this <u>Section 2.03(d)(ii)</u> may be oral if immediately confirmed in writing; <u>provided</u> that the lack of such an
immediate confirmation shall not affect the conclusiveness or binding effect of such notice.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(iii) Each Lender shall upon any notice pursuant to <u>Section 2.03(d)(ii)</u> make available to the
Administrative Agent an amount in immediately available funds equal to its pro rata share of the amount of the drawing, whereupon the participating Lenders shall (subject to <u>Section 2.03(d)(iv)</u>) each be deemed to have made a Loan that is
a Base Rate Loan to the Borrowers in that amount. If any Lender so notified fails to make available to the Administrative Agent the amount of such Lender's pro rata share of such amount by no later than 2:00 p.m. (New York time) on the Drawing
Date, then interest shall accrue on such Lender's obligation to make such payment, from the Drawing Date to the date on which such Lender makes such payment (i) at a rate per annum equal to the Federal Funds Rate during

------

the first three days following the Drawing Date and (ii) at a rate per annum equal to the interest rate on Loans that are Base Rate Loans on and after the fourth day following the Drawing Date. The Administrative Agent will promptly give notice of the occurrence of the Drawing Date, but failure of the Administrative Agent to give any such notice on the Drawing Date or in sufficient time to enable any Lender to effect such payment on such date shall not relieve such Lender from its obligation under this <u>Section 2.03(d)(iii)</u>, provided that such Lender shall not be obligated to pay interest as provided in <u>clauses (i)</u> and <u>(ii)</u> until and commencing from the date of receipt of notice from the Administrative Agent of a drawing. Each Lender's payment to the Administrative Agent pursuant to this <u>Section 2.03(d)(iii)</u> shall be deemed to be a payment in respect of its participation in such Letter of Credit Borrowing and shall constitute a "<u>Participation Revolving Loan</u>" from such Lender in satisfaction of its Participation Commitment under this <u>Section 2.03(d)</u>.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(iv) With respect to any unreimbursed drawing that is not converted into a Loan to the Borrowers in whole or in part
as contemplated by <u>Section 2.03(d)(ii)</u>, because of the Borrowers' failure to satisfy the conditions set forth in <u>Section 4.02</u> (other than any notice requirements) or for any other reason, the Borrowers shall be deemed to
have incurred from the Administrative Agent a borrowing (each a " <u>Letter of Credit Borrowing</u> ") in the amount of such drawing. Such Letter of Credit Borrowing shall be due and payable on demand (together with interest) and shall bear
interest at the rate per annum equal to the interest rate on Loans that are Base Rate Loans.

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

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(e) <u>*Repayment of Participation Revolving Loans*.</u>

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

------

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(ii) If the Administrative Agent is required at any time to return to the Borrowers, or to a trustee, receiver,
liquidator, custodian, or any official in any proceeding under any Debtor Relief Law, any portion of the payments made by the Borrowers to the Administrative Agent pursuant to <u>Section 2.03(e)(i)</u> in reimbursement of a payment made under a
Letter of Credit or interest or fee thereon, each Lender shall, on demand of the Administrative Agent, forthwith return to the Administrative Agent the amount of its pro rata share of any amounts so returned by the Administrative Agent plus interest
at the Federal Funds Rate.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(f) <u>*Documentation*</u>. The Borrowers agree to be bound by the terms of each Letter of Credit Application and by the L/C Issuer's interpretations of each Letter of Credit issued for the Borrowers' account and by the L/C Issuer's written regulations and customary practices relating to letters of credit, though the L/C Issuer's interpretations may be different from the Borrowers' own. In the event of a conflict between any Letter of Credit Application and this Agreement, this Agreement shall govern. It is understood and agreed that, except in the case of gross negligence or willful misconduct (as determined by a court of competent jurisdiction in a final nonappealable<u>non-appealable</u> judgment), the Administrative Agent shall not be liable for any error, negligence and/or mistakes, whether of omission or commission, in following any Borrower's instructions or those contained in any Letter of Credit or any modification, amendment or supplement thereto.

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

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(h)*<u>Nature of Participation and Reimbursement Obligations</u>*. Each Lender's obligation in accordance with this Agreement to make the Loans or Participation Revolving Loans as a result of a drawing under a Letter of Credit, and the obligations of the Borrowers to reimburse the Administrative Agent upon a draw under a Letter of Credit, shall be absolute, unconditional and irrevocable, and shall be performed strictly in accordance with the terms of this <u>Section 2.03</u> under all circumstances, including the following circumstances: 

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

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(ii) the failure of the Borrowers or any other Person to comply, in connection with a Letter of Credit Borrowing,
with the conditions set forth in this Agreement for the making of a Loan, it being acknowledged that such conditions are not required for the making of a Letter of Credit Borrowing and the obligation of the Lenders to make Participation Revolving
Loans under <u>Section 2.03(d)</u>;

------

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

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

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

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(vi) except as provided in <u>Section 2.03(g)</u>, any payment by the Administrative Agent under any Letter of
Credit against presentation of a demand, draft or certificate or other document which does not comply with the terms of such Letter of Credit;

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

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

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(ix) any Material Adverse Effect on any Borrower or any Guarantor;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(x) any breach of this Agreement or any Loan Document by any party thereto;

------

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(xi) the occurrence or continuance of a proceeding under any Debtor Relief Law with respect to any Borrower or any
Guarantor;

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

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(xiii) the fact that the Revolving Facility Maturity Date shall have expired or this Agreement or the Finance
Obligations hereunder shall have been terminated; and

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

Nothing contained in this <u>Section 2.03(h)</u> shall be deemed to relieve the Administrative Agent or the L/C Issuer from any claim by the Borrowers for the gross negligence or willful misconduct of the Administrative Agent or the L/C Issuer, respectively, in respect of honoring or failing to honor any drawing under any Letter of Credit or otherwise in respect of any Letter of Credit, but any such claim may not be used as a defense to the reimbursement obligation for any such drawing.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(i)*<u>Indemnity</u>*. In addition to amounts payable as provided in <u>Section 10.04</u>, the Borrowers hereby agree to protect, indemnify, pay and save harmless the Administrative Agent and the L/C Issuer from and against any and all claims, demands, liabilities, damages, taxes, (except for the imposition or any change in rate of any Taxes for which such Person is indemnified pursuant to <u>Article III</u> or the imposition or any change in the rate of, any Taxes specifically excluded under <u>Article III</u>), penalties, interest, judgments, losses, costs, charges and expenses (including reasonable fees, expenses and disbursements of outside counsel and allocated costs of internal counsel) which the Administrative Agent or any of the Administrative Agent's Affiliates may incur or be subject to as a consequence, direct or indirect, of the issuance of any Letter of Credit, other than as a result of (a) the gross negligence or willful misconduct of the Administrative Agent or the L/C Issuer (as determined by a court of competent jurisdiction in a final nonappealable<u>non-appealable</u> judgment) or (b) the wrongful dishonor by the Administrative Agent, the L/C Issuer, or any of the Administrative Agent's or L/C Issuer's Affiliates of a proper demand for payment made under any Letter of Credit, except if such dishonor resulted from any act or omission, whether rightful or wrongful, of any present or future de jure or de facto Governmental Authority (all such acts or omissions herein called "<u>Governmental Acts</u>"). The obligations of the Borrowers under this <u>Section 2.03(i)</u> shall survive the termination of this Agreement and the payment of the Loans and all other amounts payable hereunder.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(j)*<u>Liability for Acts and Omissions</u>*.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(i) As between the Borrowers and the Agents and the Lenders, the Borrowers assume all risks of the acts and
omissions of, or misuse of the Letters of Credit by, the respective beneficiaries of such Letters of Credit. In furtherance and not in limitation of the foregoing, the Agents and the Lenders shall not be responsible for: (i) the form, validity,
sufficiency, accuracy, genuineness or legal effect of any document submitted by any

------

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

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(ii) Without limiting the generality of the foregoing, the Administrative Agent and each of its Affiliates
(i) may rely on any oral or other communication believed in good faith by the Administrative Agent or such Affiliate to have been authorized or given by or on behalf of the applicant for a Letter of Credit, (ii) may honor any presentation
if the documents presented appear on their face substantially to comply with the terms and conditions of the relevant Letter of Credit; (iii) may honor a previously dishonored presentation under a Letter of Credit, whether such dishonor was
pursuant to a court order, to settle or compromise any claim of wrongful dishonor, or otherwise, and shall be entitled to reimbursement to the same extent as if such presentation had initially been honored, together with any interest paid by the
Administrative Agent or its Affiliates; (iv) may honor any drawing

------

that is payable upon presentation of a statement advising negotiation or payment, upon receipt of such statement (even if such statement indicates that a draft or other document is being delivered separately), and shall not be liable for any failure of any such draft or other document to arrive, or to conform in any way with the relevant Letter of Credit; (v) may pay any paying or negotiating bank claiming that it rightfully honored under the laws or practices of the place where such bank is located; and (vi) may settle or adjust any claim or demand made on the Administrative Agent or its Affiliate in any way related to any order issued at the applicant's request to an air carrier, a letter of guarantee or of indemnity issued to a carrier or any similar document (each an "<u>Order</u>") and honor any drawing in connection with any Letter of Credit that is the subject of such Order, notwithstanding that any drafts or other documents presented in connection with such Letter of Credit fail to conform in any way with such Letter of Credit.

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

Section 2.04 <u>Swing Line Loans</u>.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a)*<u>The Swing Line</u>*. Subject to the terms and conditions set forth herein, the Swing Line Lender, in reliance upon the agreements of the other Lenders set forth in this <u>Section 2.04</u>, may in its sole discretion make loans (each such loan, a "<u>Swing Line Loan</u>") to one or more Borrowers from time to time on any Business Day during the Availability Period in an aggregate amount not to exceed at any time outstanding the amount of the Swing Line Sublimit, notwithstanding the fact that such Swing Line Loans, when aggregated with the Revolving Facility Percentage of the Outstanding Amount of Revolving Facility Loans and L/C Obligations of the Lender acting as Swing Line Lender, may exceed the amount of such Lender's Revolving Facility Commitment; <u>provided</u>, <u>however</u>, that (x) after giving effect to any Swing Line Loan, (i) the Revolving Facility Credit Exposure shall not exceed the lesser of (I) Revolving Facility Commitments and (II) the Borrowing Base (ii) the Revolving Facility Credit Exposure of any Lender shall not exceed such Lender's Revolving Facility Commitment, (y) the Borrowers shall not use the proceeds of any Swing Line Loan to refinance any outstanding Swing Line Loan and (z) the Swing Line Lender shall not be under any obligation to make any Swing Line Loan if it shall determine (which determination shall be conclusive and binding absent manifest error) that is has, or by such Credit Extension may have, Fronting Exposure. Within the foregoing limits, and subject to the other terms and conditions hereof, the Borrowers may borrow under this <u>Section 2.04</u>, prepay under <u>Section 2.05</u>, and reborrow under this <u>Section 2.04</u>. Each Swing Line Loan shall bear interest only at a rate based on the Base Rate. Immediately upon the making of a Swing Line Loan, each Revolving Facility Lender shall be deemed to, and hereby irrevocably and unconditionally agrees to, purchase from the Swing Line Lender a risk participation in such Swing Line Loan in an amount equal to the product of such Revolving Facility Lender's applicable Revolving Facility Percentage times the amount of such Swing Line Loan.

------

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b) <u>*Borrowing Procedures*</u>. Each Swing Line Borrowing shall be made upon the Parent Borrower's irrevocable notice to the Swing Line Lender and the Administrative Agent, which may be given by (A) telephone or (B) by a Swing Line Loan Notice; provided that any telephonic notice must be confirmed promptly by delivery to the Swing Line Lender and the Administrative Agent of a Swing Line Loan Notice. Each such Swing Line Loan Notice must be received by the Swing Line Lender and the Administrative Agent not later than 1:00 p.m. on the requested borrowing date, and shall specify (i) the amount to be borrowed, which shall be a minimum of $500,000 and whole multiples of $100,000 in excess thereof, and (ii) the requested borrowing date, which shall be a Business Day. Promptly after receipt by the Swing Line Lender of any Swing Line Loan Notice, the Swing Line Lender will confirm with the Administrative Agent (by telephone or in writing) that the Administrative Agent has also received such Swing Line Loan Notice and, if not, the Swing Line Lender will notify the Administrative Agent (by telephone or in writing) of the contents thereof. Unless the Swing Line Lender has received notice (by telephone or in writing) from the Administrative Agent (including at the request of any Revolving Facility Lender) prior to 2:00 p.m. on the date of the proposed Swing Line Borrowing (A) directing the Swing Line Lender not to make such Swing Line Loan as a result of the limitations set forth in the proviso to the first sentence of <u>Section 2.04(a)</u>, or (B) that one or more of the applicable conditions specified in <u>Article IV</u> is not then satisfied, then, subject to the terms and conditions hereof, the Swing Line Lender will, not later than 3:00 p.m. on the borrowing date specified in such Swing Line Loan Notice, make the amount of its Swing Line Loan available to the Parent Borrower, including at its office by crediting the account of the Parent Borrower on the books of the Swing Line Lender in immediately available funds.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c) <u>*Refinancing of Swing Line Loans*.</u>

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(i) The Swing Line Lender at any time in its sole discretion may request, on behalf of the Borrowers (each of which
hereby irrevocably authorizes the Swing Line Lender to so request on its behalf), that each Revolving Facility Lender make a Base Rate Loan in an amount equal to such Lender's applicable Revolving Facility Percentage of the amount of Swing Line
Loans then outstanding. Such request shall be made in writing (which written request shall be deemed to be a Committed Loan Notice for purposes hereof) and in accordance with the requirements of <u>Section 2.02</u>, without regard to the
minimum and multiples specified therein for the principal amount of Base Rate Loans, but subject to the unutilized portion of the Facility and the conditions set forth in <u>Section 4.02</u>. The Swing Line Lender shall furnish the Parent
Borrower with a copy of the applicable Committed Loan Notice promptly after delivering such notice to the Administrative Agent. Each Revolving Facility Lender shall make an amount equal to its applicable Revolving Facility Percentage of the amount
specified in such Committed Loan Notice available to the Administrative Agent in immediately available funds (and the Administrative Agent may apply Cash Collateral available with respect to the applicable Swing Line Loan) for the account of the
Swing Line Lender at the Administrative

------

Agent's Office not later than 1:00 p.m. on the day specified in such Committed Loan Notice, whereupon, subject to <u>Section 2.04(c)(ii)</u>, each Revolving Facility Lender that so makes funds available shall be deemed to have made a Base Rate Loan to the Parent Borrower in such amount. The Administrative Agent shall remit the funds so received to the Swing Line Lender.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(ii) If for any reason any Swing Line Loan cannot be refinanced by such a Revolving Facility Borrowing in accordance
with <u>Section 2.04(c)(i)</u>, the request for Base Rate Loans submitted by the Swing Line Lender as set forth herein shall be deemed to be a request by the Swing Line Lender that each of the Revolving Facility Lenders fund its risk
participation in the relevant Swing Line Loan and each Revolving Facility Lender's payment to the Administrative Agent for the account of the Swing Line Lender pursuant to <u>Section 2.04(c)(i)</u> shall be deemed payment in respect of
such participation.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(iii) If any Revolving Facility Lender fails to make available to the Administrative Agent for the account of the
Swing Line Lender any amount required to be paid by such Lender pursuant to the foregoing provisions of this <u>Section 2.04(c)</u> by the time specified in <u>Section 2.04(c)(i)</u>, the Swing Line Lender shall be entitled to recover from
such Lender (acting through the Administrative Agent), on demand, such amount with interest thereon for the period from the date such payment is required to the date on which such payment is immediately available to the Swing Line Lender at a rate
per annum equal to the greater of the Federal Funds Rate and a rate determined by the Swing Line Lender in accordance with banking industry rules on interbank compensation, plus any administrative, processing or similar fees customarily charged by
the Swing Line Lender in connection with the foregoing. If such Lender pays such amount (with interest and fees as aforesaid), the amount so paid shall constitute such Lender's Revolving Facility Loans included in the relevant Borrowing or
funded participation in the relevant Swing Line Loan, as the case may be. A certificate of the Swing Line Lender submitted to any Lender (through the Administrative Agent) with respect to any amounts owing under this <u>clause (iii)</u> shall
be conclusive absent manifest error.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(iv) Each Revolving Facility Lender's obligation to make Revolving Facility Loans or to purchase and fund risk
participations in Swing Line Loans pursuant to this <u>Section 2.04(c)</u> shall be absolute and unconditional and shall not be affected by any circumstance, including (A) any setoff, counterclaim, recoupment, defense or other right which
such Lender may have against the Swing Line Lender, any Borrower or any other Person for any reason whatsoever, (B) the occurrence or continuance of a Default or (C) any other occurrence, event or condition, whether or not similar to any
of the foregoing; <u>provided</u>, <u>however</u>, that each Revolving Facility Lender's obligation to make Revolving Facility Loans pursuant to this <u>Section 2.04(c)</u> is subject to the conditions set forth in <u>Section 4.02</u> 

------

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(d) <u>*Repayment of Participations*.</u>

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(i) At any time after any Revolving Facility Lender has purchased and funded a risk participation in a Swing Line
Loan, if the Swing Line Lender receives any payment on account of such Swing Line Loan, the Swing Line Lender will distribute to such Revolving Facility Lender its applicable Revolving Facility Percentage thereof in the same funds as those received
by the Swing Line Lender.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(ii) If any payment received by the Swing Line Lender in respect of principal or interest on any Swing Line Loan is
required to be returned by the Swing Line Lender under any of the circumstances described in <u>Section 10.05</u> (including pursuant to any settlement entered into by the Swing Line Lender in its discretion), each Revolving Facility Lender
shall pay to the Swing Line Lender its applicable Revolving Facility Percentage thereof on demand of the Administrative Agent, plus interest thereon from the date of such demand to the date such amount is returned, at a rate per annum equal to the
Federal Funds Rate. The Administrative Agent will make such demand upon the request of the Swing Line Lender. The obligations of the Lenders under this clause shall survive the payment in full of the ABL Credit Obligations and the termination of
this Agreement.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(e)*<u>Interest for Account of Swing Line Lender</u>*. The Swing Line Lender shall be responsible for invoicing the Parent Borrower for interest on the Swing Line Loans. Until each Revolving Facility Lender funds its Base Rate Loan or risk participation pursuant to this <u>Section 2.04</u> to refinance such Revolving Facility Lender's applicable Revolving Facility Percentage of any Swing Line Loan, interest in respect of such applicable Revolving Facility Percentage shall be solely for the account of the Swing Line Lender. 

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(f)*<u>Payments Directly to Swing Line Lender</u>*. The Borrowers shall make all payments of principal and interest in respect of the Swing Line Loans directly to the Swing Line Lender. 

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(g)*<u>Defaulting Lenders</u>*. Notwithstanding anything to the contrary contained in this <u>Section 2.04</u>, the Swing Line Lender shall not be obligated to make any Swing Line Loan at a time when any Revolving Facility Lender is a Defaulting Lender, unless the Swing Line Lender has entered into arrangements satisfactory to it to eliminate its risk with respect to any Defaulting Lender's risk participations in, and all other obligations in respect of, Swing Line Loans, including by cash collateralizing such Defaulting Lender's applicable Revolving Facility Percentage of all Swing Line Loans outstanding or to be outstanding hereunder. 

------

Section 2.05 <u>Prepayments</u>.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a)*<u>Optional</u>*. Subject to the last sentence of this <u>Section 2.05(a)</u>, the Borrowers may at any time or from time to time voluntarily prepay Loans in whole or in part without premium or penalty; <u>provided</u> that: (A) any prepayment of Eurodollar Rate<u>Term SOFR</u> Loans shall be in a principal amount of $1,000,000 or a whole multiple of $500,000 in excess thereof; (B) any prepayment of Base Rate Loans shall be in a principal amount of $500,000 or a whole multiple of $100,000 in excess thereof or, in each case, if less, the entire principal amount thereof then outstanding; and (C) any prepayment of Eurodollar Rate<u>Term SOFR</u> Loans shall be accompanied by all accrued interest on the amount prepaid, together with any additional amounts required by <u>Section 2.03(d)</u> and by <u>Section 3.05</u>. Each prepayment of the outstanding Loans pursuant to this <u>Section 2.05(a)</u> shall be paid to the Lenders in accordance with their respective Revolving Facility Percentages.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b) <u>*Mandatory*.</u>

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(i) <u>*Revolving Facility Credit Exposure*.</u> Except as otherwise provided in <u>Section 2.17</u>, the
Borrowers shall immediately prepay the Loans at any time when the Revolving Facility Credit Exposure exceeds the lesser of (A) the total Revolving Facility Commitments and (B) the Borrowing Base, to the full extent of any such excess. If
at any time after the Borrowers have complied with the first sentence of this <u>Section 2.05(b)</u>, the aggregate L/C Obligations are greater than the then current Borrowing Base, the Borrowers shall provide Cash Collateral in respect of such
excess to the Administrative Agent, which Cash Collateral shall be deposited in a bank account subject to a Cash Management Agreement in favor of the Collateral Agent and, provided that no Default or Event of Default shall have occurred and be
continuing, returned to the Borrowers at such time as the aggregate L/C Obligations plus the aggregate principal amount of all outstanding Loans no longer exceeds the then current Borrowing Base (as updated by the weekly reports to the Borrowing
Base Certificate described in <u>Section 6.01(j)</u>, when applicable) as determined by the Administrative Agent.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(ii) <u>*Dispositions; Events of Loss*</u> . Subject to the
ABL/Term <u>an</u> Intercreditor Agreement, if a Loan Party or any Subsidiary of a Loan Party shall, during a Cash Dominion Period:

&nbsp;&nbsp;&nbsp;&nbsp;&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) make or agree to make a Disposition of <u>Collateral (or, after the incurrence of the Permitted Term Debt,</u> ABL Priority Collateral<u>)</u> not 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;&nbsp;&nbsp;&nbsp;&nbsp;(B) or suffer an Event of Loss in respect of the <u>Collateral (or, after the incurrence of the Permitted Term Debt,</u> ABL Priority Collateral<u>)</u>

and the aggregate amount of the Net Proceeds received by the Loan Parties and their Subsidiaries in connection with such Disposition or Event of Loss and all other such Dispositions and Events of Loss occurring during the Fiscal Year exceeds $2,500,000, then (A) the Parent Borrower shall promptly notify the Administrative Agent of such proposed Disposition or Event of Loss (including the amount of the estimated Net Proceeds to be received by a Loan Party and/or such Subsidiary in respect thereof) and (B) within two Business Days after receipt by a Loan Party and/or such Subsidiary of the Net Proceeds of such Disposition or Event of Loss, the Parent Borrower shall deliver, or cause to be delivered, such excess Net Proceeds to the Administrative Agent for distribution to the Lenders as a prepayment of the Loans without reducing the Revolving Facility Commitment.

------

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c)*<u>Application to the Revolving Facility</u>*. Each prepayment of Loans pursuant to the foregoing provisions of this <u>Section 2.05</u> shall be applied <u>first</u>, ratably to pay accrued and unpaid interest in respect of the outstanding L/C Borrowings and the outstanding Swing Line Loans, Overadvances and Agent Advances then being prepaid, <u>second</u>, ratably to prepay the principal of any outstanding Unreimbursed Amounts and any outstanding Swing Line Loans, Overadvances and Agent Advances, if any, <u>third</u>, ratably to the outstanding Revolving Facility Loans (other than Overadvances and Agent Advances), and, <u>fourth</u>, to Cash Collateralize the remaining L/C Obligations; in each case, without permanent reduction of the Revolving Facility Commitments, and the amount remaining, if any, after the prepayment in full of all Unreimbursed Amounts, Swing Line Loans and Revolving Facility Loans outstanding at such time and the Cash Collateralization of the remaining L/C Obligations in full may be retained by the Borrowers for use in the Ordinary Course of Business; <u>provided</u> that, upon the drawing of any Letter of Credit that has been Cash Collateralized, the funds held as Cash Collateral shall be applied (without any further action by or notice to or from any Borrower or any other Loan Party) to reimburse the applicable L/C Issuer or the applicable Lenders, as applicable. 

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(d)*<u>Prepayment Notices</u>*. Unless otherwise specified in this <u>Section 2.05</u>, each prepayment made pursuant to this <u>Section 2.05</u> shall be made upon notice by the Parent Borrower to the Administrative Agent, which may be given by telephone or e-mail (and if in writing shall be in the form of a Prepayment Notice appropriately completed and signed by a Responsible Officer of the Parent Borrower), which notice must be received by the Administrative Agent not later than 1:00 p.m. (x) three Business Days prior to any date of prepayment of Eurodollar Rate<u>Term SOFR</u> Loans and (y) on the date of prepayment of Base Rate Loans. Each such notice shall specify the date and amount of such prepayment and the Type(s) of Loans to be prepaid and, if Eurodollar Rate<u>Term SOFR</u> Loans are to be prepaid, the Interest Period(s) of such Loans. Each telephonic notice by the Parent Borrower pursuant to this <u>Section 2.05</u> must be confirmed promptly by delivery to the Administrative Agent of a written Prepayment Notice, appropriately completed and signed by a Responsible Officer of the Parent Borrower. The Administrative Agent will promptly notify each Lender of its receipt of each such notice, and of the amount of such Lender's ratable portion of such prepayment (based on such Lender's Revolving Facility Percentage). If such notice is given by the Parent Borrower, the Borrowers shall make such prepayment and the payment amount specified in such notice shall be due and payable on the date specified therein; it being understood and agreed that, if such notice is given in connection with the refinancing of the entire Facility, such notice may be conditioned upon the effectiveness of Indebtedness the proceeds of which are being used to refinance the Facility and such notice may be revoked if such condition is not satisfied. Any prepayment of Eurodollar Rate<u>Term SOFR</u> Loans under this <u>Section 2.05</u> shall be accompanied by all accrued interest on the amount prepaid, together with any additional amounts required pursuant to <u>Section 3.05</u>. Each such prepayment shall be paid to the Lenders in accordance with their respective Revolving Facility Percentage in the manner described in <u>Section 2.05(a)</u> or <u>(b)</u>, as applicable. 

------

Section 2.06 <u>Scheduled Repayment of Loans</u>.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a) To the extent not previously paid, outstanding Loans shall be due and payable on the Revolving Facility Maturity Date.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b) The Borrowers shall jointly and severally repay each Swing Line Loan on the earlier to occur of (i) the date five Business Days after such Loan is made and (ii) the Revolving Facility Maturity Date.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c) Prior to any repayment of any Loans, the Parent Borrower shall select the Borrowing or Borrowings under the Facility to be repaid and shall notify the Administrative Agent by telephone (confirmed by telecopy) of such selection not later than 1:00 p.m., (i) in the case of a Base Rate Borrowing, one Business Day before the scheduled date of such repayment and (ii) in the case of a Eurodollar Rate<u>Term SOFR</u> Borrowing, three Business Days before the scheduled date of such repayment. Each repayment of a Borrowing shall be applied to the Revolving Facility Loans included in the repaid Borrowing such that each Revolving Facility Lender receives its ratable share of such repayment (based upon the respective Revolving Facility Credit Exposures of the Revolving Facility Lenders at the time of such repayment). Repayments of Eurodollar Rate<u>Term SOFR</u> Borrowings shall be accompanied by accrued interest on the amount repaid, together with any additional amounts required pursuant to <u>Section 3.05</u>.

Section 2.07 <u>Termination and Reduction of Revolving Facility Commitments</u>.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a) Unless previously terminated, the Revolving Facility Commitments shall terminate on the Revolving Facility Maturity Date.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b) The Borrowers may reduce the Revolving Facility Commitments to an amount (which may be zero) not less than the sum of (A) the aggregate unpaid principal amount of all Loans then outstanding, (B) the aggregate principal amount of all Loans not yet made as to which a Committed Loan Notice has been given by the Parent Borrower under <u>Section 2.02</u>, (C) the L/C Obligations at such time, (D) the stated amount of all Letters of Credit not yet issued as to which a request has been made and not withdrawn, (E) the Swing Line Obligations at such time and (F) $10,000,000, unless the total Revolving Facility Commitment is reduced to zero in accordance with the preceding <u>clauses (A)</u> through <u>(E)</u> hereof. Each such reduction (1) shall be in an amount which is an integral multiple of $1,000,000 (or by the full amount of the Revolving Facility Commitment in effect immediately prior to such reduction if such amount at that time is less than $1,000,000) and (2) shall be made by providing not less than five Business Days' prior written notice to the Administrative Agent, provided, that a notice of termination of the Revolving Facility Commitment may state that such notice is conditioned upon the effectiveness of other credit facilities, 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. Once reduced, the Revolving Facility Commitment may not be increased. Each such reduction of the Revolving Facility Commitment shall reduce the Revolving Facility Commitment of each Lender proportionately in accordance with its Revolving Facility Percentage thereof.

------

Section 2.08 <u>Interest</u>.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a) <u>Stated Interest</u>. Subject to the provisions of <u>Section 2.08(b)</u>: (i) each Eurodollar Rate<u>Term SOFR</u> Loan shall bear interest on the outstanding principal amount thereof for each Interest Period at a rate per annum equal to the sum of (A) the Adjusted Eurodollar Rate<u>Term SOFR</u> for such Interest Period plus (B) the Applicable Rate; (ii) each Base Rate Loan shall bear interest on the outstanding principal amount thereof from the applicable borrowing date at a rate per annum equal to the sum of (A) the Base Rate plus (B) the Applicable Rate; and (iii) each Swing Line Loan shall bear interest on the outstanding principal amount thereof from the applicable borrowing date at a rate per annum equal to the sum of (A) the Base Rate plus (B) the Applicable Rate.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b) <u>*Default Interest*.</u>

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(i) If any amount of principal of any Loan is not paid when due (after giving effect to any applicable grace
periods), whether at stated maturity, by acceleration or otherwise, such overdue amount shall thereafter bear interest at a fluctuating interest rate per annum at all times equal to the Default Rate to the fullest extent permitted by applicable
Requirements of Law.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(ii) If any amount (other than principal of any Loan) payable by the Borrowers under any Loan Document is not paid
when due (after giving effect to any applicable grace periods), whether at stated maturity, by acceleration or otherwise, then upon the request of the Required Lenders such overdue amount shall bear interest from the date when due at a fluctuating
interest rate per annum at all times equal to the Default Rate to the fullest extent permitted by applicable Requirements of Law.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(iii) During the existence of any Event of Default under <u>Section 8.01(f)</u>, the Borrowers shall pay
interest on the principal amount of all outstanding ABL Credit Obligations at a fluctuating interest rate per annum at all times equal to the Default Rate to the fullest extent permitted by applicable Requirements of Law.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(iv) Accrued and unpaid interest on past due amounts (including interest on past due interest) shall be due and
payable upon demand.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c)*<u>Payments of Interest</u>*. Interest on each Loan shall be due and payable in arrears on each Interest Payment Date applicable thereto, upon termination of the Revolving Facility Commitments, on the Revolving Facility Maturity Date and at such other times as may be specified herein. Interest hereunder shall be due and payable in accordance with the terms hereof before and after judgment, and before and after the commencement of any proceeding under any Debtor Relief Law. 

Section 2.09 <u>Fees</u>.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a) Each of the Borrowers shall, jointly and severally, pay to the Administrative Agent for the account of each Revolving Facility Lender (other than Defaulting Lenders), in accordance with each such Lender's Revolving Facility Percentage, a commitment fee (the "<u>Commitment Fee</u>") equal to 0.375% per annum <u>multiplied by</u> the actual daily amount by which the Revolving Facility exceeds the sum of (i) the Outstanding Amount of Loans and (ii) the Outstanding Amount of L/C Obligations, subject to adjustment as provided in <u>Section 2.15</u>; <u>provided</u>, <u>however</u>, that,

------

from and after the date that the third monthly Borrowing Base Certificate is delivered to the Collateral Agent after the Original Closing Date, if the sum of (i) the Outstanding Amount of Loans and (ii) the Outstanding Amount of L/C Obligations is greater than or equal to 50.0% of the Facility, the Commitment Fee shall be reduced to 0.25% per annum <u>multiplied by</u> the actual daily amount by which the Facility exceeds the sum of (i) the Outstanding Amount of Loans and (ii) the Outstanding Amount of L/C Obligations, subject to adjustment as provided in <u>Section 2.15</u>. The Commitment Fee shall accrue at all times during the Availability Period, including at any time during which one or more of the conditions in <u>Article IV</u> is not met, and shall be due and payable quarterly in arrears on the first calendar day of January, April, July and October, commencing with the first such date to occur after the Original Closing Date, and on the last day of the Availability Period. The Commitment Fee shall be calculated quarterly in arrears. For the avoidance of doubt, Swing Line Loans shall not be counted towards the Outstanding Amount of Revolving Facility Loans for purposes of determining the Commitment Fee.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b) Each of the Borrowers shall, jointly and severally, pay (i) to the Administrative Agent, for the ratable benefit of the Lenders, a Letter of Credit fee (in addition to the charges, commissions, fees, and costs set forth in <u>clause (ii)</u> below) which shall accrue at a rate per annum equal to the Applicable Rate in effect at such time for Eurodollar Rate<u>Term SOFR</u> Loans, times the daily balance of the Maximum Undrawn Amount of the Letters of Credit, for the period from and excluding the date of issuance of same to and including the date of expiration or termination, such fees to be calculated on the basis of a 360-day year for the actual number of days elapsed and to be payable monthly in arrears on the first day of each month and on the Revolving Facility Maturity Date, and (ii) to the L/C Issuer, (A) a fronting fee of one eighth of one percent (0.125%) per annum multiplied times the Maximum Undrawn Amount of each Letter of Credit, which fee shall be payable monthly in arrears on the first day of each month and on the Revolving Facility Maturity Date, and (B) any and all customary administrative, issuance, amendment, payment and negotiation charges (as per the L/C Issuer's standard fee schedule) with respect to any Letters of Credit and all fees and expenses as agreed upon by the L/C Issuer and the Borrowers in connection with any Letter of Credit, including in connection with the opening, amendment or renewal of any such Letter of Credit and any acceptances created thereunder and shall reimburse the Administrative Agent for any and all fees and expenses, if any, paid by the Administrative Agent to the L/C Issuer, which charges and fees shall be payable on demand or as otherwise mutually agreed upon by the Administrative Agent and the Parent Borrower (all of the foregoing fees and charges in this <u>clause (b)</u>, collectively, the "<u>Letter of Credit Fees</u>"). Any such charge in effect at the time of a particular transaction shall be the charge for that transaction, notwithstanding any subsequent change in the L/C Issuer's prevailing charges for that type of transaction. All Letter of Credit Fees payable hereunder shall be deemed earned in full on the date when the same are due and payable hereunder and shall not be subject to rebate or pro-ration upon the termination of this Agreement for any reason.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c) Each of the Borrowers, jointly and severally, shall pay to the Joint Lead Arrangers and the Administrative Agent for their own respective accounts fees in the amounts and at the times specified in the Fee Letter. Such fees shall be fully earned when paid and shall not be refundable for any reason whatsoever.

------

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(d) Each of the Borrowers acknowledge that pursuant to <u>Section 6.09</u>, representatives of the Administrative Agent may visit any or all of the Loan Parties and/or conduct inspections, audits, physical counts, valuations, appraisals, environmental site assessments and/or examinations of any or all of the Loan Parties at any time and from time to time. The Borrowers shall, jointly and severally pay (i) $1,100 per day for any examiner that is an employee of an Agent or its Affiliates plus any third party examiner's out-of-pocket costs and reasonable expenses incurred in connection with all such visits, inspections, audits, physical counts, valuations, appraisals, environmental site assessments and/or examinations and (ii) the cost of all visits, inspections, audits, physical counts, valuations, appraisals, environmental site assessments and/or examinations conducted by each third party on behalf of the Administrative Agent and the Lenders (including any Field Survey and Audit); <u>provided</u>, <u>however</u>, that so long as no Default or Event of Default shall have occurred and be continuing, the Borrowers shall not be obligated to reimburse the Administrative Agent and the Lenders for more than (A) two Field Survey and Audit and collateral inspections during any Fiscal Year, and (B) one appraisal of all or any portion of the Collateral during any Fiscal Year, which, in the first Field Survey and Audit, shall be conducted within 60 days of the Original Closing Date; <u>provided</u>, <u>further</u>, that notwithstanding the foregoing, regardless of whether a Default or an Event of Default shall have occurred and be continuing (1) the Borrowers shall be obligated, jointly and severally, to reimburse the Administrative Agent for each Field Survey and Audit conducted by them in connection with (and with respect to the assets and/or entities acquired in) any Permitted Acquisition as contemplated by <u>Section 7.04</u>, and (2) any such Field Survey and Audit shall not be counted against the limitations set forth in the preceding <u>clauses (A)</u> and <u>(B)</u>. Notwithstanding the foregoing, (i) during an Inspection Trigger Period, the Borrowers shall not be obligated to reimburse the Administrative Agent for more than (A) three Field Survey and Audit and collateral inspections during any Fiscal Year, and (B) two appraisals of all or any portion of the Collateral and (ii) following the occurrence and during the continuance of a Default or Event of Default, such collateral audits, any Field Survey and Audit and inventory appraisals may be conducted at the Borrowers' expense as many times as the Administrative Agent may require.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(e) Each of the Borrowers, jointly and severally, shall pay to the Lenders such fees as shall have been separately agreed upon in writing in the amounts and at the times so specified, including those fees set forth in the Closing Fee Letter. Such fees shall be fully earned when paid and shall not be refundable for any reason whatsoever.

Section 2.10 <u>Computation of Interest and Fees</u>. All computations of interest for Base Rate Loans (including Base Rate Loans determined by reference to the Eurodollar Rate<u>Term SOFR</u>) shall, to the extent based upon the Prime Rate, be made on the basis of a year of 365 or 366 days, as the case may be, and actual days elapsed. All other computations of fees and interest shall be made on the basis of a 360-day year and actual days elapsed (which results in more fees or interest, as applicable, being paid than if computed on the basis of a 365-day year). Interest shall accrue on each Loan for the day on which the Loan is made, and shall not accrue on a Loan, or any portion thereof, for the day on which the Loan or such portion is paid, <u>provided</u> that any Loan that is repaid on the same day on which it is made shall, subject to <u>Section 2.12(a)</u>, bear interest for one day. Each determination by the Administrative Agent of an interest rate or fee hereunder shall be conclusive and binding for all purposes, absent manifest error.

------

Section 2.11 <u>Evidence of Debt</u>. The extension of Loans made by each Lender shall be evidenced by one or more accounts or records maintained by such Lender and by the Administrative Agent in the ordinary course of business. The accounts or records maintained by the Administrative Agent and each Lender shall be conclusive absent manifest error of the amount of the Loans made by the Lenders to the Borrowers and the interest and payments thereon. Any failure to so record or any error in doing so shall not, however, limit or otherwise affect the obligations of the Borrowers hereunder to pay any amount owing with respect to the ABL Credit Obligations. In the event of any conflict between the accounts and records maintained by any Lender and the accounts and records of the Administrative Agent in respect of such matters, the accounts and records of the Administrative Agent shall control in the absence of manifest error. Upon the request of any Lender made through the Administrative Agent, the Borrowers shall, jointly and severally, execute and deliver to such Lender (through the Administrative Agent) a Note, which shall evidence such Lender's Loans in addition to such accounts or records.

Section 2.12 <u>Payments Generally; Administrative Agent's Clawback</u>.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a)*<u>General</u>*. All payments to be made by the Borrowers shall be made jointly and severally, and without condition or deduction for any counterclaim, defense, recoupment or setoff. Except as otherwise expressly provided for herein, all payments by the Borrowers hereunder shall be made to the Administrative Agent, for the account of the respective Lenders to which such payment is owed, at the Administrative Agent's Office in Dollars and in immediately available funds not later than 2:00 P.M. on the date specified herein, except payments to be made directly to the applicable L/C Issuer or the Swing Line Lender, as expressly provided herein. The Administrative Agent will promptly distribute to each Lender its Revolving Facility Percentage (or other applicable share as provided herein) of such payment in like funds as received by wire transfer to such Lender's Lending Office. All payments received by the Administrative Agent after 2:00 PM shall be deemed received on the next succeeding Business Day and any applicable interest or fee shall continue to accrue. If any payment to be made by the Borrowers shall come due on a day other than a Business Day, payment shall be made on the next following Business Day, and such extension of time shall be reflected in computing interest or fees, as the case may be. 

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b) <u>*Funding and Payments; Presumptions*.</u>

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(i) <u>*Funding by Lenders; Presumption by Administrative Agent*</u> . Unless the Administrative Agent shall
have received notice from a Lender prior to the proposed date of any Borrowing of Eurodollar Rate <u>Term SOFR</u> Loans
(or, in the case of any Borrowing of Base Rate Loans, prior to 12:00 noon on the date of such 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 <u>Section 2.02</u> (or, in the case of a Borrowing of Base Rate Loans, that such Lender has made such share available in accordance with and at the time
required by <u>Section 2.02</u>) 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 applicable Borrowing available to the
Administrative Agent, then the applicable Lender and each of the Borrowers severally agree to pay to the Administrative Agent forthwith on demand such corresponding amount in immediately available funds 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 (A) in the case of a payment to be made by such Lender, the greater of the Federal Funds Rate and a rate determined by the Administrative Agent in accordance with banking industry rules on interbank compensation, plus any administrative, processing or similar fees customarily charged by the Administrative Agent in connection with the foregoing, and (B) in the case of a payment to be made by the Borrowers, the interest rate applicable to Base Rate Loans. If any Borrower and such Lender shall pay such interest to the Administrative Agent for the same or an overlapping period, the Administrative Agent shall promptly remit to such Borrower the amount of such interest paid by such Borrower for such period. If such Lender pays its share of the applicable Borrowing to the Administrative Agent, then the amount so paid shall constitute such Lender's Loan included in such Borrowing. Any payment by any Borrower shall be without prejudice to any claim any Borrower may have against a Lender that shall have failed to make such payment to the Administrative Agent.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(ii) <u>*Payments by the Borrowers; Presumptions by Administrative Agent*</u> . Unless the Administrative Agent
shall have received notice from the Parent Borrower prior to the time at which any payment is due to the Administrative Agent for the account of the Lenders or the L/C Issuer 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 the amount due. In such event, if the Borrowers haves not in fact made
such payment, then each of the Lenders severally agrees to repay to the Administrative Agent forthwith on demand the amount so distributed to such Lender, in immediately available funds with interest thereon, for each day from and including the date
such amount is distributed to it to but excluding the date of payment to the Administrative Agent, at the greater of the Federal Funds Rate and a rate determined by the Administrative Agent in accordance with banking industry rules on interbank
compensation.

A notice of the Administrative Agent to any Lender or the Parent Borrower with respect to any amount owing under this <u>subsection (b)</u> shall be conclusive, absent manifest error.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c)*<u>Failure to Satisfy Conditions Precedent</u>*. If any Lender makes available to the Administrative Agent funds for any Loan to be made by such Lender as provided in the foregoing provisions of this <u>Article II</u>, and such funds are not made available to the Borrowers by the Administrative Agent because the conditions to the Borrowings set forth in <u>Article IV</u> are not satisfied or waived in accordance with the terms hereof, the Administrative Agent shall return such funds (in like funds as received from such Lender) to such Lender without interest. 

------

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(d) <u>*Obligations of Lenders Several*</u>. The obligations of the Lenders hereunder to make Loans, to fund participations in Letters of Credit and Swing Line Loans and to make payments pursuant to <u>Section 10.04(c)</u> are several and not joint. The failure of any Lender to make any Loan or to make any payment under <u>Section 10.04(c)</u> on any date required hereunder shall not relieve any other Lender of its corresponding obligation to do so on such date, and no Lender shall be responsible for the failure of any other Lender to so make its Loan or to make its payment under <u>Section 10.04(c)</u>.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(e)*<u>Funding Source</u>*. Nothing herein shall be deemed to obligate any Lender to obtain the funds for any Loan in any particular place or manner or to constitute a representation by any Lender that it has obtained or will obtain the funds for any Loan in any particular place or manner. 

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(f)*<u>Insufficient Funds</u>*. If at any time insufficient funds are received by and available to the Administrative Agent to pay fully all amounts of principal, unreimbursed L/C Obligations, interest and fees then due hereunder, such funds shall be applied (i) first, toward payment of interest and fees then due hereunder, ratably among the parties entitled thereto in accordance with the amounts of interest and fees then due to such parties, (ii) second, toward payment of principal of unreimbursed L/C Obligations then due from the Borrowers hereunder, ratably among the parties entitled thereto in accordance with the amounts of principal and unreimbursed L/C Obligations then due to such parties, and (iii) third, towards payment of principal of Loans then due hereunder, ratably among the parties entitled thereto in accordance with the amounts of principal then due to such parties. 

Section 2.13 <u>Sharing of Payments by Lenders</u>. If any Lender shall, by exercising any right of setoff or counterclaim or otherwise, obtain payment in respect of (i) ABL Credit Obligations due and payable to such Lender hereunder and under the other Loan Documents at such time in excess of its ratable share (according to the proportion of (x) the amount of such ABL Credit Obligations due and payable to such Lender at such time to (y) the aggregate amount of the ABL Credit Obligations due and payable to all Lenders hereunder and under the other Loan Documents at such time) of payments on account of the ABL Credit Obligations due and payable to all Lenders hereunder and under the other Loan Documents at such time obtained by all the Lenders at such time or (ii) ABL Credit Obligations owing (but not due and payable) to such Lender hereunder and under the other Loan Documents at such time in excess of its ratable share (according to the proportion of (x) the amount of such ABL Credit Obligations owing (but not due and payable) to such Lender at such time to (y) the aggregate amount of the ABL Credit Obligations owing (but not due and payable) to all Lenders hereunder and under the other Loan Parties at such time) of payment on account of the ABL Credit Obligations owing (but not due and payable) to all Lenders hereunder and under the other Loan Documents at such time obtained by all of the Lenders at such time then the Lender receiving such greater proportion shall (A) notify the Administrative Agent of such fact, and (B) purchase (for cash at face value) participations in the Loans and subparticipations in L/C Obligations and Swing Line Loans of the other Lenders, or make such other adjustments as shall be equitable, so that the benefit of all such payments shall be shared by the Lenders ratably in accordance with the aggregate amount of ABL Credit Obligations then due and payable to the Lenders or owing (but not due and payable) to the Lenders, as the case may be, <u>provided</u> that:

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

------

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(ii) the provisions of this Section shall not be construed to apply to (A) any payment made by or on behalf of
the Borrowers pursuant to and in accordance with the express terms of this Agreement (including the application of funds arising from the existence of a Defaulting Lender), (B) the application of Cash Collateral provided for in
Section 2.16, or (C) any payment obtained by a Lender as consideration for the assignment of or sale of a participation in any of its Loans or subparticipations in L/C Obligations or Swing Line Loans to any assignee or participant, other
than an assignment to any Borrower or any Subsidiary or Affiliate thereof not otherwise permitted by this Agreement (as to which the provisions of this Section shall apply).

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

Section 2.14 <u>Incremental Loans</u>.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a)*<u>Requests for Incremental Loans</u>*. Upon notice by the Parent Borrower to the Administrative Agent (which Administrative Agent shall promptly notify the Lenders), at any time after the Second<u>Third</u> Amendment Effective Date, the Borrowers may request one or more incremental Revolving Facility Commitments (each an "<u>Incremental Commitment</u>" and all of them, collectively, the "<u>Incremental Commitments</u>" and any such loans, "<u>Incremental Loans</u>"), each of which Incremental Commitment shall be in minimum increments of $1,000,000 and a minimum amount of $10,000,000; <u>provided</u> that after giving effect to any such addition, the aggregate amount of Incremental Commitments that have been added pursuant to this <u>Section 2.14</u> shall not exceed $25,000,000. 

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b)*<u>Ranking and Other Provisions</u>*. The Incremental Loans shall rank pari passu or junior in right of payment and in respect of lien priority as to the Collateral with the ABL Credit Obligations in respect of the outstanding Loans and otherwise have terms identical to the Revolving Facility Loans (other than with respect to any fees paid in connection with any Incremental Commitment or Incremental Loans and it being understood that the Borrowers, at their option, may increase the Applicable Rate and fees payable in respect of the Facility to be identical to those paid in connection with any Incremental Commitment or Incremental Loans). 

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c)*<u>Notices; Lender Elections</u>*. Each notice from the Parent Borrower pursuant to this Section shall set forth the requested amount and proposed terms of the Incremental Commitments. At the time of the sending of such notice, the Parent Borrower (in consultation with the Administrative Agent) shall specify the time period within which each Lender is requested to respond (which shall in no event be less than ten Business Days from the date of delivery of such notice to the Lenders). Incremental Loans (or any portion thereof) may be made by any existing Lender or by any other bank or investing entity satisfactory to the Administrative Agent and each L/C Issuer (but in no case (i) by any Borrower or any Borrowers' Affiliates or Subsidiaries, (ii) by any Defaulting Lender or any of its Subsidiaries, (iii) by any Person who, upon becoming a Lender 

------

hereunder, would constitute any of the foregoing Persons described in <u>clause (ii)</u> or (iv) by any natural person) (each, except to the extent excluded pursuant to the foregoing parenthetical, an "<u>Incremental Lender</u>"), in each case on terms permitted in this Section and otherwise on terms reasonably acceptable to the Administrative Agent and L/C Issuer, <u>provided</u> that the Administrative Agent, L/C Issuer, the Swing Line Lender and the Parent Borrower shall have consented (not to be unreasonably withheld) to such Lender's or Incremental Lender's, as the case may be, making such Incremental Loans if such consent would be required under <u>Section 10.06</u> for an assignment of Loans to such Lender or Incremental Lender, as the case may be. No Lender shall be obligated to provide any Incremental Loans, unless it so agrees. Each Lender shall notify the Administrative Agent within such time period whether or not it agrees to provide an Incremental Commitment and, if so, whether by an amount equal to, greater than, or less than its Revolving Facility Percentage of such requested increase (which shall be calculated on the basis of the amount of the funded and unfunded exposure under the Facility). Any Lender not responding within such time period shall be deemed to have declined to provide an Incremental Commitment. The Administrative Agent shall notify the Parent Borrower and each Lender of the Lenders' responses to each request made hereunder. To achieve the full amount of a requested increase, the Parent Borrower may also invite additional Eligible Assignees to become Lenders pursuant to an accession agreement in form and substance reasonably satisfactory to the Administrative Agent and its counsel.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(d)*<u>Incremental Commitments Amendment</u>*. Revolving Facility Commitments in respect of any Incremental Commitments shall become Revolving Facility Commitments under this Agreement pursuant to an amendment (an "<u>Incremental Commitments Amendment</u>") to this Agreement and, as appropriate, the other Loan Documents, executed by Holdings, each Borrower, each Lender agreeing to provide such Revolving Facility Commitment, if any, each Incremental Lender, if any, and the Administrative Agent. An Incremental Commitments Amendment may, without the consent of any other Lenders, effect such amendments to any Loan Documents as may be necessary or appropriate, in the opinion of the Administrative Agent, to effect the provisions of this Section. 

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(e)*<u>Effective Date and Allocations</u>*. If any Incremental Commitments are added in accordance with this <u>Section 2.14</u>, the Administrative Agent and the Parent Borrower shall determine the effective date (the "<u>Incremental Commitments Effective Date</u>") and the final allocation of such addition. The Administrative Agent shall promptly notify the Parent Borrower and the Lenders of the final allocation of such addition, the Incremental Commitments Effective Date and the amount of each Lender's Revolving Facility Percentage of Loans after giving effect to such Incremental Commitments.

------

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(f)*<u>Conditions to Effectiveness of Increase</u>*. The effectiveness of any Incremental Commitments Amendment shall, unless otherwise agreed to by the Administrative Agent, L/C Issuer, each Lender party thereto, if any, and the Incremental Lenders, if any, be subject to the satisfaction or waiver by the Administrative Agent on the date thereof of each of the following conditions: 

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(i) the Administrative Agent shall have received on or prior to the Incremental Commitments Effective Date each of
the following, each dated the applicable Incremental Commitments Effective Date unless otherwise indicated or agreed to by the Administrative Agent and each in form and substance reasonably satisfactory to the Administrative Agent: (A) the
applicable Incremental Commitments Amendment; (B) certified copies of resolutions of the board of directors (or other similar governing body) of each Loan Party approving the execution, delivery and performance of the Incremental Commitments
Amendment; and (C) a favorable opinion of counsel for the Loan Parties dated the Incremental Commitments Effective Date, to the extent requested by the Administrative Agent addressed to the Administrative Agent and the Lenders and in form and
substance and from counsel reasonably satisfactory to the Administrative Agent;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(ii) (A) such increase shall be made on the terms and conditions provided for above, (B) both at the time of
any request for Incremental Commitments and upon the effectiveness of any Incremental Commitments Amendment, no Default or Event of Default shall exist and at the time that any such Incremental Loan is made (and after giving effect thereto) no
Default or Event of Default shall exist, (C) the conditions specified in <u>Section 4.02</u> shall have been satisfied, (D) the representations and warranties in the Loan Documents shall be true and correct in all material respects on
and as of the date of the incurrence of the Incremental Loans (although any representations and warranties which expressly relate to a given date or period shall be required only to be true and correct in all material respects as of the respective
date or for the respective period, as the case may be), before and after giving effect to such incurrence, as though made on and as of such date, and (E) the Fixed Charge Coverage Ratio would not be less than 1.00 to 1.00 as of the most
recently completed Measurement Period on a pro forma basis, after giving effect to the incurrence of such Incremental Loans or Incremental Commitments (assuming that the full amount of such Incremental Commitments would be drawn as Incremental
Loans); and

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(iii) there shall have been paid to the Administrative Agent, for the account of the Administrative Agent and the
Lenders (including any Person becoming a Lender as part of such Incremental Commitments Amendment on the related Incremental Commitments Effective Date), as applicable, all reasonable fees and out-of-pocket expenses (including reasonable
out-of-pocket fees, charges and disbursements of counsel) that are due and payable on or before the Incremental Commitments Effective Date.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(g)*<u>Effect of Incremental Commitments Amendment</u>*. On each Incremental Commitments Effective Date, each Lender or Eligible Assignee which is providing an Incremental Commitment (i) shall become a "Lender" for all purposes of this Agreement and the other Loan Documents, (ii) shall have an Incremental Commitment which shall be a "Revolving Facility Commitment" hereunder and (iii) shall make an Incremental Loan to the Borrowers in a principal amount equal to such Incremental Commitment, and such Incremental Loan shall be a "Loan" for all purposes of this Agreement and the other Loan Documents. 

------

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(h)*<u>Conflicting Provisions</u>*. This <u>Section 2.14</u> shall supersede any provision of <u>Section 2.13</u> or <u>Section 10.01</u> to the contrary. 

Section 2.15 <u>Defaulting Lenders</u>.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a)*<u>Adjustments</u>*. Notwithstanding anything to the contrary contained in this Agreement, if any Lender becomes a Defaulting Lender, then, until such time as that Lender is no longer a Defaulting Lender, to the extent permitted by applicable Requirements of Law: 

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(i) That Defaulting Lender's right to approve or disapprove any amendment, waiver or consent with respect to
this Agreement or any other Loan Document shall be restricted as set forth in the definition of "Required Lenders" and <u>Section 10.01</u>.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(ii) Any payment of principal, interest, fees or other amounts received by the Administrative Agent for the account
of that Defaulting Lender (whether voluntary or mandatory, at maturity, pursuant to <u>Article VIII</u> or otherwise, and including any amounts made available to the Administrative Agent by that Defaulting Lender pursuant to <u>Section 10.08</u>), shall be applied at such time or times as may be determined by the Administrative Agent as follows: <u>first</u>, to the payment of any amounts owing by that Defaulting Lender to the Administrative Agent hereunder; <u>second</u>, to the payment on a pro rata basis of any amounts owing by such Defaulting Lender to any L/C Issuer or Swing Line Lender hereunder; <u>third</u>, to Cash Collateralize the L/C Issuer's Fronting Exposure with respect to such
Defaulting Lender in accordance with <u>Section 2.16</u>; <u>fourth</u>, as the Parent Borrower may request (so long as no Event of Default exists), to the funding of any Loan in respect of which that Defaulting Lender has failed to fund its
portion thereof as required by this Agreement, as determined by the Administrative Agent; <u>fifth</u>, if so determined by the Administrative Agent and the Parent Borrower, to be held in a non-interest bearing deposit account and released in order
to (x) satisfy obligations of that Defaulting Lender to fund Loans under this Agreement and (y) Cash Collateralize the L/C Issuer's future Fronting Exposure with respect to such Defaulting Lender with respect to future Letters of
Credit issued under this Agreement, in accordance with <u>Section 2.16</u>; <u>sixth</u>, to the payment of any amounts owing to the Lenders, the L/C Issuers or Swing Line Lender as a result of any judgment of a court of competent jurisdiction
obtained by any Lender, L/C Issuer or Swing Line Lender against that Defaulting Lender as a result of that Defaulting Lender's breach of its obligations under this Agreement; <u>seventh</u>, so long as no Event of Default exists, to the payment
of any amounts owing to any Borrower as a result of any judgment of a court of competent jurisdiction obtained by any Borrower against that Defaulting Lender as a result of that Defaulting Lender's breach of its obligations under this
Agreement; and <u>eighth</u>, to that Defaulting Lender or as otherwise directed by a court of competent jurisdiction; <u>provided</u> that if (x) such payment is a payment of the principal amount of any Loans or Letter of Credit Borrowings in
respect of which that

------

Defaulting Lender has not fully funded its appropriate share and (y) such Loans or the related Letters of Credit were made at a time when the conditions set forth in <u>Section 4.01(j)</u> or <u>(k)</u> were satisfied or waived, such payment shall be applied solely to pay the Loans of, and L/C Obligations owed to, all non-Defaulting Lenders on a pro rata basis prior to being applied to the payment of any Loans of, or L/C Obligations owed to, that Defaulting Lender until such time as all Loans and funded and unfunded participations in L/C Obligations and Swing Line Loans are held by the Lenders pro-rata in accordance with the Commitments hereunder without giving effect to <u>Section 2.15(a)(v)</u>. Any payments, prepayments or other amounts paid or payable to a Defaulting Lender that are applied (or held) to pay amounts owed by a Defaulting Lender or to post Cash Collateral pursuant to this <u>Section 2.16(a)(ii)</u> shall be deemed paid to and redirected by that Defaulting Lender, and each Lender irrevocably consents hereto.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(iii) That Defaulting Lender shall not be entitled to any fee pursuant to <u>Section 2.09(d)</u> for any period
during which that Lender is a Defaulting Lender.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(iv) <u>*Certain 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;&nbsp;&nbsp;&nbsp;&nbsp;(A) Each Defaulting Lender shall be entitled to receive fees payable under <u>Section 2.09(a)</u> for any period during which that Lender is a Defaulting Lender only to extent allocable to the sum of (1) the outstanding principal amount of the Revolving Facility Loans funded by it, and (2) its Revolving Facility Percentage of the stated amount of Letters of Credit for which it has provided Cash Collateral pursuant to <u>Section 2.16</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;&nbsp;&nbsp;&nbsp;&nbsp;(B) Each Defaulting Lender shall be entitled to receive Letter of Credit Fees for any period during which that Lender is a Defaulting Lender only to the extent allocable to its applicable percentage of the stated amount of Letters of Credit for which it has provided Cash Collateral pursuant to <u>Section 2.16</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;&nbsp;&nbsp;&nbsp;&nbsp;(C) With respect to any fee payable under <u>Section 2.09(a)</u> or any Letter of Credit Fee not required to be paid to any Defaulting Lender pursuant to <u>clause (A)</u> or <u>(B)</u> above, the Parent Borrower shall (x) pay to each Non-Defaulting Lender that portion of any such fee otherwise payable to such Defaulting Lender with respect to such Defaulting Lender's participation in L/C Obligations or Swing Line Loans that has been reallocated to such Non-Defaulting Lender pursuant to <u>clause (v)</u> below, (y) pay to the applicable L/C Issuers and Swing Line Lender, as applicable, the amount of any such fee otherwise payable to such Defaulting Lender to the extent allocable to such L/C Issuers' or Swing Line Lender's Fronting Exposure to such Defaulting Lender and (z) not be required to pay the remaining amount of any such fee.

------

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(v) <u>*Reallocation of Revolving Facility Percentages to Reduce Fronting Exposure*</u> . All or any part of
such Defaulting Lender's participation in L/C Obligations and Swing Line Loans shall be reallocated among the Non-Defaulting Lenders in accordance with their respective Revolving Facility Percentages (calculated without regard to such
Defaulting Lender's Revolving Facility Commitment) but only to the extent that (x) the conditions set forth in <u>Section 4.02</u> are satisfied at the time of such reallocation (and, unless the Parent Borrower shall have otherwise
notified the Administrative Agent at such time, the Parent Borrower shall be deemed to have represented and warranted that such conditions are satisfied at such time), and (y) such reallocation does not cause the aggregate Revolving Facility
Credit Exposure of any Non-Defaulting Lender to exceed such Non-Defaulting Lender's Revolving Facility Commitment. Subject to <u>Section 10.23</u>, no reallocation hereunder shall constitute a waiver or release of any claim of any party
hereunder against a Defaulting Lender arising from that Lender having become a Defaulting Lender, including any claim of a Non-Defaulting Lender as a result of such Non-Defaulting Lender's increased exposure following such reallocation.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(vi) <u>*Cash Collateral, Repayment of Swing Line Loans*</u> *.* If the reallocation described in <u>clause (a)(v)</u> above cannot, or can only partially, be effected, the Borrowers shall, without prejudice to any right or remedy available to it hereunder or under applicable Law, (x) first, prepay Swing Line Loans in an amount equal to the Swing
Line Lender's Fronting Exposure and (y) second, Cash Collateralize the L/C Issuers' Fronting Exposure in accordance with the procedures set forth in <u>Section 2.16</u>.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b)*<u>Defaulting Lender Cure</u>*. If the Parent Borrower, the Administrative Agent, the Swing Line Lender and one or more applicable L/C Issuer agree in writing in their sole discretion that a Defaulting Lender should no longer be deemed to be a Defaulting Lender, the Administrative Agent will so notify the parties hereto, whereupon as of the effective date specified in such notice and subject to any conditions set forth therein (which may include arrangements with respect to any Cash Collateral), that Lender will, to the extent applicable, purchase that portion of outstanding Loans of the other Lenders or take such other actions as the Administrative Agent may determine to be necessary to cause the Loans and funded and unfunded participations in Letters of Credit and Swing Line Loans to be held on a pro rata basis by the Lenders in accordance with their Revolving Facility Percentages, whereupon that Lender will cease to be a Defaulting Lender; <u>provided</u> that no adjustments will be made retroactively with respect to fees accrued or payments made by or on behalf of the Borrowers while that Lender was a Defaulting Lender; and <u>provided</u>, <u>further</u>, that except to the extent otherwise expressly agreed by the affected parties, no change hereunder from Defaulting Lender to Lender will constitute a waiver or release of any claim of any party hereunder arising from that Lender's having been a Defaulting Lender. 

Section 2.16 <u>Cash Collateral.</u>

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a)*<u>Certain Credit Support Events</u>*. If (i) an L/C Issuer has honored any full or partial drawing request under any Letter of Credit and such drawing has resulted in a Letter of Credit Borrowing, (ii) as of the Letter of Credit Expiration Date, any L/C Obligation for any reason remains outstanding, (iii) the Borrowers shall be required to provide Cash Collateral pursuant to <u>Section 8.02</u>, or (iv) there shall exist a Defaulting Lender, the Borrowers shall immediately (in the 

------

case of <u>clause (iii)</u> above) or within one Business Day (in all other cases) following any request by the Administrative Agent or the L/C Issuer, provide Cash Collateral in an amount not less than the applicable Minimum Collateral Amount (determined in the case of Cash Collateral provided pursuant to <u>clause (iv)</u> above, after giving effect to <u>Section 2.16(a)(iv)</u> and any Cash Collateral provided by the Defaulting Lender).

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b)*<u>Grant of Security Interest</u>*. Each Loan Party and to the extent provided by any Defaulting Lender, such Defaulting Lender, hereby grants to (and subjects to the control of) the Administrative Agent, for the benefit of the Administrative Agent, the L/C Issuers and the Lenders, and agrees to maintain, a first priority security interest in all such cash, deposit accounts and all balances therein, and all other property so provided as collateral pursuant hereto, and in all proceeds of the foregoing, all as security for the obligations to which such Cash Collateral may be applied pursuant to <u>clause (c)</u> below. If at any time the Administrative Agent determines that Cash Collateral is subject to any right or claim of any Person other than the Administrative Agent or an L/C Issuer as herein provided, or that the total amount of such Cash Collateral is less than the Minimum Collateral Amount, the Borrowers will, promptly upon demand by the Administrative Agent, pay or provide to the Administrative Agent additional Cash Collateral in an amount sufficient to eliminate such deficiency. All Cash Collateral (other than credit support not constituting funds subject to deposit) shall be maintained in one or more Controlled Accounts at Bank of America. The Borrowers shall jointly and severally pay on demand therefor from time to time all customary account opening, activity and other administrative fees and charges in connection with the maintenance and disbursement of Cash Collateral. 

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c)*<u>Application</u>*. Notwithstanding anything to the contrary contained in this Agreement, Cash Collateral provided under any of this <u>Section 2.16</u>, <u>2.03</u>, <u>2.15</u> or <u>8.02</u> in respect of Letters of Credit shall be held and applied to the satisfaction of the specific L/C Obligations, obligations to fund participations therein (including, as to Cash Collateral provided by a Defaulting Lender, any interest accrued on such obligation) and other obligations for which the Cash Collateral was so provided, prior to any other application of such property as may otherwise be provided for herein.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(d)*<u>Release</u>*. Cash Collateral (or the appropriate portion thereof) provided to reduce Fronting Exposure or to secure other obligations shall be released promptly following (i) the elimination of the applicable Fronting Exposure or other obligations giving rise thereto (including by the termination of Defaulting Lender status of the applicable Lender (or, as appropriate, its assignee following compliance with <u>Section 10.06(b)(vi))</u>) or (ii) the determination by the Administrative Agent and the applicable L/C Issuer that there exists excess Cash Collateral; <u>provided</u>, <u>however</u>, (x) any such release shall be without prejudice to, and any disbursement or other transfer of Cash Collateral shall be and remain subject to, any other Lien conferred under the Loan Documents and the other applicable provisions of the Loan Documents, and (y) the Person providing Cash Collateral and the applicable L/C Issuer may agree that Cash Collateral shall not be released but instead held to support future anticipated Fronting Exposure or other obligations.

------

Section 2.17 <u>Agent Advances; Overadvances</u>.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a) <u>*Agent Advances*</u>. Any Agent may from time to time make such disbursements and advances ("<u>Agent Advances</u>") which such Agent, in its sole discretion, deems necessary or desirable to preserve, protect, prepare for sale or lease or dispose of the Collateral or any portion thereof, to enhance the likelihood or maximize the amount of repayment by the Borrowers of the Loans, L/C Obligations and other ABL Credit Obligations or to pay any other amount chargeable to the Borrowers pursuant to the terms of this Agreement, including, without limitation, costs, fees and expenses as described in <u>Section 10.04</u>. The Agent Advances shall be repayable on demand and be secured by the Collateral and shall bear interest at a rate per annum equal to the rate then applicable to Loans that are Base Rate Loans. The Agent Advances shall constitute ABL Credit Obligations hereunder. The Agent making the Agent Advance shall notify the other Agent and each Lender and the Parent Borrower in writing of each such Agent Advance, which notice shall include a description of the purpose of such Agent Advance. Without limitation to its obligations pursuant to <u>Section 10.05</u>, each Lender agrees that it shall make available to the Agent making the Agent Advance, upon such Agent's demand, in Dollars in immediately available funds, the amount equal to such Lender's pro rata share of each such Agent Advance. If such funds are not made available to the Agent making such Agent Advance by such Lender, such Agent shall be entitled to recover such funds on demand from such Lender, together with interest thereon for each day from the date such payment was due until the date such amount is paid to such Agent, at the Federal Funds Rate for three Business Days and thereafter at the Base Rate.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b)*<u>Overadvances</u>*. If the aggregate Outstanding Amounts exceed the Borrowing Base ("<u>Overadvance</u>") at any time, the excess amount shall be payable jointly and severally by Borrowers within one (1) Business Day after demand by the Administrative Agent, but all such Loans shall nevertheless constitute ABL Credit Obligations secured by the Collateral and entitled to all benefits of the Loan Documents. Unless its authority has been revoked in writing by the Required Lenders, the Administrative Agent may require Lenders to honor requests for Overadvances and to forbear from requiring Borrowers to cure an Overadvance, (a) when no other Default or Event of Default is known to the Administrative Agent, as long as (i) the Overadvance does not continue for more than 45 consecutive days (and no Overadvance may exist for at least five consecutive days thereafter before further Overadvances are required), and (ii) the Overadvance is not known by the Administrative Agent to exceed 10% of the Borrowing Base at any time while such Overadvance is outstanding; and (b) regardless of whether Default or an Event of Default exists, if the Administrative Agent discovers an Overadvance not previously known by it to exist, as long as from the date of such discovery the Overadvance (i) is not increased by more than $1,000,000, and (ii) does not continue for more than 45 consecutive days. In no event shall Overadvances be required that would cause the outstanding Loans and L/C Obligations to exceed the Aggregate Commitments. Any funding of an Overadvance or sufferance of an Overadvance shall not constitute a waiver by the Administrative Agent or Lenders of the Default or Event of Default caused thereby. In no event shall any Borrower or other Loan Party be deemed a beneficiary of this <u>clause (b)</u> nor authorized to enforce any of its terms. 

Section 2.18 <u>Settlement</u>. Except as may be specifically provided otherwise herein, it is agreed that each Lender's funded portion of the Loans is intended by the Lenders to be equal at all times to such Lender's applicable pro rata share of the outstanding Loans of such Type. Notwithstanding such agreement, the Administrative Agent and the Lenders agree (which agreement shall not be for the benefit of or enforceable by the Borrowers) that in order to facilitate the administration of this Agreement and the other Loan Documents, settlement among them as to the Loans, including the Agent Advances and Overadvances, shall take place on a periodic basis in accordance with the following provisions:

------

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a) The Administrative Agent shall request settlement (a "<u>Settlement</u>") with the Lenders at least twice a month, or on a more frequent basis if so determined by the Administrative Agent, (i) for itself, with respect to each Agent Advance and Overadvance, as applicable, and (ii) with respect to Collections received, in each case, by notifying the Lenders of such requested Settlement by telecopy, telephone, or other means of written electronic communication, no later than 12:00 noon on the date of such requested Settlement (the "<u>Settlement Date</u>"). Each Revolving Facility Lender (other than the Administrative Agent, in the case of Agent Advances and Overadvances) shall make the amount of such Lender's pro rata share of the outstanding principal amount of Agent Advances and Overadvances, as applicable, with respect to which Settlement is requested available to the Administrative Agent at the Administrative Agent's Office not later than 3:00 p.m. on the Settlement Date applicable thereto, which may occur before or after the occurrence or during the continuation of a Default or an Event of Default and whether or not the applicable conditions precedent set forth in <u>Article IV</u> have then been satisfied. Such amounts made available to the Administrative Agent shall be applied against the amounts of the applicable Agent Advance or Overadvances, as applicable, and shall constitute Revolving Facility Loans of the Lenders. If any such amount is not made available to the Administrative Agent by any Lender on the Settlement Date applicable thereto, the Administrative Agent shall, for itself with respect to each Agent Advance and Overadvance, be entitled to recover such amount on demand from such Lender together with interest thereon at the Federal Funds Rate for the first three days from and after the Settlement Date and thereafter at the Interest Rate then applicable to Revolving Facility Loans that are Base Rate Loans.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b) Notwithstanding the foregoing, not more than one Business Day after demand is made by the Administrative Agent (whether before or after the occurrence of a Default or an Event of Default and regardless of whether the Administrative Agent has requested a Settlement with respect to an Agent Advance or Overadvance), each Lender (i) shall irrevocably and unconditionally purchase and receive from the Administrative Agent, without recourse or warranty, an undivided interest and participation in such Agent Advance or Overadvance, as applicable, equal to such Lender's pro rata share of such Agent Advance and (ii) if Settlement has not previously occurred with respect to such Agent Advances, upon demand by the Administrative Agent, shall pay to the Administrative Agent as the purchase price of such participation an amount equal to one-hundred percent (100%) of such Lender's pro rata share of such Agent Advances or Overadvance, as applicable. If such amount is not in fact made available to the Administrative Agent by any Lender, the Administrative Agent shall be entitled to recover such amount on demand from such Lender together with interest thereon at the Federal Funds Rate for the first three days from and after such demand and thereafter at the Interest Rate then applicable to Base Rate Loans.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c) From and after the date, if any, on which any Lender purchases an undivided interest and participation in any Agent Advance or Overadvance pursuant to <u>clause (b)</u> above, the Administrative Agent shall promptly distribute to such Lender such Lender's pro rata share of all payments of principal and interest and all proceeds of Collateral received by the Administrative Agent in respect of such Agent Advance or Overadvance, as applicable.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(d) During the period between Settlement Dates, the Administrative Agent with respect to Agent Advances or Overadvances, as applicable, and each Lender with respect to the Revolving Facility Loans other than Agent Advances or Overadvances, shall be entitled to interest at the applicable rate or rates payable under this Agreement on the actual average daily amount of funds employed by the Administrative Agent and the Lenders.

------

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(e) Unless the Administrative Agent has received written notice from a Lender to the contrary, the Administrative Agent may assume that the applicable conditions precedent set forth in <u>Article IV</u> have been satisfied and the requested Borrowing will not exceed Availability on any date for funding a Revolving Facility Loan. If any Lender makes available to the Administrative Agent funds for any Revolving Facility Loan to be made by such Lender as provided in the provisions of this <u>Article II</u>, and such funds are not made available to the Borrowers by the Administrative Agent because the conditions set forth in <u>Article IV</u> are not satisfied or waived in accordance with the terms hereof, the Administrative Agent shall return such funds (in like funds as received from such Lender) to such Lender, without interest.

**ARTICLE III** 

**TAXES, YIELD PROTECTION AND ILLEGALITY** 

Section 3.01 <u>Taxes</u>.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a) <u>*Payments Free of Taxes; Obligation to Withhold; Payments on Account of Taxes.*</u>

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(i) Any and all payments by or on account of any obligation of the Borrowers hereunder or under any other Loan
Document shall to the extent permitted by applicable Requirements of Law be made free and clear of and without reduction or withholding for any Taxes. If, however, applicable Requirements of Law require any Borrower or the Administrative Agent to
withhold or deduct any Tax, such Tax shall be withheld or deducted in accordance with such Requirements of Law as determined by the Parent Borrower or the Administrative Agent, as the case may be, upon the basis of the information and documentation
to be delivered pursuant to <u>subsection (e)</u> below.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(ii) If any Borrower or the Administrative Agent shall be required by the Code to withhold or deduct any Taxes,
including both United States federal backup withholding and withholding taxes, from any payment, then (A) such Borrower or the Administrative Agent, as applicable, shall withhold or make such deductions as are determined by such Borrower or the
Administrative Agent, as applicable, to be required based upon the information and documentation it has received pursuant to <u>subsection (e)</u> below, (B) such Borrower or the Administrative Agent, as applicable, shall timely pay the
full amount withheld or deducted to the relevant Governmental Authority in accordance with the Code and (C) to the extent that the withholding or deduction is made on account of Indemnified Taxes or Other Taxes, the sum payable by the Borrowers
shall be increased as necessary so that after any required withholding or the making of all required deductions (including deductions applicable to additional sums payable under this Section) the Administrative Agent or Lender or L/C Issuer, as the
case may be, receives an amount equal to the sum it would have received had no such withholding or deduction been made.

------

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b)*<u>Payment of Other Taxes by the Borrowers</u>*. Without limiting the provisions of <u>subsection (a)</u> above, each Borrower shall timely pay any Other Taxes to the relevant Governmental Authority in accordance with applicable Requirement of Law. 

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c) <u>*Tax Indemnifications*.</u>

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(i) Without limiting the provisions of <u>subsection (a)</u> or <u>(b)</u> above, each Borrower shall,
and does hereby, jointly and severally, indemnify the Administrative Agent, each Lender and each L/C Issuer, and shall make payment in respect thereof within ten days after written demand therefor, for the full amount of any Indemnified Taxes or
Other Taxes (including Indemnified Taxes or Other Taxes imposed or asserted on or attributable to amounts payable under this <u>Section 3.01</u>) withheld or deducted by the Borrowers or the Administrative Agent or paid by the Administrative
Agent, such Lender or such L/C Issuer, as the case may be, and any penalties, interest and reasonable expenses arising therefrom or with respect thereto, whether or not such Indemnified Taxes or Other Taxes were correctly or legally imposed or
asserted by the relevant Governmental Authority. Each Borrower shall also, and does hereby, indemnify the Administrative Agent, and shall make payment in respect thereof within ten days after written demand therefor, for any amount which a Lender or
an L/C Issuer for any reason fails to pay indefeasibly to the Administrative Agent as required by <u>clause (ii)</u> of this <u>subsection (c)</u>. A certificate as to the amount of any such payment or liability delivered to the Parent Borrower
by a Lender or an L/C Issuer (with a copy to the Administrative Agent), or by the Administrative Agent on its own behalf or on behalf of a Lender or an L/C Issuer, shall be conclusive absent manifest error.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(ii) Without limiting the provisions of <u>subsection (a)</u> or <u>(b)</u> above, each Lender and each
L/C Issuer shall, and does hereby, indemnify the Borrowers and the Administrative Agent, and shall make payment in respect thereof within ten days after demand therefor, against any and all Taxes and any and all related losses, claims, liabilities,
penalties, interest and expenses (including the fees, charges and disbursements of any counsel for the Borrowers or the Administrative Agent) incurred by or asserted against the Borrowers or the Administrative Agent by any Governmental Authority
(x) as a result of the failure by such Lender or such L/C Issuer, as the case may be, to deliver, or as a result of the inaccuracy, inadequacy or deficiency of, any documentation required to be delivered by such Lender or such L/C Issuer, as
the case may be, to the Borrowers or the Administrative Agent pursuant to <u>subsection (e)</u> or attributable to such Lender's failure to comply with the provisions of <u>Section 10.06(d)</u> relating to the maintenance of a
Participant Register or (y) that are Excluded Taxes attributable to such Lender or such L/C Issuer. Each Lender and each L/C Issuer hereby authorizes the

------

Administrative Agent to set off and apply any and all amounts at any time owing to such Lender or such L/C Issuer, as the case may be, under this Agreement or any other Loan Document against any amount due to the Administrative Agent under this <u>clause (ii)</u>. The agreements in this <u>clause (ii)</u> shall survive the resignation and/or replacement of the Administrative Agent, any assignment of rights by, or the replacement of, a Lender or an L/C Issuer, the termination of the Aggregate Commitments and the repayment, satisfaction or discharge of all other Finance Obligations.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(d)*<u>Evidence of Payments</u>*. Upon request by the Parent Borrower or the Administrative Agent, as the case may be, after any payment of Taxes by any Borrower or the Administrative Agent to a Governmental Authority as provided in this <u>Section 3.01</u>, the Parent Borrower shall deliver to the Administrative Agent or the Administrative Agent shall deliver to the Parent Borrower, as the case may be, the original or a certified copy of a receipt issued by such Governmental Authority evidencing such payment, a copy of any return required by Requirements of Law to report such payment or other evidence of such payment reasonably satisfactory to the Parent Borrower or the Administrative Agent, as the case may be. 

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(e) <u>*Status of Lenders; Tax Documentation*.</u>

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(i) Each Lender shall deliver to the Parent Borrower and to the Administrative Agent, at the time or times
prescribed by applicable Requirements of Law or when reasonably requested by the Parent Borrower or the Administrative Agent, such properly completed and executed documentation prescribed by applicable Requirements of Law or by the Taxing
authorities of any jurisdiction and such other reasonably requested information as will permit the Parent Borrower or the Administrative Agent, as the case may be, to determine (A) whether or not payments made hereunder or under any other Loan
Document are subject to Taxes, (B) if applicable, the required rate of withholding or deduction, and (C) such Lender's entitlement to any available exemption from, or reduction of, applicable Taxes in respect of all payments to be
made to such Lender by the Borrowers pursuant to this Agreement or otherwise to establish such Lender's status for withholding Tax purposes in the applicable jurisdiction.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(ii) Without limiting the generality 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;&nbsp;&nbsp;&nbsp;&nbsp;(A) any Lender that is a "United States person" within the meaning of Section 7701(a)(30) of the Code shall deliver to the Parent Borrower and the Administrative Agent executed copy of Internal Revenue Service Form W-9 or such other documentation or information prescribed by applicable Requirements of Law or reasonably requested by the Parent Borrower or the Administrative Agent as will enable the Parent Borrower or the Administrative Agent, as the case may be, to determine whether or not such Lender is subject to backup withholding or information reporting requirements; 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;(B) each Foreign Lender that is entitled under the Code or any applicable treaty to an exemption from or reduction of withholding tax with respect to payments hereunder or under any other Loan Document shall 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 request of the Parent Borrower or the Administrative Agent, but only if such Foreign Lender is legally entitled to do so), 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;(1) an executed copy of Internal Revenue Service Form W-8BEN-E claiming eligibility for benefits of an income tax treaty to which the United States is a 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;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(2) an executed copy of Internal Revenue Service 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;(3) an executed copy of Internal Revenue Service Form W-8IMY and all required supporting documentation;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&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) in the case of a Foreign Lender claiming the benefits of the exemption for portfolio interest under Section 881(c) of the Code, (x) a certificate to the effect that such Foreign Lender is not (A) a "bank" within the meaning of Section 881(c)(3)(A) of the Code, (B) a "10 percent shareholder" of any Borrower within the meaning of Section 881(c)(3)(B) of the Code, or (C) a "controlled foreign corporation" described in Section 881(c)(3)(C) of the Code and (y) an executed copy of Internal Revenue Service Form W-8BEN or W-8BEN-E; 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;(5) executed originals of any other form prescribed by applicable Requirements of Law as a basis for claiming exemption from or a reduction in United States federal withholding tax together with such supplementary documentation as may be prescribed by applicable Requirements of Law to permit the Parent Borrower or the Administrative Agent to determine the withholding or deduction required to be made.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(iii) If a payment made to any Lender hereunder or under any other Loan Document would be subject to United States
federal withholding tax imposed pursuant to FATCA if such Lender fails to comply with applicable reporting and other requirements of FATCA (including those contained in Section 1471(b) or 1472(b) of the Code, as applicable), such Lender shall
use commercially reasonable efforts to deliver to the Parent Borrower and the Administrative Agent, at the time or times prescribed by applicable law or as reasonably requested by the Parent Borrower or the Administrative Agent, (A) two
accurate, complete and signed certifications prescribed by applicable law and/or reasonably satisfactory to the Parent Borrower and the Administrative Agent that establish that such payment is exempt from

------

United States federal withholding tax imposed pursuant to FATCA and (B) any other documentation reasonably requested by the Parent Borrower or the Administrative Agent sufficient for the Parent Borrower and the Administrative Agent to comply with their obligations under FATCA and to determine that a Lender has complied with such applicable reporting and other requirements of FATCA.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(iv) Each Lender shall promptly (A) notify the Parent Borrower and the Administrative Agent of any change in
circumstances which would modify or render invalid any claimed exemption or reduction, and (B) take such steps as shall not be materially disadvantageous to it, in the reasonable judgment of such Lender, and as may be reasonably necessary
(including the re-designation of its Lending Office) to avoid any requirement of applicable Requirements of Law of any jurisdiction that the Parent Borrower or the Administrative Agent make any withholding or deduction for Taxes from amounts payable
to such Lender.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(f)*<u>Treatment of Certain Refunds</u>*. Unless required by applicable Requirements of Law, at no time shall the Administrative Agent have any obligation to file for or otherwise pursue on behalf of a Lender or an L/C Issuer, or have any obligation to pay to any Lender or any L/C Issuer, any refund of Taxes withheld or deducted from funds paid for the account of such Lender or such L/C Issuer, as the case may be. If the Administrative Agent, any Lender or any L/C Issuer determines, in its sole discretion, that it has received a refund of any Taxes or Other Taxes as to which it has been indemnified by the Borrowers or with respect to which the Borrowers have paid additional amounts pursuant to this <u>Section 3.01</u>, it shall pay to the Borrowers an amount equal to such refund (but only to the extent of indemnity payments made, or additional amounts paid, by the Borrowers under this <u>Section 3.01</u> with respect to the Taxes or Other Taxes giving rise to such refund), net of all out-of-pocket expenses incurred by the Administrative Agent, such Lender or such L/C Issuer, as the case may be, and without interest (other than any interest paid by the relevant Governmental Authority with respect to such refund), <u>provided</u> that the Borrowers, upon the request of the Administrative Agent, such Lender or such L/C Issuer, agree to jointly and severally repay the amount paid over to the Borrowers (plus any penalties, interest or other charges imposed by the relevant Governmental Authority) to the Administrative Agent, such Lender or such L/C Issuer in the event the Administrative Agent or such Lender is required to repay such refund to such Governmental Authority. This subsection shall not be construed to require the Administrative Agent, any Lender or any L/C Issuer to make available its tax returns (or any other information relating to its taxes that it deems confidential) to the Borrowers or any other Person. 

Section 3.02 <u>Illegality</u>. If any Lender determines that any Requirement of Law has made it unlawful, or that any Governmental Authority has asserted that it is unlawful, for any Lender or its applicable Lending Office to make, maintain or fund Loans whose interest is determined by reference to the Eurodollar Rate<u>SOFR or Term SOFR</u>, or to determine or charge interest rates based upon the Eurodollar Rate<u>SOFR or Term SOFR</u>, 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<u>any applicable</u> interbank market, then, after consultation by such Lender with the Parent Borrower and the Administrative Agent, (i) any obligation of such Lender to make or continue Eurodollar Rate<u>Term SOFR</u> Loans or to convert Base Rate Loans to Eurodollar

------

Rate<u>Term SOFR</u> Loans shall be suspended, and (ii) if such notice asserts the illegality of such Lender making or maintaining Base Rate Loans the interest rate on which is determined by reference to the Eurodollar Rate<u>Term SOFR</u> component of the Base Rate, the interest rate on which Base Rate Loans of such Lender shall, if necessary to avoid such illegality, be determined by the Administrative Agent without reference to the Eurodollar Rate<u>Term SOFR</u> component of the Base Rate, in each case until such Lender notifies the Administrative Agent and the Parent Borrower that the circumstances giving rise to such determination no longer exist. After such consultation, (i) the Borrowers shall, upon written demand from such Lender to the Parent Borrower (with a copy to the Administrative Agent), prepay or, if applicable, convert all Eurodollar Rate<u>Term SOFR</u> Loans of such Lender to Base Rate Loans (the interest rate on which Base Rate Loans of such Lender shall, if necessary to avoid such illegality, be determined by the Administrative Agent without reference to the Eurodollar Rate<u>Term SOFR</u> component of the Base Rate), either on the last day of the Interest Period therefor, if such Lender may lawfully continue to maintain such Eurodollar Rate<u>Term SOFR</u> Loans to such day, or immediately, if such Lender may not lawfully continue to maintain such Eurodollar Rate<u>Term SOFR</u> Loans and (ii) if such notice asserts the illegality of such Lender determining or charging interest rates based upon the Eurodollar Rate<u>Term SOFR</u>, the Administrative Agent shall during the period of such suspension compute the Base Rate applicable to such Lender without reference to the Eurodollar Rate<u>Term SOFR</u> component thereof until the Administrative Agent is advised in writing by such Lender that it is no longer illegal for such Lender to determine or charge interest rates based upon the Eurodollar Rate<u>Term SOFR</u>. Upon any such prepayment or conversion, the Borrowers shall also pay accrued interest on the amount so prepaid or converted.

Section 3.03 <u>Inability to Determine Rates.</u>

. If (a) the Required Lenders determine for any reason <u>If</u> in connection with any request for a <u>Term SOFR</u> Loan or<u>,</u> a conversion to or continuation thereof that (i) Dollar deposits are not being offered to banks in the applicable offshore interbank market for such currency for the applicable amount and Interest Period of such Loan, (ii<u>of Base Rate Loans to Term SOFR Loans or a continuation of any Term SOFR Loan, as applicable, (i) the Administrative Agent determines (which determination shall be conclusive absent manifest error) that (A) no</u> <u>Successor Rate has been determined in accordance with Section</u> <u>3.03(b),</u> <u>and the circumstances under clause (i)</u> <u>of Section 3.03(b)</u> <u>or the Scheduled Unavailability Date has occurred</u><u>, or (B</u>) adequate and reasonable means do not <u>otherwise</u> exist for determining the Eurodollar Rate<u>Term SOFR</u> for any requested Interest Period with respect to a proposed Eurodollar Rate<u>Term SOFR</u> Loan or in connection with an existing or proposed Base Rate Loan (in each case with respect to clause (a) above, "<u>Impacted Loans</u>")<u>,</u> or (b<u>ii</u>) the Administrative Agent or the Required Lenders determine that for any reason the Eurodollar Rate<u>that Term SOFR</u> for any requested Interest Period with respect to a proposed Eurodollar Rate Loan does not adequately and fairly reflect the cost to such Lenders of funding such Eurodollar Rate Loan, the Administrative Agent will promptly so notify the Parent Borrower and each Lender. Thereafter, (i<u>x</u>) the obligation of the Lenders to make or maintain Eurodollar<u>Term SOFR Loans, or to convert Base</u> Rate Loans <u>to Term SOFR Loans,</u> shall be suspended <u>(to the extent of the affected Term SOFR Loans or Interest Periods),</u> and (ii<u>y</u>) in the event of a determination described in the preceding sentence with respect to the Eurodollar Rate<u>Term SOFR</u> component of the Base Rate, the utilization of the Adjusted Eurodollar Rate<u>Term SOFR</u> component in determining the Base Rate shall be suspended, in each case until the Administrative Agent upon the <u>(or,</u> <u>in the case of</u> <u>a determination by the Required Lenders</u> 

------

<u>described in clause (ii) of this Section 3.03(a), until the Administrative Agent upon</u> instruction of the Required Lenders<u>)</u> revokes such notice. Upon receipt of such notice, <u>(i)</u> the Parent Borrower may revoke any pending request for a Borrowing of, <u>or</u> conversion to<u>,</u> or continuation of Eurodollar Rate Loans <u>Term SOFR</u> <u>Loans (to the extent of the affected</u> <u>Term SOFR</u> <u>Loans or Interest Periods)</u> or, failing that, will be deemed to have converted such request into a request for a Borrowing of Base Rate Loans in the amount specified therein <u>and (ii) any outstanding Term SOFR Loans shall be deemed to have been converted to Base Rate Loans immediately at the end of their respective applicable Interest Period</u>.

Notwithstanding the foregoing, if the Administrative Agent has made the determination described in clause (a) of the first sentence of this section, the Administrative Agent, in consultation with the Parent Borrower and the affected Lenders, may establish an alternative interest rate for the Impacted Loans, in which case, such alternative rate of interest shall apply with respect to the Impacted Loans until (1) the Administrative Agent revokes the notice delivered with respect to the Impacted Loans under clause (a) of the first sentence of this section, (2) the Administrative Agent or the Required Lenders notify the Administrative Agent and the Parent Borrower that such alternative interest rate does not adequately and fairly reflect the cost to such Lenders of funding the Impacted Loans, or (3) any Lender determines that any Requirement of Law has made it unlawful, or that any Governmental Authority has asserted that it is unlawful, for such Lender or its applicable Lending Office to make, maintain or fund Loans whose interest is determined by reference to such alternative rate of interest or to determine or charge interest rates based upon such rate or any Governmental Authority has imposed material restrictions on the authority of such Lender to do any of the foregoing and provides the Administrative Agent and the Parent Borrower written notice thereof.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<u>(b) Replacement of Term SOFR or Successor Rate</u><u>. Notwithstanding anything to the contrary in this Agreement or any other Loan Documents, if the Administrative Agent determines (which determination shall be conclusive absent manifest error), or the</u> <u>Borrower</u> <u>or Required Lenders notify the Administrative Agent (with, in the case of the Required Lenders, a copy to</u> <u>the Borrower) that the Borrower</u> <u>or Required Lenders (as applicable) have determined, that:</u>

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(i) <u>adequate and reasonable means do not exist for ascertaining</u> <u>one month, three month and six month interest periods of Term SOFR</u> <u>, including, without limitation, because the</u> <u>Term SOFR</u> <u>Screen Rate is not available or published on a current basis and such circumstances are unlikely to be temporary; or</u> 

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(ii) <u>CME or any successor administrator of the Term SOFR</u> <u>Screen Rate or a Governmental Authority having jurisdiction over the Administrative Agent</u> <u>or such administrator with respect to its publication of Term SOFR, in each case acting in such capacity,</u> <u>has made a public statement identifying a specific date after which</u> <u>one month, three month and six month interest periods of Term SOFR or the Term SOFR Screen Rate shall or will</u> <u>no longer be made available, or</u> <u>permitted to be</u> <u>used for determining the interest rate of</u> <u>U.S. dollar denominated syndicated loans, or shall or will otherwise cease, provided</u> <u>that, at the time</u> <u>of such statement, there is no successor administrator that is satisfactory to the Administrative Agent, that</u> 

------

<u>will continue to provide such interest periods of Term SOFR after such specific date (the latest date on which one month, three month and six month interest periods of Term SOFR or the Term SOFR Screen Rate are no longer available permanently or indefinitely</u><u>, the "Scheduled Unavailability Date")</u><u>;</u>

<u>then, on a date and time determined by the Administrative Agent (any such date, the "Term SOFR Replacement Date"), which date shall be at the end of an Interest Period or on the relevant interest payment date, as applicable, for interest calculated and, solely</u> <u>with respect to clause (</u><u>ii) above, no later than the Scheduled Unavailability Date, Term SOFR will be replaced hereunder and under any Loan Document with Daily Simple SOFR *plus* the SOFR Adjustment for any payment period for interest calculated that can be determined by the Administrative Agent, in each case, without any amendment to, or further action or consent of any other party to, this Agreement or any other Loan Document (the "Successor Rate). If the Successor Rate is Daily Simple SOFR plus the SOFR Adjustment, all interest payments will be payable on a monthly basis.</u>

<u>Notwithstanding anything to the contrary herein, (i) if the Administrative Agent determines that Daily Simple SOFR is not available on or prior to the Term SOFR Replacement Date, or (ii) if the events or circumstances of the type described in Section 3.03(b)(i) or (ii) have occurred</u> <u>with respect to the</u> <u>Successor Rate then in effect, then in each case</u><u>, the Administrative Agent and the</u> <u>Borrower</u> <u>may amend this Agreement</u> <u>solely for the purpose of replacing Term SOFR or any then current Successor Rate in accordance with this Section 3.03 at the end of any Interest Period, relevant interest payment date or payment period for interest calculated, as applicable, with an alternative benchmark rate</u> <u>giving due consideration to any evolving or then existing convention for similar U.S. dollar denominated</u> <u>credit facilities syndicated and agented in the United States for such alternative benchmark. and, in each case, including any mathematical or other adjustments to such benchmark giving due consideration to any evolving or then existing convention for similar U.S. dollar denominated credit facilities syndicated and agented in the United States for such benchmark, which adjustment or method for calculating such adjustment shall be published on an information service as selected</u> <u>by the Administrative Agent from time to time</u> <u>in its reasonable discretion and may be periodically updated. For the avoidance of doubt,</u> <u>any such proposed rate</u> <u>and adjustments, shall constitute a "Successor Rate". Any</u> <u>such amendment shall become effective at 5:00 p.m. on the fifth Business Day after the Administrative Agent shall have posted such proposed amendment to all Lenders and the</u> <u>Borrower</u> <u>unless, prior to such time, Lenders comprising the Required Lenders have delivered to the Administrative Agent written notice that such Required Lenders</u> <u>object to such amendment.</u>

<u>The Administrative Agent will promptly (in one or more notices) notify the Borrower and each Lender of the implementation of any Successor Rate. Any Successor Rate shall be applied</u> <u>in a manner consistent with market practice</u><u>; provided</u> <u>that to the extent such market practice is not administratively feasible for the Administrative Agent, such</u> <u>Successor Rate shall be applied in a manner</u> <u>as otherwise reasonably determined by the Administrative Agent.</u> <u>Notwithstanding anything else herein, if at any time any Successor Rate as so determined would otherwise be less than 0%, the Successor Rate will be deemed to be 0% for the purposes of this</u> <u>Agreement and the other Loan Documents</u><u>. In connection with the implementation of a Successor Rate, the Administrative Agent will have the right to make Conforming Changes from time to time and, notwithstanding anything to the contrary herein or in any other Loan Document, any amendments</u> 

------

<u>implementing such Conforming Changes will become effective without any further action or consent of any other party to this Agreement; provided that, with respect to any such amendment effected, the Administrative Agent shall post each such amendment implementing such Conforming Changes to the Borrower and the Lenders reasonably promptly after such amendment becomes effective.</u>

Section 3.04 <u>Increased Costs</u>. (a) *<u>Increased Costs Generally</u>*. If any Change in Law shall:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(i) impose, modify or deem applicable any reserve, special deposit, compulsory loan, insurance charge or similar
requirement against assets held by, deposits with or for the account of, or credit extended or participated in by, any Lender (or its Lending Office) (except any reserve requirement which is reflected in the determination of the Adjusted Eurodollar Rate <u>Term SOFR</u> hereunder) or any L/C Issuer;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(ii) subject any Lender (or its Lending Office) or any L/C Issuer to any Tax of any kind whatsoever with respect to
this Agreement, any Letter of Credit or any participation interest in any Letter of Credit, or any Eurodollar Rate <u>Term SOFR</u> Loan made by it, or change the basis of Taxation of payments to such Lender or L/C Issuer in respect thereof (except for Indemnified Taxes or Other Taxes covered by <u>Section 3.01</u> and the imposition of, or any change in the
rate of, any Excluded Tax payable by such Lender or L/C Issuer); or

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(iii) impose on any Lender (or its Lending Office) or L/C Issuer or the London interbank market any other condition,
cost or expense affecting this Agreement or Eurodollar Rate <u>Term SOFR</u> Loans made by such Lender or Letter of Credit
issued by such L/C Issuer;

and the result of any of the foregoing shall be to increase the cost to such Lender (or its Lending Office) of making, converting to, continuing or maintaining any Loan the interest on which is determined by reference to the Eurodollar Rate<u>Term SOFR</u> (or of maintaining its obligation to make any such Loan), or to increase the cost to such Lender or any L/C Issuer of participating in, issuing or maintaining any Letter of Credit (or of maintaining its obligation to participate in or to issue any Letter of Credit), or to reduce the amount of any sum received or receivable by such Lender or L/C Issuer hereunder (whether of principal, interest or any other amount) then, upon request of such Lender or L/C Issuer, the Borrowers will pay to such Lender or L/C Issuer, as the case may be, such additional amount or amounts as will compensate such Lender or L/C Issuer for such additional costs incurred or reduction suffered.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b)*<u>Capital Requirements</u>*. If (x) any Lender or an L/C Issuer determines that any Change in Law affecting such Lender or L/C Issuer or any Lending Office of such Lender or such Lender's or L/C Issuer's holding company, if any, regarding capital or liquidity requirements has or would have the effect of reducing the rate of return on such Lender's or L/C Issuer's capital or on the capital of such Lender's or L/C Issuer's holding company, if any, as a consequence of this Agreement, the Revolving Facility Commitments of such Lender or the Loans made by or participations in Letters of Credit or Swing Line Loans held by, such Lender, or the Letters of 

------

Credit issued by such L/C Issuer to a level below that which such Lender or L/C Issuer or such Lender's or L/C Issuer's holding company could have achieved but for such Change in Law (taking into consideration such Lender's or L/C Issuer's policies and the policies of such Lender's or L/C Issuer's holding company with respect to capital adequacy) and (y) such Lender or L/C Issuer is, as a policy, seeking compensation in respect of such reduction from other similarly-situated customers, then, subject to <u>subsection (c)</u> or <u>(d)</u> of this <u>Section 3.04</u> and <u>Section 3.06</u>, then from time to time the Borrowers will pay to such Lender or L/C Issuer such additional amount or amounts as will compensate such Lender or L/C Issuer or such Lender's or L/C Issuer's holding company for any such reduction suffered.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c)*<u>Certificates for Reimbursement</u>*. A certificate of a Lender or L/C Issuer setting forth the amount or amounts necessary to compensate such Lender or L/C Issuer or its holding company, as the case may be, as specified in <u>subsection (a)</u> or <u>(b)</u> of this <u>Section 3.04</u> and delivered to the Parent Borrower shall be conclusive absent manifest error. The Borrowers shall pay such Lender or L/C Issuer the amount shown as due on any such certificate within ten days after receipt thereof. 

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(d)*<u>Delays in Requests</u>*. Failure or delay on the part of any Lender or L/C Issuer to demand compensation pursuant to the foregoing provisions of this <u>Section 3.04</u> shall not constitute a waiver of such Lender's or L/C Issuer's right to demand such compensation; <u>provided</u> that the Borrowers shall not be required to compensate a Lender or L/C Issuer pursuant to the foregoing provisions of this <u>Section 3.04</u> for any increased costs incurred or reductions suffered more than nine months prior to the date that such Lender or L/C Issuer, 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 L/C Issuer's intention to claim compensation therefor (except that, if the Change in Law giving rise to such increased costs or reductions is retroactive, then the nine-month period referred to above shall be extended to include the period of retroactive effect thereof). 

Section 3.05 <u>Compensation for Losses</u>. Upon demand of any Lender to the Parent Borrower (with a copy to the Administrative Agent) from time to time, the Borrowers shall promptly (and in no event more than ten days after receipt by the Parent Borrower of notice thereof from such Lender) compensate such Lender for and hold such Lender harmless from any loss, cost or expense incurred by it as a result of:

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

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

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(iii) any assignment of a Eurodollar
Rate <u>Term SOFR</u> Loan on a day other than the last day of the Interest Period therefor as a result of a request by the Parent Borrower pursuant to <u>Section 10.13</u>;

------

including any loss of anticipated profits (other than Applicable Rate) and any loss or expense arising from the liquidation or reemployment of funds obtained by it to maintain such Loan or from fees payable to terminate the deposits from which such funds were obtained and after giving effect to such Lender's commercially reasonable efforts to mitigate damages. The Borrowers shall also pay any customary administrative fees charged by such Lender in connection with the foregoing. For purposes of calculating amounts payable by the Borrowers to the Lenders under this <u>Section 3.05</u>, each Lender shall be deemed to have funded each Eurodollar Rate<u>Term SOFR</u> Loan made by it at the Eurodollar Rate<u>rate</u> used in determining the Adjusted Eurodollar Rate<u>Term SOFR</u> for such Loan by a matching deposit<u>,</u> or, other borrowing in the London<u>any</u> interbank eurodollar market for a comparable amount and for a comparable period, whether or not such Eurodollar Rate<u>Term SOFR</u> Loan was in fact so funded.

<u>Notwithstanding anything herein to the contrary, no compensation shall be due to the Lenders arising solely out of the conversion of the Revolving Facility Loans into Term SOFR Loans on the Third Amendment Effective Date.</u>

Section 3.06 <u>Mitigation Obligations; Replacement of Lenders</u>.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a)*<u>Designation of a Different Lending Office</u>*. If any Lender requests compensation under <u>Section 3.04</u>, or the Borrowers are required to pay any additional amount to any Lender, L/C Issuer or any Governmental Authority for the account of any Lender or L/C Issuer pursuant to <u>Section 3.01</u>, or if any Lender gives a notice pursuant to <u>Section 3.02</u>, then such Lender or L/C Issuer shall, as applicable, 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 or L/C Issuer, such designation or assignment (i) would eliminate or reduce amounts payable pursuant to <u>Section 3.01</u> or <u>3.04</u>, as the case may be, in the future, or eliminate the need for the notice pursuant to <u>Section 3.02</u>, as applicable, and (ii) in each case, would not subject such Lender or L/C Issuer to any unreimbursed cost or expense and would not otherwise be disadvantageous to such Lender or L/C Issuer, as the case may be. Each of the Borrowers hereby agrees, jointly and severally, to pay all reasonable costs and expenses incurred by any Lender or L/C Issuer in connection with any such designation or assignment.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b)*<u>Replacement of Lenders</u>*. If any Lender requests compensation under <u>Section 3.04</u>, or if the Borrowers are required to pay any additional amount to any Lender or any Governmental Authority for the account of any Lender or L/C Issuer pursuant to <u>Section 3.01</u>, the Parent Borrower may replace such Lender or L/C Issuer in accordance with <u>Section 10.13</u>. 

Section 3.07 <u>LIBOR Amendment</u>. Notwithstanding anything to the contrary in this Agreement or any other Loan Documents, if the Administrative Agent determines (which determination shall be conclusive absent manifest error), or the Borrowers or Required Lenders notify the Administrative Agent (with, in the case of the Required Lenders, a copy to Borrowers) that the Borrowers or Required Lenders (as applicable) have determined, that:

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

------

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b) the administrator of the LIBOR Screen Rate or a Governmental Authority having jurisdiction over the Administrative Agent has made a public statement identifying a specific date after which LIBOR or the LIBOR Screen Rate shall no longer be made available, or used for determining the interest rate of loans (such specific date, the "<u>Scheduled Unavailability Date</u>"), or

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c) syndicated loans currently being executed, or that include language similar to that contained in this Section, are being executed or amended (as applicable) to incorporate or adopt a new benchmark interest rate to replace LIBOR, then, reasonably promptly after such determination by the Administrative Agent or receipt by the Administrative Agent of such notice, as applicable, the Administrative Agent and the Borrowers may amend this Agreement to replace LIBOR with an alternate benchmark rate (including any mathematical or other adjustments to the benchmark (if any) incorporated therein), giving due consideration to any evolving or then existing convention for similar U.S. dollar denominated syndicated credit facilities for such alternative benchmarks (any such proposed rate, a "<u>LIBOR Successor Rate</u>"), together with any proposed LIBOR Successor Rate Conforming Changes and any such amendment shall become effective at 5:00 p.m. (New York time) on the fifth Business Day after the Administrative Agent shall have posted such proposed amendment to all Lenders and the Borrowers unless, prior to such time, Lenders comprising the Required Lenders have delivered to the Administrative Agent written notice that such Required Lenders do not accept such amendment.

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

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

Section 3.08<u>3.07</u> <u>Survival</u>. All of the Borrowers' obligations under this <u>Article III</u> shall survive termination of the Revolving Facility Commitments, repayment of all other ABL Credit Obligations hereunder and resignation of the Administrative Agent.

**ARTICLE IV** 

**CONDITIONS PRECEDENT** 

The obligation of (a) each Lender to make Loans and (b) any L/C Issuer to issue Letters of Credit or increase the stated amount of Letters of Credit hereunder (each of <u>clauses (a)</u> and/or <u>(b)</u>, a "<u>Credit Event</u>") is subject to the satisfaction or waiver by the Administrative Agent of the following conditions precedent:

------

Section 4.01 <u>Conditions to Original Closing Date Borrowing</u>. The obligation of each Lender to make its initial Loan as a part of the Borrowing and of the L/C Issuer to issue Letters of Credit, in each case, on the Original Closing Date is subject to the satisfaction or waiver by the Administrative Agent of the following conditions precedent:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a)*<u>Deliverables</u>*. The Administrative Agent's receipt (or receipt by the Control Agent (as defined in the ABL/Term<u>Original</u> Intercreditor Agreement) on behalf of the Administrative Agent) of the following, each of which shall be originals or telecopies (followed promptly by originals) unless otherwise specified, each properly executed by a Responsible Officer of the signing Loan Party, each dated the Original Closing Date (or, in the case of certificates of governmental officials, a recent date before the Original Closing Date) and each in form and substance satisfactory to the Administrative Agent and each of the Lenders: 

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(i) fully executed counterparts of this Agreement and the Guaranty, sufficient in number for distribution to the
Administrative Agent, each Lender and the Parent Borrower;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(ii) a Note executed by the Borrowers in favor of each Lender requesting a Note;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(iii) executed counterparts of the Pledge and Security Agreement and all other Collateral Documents, duly executed by
each Loan Party, together with:

&nbsp;&nbsp;&nbsp;&nbsp;&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) a Perfection Certificate from each 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;&nbsp;&nbsp;&nbsp;&nbsp;(C) copies of reports from CT Corporation or another independent search service reasonably satisfactory to the Collateral Agent listing all effective financing statements, notices of tax, PBGC or judgment liens or similar notices that name Holdings, any Borrower, any other Loan Party, as such (under its present name and any previous name and, if requested by the Collateral Agent, under any trade names), as debtor or seller that are filed in the jurisdictions referred to in <u>clause (B)</u> above or in any other jurisdiction having files which must be searched in order to determine fully the existence of the UCC security interests, notices of the filing of federal tax Liens (filed pursuant to Section 6323 of the Code), Liens of the PBGC (filed pursuant to Section 4068 of ERISA) or judgment Liens on any Collateral, together with copies of such financing statements, notices of tax, PBGC or judgment Liens or similar notices (none of which shall cover the Collateral except to the extent evidencing Permitted Liens or for which the Collateral Agent shall have received estoppel letters or termination statements (Form UCC-3 or such other termination statements as shall be required by local Requirement of Law) authenticated and authorized for filing);

------

&nbsp;&nbsp;&nbsp;&nbsp;&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) searches of ownership of intellectual property in the appropriate governmental offices and such patent, trademark and/or copyright filings as may be requested by the Collateral Agent at least 15 days prior to the Original Closing Date, in each case, to the extent necessary or reasonably advisable to perfect the Collateral Agent's security interest in intellectual property Collateral in 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;&nbsp;&nbsp;&nbsp;&nbsp;(E) all of the Pledged Collateral, which Pledged Collateral shall be in suitable form for transfer by delivery, or shall be accompanied by duly executed instruments of transfer or assignment in blank, with signatures appropriately guaranteed, accompanied in each case by any required transfer tax stamps, all in form and substance reasonably satisfactory to the Collateral Agent; and

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(iv) Reserved;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(v) a short form collateral assignment or grant of security interest in intellectual property, in form and
substance satisfactory to the Administrative Agent, duly executed by each Loan Party, together with evidence that all action that the Administrative Agent may deem necessary or desirable in order to perfect, in the United States, the Liens in
intellectual property created under the Pledge and Security Agreements and under such short form assignments or grants of security interests has been taken;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(vi) a copy of the Organization Documents, including all amendments thereto, of each Loan Party, and with respect to
the certificate or articles of formation or certificate or articles of incorporation, as applicable, certified as of a recent date by the Secretary of State or other applicable Governmental Authority of its respective jurisdiction of organization,
together with:

&nbsp;&nbsp;&nbsp;&nbsp;&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) a certificate as to the good standing of each Loan Party, as of a recent date, from the Secretary of State or other applicable authority of its respective jurisdiction of organization and from each other jurisdiction in which such Loan Party is qualified to do business, together in each case, to the extent taxes are not covered by such certificate of good standing, with a certificate or other evidence of good standing as to payment of any applicable franchise or similar taxes from the appropriate Taxing authority of each such 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;&nbsp;&nbsp;&nbsp;&nbsp;(B) a certificate of a Responsible Officer, secretary or assistant secretary (or any other officer having substantially the same authority and responsibility or otherwise satisfactory to the Administrative Agent) of each Loan Party dated the Original Closing Date and certifying (1) that the Organization Documents of such Loan Party have not been amended since the date of the last amendment thereto shown on the certified document from its jurisdiction of organization furnished pursuant to the preamble of this <u>clause (vi)</u> above; (2) that attached thereto is a true and complete copy of the agreement of limited partnership, operating agreement or by-laws of such Loan Party, as applicable, as in effect on the Original Closing Date and at all times since a date prior to the date of the resolutions described in <u>clause (3)</u> below, (3) that attached thereto is a true and complete copy of resolutions duly adopted by the board of directors (or other similar governing body) of such Loan Party authorizing the execution, delivery and performance of the Loan Documents to which it is to be a party and, in the case of each Borrower, the borrowings hereunder, and that such resolutions have not been modified, rescinded or amended and are in full force and effect; and (4) as to the incumbency and specimen signature of each officer executing any Loan Document or any other document delivered in connection herewith on behalf of such 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;&nbsp;&nbsp;&nbsp;&nbsp;(C) a certificate of another officer as to the incumbency and specimen signature of a Responsible Officer, secretary or assistant secretary (or any other officer having substantially the same authority and responsibility or otherwise satisfactory to the Administrative Agent) executing the certificate pursuant to <u>clause (B)</u> 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;&nbsp;&nbsp;&nbsp;&nbsp;(D) such other corporate or other constitutive or organizational documents as the Administrative Agent or Fried, Frank, Harris, Shriver & Jacobson, LLP, counsel for the Administrative Agent, may reasonably request;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(vii) a favorable written opinion of Akin Gump Strauss Hauer & Feld LLP, special counsel to the Loan
Parties, addressed to the Administrative Agent, the Collateral Agent, the L/C Issuer and each Lender from time to time party hereto, dated the Original Closing Date, covering such matters incident to the transactions contemplated hereby as the
Administrative Agent may reasonably request;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(viii) Reserved;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(ix) Reserved;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(x) from special Ohio counsel to the Loan Parties organized under the laws of Ohio, a favorable written opinion
addressed to the Administrative Agent, the Collateral Agent and each Lender from time to time party hereto, dated the Original Closing Date, covering such additional matters incident to the transactions contemplated hereby as the Administrative
Agent may reasonably request;

------

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(xi) a certificate signed by a Responsible Officer of the Parent Borrower certifying (A) that the conditions
specified in <u>Sections 4.01(f)</u> through <u>(j)</u>, <u>(m)</u>, <u>(n)</u> and (q) have been satisfied, and (B) that there has been no event or circumstance since the date of the Audited Financial Statements that has had or could
reasonably be expected to have, either individually or in the aggregate, a Material Adverse Effect;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(xii) Reserved;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(xiii) a certificate from the chief financial officer of the Parent Borrower addressed to the Administrative Agent and
the Lenders from time to time party to this Agreement, reasonably satisfactory in form and substance to the Administrative Agent and the Joint Lead Arrangers and substantially in the form of <u>Exhibit G</u> hereto, demonstrating the financial
condition and Solvency of Holdings, the Parent Borrower and their Subsidiaries on a consolidated basis after giving effect to the incurrence of all Loans to occur on the Original Closing Date and the "rollover" of all Existing Letters of
Credit into this Facility, all credit extensions under the <u>Original</u> Term Credit Agreement and the <u>Original</u> Second Lien Credit Agreement to occur on the Original Closing Date and all other elements of the Transaction to occur on the Original Closing Date and
the incurrence of all Indebtedness related thereto, and to the extent reasonably requested by the Administrative Agent, together with copies of additional valuations, appraisals and similar reports prepared by or on behalf of Holdings or any of its
Subsidiaries or the Sponsor in connection with the Transaction;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(xiv) evidence that all insurance required to be maintained pursuant to the Loan Documents has been obtained and is
in effect, together with the certificates of insurance, naming the Administrative Agent, on behalf of the Lenders, as an additional insured or loss payee, as the case may be, under all insurance policies maintained with respect to the assets and
properties of the Loan Parties that constitutes Collateral; and

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(xv) such other assurances, certificates, documents, consents or opinions as the Administrative Agent or any Lender
reasonably may require.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b)*<u>Certain Fees</u>*. All fees required to be paid on or before the Original Closing Date (i) to the Administrative Agent and the Joint Lead Arrangers and (ii) to the Administrative Agent for the benefit of the Lenders shall (to the extent invoiced at least two Business Days prior to the Original Closing Date, except as otherwise reasonably agreed by the Parent Borrower) in each case have been paid. 

------

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c)*<u>Counsel Fees</u>*. The Parent Borrower shall have paid all reasonable fees, out-of-pocket charges and disbursements of one counsel to the Administrative Agent (and any reasonably necessary special counsel and up to one local counsel in each applicable jurisdiction) (directly to such counsel if requested by the Administrative Agent) to the extent invoiced prior to or on the Original Closing Date, plus such additional amounts of such fees, charges and disbursements as shall constitute its reasonable estimate of such fees, charges and disbursements incurred or to be incurred by it through the closing proceedings (<u>provided</u> that such estimate shall not thereafter preclude a final settling of accounts between the Parent Borrower and the Administrative Agent). 

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(d) <u>*Original Closing Date*</u>. The Original Closing Date shall have occurred on or before December 12, 2013.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(e)*<u>Financial Information</u>*. The Administrative Agent shall have received (i) the Audited Financial Statements; (ii) unaudited consolidated balance sheets and related statements of income, stockholders' equity and cash flows of the Company and its subsidiaries, for any interim quarterly period which have ended since the Audited Financial Statements at least 45 days prior to the Original Closing Date, each prepared in accordance with GAAP; and (iii) an unaudited pro forma consolidated balance sheet and related unaudited pro forma consolidated statement of income of Holdings and its subsidiaries as of and for the twelve-month period ending on the last day of the most recently completed four-fiscal quarter period ended at least 45 days prior to the Original Closing Date, prepared after giving effect to the Transaction as if the Transaction had occurred as of such date (in the case of such pro forma balance sheet) and at the beginning of such period (in the case of such pro forma statement of income) (which, for the avoidance of doubt, excludes the impacts of purchase accounting adjustments arising as a result of the Transaction). 

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(f) *<u>Equity Contribution</u>*. On the Original Closing Date, substantially concurrently with the Borrowing of the initial Term Loans, the <u>(as defined in the</u> <u>Original Term Credit Agreement), the</u> initial Loans (if any) and the "rollover" of all Existing Letters of Credit into this Facility, the Administrative Agent shall have received evidence that the Parent Borrower has received cash proceeds from the issuance to the Sponsor and other co-investors (if any) of common equity (or other equity reasonably acceptable to the Administrative Agent) of Holdings (or other equity reasonably acceptable to the Administrative Agent), and the cash contribution thereof to the Parent Borrower (the "<u>Equity Contribution</u>") in an amount equal to at least 35.0% of the total amount of the funds necessary to consummate the Transaction.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(g)*<u>Term Loan Documents</u>*. On or prior to the Original Closing Date, (i) Holdings and the <u>Original</u> Term Borrower shall have entered into the <u>Original</u> Term Credit Agreement on terms and conditions reasonably satisfactory to the Administrative Agent and (ii) the Administrative Agent shall have received true and correct copies, certified as such by an appropriate officer of the <u>Original</u> Term Borrower of the <u>Original</u> Term Loan<u>Finance</u> Documents as in effect on the Original Closing Date and each of the other <u>Original</u> Term Finance Documents as originally executed and delivered on the Original Closing Date (each of which shall be reasonably satisfactory to the Administrative Agent). 

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(h) *<u>Second Lien Loan Documents</u>*. On or prior to the Original Closing Date, (i) Holdings and the <u>Original</u> Term Borrower shall have entered into the <u>Original</u> Second Lien Credit Agreement on terms and conditions reasonably satisfactory to the Administrative Agent and (ii) the Administrative Agent shall have received true and correct copies, certified as such by an appropriate officer of the <u>Original</u> Term Borrower of the <u>Original</u> Second Lien Loan Documents <u>(as defined in the Original Second Lien Credit Agreement)</u> as in effect on the Original Closing Date and each of the other <u>Original</u> Second Lien Loan Documents as originally executed and delivered on the Original Closing Date (each of which shall be reasonably satisfactory to the Administrative Agent).

------

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(i)*<u>Refinancing of Existing Indebtedness</u>*. On the Original Closing Date, after giving effect to the Transaction, neither Holdings nor any of its Subsidiaries shall have any material Indebtedness for borrowed money other than the Facility, Indebtedness incurred under the <u>Original</u> Term Loan<u>Finance</u> Documents, Indebtedness incurred under the <u>Original</u> Second Lien Loan Documents, working capital facilities for Foreign Subsidiaries, other Indebtedness incurred in the Ordinary Course of Business, other Indebtedness incurred that is permitted pursuant to the terms of the Merger Agreement, and other debt agreed to by the Administrative Agent and the Parent Borrower. 

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(j)*<u>Representations and Warranties</u>*. Each of the Specified Representations and the representations and warranties made by the Company in the Merger Agreement shall be true and correct in all material respects on and as of the date of such Borrowing, except to the extent that such representations and warranties specifically refer to an earlier date, in which case they shall be true and correct in all material respects as of such earlier date (but in any respect if any such representation or warranty is qualified by "material" or "material adverse effect" such representation or warranty shall be true and correct in all respects). 

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(k)*<u>Notice</u>*. The Administrative Agent shall have received a Request for Credit Extension in accordance with the requirements hereof. 

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;*(l) <u>ABL/Term</u> <u>Intercreditor Agreement</u>*. The ABL/Term<u>Original</u> Intercreditor Agreement shall have been duly executed and delivered by each party thereto and shall be in full force and effect. 

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(m) <u>*Consummation of the Closing Date Acquisition*</u>*.* On the Original Closing Date, immediately prior to the Borrowing of the initial Term Loans <u>(as defined in the</u> <u>Original Term Credit Agreement)</u>, the initial Loans (if any) and the "rollover" of all Existing Letters of Credit, into this Facility, the Closing Date Acquisition shall have been consummated pursuant to the Merger Agreement (without giving effect to any amendment or modification thereof or waiver with respect thereto, in each case, in a manner materially adverse to the Lenders (in their capacities as such) without the prior written consent of the Joint Lead Arrangers (such consent not to be unreasonably withheld, delayed or conditioned (it being agreed by the Joint Lead Arrangers that, with respect to any consent to any amendment, modification or waiver of the Merger Agreement, its consent shall be deemed to have been given if the Joint Lead Arrangers do not object in writing to a written request for such consent within one Business Day after such request for consent is delivered to the Joint Lead Arrangers in writing)); <u>provided</u> that (a) any reduction not in excess of 15% of the aggregate purchase price shall be deemed not to be materially adverse to the Lenders if such reduction is applied to reduce the Equity Contribution and the amount of funded debt on the Original Closing Date under this Agreement, the <u>Original</u> Term Credit Agreement and the <u>Original</u> Second Lien Credit Agreement on a pro rata basis and (b) any amendment or waiver of the definition of Material Adverse Effect or the conditions precedent in the Merger Agreement shall require the consent of the Joint Lead Arrangers (such consent not to be unreasonably withheld, delayed or conditioned)).

------

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(n) <u>*Company Material Adverse Effect*.</u>

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(i) Since January 1, 2013 through August 14, 2013, except as disclosed in (a) the Company SEC
Documents (as defined in the Merger Agreement) filed with the SEC (as defined in the Merger Agreement) on or after January 1, 2010, and prior to the date of the Merger Agreement (excluding any exhibits or any disclosures in such SEC Filings
contained in the "Risk Factors" and "Forward Looking Statements" sections thereof or any other disclosures in such SEC Filings that are forward-looking or cautionary in nature) or (b) the Company Disclosure Letter (as
defined in the Merger Agreement (and provided to the Administrative Agent prior to the August 14, 2013)), there has not been any change, effect, event or occurrence that, individually or in the aggregate, has had or would reasonably be expected
to have a Company Material Adverse Effect (as defined in the Merger Agreement); and

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(ii) Since August 14, 2013, there shall not have been any change, effect, event or occurrence that,
individually or in the aggregate with all other changes, effects, events or occurrences, has resulted in a Company Material Adverse Effect.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(o)*<u>Patriot Act</u>*. The Administrative Agent and the Lenders (to the extent reasonably requested in writing at least ten days prior to the Original Closing Date) shall have received, at least three Business Days prior to the Original Closing Date, all documentation and other information that the Administrative Agent reasonably determines to be required by Governmental Authorities under applicable "know your customer" and anti-money-laundering rules and regulations, including the Patriot Act. 

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(p)*<u>Borrowing Base Certificate</u>*. The Administrative Agent shall have received the borrowing base certificate most recently delivered under the Existing Credit Agreement prior to the Original Closing Date. 

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(q) <u>*Outstandings*</u>. On the Original Closing Date, the total Outstanding Amount shall not exceed $20,000,000.

Without limiting the generality of the provisions of the last paragraph of <u>Section 9.03</u>, for purposes of determining compliance with the conditions specified in this <u>Section 4.01</u>, each Lender that has signed this Agreement shall be deemed to have consented to, approved or accepted or to be satisfied with, each document or other matter required thereunder to be consented to or approved by or acceptable or satisfactory to a Lender unless the Administrative Agent shall have received notice from such Lender prior to the proposed Original Closing Date specifying its objection thereto.

------

Section 4.02 <u>All Credit Events</u>. On the date of each Credit Event after the Original Closing Date:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a)*<u>Committed Loan Notice</u>*. The Administrative Agent shall have received, in the case of a Borrowing, a Committed Loan Notice as required by <u>Section 2.02(a)</u> or, in the case of the issuance of a Letter of Credit, the applicable L/C Issuer and the Administrative Agent shall have received a Letter of Credit Application as required by <u>Section 2.03(b)</u>. 

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b)*<u>Representations and Warranties</u>*. The representations and warranties set forth in the Loan Documents shall be true and correct in all material respects as of such date (other than an amendment, extension or renewal of a Letter of Credit without any increase in the stated amount of such Letter of Credit), as applicable, with the same effect as though made on and as of such date, except to the extent such representations and warranties expressly relate to an earlier date (in which case such representations and warranties shall be true and correct in all material respects as of such earlier date). 

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c)*<u>No Default or Event of Default</u>*. At the time of and immediately after such Borrowing or issuance, amendment, extension or renewal of a Letter of Credit (other than an amendment, extension or renewal of a Letter of Credit without any increase in the stated amount of such Letter of Credit), as applicable, no Event of Default or Default shall have occurred and be continuing or would result therefrom. 

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(d)*<u>Availability; No Standstill Period</u>*. At the time of and immediately after such Borrowing or issuance, amendment, extension or renewal of a Letter of Credit, as applicable, (i) except as expressly set forth in <u>Section 2.17</u>, the total Outstanding Amount does not exceed the Borrowing Base and (ii) no Standstill Period is then in effect. 

Each such Credit Event shall be deemed to constitute a representation and warranty by each Borrower on the date of such Borrowing, issuance, amendment, extension or renewal as applicable, as to the matters specified in <u>paragraphs (b)</u>, <u>(c)</u> and <u>(d)</u> of this <u>Section 4.02</u>.

Section 4.03 <u>Amendment</u>. On the Second<u>Third</u> Amendment Effective Date, upon satisfaction of the conditions set forth in Section 2 of the Second<u>Third</u> Amendment, the Existing Credit Agreement will be automatically amended to read as set forth in this Agreement. The rights and obligations of the parties hereto shall be governed (i) prior to the Second<u>Third</u> Amendment Effective Date, by the Existing Credit Agreement and (ii) on and after the Second<u>Third</u> Amendment Effective Date, by this Agreement. Once the Second<u>Third</u> Amendment Effective Date has occurred, all references to the Existing Credit Agreement in any document, instrument, agreement or writing shall be deemed to refer to this Agreement.

**ARTICLE V** 

**REPRESENTATIONS AND WARRANTIES** 

The Loan Parties, jointly and severally, represent and warrant to the Administrative Agent and the Lenders that on the date of each Credit Event the following are true, correct and complete:

Section 5.01 <u>Corporate Existence and Power; Compliance with Laws</u>. Each Loan Party and each of their respective Subsidiaries:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a) is a corporation, limited liability company or limited partnership, as applicable, duly organized, validly existing and in good standing under the laws of the jurisdiction of its incorporation, organization or formation, as applicable;

------

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b) has the power and authority and all governmental licenses, authorizations, Permits, consents and approvals to own its assets, carry on its business and execute, deliver, and perform its obligations under, the Loan Documents and the Related Agreements to which it is a party;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c) is duly qualified as a foreign corporation, limited liability company or limited partnership, as applicable, and licensed and in good standing, under the laws of each jurisdiction where its ownership, lease or operation of Property or the conduct of its business requires such qualification or license; and

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(d) is in compliance with all Requirements of Law;

except, in each case referred to in <u>clause (c)</u> or <u>clause (d)</u>, to the extent that the failure to do so would not reasonably be expected to have, either individually or in the aggregate, a Material Adverse Effect.

Section 5.02 <u>Corporate Authorization; No Contravention</u>. The execution, delivery and performance by each of the Loan Parties of this Agreement, and by each of the Loan Parties and each of their respective Subsidiaries of any other<u>each</u> Loan Document and Related Agreement to which such Person is party, have been duly authorized by all necessary action, and do not and will not:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a) contravene the terms of any of that Person's Organization Documents;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b) conflict with or result in any material breach or contravention of, or result in the creation of any Lien under, any document evidencing any material Contractual Obligation to which such Person is a party or any order, injunction, writ or decree of any Governmental Authority to which such Person or its Property is subject; or

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c) violate any material Requirement of Law in any material respect.

Section 5.03 <u>Governmental Authorization</u>. No approval, consent, exemption, authorization, or other action by, or notice to, or filing with, any Governmental Authority or any other Person is necessary or required in connection with the execution, delivery or performance by, or enforcement against, any Loan Party or any Subsidiary of any Loan Party of this Agreement, <u>or</u> any other Loan Document or Related Agreement except (a) for recordings and filings in connection with the Liens granted to the Collateral Agent under the Collateral Documents and in connection with the Liens granted to the applicable collateral agent under the Term Collateral Documents, (b) those obtained or made on or prior to the Second<u>Third</u> Amendment Effective Date, <u>and</u> (c) in the case of any approval, consent, authorization, or other action by, or notice to any other Person (other than any Governmental Authority), those which, if not obtained or made, would not reasonably be expected to have, either individually or in the aggregate, a Material Adverse Effect, and (d) in the case of any Related Agreement, those which, if not obtained or made, would not reasonably be expected to have, either individually or in the aggregate, a Material Adverse Effect.

------

Section 5.04 <u>Binding Effect</u>. This Agreement and each other Loan Document and Related Agreement to which any Loan Party or any Subsidiary of any Loan Party is a party have been duly executed and delivered by such Person and constitute the legal, valid and binding obligations of each such Person which is a party thereto, enforceable against such Person in accordance with their respective terms, except as enforceability may be limited by applicable bankruptcy, insolvency, or similar laws affecting the enforcement of creditors' rights generally or by equitable principles relating to enforceability.

Section 5.05 <u>Litigation</u>. Except as specifically disclosed in <u>Schedule 5.05</u>, there are no actions, suits, proceedings, claims or disputes pending, or to the best knowledge of each Loan Party, threatened or contemplated, at law, in equity, in arbitration or before any Governmental Authority, against any Loan Party, any Subsidiary of any Loan Party or any of their respective Properties which:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a) as of the Second<u>Third</u> Amendment Effective Date, purport to affect or pertain to this Agreement, any other Loan Document or Related Agreement, or any of the transactions contemplated hereby or thereby;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b) as of the Second<u>Third</u> Amendment Effective Date, would reasonably be expected to result in equitable relief or monetary judgment(s), individually or in the aggregate, in excess of $5,000,000 in excess of applicable insurance coverage; or

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c) would reasonably be expected to result in equitable relief or monetary judgment(s), individually or in the aggregate, that would reasonably have a Material Adverse Effect.

No injunction, writ, temporary restraining order or any order of any nature has been issued by any court or other Governmental Authority purporting to enjoin or restrain the execution, delivery or performance of this Agreement, <u>or</u> any other Loan Document or any Related Agreement, or directing that the transactions provided for herein or therein not be consummated as herein or therein provided. As of the Second<u>Third</u> Amendment Effective Date, except as disclosed on <u>Schedule 5.05</u>, no Loan Party or any Subsidiary of any Loan Party is the subject of an audit by the IRS or other Governmental Authority or, to each Loan Party's knowledge, any review or investigation by the IRS or other Governmental Authority concerning the violation or possible violation of any Requirement of Law. No Loan Party and no Subsidiary of any Loan Party is a party to or is otherwise subject to any agreements or instruments or any charter or other internal restrictions which, individually or in the aggregate, could reasonably be expected to result in a Material Adverse Effect.

Section 5.06 <u>No Default</u>. No Default or Event of Default exists or would result from the incurring of any Finance Obligations by any Loan Party or the grant or perfection of the Collateral Agent's Liens on the Collateral or the consummation of the Related Transactions. No Loan Party and no Subsidiary of any Loan Party is in default under or with respect to any Contractual Obligation in any respect which, individually or together with all such defaults, would reasonably be expected to have a Material Adverse Effect.

------

Section 5.07 <u>ERISA Compliance</u>. <u>Schedule 5.07</u> sets forth, as of the Second<u>Third</u> Amendment Effective Date, a complete and correct list of, and that separately identifies, (a) all Title IV Plans and (b) all Multiemployer Plans. Except for those that would not, in the aggregate, have a Material Adverse Effect, (x) each Benefit Plan is in compliance with applicable provisions of ERISA, the Code and other Requirements of Law, (y) there are no existing or pending (or to the knowledge of any Loan Party, threatened) claims (other than routine claims for benefits in the normal course), sanctions, actions, lawsuits or other proceedings or investigation involving any Benefit Plan to which any Loan Party incurs or otherwise has or could reasonably be expected to have an obligation or any Liability and (z) no ERISA Event is reasonably expected to occur. On the Second<u>Third</u> Amendment Effective Date, no ERISA Event has occurred in connection with which obligations and liabilities (contingent or otherwise) remain outstanding except as would not result in a Material Adverse Effect. Except as set forth in <u>Schedule 5.07</u>, to the knowledge of any Loan Party, no ERISA Affiliate would have any withdrawal liability as a result of a complete withdrawal from any Multiemployer Plan on the date this representation is made except as would not reasonably be expected to result in a Material Adverse Effect.

Section 5.08 <u>Use of Proceeds; Margin Regulations</u>. The proceeds of the Loans are intended to be and shall be used solely for the purposes set forth in and permitted by <u>Section 6.10</u>, and are intended to be and shall be used in compliance with <u>Section 7.08</u>. No Loan Party and no Subsidiary of any Loan Party is engaged in the business of purchasing or selling Margin Stock or extending credit for the purpose of purchasing or carrying Margin Stock in a manner that would result in a violation of Regulation U of the Federal Reserve Board. The proceeds of the Loans shall not be used for the purpose of purchasing Margin Stock.

Section 5.09 <u>Ownership of Property; Liens</u>. As of the Second<u>Third</u> Amendment Effective Date, the Real Estate listed in <u>Schedule 5.09</u> constitutes all of the Real Estate of each Loan Party and each of their respective Subsidiaries. Each of the Loan Parties and each of their respective Subsidiaries has good record and marketable title in fee simple to, or valid leasehold interests in, all Real Estate, and good and valid title to all owned personal property and valid leasehold interests in all leased personal property, in each instance, necessary or used in the ordinary conduct of their respective businesses. As of the Second<u>Third</u> Amendment Effective Date, none of the Real Estate of any Loan Party or any Subsidiary of any Loan Party is subject to any Liens other than Permitted Liens. As of the Second<u>Third</u> Amendment Effective Date, <u>Schedule 5.09</u> also describes any purchase options, rights of first refusal or other similar contractual rights pertaining to any Real Estate. As of the Second<u>Third</u> Amendment Effective Date, all material permits required to have been issued or appropriate to enable the Real Estate to be lawfully occupied and used for all of the purposes for which it is currently occupied and used have been lawfully issued and are in full force and effect.

Section 5.10 <u>Taxes</u>. Except as disclosed in <u>Schedule 5.10</u>, (i) all federal, state, local and foreign income and franchise and other material Tax returns, reports and statements (collectively, the "<u>Tax Returns</u>") required to be filed by any of Holdings, the Borrowers or their Subsidiaries have been filed with the appropriate Governmental Authorities in all jurisdictions in which such Tax Returns are required to be filed, all such Tax Returns are true and correct in all material respects, and all Taxes reflected therein or otherwise due and payable have been timely paid except for those contested in good faith by appropriate proceedings diligently conducted and for which adequate reserves are maintained on the books of the appropriate Tax Affiliate in accordance with GAAP; (ii) as of the Second<u>Third</u> Amendment Effective Date, no Tax Return is under audit or examination by any Governmental Authority and no written notice of any pending audit or

------

examination or any assertion of any claim for Taxes has been given or made by any Governmental Authority; and (iii) proper and accurate amounts have been withheld for all periods by each of Holdings, the Borrowers and their Subsidiaries from their respective employees in material compliance with the Tax, social security and unemployment withholding provisions of applicable Requirements of Law and such withholdings have been timely paid to the respective Governmental Authorities. No Tax Affiliate has participated in a "transaction" within the meaning of Treasury Regulation Section 1.6011-4(b)(2).

Section 5.11 <u>Financial Condition</u>.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a) Each of (i) the audited consolidated balance sheet of Holdings and its Subsidiaries dated December 31, 2016<u>2021</u>, and the related audited consolidated statements of income or operations, shareholders' equity and cash flows for the Fiscal Year ended on that date and (ii) the unaudited interim consolidated balance sheet of Holdings and its Subsidiaries dated September 30, 2017<u>March 31, 2022</u> and the related unaudited consolidated statements of income, shareholders' equity and cash flows for the nine fiscal months then ended, in each case, as attached hereto as <u>Schedule 5.11(a)</u>:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(i) were prepared in accordance with GAAP (except, in the case of unaudited statements, as permitted by the rules and regulations of the SEC) applied on a consistent basis during the periods involved (except as may be indicated therein or in the notes thereto); and

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(ii) fairly present in all material respects the consolidated financial position of the Company and its consolidated subsidiaries as at the respective dates thereof and their consolidated results of operations and consolidated cash flows for the respective periods then ended (subject, in the case of unaudited statements, to normal year-end audit adjustments and to any other adjustments described therein, including in any notes thereto).

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b) [Reserved.]

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c) Since December 31, 2016<u>2021</u>, there has been no Material Adverse Effect.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(d) The Loan Parties and their Subsidiaries (i) have no Indebtedness other than Indebtedness permitted pursuant to <u>Section 7.05</u> and (ii) as of the Second<u>Third</u> Amendment Effective Date, have no other contingent liabilities or liabilities for long-term leases or unusual forward or long-term commitments except for contingent liabilities or liabilities for long-term leases or unusual forward or long-term commitments that are reflected or reserved against in the financial statements referred to in <u>Section 5.11(a)</u> or the notes thereto and which in any such case are material in relation to the business, operations, properties, assets, condition (financial or otherwise) or prospects of the Loan Parties and their respective Subsidiaries.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(e) All financial performance projections delivered to the Administrative Agent represent the Parent Borrower's best good faith estimate of future financial performance and are based on assumptions believed by the Parent Borrower to be fair and reasonable in light of current market conditions, it being acknowledged and agreed by the Administrative Agent and the Lenders that projections as to future events are not to be viewed as facts and that the actual results during the period or periods covered by such projections may differ from the projected results.

------

Section 5.12 <u>Environmental Matters</u>. Except as set forth in <u>Schedule 5.12</u>, and except where any failures to comply would not reasonably be expected to result in, either individually or in the aggregate, Material Environmental Liabilities to the Loan Parties and their Subsidiaries, (a) the operations of each Loan Party and each Subsidiary of each Loan Party are and have been in compliance with all applicable Environmental Laws, including obtaining, maintaining and complying with all Permits required by any applicable Environmental Law, (b) no Loan Party and no Subsidiary of any Loan Party is party to, and no Loan Party and no Subsidiary of any Loan Party and no Real Estate currently (or to the knowledge of any Loan Party previously) owned, leased, subleased, operated or otherwise occupied by or for any such Person is subject to or the subject of, any Contractual Obligation or any pending (or, to the knowledge of any Loan Party, threatened) order, action, investigation, suit, proceeding, audit, claim, demand, dispute or notice of violation or of potential liability or similar notice relating in any manner to any Environmental Laws, (c) no Lien in favor of any Governmental Authority securing, in whole or in part, Environmental Liabilities has attached to any Property of any Loan Party or any Subsidiary of any Loan Party and, to the knowledge of any Loan Party, no facts, circumstances or conditions exist that could reasonably be expected to result in any such Lien attaching to any such Property, (d) no Loan Party and no Subsidiary of any Loan Party has caused or suffered to occur a Release of Hazardous Materials at, to or from any Real Estate, (e) all Real Estate currently (or to the knowledge of any Loan Party previously) owned, leased, subleased, operated or otherwise occupied by or for any such Loan Party and each Subsidiary of each Loan Party is free of contamination by any Hazardous Materials, and (f) no Loan Party and no Subsidiary of any Loan Party (i) is or has been engaged in, or has permitted any current or former tenant to engage in, operations in violation of any Environmental Law or (ii) knows of any facts, circumstances or conditions reasonably constituting notice of a violation of any Environmental Law, including receipt of any information request or notice of potential responsibility under the Comprehensive Environmental Response, Compensation and Liability Act of 1980 or similar Environmental Laws. Each Loan Party has made available to the Administrative Agent copies of all existing environmental reports, reviews and audits and all material documents pertaining to actual or potential Environmental Liabilities, in each case to the extent such reports, reviews, audits and documents are in their possession, custody, control or otherwise available to the Loan Parties.

Section 5.13 <u>Regulated Entities</u>. No Loan Party, no Person controlling any Loan Party, nor any Subsidiary of any Loan Party, is (a) an "investment company" within the meaning of the Investment Company Act of 1940 or (b) subject to regulation under the Federal Power Act of 1935, the Interstate Commerce Act of 1887, any state public utilities code, or any other federal or state statute, rule or regulation limiting its ability to incur Indebtedness, pledge its assets or perform its obligations under the Loan Documents.

Section 5.14 <u>Solvency</u>. Both before and after giving effect to (a) the Loans made and Letters of Credit issued on or prior to the date this representation and warranty is made or remade, (b) the disbursement of the proceeds of such Loans, <u>and</u> (c) the consummation of the Related Transactions and (d) the payment and accrual of all transaction costs in connection with the foregoing, Holdings and its Subsidiaries, on a consolidated basis, are Solvent.

------

Section 5.15 <u>Labor Relations</u>. There are no strikes, work stoppages, slowdowns or lockouts existing, pending (or, to the knowledge of any Loan Party, threatened) against or involving any Loan Party or any Subsidiary of any Loan Party, except for those that would not, in the aggregate, reasonably be expected to have a Material Adverse Effect. Except as set forth on <u>Schedule 5.15</u>, as of the Second<u>Third</u> Amendment Effective Date, (a) there is no collective bargaining or similar agreement with any union, labor organization, works council or similar representative covering any employee of any Loan Party or any Subsidiary of any Loan Party and (b) no petition for certification or election of any such representative is existing or pending with respect to any employee of any Loan Party or any Subsidiary of any Loan Party.

Section 5.16 <u>Intellectual Property</u>. <u>Schedule 5.16</u> sets forth a true and complete list as of the Second<u>Third</u> Amendment Effective Date of the following Intellectual Property each Loan Party owns, licenses or otherwise has the right to use: (i) Intellectual Property that is registered or subject to applications for registration and (ii) Internet Domain Names, separately identifying that owned and licensed to such Loan Party and including for each of the foregoing items (1) the owner, (2) the title, (3) the jurisdiction in which such item has been registered or otherwise arises or in which an application for registration has been filed, (4) as applicable, the registration or application number and registration or application date and (5) any IP Licenses or other rights (including franchises) granted by such Loan Party with respect thereto. Each Loan Party and each Subsidiary of each Loan Party owns, or is licensed to use, all Intellectual Property necessary to conduct its business as currently conducted except for such Intellectual Property the failure of which to own or license would not reasonably be expected to have, either individually or in the aggregate, a Material Adverse Effect. To the knowledge of each Loan Party, (a) the conduct and operations of the businesses of each Loan Party and each Subsidiary of each Loan Party does not infringe, misappropriate, dilute, violate or otherwise impair any Intellectual Property owned by any other Person and (b) no other Person has contested any right, title or interest of any Loan Party or any Subsidiary of any Loan Party in, or relating to, any Intellectual Property, other than, in each case, as cannot reasonably be expected to affect the Loan Documents and the transactions contemplated therein and would not, in the aggregate, reasonably be expected to have a Material Adverse Effect.

Section 5.17 <u>Brokers' Fees; Transaction Fees</u>. Except as disclosed on <u>Schedule 5.17</u> and except for fees payable to the Administrative Agent and the Lenders, <u>as of the Third Amendment Effective Date,</u> none of the Loan Parties or any of their respective Subsidiaries has any obligation to any Person in respect of any finder's, broker's or investment banker's fee in connection with the transactions contemplated hereby.

Section 5.18 <u>Insurance</u>. <u>Schedule 5.18</u> lists all insurance policies of any nature maintained, as of the Second<u>Third</u> Amendment Effective Date, for current occurrences by each Loan Party, including issuers, coverages and deductibles. Each of the Loan Parties and each of their respective Subsidiaries and their respective Properties are insured with financially sound and reputable insurance companies which are not Affiliates of the Borrowers, in such amounts, with such deductibles and covering such risks as are customarily carried by companies engaged in similar businesses of the same size and character as the business of the Loan Parties and, to the extent relevant, owning similar Properties in localities where such Person operates.

Section 5.19 <u>Ventures, Subsidiaries and Affiliates; Outstanding Stock</u>. Except as set forth in <u>Schedule 5.19</u>, as of the Second<u>Third</u> Amendment Effective Date, no Loan Party and no Subsidiary of any Loan Party (a) has any Subsidiaries, or (b) is engaged in any joint venture or partnership with any other Person, or is an Affiliate of any other Person. All issued and outstanding Stock and Stock Equivalents of each of the Loan Parties and each of their respective Subsidiaries

------

are duly authorized and validly issued, fully paid, non-assessable, and free and clear of all Liens other than, with respect to the Stock and Stock Equivalents of the Borrowers and Subsidiaries of the Borrowers, those in favor of the Collateral Agent, for the benefit of the Secured Parties. All such securities were issued in compliance with all applicable state and federal laws concerning the issuance of securities. All of the issued and outstanding Stock of each Loan Party (other than Holdings), each Subsidiary of each Loan Party and, as of the Second<u>Third</u> Amendment Effective Date, Holdings is owned by each of the Persons and in the amounts set forth in <u>Schedule 5.19</u>. Except as set forth in <u>Schedule 5.19</u>, there are no pre-emptive or other outstanding rights to purchase, options, warrants or similar rights or agreements pursuant to which any Loan Party may be required to issue, sell, repurchase or redeem any of its Stock or Stock Equivalents or any Stock or Stock Equivalents of its Subsidiaries. Set forth in <u>Schedule 5.19</u> is a true and complete organizational chart of Holdings and all of its Subsidiaries, which the Parent Borrower shall update upon notice to the Administrative Agent promptly following the incorporation, organization or formation of any Subsidiary and promptly following the completion of any Permitted Acquisition.

Section 5.20 <u>Jurisdiction of Organization; Chief Executive Office</u>. <u>Schedule 5.20</u> lists each Loan Party's jurisdiction of organization, legal name and organizational identification number, if any, and the location of such Loan Party's chief executive office or sole place of business, in each case as of the date hereof<u>Third Amendment Effective Date</u>, and such <u>Schedule 5.20</u> also lists all jurisdictions of organization and legal names of such Loan Party for the five years preceding the Second<u>Third</u> Amendment Effective Date.

Section 5.21 <u>Status of Steinway and Sons</u>. As of the Second<u>Third</u> Amendment Effective Date, all of the Property of Steinway and Sons (other than Property that (at fair market value) does not exceed $500,000 in the aggregate for all such Property) is located outside of the United States.

Section 5.22 <u>Full Disclosure</u>. None of the representations or warranties made by any Loan Party or any of their Subsidiaries in the Loan Documents as of the date such representations and warranties are made or deemed made, and none of the statements contained in each exhibit, report, statement or certificate (including any Borrowing Base Certificate) furnished by or on behalf of any Loan Party or any of their Subsidiaries in connection with the Loan Documents (including the offering and disclosure materials, if any, delivered by or on behalf of any Loan Party to the Administrative Agent or the Lenders prior to the Second<u>Third</u> Amendment Effective Date), contains any untrue statement of a material fact or omits any material fact required to be stated therein or necessary to make the statements made therein, in light of the circumstances under which they are made, not misleading as of the time when made or delivered.

Section 5.23 <u>Foreign Assets Control Regulations, Export Controls and Anti-Money Laundering</u>. Each Loan Party and each Subsidiary of each Loan Party is in compliance in all material respects with (i) all applicable U.S. economic sanctions Requirements of Law, executive orders and implementing regulations as promulgated by the U.S. Treasury Department's Office of Foreign Assets Control ("<u>OFAC</u>"), (ii) the Export Administration Act and Regulations, the Arms Export Control Act and the International Traffic in Arms Regulations, (iii) all applicable anti-money laundering and counter-terrorism financing Requirements of Law, including, but not limited to, the Bank Secrecy Act, as amended by the Patriot Act and the Money Laundering Control Act of 1986 (i.e., 18 U.S.C. §§ 1956 and 1957); and (iv) any similar applicable Requirements of Law enacted in the United States or any other jurisdictions in which the parties to this agreement

------

operate, as any of the foregoing Requirements of Law may from time to time be amended, renewed, extended, or replaced and all other applicable legal requirements of any Governmental Authority governing, addressing, relating to, or attempting to eliminate, terrorist acts and acts of war and any regulations promulgated pursuant thereto (collectively, "<u>Anti-Money Laundering Laws, Export Controls, and Economic Sanctions</u>"). None of Loan Parties, nor any of their respective Subsidiaries nor any of their respective officers, directors, employees or agents (i) is a Person designated by the U.S. government on the list of the Specially Designated Nationals and Blocked Persons (the "<u>SDN List</u>") with which a U.S. Person cannot deal or otherwise engage in business transactions, (ii) is a Person who is otherwise the target of U.S. or applicable foreign economic sanctions Requirements of Law or (iii) is controlled by (including without limitation by virtue of such person being a director or owning controlling voting shares or interests), or acts, directly or indirectly, for or on behalf of, any person or entity on the SDN List or similar applicable U.S. or foreign economic sanctions list or a foreign government that is the target of applicable economic sanctions prohibitions such that the entry into, or performance under, this Agreement or any other Loan Document would be prohibited under applicable Requirement of Law. No part of the proceeds of any Loan will be used directly or indirectly in violation of any Anti-Money Laundering Laws, Export Controls and Economic Sanctions.

Section 5.24 <u>Patriot Act</u>. The Loan Parties, and each of their Subsidiaries are in compliance in all material respects with (a) the Trading with the Enemy Act of the United States (50 U.S.C. App. §§ 1 et seq.), as amended, and each of the foreign assets control regulations of the United States Treasury Department (31 CFR, subtitle B, Chapter V, as amended) and any other enabling legislation or executive order relating thereto, (b) the Patriot Act, (c) other applicable federal or state Requirements of Law relating to "know your customer" and anti-money laundering rules and regulations, and (d) the United States Foreign Corrupt Practices Act of 1977, as amended, or any other applicable anti-corruption Requirements of Law. No part of the proceeds of any Loan will be used directly or indirectly for any payments to any government official or employee, political party, official of a political party, candidate for political office, or anyone else acting in an official capacity, in order to illegally obtain, retain or direct business or obtain any improper advantage, in violation of the United States Foreign Corrupt Practices Act of 1977, as amended, or any other applicable anti-corruption Requirements of Law.

Section 5.25 <u>Reserved</u>.

Section 5.26 <u>Collateral Documents</u>.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a)*<u>Article 9 Collateral</u>*. The Pledge and Security Agreement is effective to create in favor of the Collateral Agent, for the ratable benefit of the Secured Parties, a legal, valid and enforceable security interest in the Collateral described therein and such security interest constitutes a fully perfected Lien on, and security interest in, all right, title and interest of the grantors thereunder in such of the Collateral in which a security interest can be perfected under Article 9 of the UCC, in each case securing the Finance Obligations and prior and superior in right to any other Person (other than the Term Collateral Agent with respect to the Term Priority Collateral), other than with respect to Permitted Liens existing on the Second<u>Third</u> Amendment Effective Date, other non-consensual Permitted Liens not perfected by the filing of UCC financing statements whose priority is determined by applicable law (other than with respect to the property of any newly formed or acquired Subsidiary or newly acquired property of any existing Loan Party to the extent Holdings and the Borrowers are in compliance with <u>Section 6.13</u>) and any title exceptions referred to in the title insurance policies reasonably acceptable to the Collateral Agent.

------

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b)*<u>Intellectual Property</u>*. The Pledge and Security Agreement constitutes a fully perfected Lien on, and security interest in, all right, title and interest of the grantors thereunder in the United States patents, trademarks, copyrights, licenses and other intellectual property rights covered in such "Notices", in each case securing the Finance Obligations and prior and superior in right to any other Person (other than the Term Collateral Agent with respect to the Term Priority Collateral) (it being understood that subsequent recordings in the United States Patent and Trademark Office and the United States Copyright Office may be necessary to perfect a lien on registered trademarks, trademark applications and copyrights acquired by the Loan Parties after the Second<u>Third</u> Amendment Effective Date) (other than with respect to such property of any newly formed or acquired Subsidiary or such newly acquired property to the extent Holdings and the Borrowers are in compliance with <u>Section 6.13</u>).

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c)*<u>Real Property Mortgages</u>*. The Mortgages are (subject to <u>Section 6.15</u>) effective to create in favor of the Collateral Agent, for the ratable benefit of the Secured Parties, a legal, valid and enforceable Lien on all of the right, title and interest of the Loan Parties in and to the Mortgaged Properties thereunder and the proceeds thereof, and the Mortgages constitute a fully perfected Lien on, and security interest in, all right, title and interest of the Loan Parties in such Mortgaged Properties and the proceeds thereof, in each case securing the Finance Obligations and prior in right to any other Person, other than with respect to Liens permitted by <u>Section 7.01(g)</u> and non-consensual Permitted Liens not perfected by the filing of UCC financing statements whose priority is determined by applicable law (other than with respect to such property of any newly formed or acquired Subsidiary or such newly acquired property to the extent Holdings and the Borrowers are in compliance with <u>Section 6.13</u>).

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(d)*<u>Status of Liens</u>*. The Collateral Agent, for the ratable benefit of the Secured Parties, will at all times have the Liens provided for in the Collateral Documents and, subject to the filing by the Collateral Agent of continuation statements to the extent required by the UCC, the Collateral Documents will at all times constitute valid and continuing liens of record and first priority perfected security interests in all the Collateral referred to therein, except as priority may be (i) in the case of Term Priority Collateral but subject to the ABL/Term Intercreditor Agreement, subject only to the Liens of the Term Collateral Documents and (ii) affected by Permitted Liens existing on the Second<u>Third</u> Amendment Effective Date or<u>,</u> by non-consensual Permitted Liens not perfected by the filing of UCC financing statements whose priority is determined by applicable law. As of the Second<u>, or, after the incurrence of a Permitted Term Debt, in the case of "Term Priority Collateral" (or any similar concept) as set forth in an Intercreditor Agreement, subject to the Liens securing any Permitted Term Debt subject to an Intercreditor Agreement). As of the Third</u> Amendment Effective Date, no filings or recordings are required in order to perfect the security interests created under the Collateral Documents.

------

**ARTICLE VI** 

**AFFIRMATIVE COVENANTS** 

So long as any Lender shall have any Revolving Facility Commitment hereunder, any Loan or other ABL Credit Obligation hereunder shall remain unpaid or unsatisfied (other than unasserted contingent indemnification obligations not due and payable), and until all Letters of Credit have been canceled or have expired (or shall have been Cash Collateralized or backstopped on terms reasonably satisfactory to the Administrative Agent) and all amounts drawn or paid thereunder have been reimbursed in full, each Loan Party and each of their respective Subsidiaries covenants and agrees that:

Section 6.01 <u>Financial Statements</u>. Each Loan Party shall maintain, and shall cause each of its Subsidiaries to maintain, a system of accounting established and administered in accordance with sound business practices to permit the preparation of financial statements in conformity with GAAP (provided that monthly financial statements shall not be required to have footnote disclosures and are subject to normal year-end adjustments). The Parent Borrower shall deliver to the Administrative Agent and each Lender by Electronic Transmission and in detail reasonably satisfactory to the Administrative Agent and the Required Lenders:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a) as soon as available, but not later than 90 days after the end of each Fiscal Year, a copy of the audited consolidated and unaudited Consolidating balance sheets of Holdings and each of its Subsidiaries as at the end of such year and the related consolidated and Consolidating statements of income or operations, shareholders' equity and cash flows for such Fiscal Year, setting forth in each case in comparative form the figures for the previous Fiscal Year, and accompanied by the report of any "Big Four" or other nationally recognized independent certified public accounting firm reasonably acceptable to the Administrative Agent which report shall contain an unqualified opinion stating that such consolidated financial statements present fairly in all material respects the financial position for the periods indicated in conformity with GAAP and shall not be subject to any "going concern" or like qualification or exception or any qualification or exception as to the scope of such audit (except for an explanatory paragraph solely with respect to or resulting solely from an upcoming scheduled maturity date of the Loans or other series of Indebtedness permitted under <u>Section 7.05(g)</u>, in each case, occurring within one year from the time such report is delivered); and

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b) as soon as available, but not later than 45 days after the end of each of the first three Fiscal Quarters of each Fiscal Year, a copy of the unaudited consolidated and Consolidating balance sheets of Holdings and each of its Subsidiaries, and the related consolidated and Consolidating statements of income, shareholders' equity and cash flows as of the end of such Fiscal Quarter and for the portion of the Fiscal Year then ended, each of which shall fairly present, in all material respects, in accordance with GAAP, the financial position and the results of operations of Holdings and its Subsidiaries, subject to normal year-end adjustments and absence of footnote disclosures.

Section 6.02 <u>Certificates; Other Information</u>. The Parent Borrower shall furnish to the Administrative Agent and each Lender by Electronic Transmission:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a) together with each delivery of financial statements pursuant to <u>Sections 6.01(a)</u> and <u>6.01(b)</u>, (i) a management report, in reasonable detail, signed by a Responsible Officer of the Parent Borrower, describing the operations and financial condition of the Loan Parties and their Subsidiaries for the Fiscal Quarter and the portion of the Fiscal Year then ended (or for the Fiscal Year then ended in the case of annual financial statements), and (ii) a report setting forth in comparative form the corresponding figures for the corresponding periods of the previous Fiscal Year and the corresponding figures from the most recent projections for the current Fiscal Year delivered pursuant to <u>Section 6.02(e)</u> and discussing the reasons for any significant variations;

------

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b) concurrently with the delivery of the financial statements referred to in <u>Sections 6.01(a)</u> and <u>6.01(b)</u> a fully and properly completed certificate in the form of <u>Exhibit D</u> (a "<u>Compliance Certificate</u>"), certified on behalf of the Parent Borrower by a Responsible Officer;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c) promptly after the same become publicly available, copies of all financial statements and regular, periodic or special reports which any Loan Party sends to its shareholders or other equity holders, as applicable, or furnishes to, or files with, the SEC or any successor or similar Governmental Authority;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(d) at the time of delivery of each of the quarterly financial statements delivered pursuant to <u>Section 6.01</u>, (i) a listing of government contracts of the Borrowers subject to the federal Assignment of Claims Act of 1940 or any similar state law; and (ii) a list of any applications for the registration of any Patent, Trademark or Copyright filed by any Loan Party with the United States Patent and Trademark Office, the United States Copyright Office or any similar office or agency in each case entered into or filed in the prior Fiscal Quarter;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(e) as soon as available and in any event no later than 45 days after the last day of each Fiscal Year of the Parent Borrower, projections of the Loan Parties (and their Subsidiaries') consolidated and Consolidating financial performance for the forthcoming Fiscal Year on a month by month basis;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(f) promptly upon receipt thereof, copies of any reports submitted by the Parent Borrower's certified public accountants in connection with each annual, interim or special audit or review of any type of the financial statements or internal control systems of any Loan Party made by such accountants;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(g) promptly upon receipt thereof, copies of any credit rating materials with respect to any Indebtedness permitted under <u>Section 7.05(g)</u>;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(h) promptly, such additional business, financial, collateral, corporate affairs, perfection certificates and other information as the Administrative Agent may from time to time reasonably request;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(i) as soon as available, and in any event within twenty Business Days after the end of each fiscal month of Parent Borrower, reports in form and detail reasonably satisfactory to the Administrative Agent and certified by a Responsible Officer of the Parent Borrower as being accurate and complete in all material respects, but without duplication of the reports and other information otherwise required to be provided pursuant to <u>Section 6.01</u> or this <u>Section 6.02</u>, as of the last Business Day of the immediately preceding month, (A) listing all Accounts of the Loan Parties in a report consistent in all material respects with the report provided under the Existing Credit Agreement (including such other information as the Administrative Agent may reasonably request), (B) listing all accounts payable of the Loan Parties in a report consistent in all material respects with the report provided under the Existing Credit Agreement (including such other information as the Administrative Agent may reasonably request), and (C) listing of Inventory in a report consistent in all material respects with the report provided under the Existing Credit Agreement (including such other information as the Administrative Agent may reasonably request); and

------

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(j) (i) as soon as available, and in any event within twenty Business Days after the end of each fiscal month of Parent Borrower, a Borrowing Base Certificate, current as of the close of business on the last Business Day of the immediately preceding month, supported by schedules showing the derivation thereof and containing such detail and other information as the Administrative Agent may request from time to time (it being agreed that the form and detail set forth in <u>Exhibit I</u> is deemed satisfactory) and (ii) at any time (but only) during any Cash Dominion Period, as soon as available and in any event no later than the third Business Day of each week commencing with the first week beginning after the commencement of such Cash Dominion Period, a weekly update report with respect to the most recently delivered Borrowing Base Certificate reflecting sales, receipts of cash, credits and collections during the preceding week, <u>provided</u> that (A) the Borrowing Base set forth in the Borrowing Base Certificate (as updated by the weekly reports, when applicable) shall be effective from and including the date such Borrowing Base Certificate is duly received by the Administrative Agent but not including the date on which a subsequent Borrowing Base Certificate is received by the Administrative Agent, unless the Administrative Agent disputes the eligibility of any property included in the calculation of the Borrowing Base or the valuation thereof by notice of such dispute to the Parent Borrower and (B) in the event of any dispute about the eligibility of any property included in the calculation of the Borrowing Base or the valuation thereof, the Administrative Agent's good faith judgment shall control.

Documents required to be delivered (A) pursuant to <u>Section 6.02(c)</u> shall be deemed to have been furnished on the date on which the Administrative Agent receives notice that such Loan Party has filed such document with the SEC and is available on the EDGAR website on the Internet at www.sec.gov or any successor government website that is freely and readily available to the Administrative Agent and the Lenders without charge and (B) pursuant to <u>Section 6.01(a)</u> or <u>(b)</u> or <u>Section 6.02(c)</u> (to the extent any such documents are included in materials not otherwise filed with the SEC) may be delivered electronically and if so delivered, shall be deemed to have been delivered on the date (i) on which such Loan Party posts such documents, or provides a link thereto on such Loan Party's website on the Internet at the website address listed on <u>Schedule 10.02</u>; or (ii) on which such documents are posted on such Loan Party's behalf on an Internet or Intranet website, if any, to which each Lender and the Administrative Agent have access (whether a commercial, third-party website or whether sponsored by the Administrative Agent); <u>provided</u> that: (i) such Loan Party shall deliver paper copies of such documents to the Administrative Agent or any Lender upon its request to such Loan Party to deliver such paper copies until a written request to cease delivering paper copies is given by the Administrative Agent or such Lender and (ii) such Loan Party shall notify (which may be by facsimile or electronic mail) the Administrative Agent and each Lender of the posting of any such documents and provide to the Administrative Agent by electronic mail electronic versions (<u>i.e</u>., soft copies) of such documents. The Administrative Agent shall have no obligation to request the delivery of or to maintain paper copies of the documents referred to above, and in any event shall have no responsibility to monitor compliance by the such Loan Party with any such request by a Lender for delivery, and each Lender shall be solely responsible for requesting delivery to it or maintaining its copies of such documents.

------

Each of Holdings and the Borrowers hereby acknowledge that (i) the Administrative Agent and/or the Joint Lead Arrangers will make available to the Lenders materials and/or information provided by or on behalf of Holdings and the Borrowers hereunder (collectively, "<u>Borrower Materials</u>") by posting the Borrower Materials on Intralinks<sup>®</sup> or another similar electronic system (the "<u>Platform</u>") and (ii) certain of the Lenders (each, a "<u>Public Lender</u>") may have personnel who do not wish to receive MNPI with respect to the Borrowers or their respective Affiliates, or the respective securities of any of the foregoing, and who may be engaged in investment and other market-related activities with respect to such Persons' securities. Each of Holdings and the Borrowers hereby agree that so long as Holdings or the Borrowers are the issuer of any outstanding debt or equity securities that are registered or issued pursuant to a private offering or is actively contemplating issuing any such securities it will use commercially reasonable efforts to identify that portion of the Borrower Materials that may be distributed to the Public Lenders and that: (w) all such Borrower Materials shall be clearly and conspicuously marked "PUBLIC" which, at a minimum, shall mean that the word "PUBLIC" shall appear prominently on the first page thereof; (x) by marking Borrower Materials "PUBLIC," Holdings and each Borrower shall be deemed to have authorized the Administrative Agent, the Joint Lead Arrangers and the Lenders to treat such Borrower Materials as not containing any MNPI (although it may be sensitive and proprietary) with respect to Holdings or the Borrowers or any of their securities for purposes of United States federal and state securities laws (<u>provided</u>, <u>however</u>, that to the extent such Borrower Materials constitute Information, they shall be treated as set forth in <u>Section 10.07</u>); (y) all Borrower Materials marked "PUBLIC" are permitted to be made available through a portion of the Platform designated "Public Side Information;" and (z) the Administrative Agent and the Joint Lead Arrangers shall be entitled to treat the Borrower Materials that are not marked "PUBLIC" as being suitable only for posting on a portion of the Platform not designated "Public Side Information."

Section 6.03 <u>Notices</u>. The Parent Borrower shall notify promptly the Administrative Agent, in writing, and each Lender of each of the following (and in no event later than five Business Days after a Responsible Officer becomes aware thereof):

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a) the occurrence or existence of any Default or Event of Default, or any event or circumstance that foreseeably will become a Default or Event of Default;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b) any breach or non-performance of, or any default under, any Contractual Obligation of any Loan Party or any Subsidiary of any Loan Party, or any violation of, or non-compliance with, any Requirement of Law, which would reasonably be expected to result, either individually or in the aggregate, in a Material Adverse Effect, including a description of such breach, non-performance, default, violation or non-compliance and the steps, if any, such Person has taken, is taking or proposes to take in respect thereof;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c) any action, suit, dispute, litigation, investigation, proceeding or suspension which may exist at any time between any Loan Party or any Subsidiary of any Loan Party and any Governmental Authority, other regulatory body or any arbitrator which would reasonably be expected to result, either individually or in the aggregate, in a Material Adverse Effect;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(d) the commencement of, or any material development in, any litigation or proceeding affecting any Loan Party or any Subsidiary of any Loan Party or its respective property (i) in which the amount of damages claimed is $3,000,000 or more, (ii) in which injunctive or similar relief is sought and which, if adversely determined, would reasonably be expected to have a Material Adverse Effect, or (iii) in which the relief sought is an injunction or other stay of the performance of this Agreement, <u>or</u> any other Loan Document or any Related Agreement;

------

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(e) (i) the receipt by any Loan Party of any notice of violation of or potential liability or similar written notice under Environmental Law that could reasonably be expected to result in Material Environmental Liabilities, (ii)(A) unpermitted Releases, (B) the existence of any condition that could reasonably be expected to result in violations of or Liabilities under, any Environmental Law or (C) the commencement of, or any material change to, any action, investigation, suit, proceeding, audit, claim, demand, dispute alleging a violation of or Liability under any Environmental Law, that, for each of <u>clauses (A)</u>, <u>(B)</u> and <u>(C)</u> above (and, in the case of <u>clause (C)</u>, if adversely determined), in the aggregate for each such clause, could reasonably be expected to result in Material Environmental Liabilities, (iii) the receipt by any Loan Party of notification that any Property of any Loan Party is subject to any Lien in favor of any Governmental Authority securing, in whole or in part, Environmental Liabilities and (iv) any proposed acquisition or lease of Real Estate, if such acquisition or lease would have a reasonable likelihood of resulting in Material Environmental Liabilities;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(f) (i) on or prior to any filing by any ERISA Affiliate of any notice of any reportable event under Section 4043 of ERISA or notice of intent to terminate any Title IV Plan, a copy of such notice, (ii) promptly, and in any event within ten days, after any officer of any ERISA Affiliate knows that a request for a minimum funding waiver under Section 412 of the Code has been filed with respect to any Title IV Plan or Multiemployer Plan, a notice describing such waiver request and the actions, if any, that any ERISA Affiliate proposes to take with respect thereto, together with a copy of any notice filed with the PBGC or the IRS pertaining thereto (but, with respect to a Multiemployer Plan, only if such notices are in possession of the Loan Parties), and (iii) promptly, and in any event within ten days after any officer of the Parent Borrower knows that an ERISA Event will or has occurred, a notice describing such ERISA Event, and the actions, if any, that any ERISA Affiliate proposes to take with respect thereto, together with a copy of any notices received from or filed with the PBGC, IRS, Multiemployer Plan or other Benefit Plan pertaining thereto (but, with respect to a Multiemployer Plan, only if such notices are in possession of the Loan Parties), provided, that if the agent and each lender have previously received notice of an ERISA Event, no notice shall be required of the continuation of such ERISA Event;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(g) any Material Adverse Effect subsequent to the date of the most recent audited financial statements delivered to the Administrative Agent and the Lenders pursuant to this Agreement;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(h) any material change in accounting policies or financial reporting practices by any Loan Party or any Subsidiary of any Loan Party;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(i) any strike, work stoppage, boycott, shutdown or other labor disruption against or involving any Loan Party or any Subsidiary of any Loan Party if the same would reasonably be expected to have, either individually or in the aggregate, a Material Adverse Effect;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(j) the occurrence of any Disposition of property or assets for which the Borrowers are required to notify the Administrative Agent pursuant to <u>Section 2.05(b)(ii)</u> or the incurrence or issuance of any Indebtedness for which the Borrowers are required to make a mandatory prepayment pursuant to <u>Section 2.05(b)(i)</u>; and

------

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(k) any announcement by Moody's or S&P of any change in the rating of the Facility as determined by either Moody's or S&P.

Each notice pursuant to this <u>Section 6.03</u> shall be in electronic form accompanied by a statement by a Responsible Officer on behalf of the Parent Borrower setting forth details of the occurrence referred to therein, and stating what action the Parent Borrower or other Person proposes to take with respect thereto and at what time. Each notice under <u>Section 6.03(a)</u> shall describe with particularity any and all clauses or provisions of this Agreement or other Loan Document that have been breached or violated.

Section 6.04 <u>Preservation of Corporate Existence, Etc</u>. Each Loan Party shall, and shall cause each of its Subsidiaries, other than Non-Material Subsidiaries, to:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a) preserve and maintain in full force and effect its organizational existence and good standing under the laws of its jurisdiction of incorporation, organization or formation, as applicable, except, with respect to the Parent Borrower's Subsidiaries, in connection with transactions permitted by <u>Section 7.03</u>;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b) preserve and maintain in full force and effect all rights, privileges, qualifications, permits, licenses and franchises necessary in the normal conduct of its business except in connection with transactions permitted by <u>Section 7.03</u> and sales of assets permitted by <u>Section 5.02</u> and except as would not reasonably be expected to have, either individually or in the aggregate, a Material Adverse Effect;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c) preserve or renew all of its registered Trademarks, the non-preservation of which would reasonably be expected to have, either individually or in the aggregate, a Material Adverse Effect; and

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(d) conduct its business and affairs without infringement of or interference with any Intellectual Property of any other Person in any respect and shall comply in all respects with the terms of its IP Licenses except, in each case, as would not be expected to have, either individually or in the aggregate, a Material Adverse Effect.

Section 6.05 <u>Maintenance of Property</u>. Each Loan Party shall maintain, and shall cause each of its Subsidiaries to maintain, and preserve all its Property which is necessary in its business in good working order and condition, ordinary wear and tear and fire, casualty or condemnation excepted and shall make all necessary repairs thereto and renewals and replacements thereof except where the failure to do so would not reasonably be expected to have, either individually or in the aggregate, a Material Adverse Effect.

------

Section 6.06 <u>Insurance</u>.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a) Each Loan Party shall, and shall cause each of its Subsidiaries to, (i) maintain or cause to be maintained in full force and effect all policies of insurance of any kind with respect to the Property and businesses of the Loan Parties and such Subsidiaries (including policies of life, fire, theft, product liability, public liability, Flood Insurance, property damage, other casualty, employee fidelity, workers' compensation, business interruption and employee health and welfare insurance) with financially sound and reputable insurance companies or associations (in each case that are not Affiliates of the Borrowers) of a nature and providing such coverage as is sufficient and as is customarily carried by businesses of the size and character of the business of the Loan Parties and (ii) cause all such insurance relating to any Property or business of any Loan Party to name the Administrative Agent as additional insured or lenders loss payee as agent for the Lenders, as appropriate. All policies of insurance on real and personal Property of the Loan Parties will contain an endorsement, in form and substance acceptable to the Administrative Agent, showing loss payable to the Administrative Agent (Form CP 1218 or equivalent and naming the Administrative Agent as lenders loss payee as agent for the Lenders) and extra expense and business interruption endorsements. Such endorsement, or an independent instrument furnished to the Administrative Agent, will provide that the insurance companies or the Parent Borrower's insurance broker will give the Administrative Agent at least 30 (or 10 in case of non-payment) days' prior written notice before any such policy or policies of insurance shall be canceled and that no act or default of the Loan Parties or any other Person shall affect the right of the Administrative Agent to recover under such policy or policies of insurance in case of loss or damage. Each Loan Party shall direct all present and future insurers under its "All Risk" policies of property insurance to pay all proceeds payable thereunder directly to the Administrative Agent. If any insurance proceeds are paid by check, draft or other instrument payable to any Loan Party and the Administrative Agent jointly, the Administrative Agent may endorse such Loan Party's name thereon and do such other things as the Administrative Agent may deem advisable to reduce the same to cash. The Administrative Agent reserves the right at any time, upon review of each Loan Party's risk profile, to require additional forms and limits of insurance. Notwithstanding the requirement in clause (i) above, Flood Insurance shall not be required for Real Estate not located in a Special Flood Hazard Area.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b) Unless the Loan Parties provide the Administrative Agent with evidence of the insurance coverage required by this Agreement (including, without limitation, Flood Insurance), the Administrative Agent may purchase insurance (including, without limitation, Flood Insurance) at the Loan Parties' expense to protect the Administrative Agent's and the Lenders' interests in the Loan Parties' and their Subsidiaries' properties. This insurance may, but need not, protect the Loan Parties' and their Subsidiaries' interests. The coverage that the Administrative Agent purchases may not pay any claim that any Loan Party or any Subsidiary of any Loan Party makes or any claim that is made against such Loan Party or any Subsidiary in connection with said Property. The Loan Parties may later cancel any insurance purchased by the Administrative Agent, but only after providing the Administrative Agent with evidence that there has been obtained insurance as required by this Agreement. If the Administrative Agent purchases insurance, the Loan Parties will be responsible for the costs of that insurance, including interest and any other charges the Administrative Agent may impose in connection with the placement of insurance, until the effective date of the cancellation or expiration of the insurance. The costs of the insurance shall be added to the Finance Obligations. The costs of the insurance may be more than the cost of insurance the Loan Parties may be able to obtain on their own.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c) Subject to the ABL/Term<u>any</u> Intercreditor Agreement, the Loan Parties appoint the Administrative Agent as their attorney-in-fact to settle or adjust all property damage claims under its casualty insurance policies; provided, that such power of attorney shall only be exercised so long as an Event of Default has occurred and is continuing or if the casualty claim exceeds $1,000,000. The Administrative Agent shall have no duty to exercise such power of attorney, but may do so at its discretion.

------

Section 6.07 <u>Payment of Obligations</u>. Each Loan Party shall, and shall cause each of its Subsidiaries to, pay, discharge and perform as the same shall become due and payable or required to be performed:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a) all federal and other material Tax liabilities, assessments and governmental charges or levies upon it or its Property, before the same shall become delinquent or in default, unless the same are being contested in good faith by appropriate proceedings diligently prosecuted which stay the filing or enforcement of any Lien and for which adequate reserves in accordance with GAAP are being maintained by such Person.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b) all lawful claims which, if unpaid, would by law become a Lien upon its Property unless the same are being contested in good faith by appropriate proceedings diligently prosecuted which stay the imposition or enforcement of any Lien and for which adequate reserves in accordance with GAAP are being maintained by such Person;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c) the performance of all obligations under any Contractual Obligation to such Loan Party or any of its Subsidiaries is bound, or to which it or any of its Property is subject, including the Related Agreements, except where the failure to perform would not reasonably be expected to have, either individually or in the aggregate, a Material Adverse Effect; and

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(d) payments to the extent necessary to avoid the imposition of a Lien on assets of any Loan Party or any of its Subsidiaries with respect to, or the involuntary termination of, any underfunded Benefit Plan that is described in Section 3(2) of ERISA.

Section 6.08 <u>Compliance with Laws</u>. Each Loan Party shall, and shall cause each of its Subsidiaries to, comply with all Requirements of Law of any Governmental Authority having jurisdiction over it or its business, except where the failure to comply would not reasonably be expected to have, either individually or in the aggregate, a Material Adverse Effect.

Section 6.09 <u>Inspection of Property and Books and Records; Quarterly Management Calls</u>.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a) Each Loan Party shall, and shall cause each of its Subsidiaries to maintain, proper books of record and account, in which full, true and correct entries in conformity with GAAP consistently applied shall be made of all financial transactions and matters involving the assets and business of such Person. Each Loan Party shall, and shall cause each of its Subsidiaries to, with respect to each owned, leased, or controlled property, during normal business hours and upon reasonable advance notice (unless an Event of Default shall have occurred and be continuing, in which event no notice shall be required and the Administrative Agent shall have access at any and all times during the continuance thereof): (a) provide access to such property to the Administrative Agent and any of its Related Parties, as frequently as the Administrative Agent reasonably determines to be appropriate; and (b) permit the Administrative Agent and any of its Related Parties to conduct field examinations (including any Field Survey and Audit), audit, inspect and make extracts and copies (or take originals if reasonably necessary) from all of such Loan Party's

------

books and records, and evaluate and make physical verifications of the Inventory and other Collateral in any manner and through any medium that the Administrative Agent reasonably considers advisable, in each instance, at the Loan Parties' expense; <u>provided</u>, that excluding any such visits and inspections during the continuation of an Event of Default, (x) only the Administrative Agent on behalf of the Lenders may exercise rights of the Administrative Agent and the Lenders under this <u>Section 6.09(a),</u> and the Administrative Agent shall not exercise such rights more often than two times during any calendar year and (y) other than pursuant to <u>Section 6.19</u>, inventory appraisals may only be performed during an Inspection Trigger Period; <u>provided</u>, <u>further,</u> that when (A) a Default or Event of Default exists, the Administrative Agent or any Lender may do any of the foregoing at the expense of the Borrowers at any time and (B) during an Inspection Trigger Period, the Administrative Agent may do any of the foregoing at the expense of the Borrowers up to one additional time during such calendar year.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b) Promptly after the time of delivery of financial statements with respect to the preceding Fiscal Quarter pursuant to <u>Section 6.01(a)</u> or <u>Section 6.01(b)</u>, as applicable, (and in no event more than ten days after the time such financial statements are required to be delivered pursuant to <u>Section 6.01(a)</u> or <u>Section 6.01(b)</u>, as applicable), the Parent Borrower shall, and shall cause its Responsible Officers to, conduct a conference call with the Administrative Agent and the Lenders to discuss such financial statements.

Section 6.10 <u>Use of Proceeds</u>. The Borrowers shall use the proceeds of the Loans solely as follows: (a) on the Second Amendment Effective Date, to repay a portion of the Term Loans, (b) on the Second Amendment Effective Date, to pay costs and expenses of the Related Transactions and costs and expenses required to be paid pursuant to <u>the Third Amendment Fee Letter and</u> Sections 2.09 and <u>10.04</u>, and (c) after the Second Amendment Effective Date, for capital expenditures and other general corporate purposes not in contravention of any Requirement of Law and not in violation of this Agreement or the other Loan Documents.

Section 6.11 <u>Collection of Accounts; Management of Collateral</u>.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a) As of the Second<u>Third</u> Amendment Effective Date (or such later date, subject to <u>Section 6.15</u>), the Loan Parties shall have established and thereafter shall maintain cash management services and Cash Management Accounts of a type and on terms reasonably satisfactory to the Collateral Agent, which Cash Management Accounts are in each case subject to a Deposit Account Control Agreement or Securities Account Control Agreement (i) in favor of the Collateral Agent and (ii) which provides that all amounts on deposit in each such Cash Management Account be automatically transferred each Business Day during a Cash Dominion Period (as defined below) to at least one Cash Management Account (as designated by the Collateral Agent) at the Administrative Agent or a Cash Management Bank designated by the Collateral Agent, to be used as a collections account (such account, together with any other collections accounts (including any "lockbox accounts") established by the Loan Parties with the Administrative Agent or Cash Management Bank so designated, the "<u>Cash Management Collections Accounts</u>").

------

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b) If (i) a Default or Event of Default has occurred and is continuing or (ii) Availability is less than 17.5% of the Revolving Facility Commitment for five consecutive Business Days (each a "<u>Cash Management Triggering Event</u>") and until such Cash Management Triggering Event no longer exists for a 30 consecutive calendar day period (such period, a "<u>Cash Dominion Period</u>"), then (A) the Loan Parties shall deposit or cause to be deposited promptly, and in any event no later than the next Business Day after the occurrence of a Cash Management Triggering Event, all proceeds in respect of any Collateral, all collections of a nature susceptible to a deposit in a bank account and all other amounts received by any Loan Party (including payments made by Account Debtors directly to any Loan Party and remittances on credit card sales) into the Cash Management Collections Accounts, and (B) subject to the conditions set forth in a Cash Management Agreement with respect to a Cash Management Account, pursuant to each applicable Deposit Account Control Agreement or Securities Account Control Agreement (or otherwise at the instruction of the Collateral Agent) all amounts on deposit in the Cash Management Accounts each Business Day to the Cash Management Collections Accounts. At all times prior to and after a Cash Dominion Period, the Loan Parties shall have full dominion and control over the Cash Management Accounts, and the Collateral Agent agrees not to deliver a control notice or take any other action to control the Cash Managements Accounts unless and until a Cash Management Triggering Event has occurred and is continuing. The Collateral Agent further agrees that upon the termination of a Cash Dominion Period, the Collateral Agent shall provide notice to the banks with Cash Management Accounts and take all other commercially reasonable actions necessary to revert control of such Cash Managements Accounts to the Loan Parties.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c) Except as otherwise provided for in <u>Section 8.03</u>, all amounts received or deposited into the Cash Management Collections Accounts during a Cash Dominion Period (whether under this <u>Section 6.11</u> or otherwise) shall be applied to the payment of the outstanding principal balance of the Loans and the L/C Obligations (or, to the extent such L/C Obligations are contingent, to provide Cash Collateral in respect of such L/C Obligations).

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(d) The Loan Parties shall not maintain cash, Cash Equivalents or other amounts in either (i) any Deposit Account, unless the Collateral Agent shall have received a Deposit Account Control Agreement in respect of such Deposit Account (other than Excluded Accounts) or (ii) any securities account, unless the Collateral Agent shall have received a Securities Account Control Agreement in respect of such securities account (other than Excluded Accounts).

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(e) Each Loan Party shall close any of its Cash Management Accounts maintained with a bank or depositary institution promptly and in any event within forty-five days (or such longer period as the Collateral Agent is willing, in its sole discretion, to accommodate from time to time) of notice from the Collateral Agent that the creditworthiness of such bank or depositary institution is no longer acceptable in the Collateral Agent's Credit Judgment, or that the operating performance, funds transfer, or availability procedures or performance of such bank or depositary institution with respect to Cash Management Accounts or the Collateral Agent's liability under any Cash Management Agreement with such bank or depositary institution is no longer acceptable in the Collateral Agent's Credit Judgment.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(f) The Cash Management Accounts with Cash Management Banks shall be cash collateral accounts, with all cash, checks and similar items of payment in such accounts securing payment of the Finance Obligations, and in which the Loan Parties are hereby deemed to have granted a Lien to the Collateral Agent for the benefit of the Secured Parties. All checks, drafts, notes, money orders, acceptances, cash and other evidences of Indebtedness received during a Cash Dominion Period directly by any Loan Party from any of its Account Debtors, as proceeds

------

from Accounts of such Loan Party or as proceeds of any other Collateral shall be held by such Loan Party in trust for the Secured Parties and if of a nature susceptible to a deposit in a bank account, upon receipt be deposited by such Loan Party in original form and no later than the next Business Day after receipt thereof into a Cash Management Account in accordance with <u>Section 6.11(b)</u>. Each Loan Party shall not commingle such collections with the proceeds of any Property not included in the Collateral. No checks, drafts or other instrument received by the Administrative Agent shall constitute final payment to the Administrative Agent unless and until such instruments have actually been collected.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(g) The Loan Parties shall take all reasonable steps to enforce, collect and receive all amounts owing on the Accounts of the Loan Parties or any of their Subsidiaries. After the occurrence and during the continuance of a Default or Event of Default, the Collateral Agent may send a notice of assignment and/or notice of the Secured Parties' security interest to any and all Account Debtors or third parties holding or otherwise concerned with any of the Collateral, and thereafter the Collateral Agent or its designee shall have the sole right to collect the Accounts and/or take possession of the Collateral and the books and records relating thereto.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(h) Each Loan Party hereby appoints each Agent or its designee on behalf of such Agent as the Loan Parties' attorney-in-fact with power to endorse any Loan Party's name upon any notes, acceptances, checks, drafts, money orders or other evidences of payment relating to the Accounts, to sign any Loan Party's name on any invoice or bill of lading relating to any of the Accounts, drafts against Account Debtors with respect to Accounts, assignments of Accounts, verification of Accounts of any Account Debtor with an outstanding balance of Accounts owing to the Loan Parties in excess of $1,000,000 and notices to such Account Debtors with respect to Accounts. All acts of said attorney or designee are hereby ratified and approved, and such attorney or designee shall not be liable for any acts of omission or commission (other than acts of omission or commission constituting gross negligence or willful misconduct as determined by a final judgment of a court of competent jurisdiction), or for any error of judgment or mistake of fact or law; this power being coupled with an interest is irrevocable until the date on which all Finance Obligations are paid in full and all of the Loan Documents are terminated. Each Agent agrees not to deliver any such notice or take any such actions unless and until a Cash Management Triggering Event has occurred and is continuing.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(i) Nothing herein contained shall be construed to constitute any Agent as agent of any Loan Party for any purpose whatsoever, and the Agents shall not be responsible or liable for any shortage, discrepancy, damage, loss or destruction of any part of the Collateral wherever the same may be located and regardless of the cause thereof (other than from acts of omission or commission constituting gross negligence or willful misconduct as determined by a final judgment of a court of competent jurisdiction). The Agents shall not, under any circumstance or in any event whatsoever, have any liability for any error or omission or delay of any kind occurring in the settlement, collection or payment of any of the Accounts or any instrument received in payment thereof or for any damage resulting therefrom (other than acts of omission or commission constituting gross negligence or willful misconduct as determined by a final judgment of a court of competent jurisdiction). The Agents, by anything herein or in any assignment or otherwise, do not assume any of the obligations under any contract or agreement assigned to any Agent and shall not be responsible in any way for the performance by any Loan Party of any of the terms and conditions thereof.

------

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(j) If any Account includes a charge for any tax payable to any Governmental Authority, each Agent is hereby authorized (but in no event obligated) in its discretion to pay the amount thereof to the proper taxing authority for the Loan Parties' account and to charge the Loan Parties therefor. The Loan Parties shall notify the Agents if any Account includes any taxes due to any such Governmental Authority and, in the absence of such notice, the Agents shall have the right to retain the full proceeds of such Account and shall not be liable for any taxes that may be due by reason of the sale and delivery creating such Account.

Notwithstanding any other terms set forth in the Loan Documents, the rights and remedies of the Agents and the Lenders herein provided, and the obligations of the Loan Parties set forth herein, are cumulative of, may be exercised singly or concurrently with, and are not exclusive of, any other rights, remedies or obligations set forth in any other Loan Document or as provided by law

Section 6.12 <u>Landlord Agreements</u>. Each Loan Party shall use commercially reasonable efforts to obtain a Collateral Access Agreement, from the lessor of each leased property, bailee in possession of any Collateral or mortgagee of any owned property with respect to each location where any Collateral having a value in excess of $500,000 is stored or located, which agreement shall be reasonably satisfactory in form and substance to Agent.

Section 6.13 <u>Further Assurances</u>. Each Loan Party shall ensure that all written information, exhibits and reports furnished to the Administrative Agent or the Lenders do not and will not contain any untrue statement of a material fact and do not and will not omit to state any material fact or any fact necessary to make the statements contained therein not materially misleading in light of the circumstances in which made, and will promptly disclose to the Administrative Agent and the Lenders and correct any defect or error that may be discovered therein or in any Loan Document or in the execution, acknowledgement or recordation thereof.

------

writing by Required Lenders, each Loan Party shall pledge, and shall cause each of its Domestic Subsidiaries (other than Excluded Subsidiaries) to pledge, (i) all of the Stock and Stock Equivalents of each of its Domestic Subsidiaries (other than Excluded Subsidiaries) and (ii) sixty-five percent (65%) of the outstanding voting Stock and Stock Equivalents and one hundred percent (100%) of outstanding non-voting Stock and Stock Equivalents of each Foreign Subsidiary directly owned by a Loan Party and each Excluded Domestic Holdco directly owned by a Loan Party, in each instance, to the Term Administrative Agent,<u>Collateral Agent (or to the collateral agent under any Permitted Term Debt, subject to an Intercreditor Agreement),</u> for the benefit of the Secured Parties (subject to the ABL/Term Intercreditor Agreement), to secure the Finance Obligations, promptly after formation or acquisition of such Subsidiary. For the avoidance of doubt, notwithstanding anything herein or in the Collateral Documents to the contrary, (i) no Foreign Subsidiary or Excluded Subsidiary will guaranty the Finance Obligations or grant a Lien on any of its assets to secure payment of the Finance Obligations and (ii) no more than sixty-five percent (65%) of the outstanding voting Stock and Stock Equivalents of any Foreign Subsidiary directly owned by a Loan Party or any Excluded Domestic Holdco directly owned by a Loan Party will be pledged to secure the Finance Obligations. The Loan Parties shall deliver, or cause to be delivered, to the Administrative Agent, appropriate resolutions, secretary certificates, certified Organization Documents and, if requested by the Administrative Agent, legal opinions relating to the matters described in this <u>Section 6.13</u> (which opinions shall be in form and substance reasonably acceptable to the Administrative Agent and, to the extent applicable, substantially similar to the opinions delivered on the Original Closing Date), in each instance with respect to each Loan Party formed or acquired after the Original Closing Date. In connection with each pledge of Stock and Stock Equivalents, the Loan Parties shall deliver, or cause to be delivered, to the Term Collateral Agent (<u>or to the collateral agent under any Permitted Term Debt,</u> subject to the ABL/Term<u>an</u> Intercreditor Agreement), irrevocable proxies and stock powers and/or assignments, as applicable, duly executed in blank. In the event any Loan Party acquires any fee interest in Real Estate located in the United States (it being understood and agreed that any Real Estate owned by a Governmental Authority in connection with a tax exempt financing and leased by such Governmental Authority to such Loan Party shall be deemed to be owned in fee by such Loan Party) having a fair value exceeding $2,500,000, simultaneously with (or such later date as may be agreed by the Collateral Agent in its sole discretion) such acquisition, such Person shall execute and/or deliver, or cause to be executed and/or delivered, to the Collateral Agent, (w) a fully executed Mortgage, in form and substance reasonably satisfactory to the Collateral Agent together with an A.L.T.A. lender's title insurance policy (any such policy, a "<u>Mortgage Policy</u>") issued by a title insurer reasonably satisfactory to the Collateral Agent, in form and substance and in an amount reasonably satisfactory to the Collateral Agent insuring that the Mortgage is a valid and enforceable first priority Lien on the respective property, free and clear of all defects, encumbrances and Liens other than Permitted Liens and any title exceptions referred to in the title insurance policies reasonably acceptable to the Collateral Agent, and (x) then current A.L.T.A. surveys, certified to the Collateral Agent by a licensed surveyor sufficient to allow the issuer of the lender's title insurance policy to issue such policy without a survey exception. In the event any Loan Party acquires any Real Estate located in the United States having a fair value exceeding $2,500,000, at the Collateral Agent's request, the Loan Parties shall cause to be delivered to the Administrative Agent, within 90 days after such acquisition, an environmental site assessment prepared by a qualified firm reasonably acceptable to the Collateral Agent, in form and substance reasonably satisfactory to the Administrative Agent. In addition to the obligations set forth in <u>Section 6.06(a)</u>, within 90 days after written notice from the Administrative Agent to the Loan Parties that any Real Estate is located in a Special Flood Hazard Area, the Loan Parties shall satisfy the Flood Insurance requirements of <u>Section 6.06(a)</u>. For the avoidance of doubt, the provisions of this paragraph shall be subject to the terms of the<u>any</u> Intercreditor Agreements<u>Agreement</u> .

------

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b) Notwithstanding anything herein or in the Collateral Documents to the contrary, on the Original Closing Date, Conn-Selmer shall pledge all of the Stock and Stock Equivalents of Steinway and Sons to the Collateral Agent, for the benefit of the Secured Parties, to secure the Finance Obligations.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c) The Parent Borrower shall, promptly following receipt of the acknowledgment copy of any financing statements filed under the UCC in any jurisdiction by or on behalf of the Secured Parties, deliver to the Administrative Agent completed requests for information listing such financing statement and all other effective financing statements filed in such jurisdiction that name any Loan Party as debtor, together with copies of such other financing statements.

Section 6.14 <u>Environmental Matters</u>. Each Loan Party shall, and shall cause each of its Subsidiaries to, comply with, and maintain its Real Estate, whether owned, leased, subleased or otherwise operated or occupied, in compliance with, all applicable Environmental Laws (including by implementing any Remedial Action necessary to achieve such compliance) or that is required by orders and directives of any Governmental Authority, except in each case where the failure to comply would not reasonably be expected to, individually or in the aggregate, result in a Material Environmental Liability. Without limiting the foregoing, if an Event of Default is continuing or if the Administrative Agent at any time has a reasonable basis to believe that there exist material violations of Environmental Laws by any Loan Party or any Subsidiary of any Loan Party or that there exist any material Environmental Liabilities, then each Loan Party shall, promptly upon receipt of request from the Administrative Agent, cause the performance of, and allow the Administrative Agent and its Related Parties access to such Real Estate for the purpose of conducting, such environmental audits and assessments, including subsurface sampling of soil and groundwater, and cause the preparation of such reports, in each case as the Administrative Agent may from time to time reasonably request. Such audits, assessments and reports, to the extent not conducted by the Administrative Agent or any of its Related Parties, shall be conducted and prepared by reputable environmental consulting firms reasonably acceptable to the Administrative Agent and shall be in form and substance reasonably acceptable to the Administrative Agent.

Section 6.15 <u>Post-Closing Obligations</u>. The Parent Borrower will, as promptly as practicable, and in any event within the time periods after the Second<u>Third</u> Amendment Effective Date specified in <u>Schedule 6.15</u> (or such later date as may be agreed by the Collateral Agent in its sole discretion), deliver the documents or take the actions specified on <u>Schedule 6.15</u>, in each case except to the extent otherwise agreed to by the Required Lenders. In the event of any conflict between the terms set forth on <u>Schedule 6.15</u> and the terms of any of <u>Article V</u>, <u>VI</u> or <u>VII</u>, the terms set forth on <u>Schedule 6.15</u> shall control.

Section 6.16 <u>Material Contracts</u>. Each Loan Party shall, and shall cause each of its Subsidiaries to, perform and observe all the terms and provisions of each Material Contract to be performed or observed by it, maintain each such Material Contract in full force and effect, enforce each such Material Contract in accordance with its terms, take all such action to such end as may be from time to time requested by the Administrative Agent and, upon request of the Administrative Agent, make to each other party to each such Material Contract such demands and requests for information and reports or for action as any Loan Party or any of its Subsidiaries is entitled to make under such Material Contract, and cause each of its Subsidiaries to do so.

------

Section 6.17 <u>Designation as Senior Debt</u>. All ABL Credit Obligations shall be "Designated Senior Indebtedness" or similar term for purposes of and as defined in any documentation with respect to any Subordinated Indebtedness.

Section 6.18 <u>Change in Collateral; Collateral Records; Account Documentation</u>.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a) The Parent Borrower shall advise the Collateral Agent promptly, in sufficient detail, of any location not identified in the reports delivered to the Agents pursuant to <u>Section 6.02(i)</u> at which Collateral with a fair market value in excess of $500,000 is located and of any material adverse change relating to the type, quantity or quality of the Collateral or the Lien granted thereon, and execute and deliver, and cause each of its Subsidiaries to execute and deliver, to the Collateral Agent for the benefit of the Agents and the Lenders from time to time, solely for the Collateral Agent's convenience in maintaining a record of Collateral, such written statements and schedules as the Collateral Agent may reasonably require, designating, identifying or describing the Collateral.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b) The Loan Parties will at such intervals as the Agents may reasonably require during a Cash Dominion Period, execute and deliver confirmatory written assignments of the Accounts to the Agents and furnish such further schedules and/or information as any Agent may require relating to the Accounts, including, without limitation, sales invoices or the equivalent, credit memos issued, remittance advices, reports and copies of deposit slips and copies of original shipping or delivery receipts for all merchandise sold. The items to be provided under this <u>Section 6.18(b)</u> are to be in form reasonably satisfactory to the Collateral Agent and are to be executed and delivered to the Collateral Agent from time to time solely for their convenience in maintaining records of the Collateral. If the Loan Parties become aware of anything materially detrimental to the credit (that is not otherwise public information) of any Account Debtor with an aggregate outstanding balance of Accounts owing to the Borrowers in excess of $1,000,000, the Parent Borrower shall promptly advise the Agents thereof.

Section 6.19 <u>Mortgage Amendments</u>. The Parent Borrower will, as promptly as reasonably practicable, and in any event within 150 days after the Second<u>Third</u> Amendment Effective Date (or such later date as may be agreed by the Administrative Agent in its sole discretion), cause each Loan Parties to deliver the following with respect to the Mortgages existing as of the Second<u>Third</u> Amendment Effective Date, in each case in form and substance reasonably acceptable to the Administrative Agent:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a) an amendment to each Mortgage (each, a "<u>Mortgage Amendment</u>") to reflect the matters set forth herein, duly executed and acknowledged by the applicable Loan Party, and in form for recording in the recording office where such Mortgage was recorded, together with such certificates, affidavits, questionnaires or returns as shall be required in connection with the recording or filing thereof under applicable law; provided that such Mortgage Amendment shall not be required if the Administrative Agent shall have received, within such 150 day period, written confirmation from local counsel (in form satisfactory to the Administrative Agent) that such Mortgage continues to be in full force and effect as enforceable Liens securing the Finance Obligations of the applicable Loan Party, as amended, and having priority as of the date of recordation of the original mortgage, without the necessity of any Mortgage Amendment;

------

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b) a favorable opinion addressed to the Administrative Agent and the Secured Parties covering, among other things, the enforceability of the applicable Mortgage as amended by the Mortgage Amendment (such opinion may, without limitation, take assumptions for any matters addressed in the local counsel opinion originally delivered in connection with such Mortgage), or if any Mortgage Amendment is not required pursuant to <u>Section 6.19(a)</u> above, written confirmation from local counsel as described in <u>Section 6.19(a)</u>;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c) with respect to any Mortgage Amendment required hereunder, a date-down endorsement to the existing title policy, which shall be in form and substance reasonably satisfactory to the Administrative Agent and reasonably assure the Administrative Agent as of the date of such endorsement that the real property subject to the Lien of such Mortgage is free and clear of all defects and encumbrances except those Liens permitted under such Mortgage;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(d) with respect to any Mortgage Amendment required hereunder, evidence of payment of all search charges, mortgage recording taxes, fees, charges, costs and expenses required for the recording of the Mortgage Amendment referred to above; and

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(e) with respect to any Mortgage Amendment required hereunder, such affidavits, certificates, information and instruments of indemnification as shall be required to induce the title insurance company to issue the endorsement to the title policy contemplated in this <u>Section 6.19</u> and evidence of payment of all applicable title insurance premiums required for the issuance of the endorsement to the title policy contemplated in this <u>Section 6.19</u>.

**ARTICLE VII** 

**NEGATIVE COVENANTS** 

So long as any Lender shall have any Revolving Facility Commitment hereunder, any Loan or other ABL Credit Obligation hereunder shall remain unpaid or unsatisfied (other than unasserted contingent indemnification obligations not due and payable), and until all Letters of Credit have been canceled or have expired (or shall have been Cash Collateralized or backstopped on terms reasonably satisfactory to the Administrative Agent) and all amounts drawn or paid thereunder have been reimbursed in full, each Loan Party and each of their respective Subsidiaries covenants and agrees that:

Section 7.01 <u>Limitation on Liens</u>. No Loan Party shall, and no Loan Party shall suffer or permit any of its Subsidiaries to, directly or indirectly, make, create, incur, assume or suffer to exist any Lien upon or with respect to any part of its Property, whether now owned or hereafter acquired, other than the following ("<u>Permitted Liens</u>"):

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a) any Lien existing on the Property of a Loan Party or a Subsidiary of a Loan Party on the Second<u>Third</u> Amendment Effective Date and set forth in <u>Schedule 7.01</u> securing Indebtedness outstanding on such date and permitted by <u>Section 7.05(c)</u>, including replacement Liens on the Property currently subject to such Liens securing Indebtedness permitted by <u>Section 7.05(c)</u>;

------

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b) any Lien created under any Loan Document;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c) Liens for Taxes (i) which are not delinquent for more than 30 days, or (ii) the non-payment of which is permitted by <u>Section 6.07</u>;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(d) carriers', warehousemen's, mechanics', landlords', materialmen's, repairmen's or other similar Liens arising in the Ordinary Course of Business which are not delinquent for more than 90 days or remain payable without penalty or which are being contested in good faith and by appropriate proceedings diligently prosecuted, which proceedings have the effect of preventing the forfeiture or sale of the Property subject thereto and for which adequate reserves in accordance with GAAP are being maintained;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(e) Liens (other than any Lien imposed by ERISA) consisting of pledges or deposits required in the Ordinary Course of Business in connection with workers' compensation, unemployment insurance and other social security legislation or to secure the performance of tenders, statutory obligations, surety, stay, customs and appeals bonds, bids, leases, governmental contract, trade contracts, performance and return of money bonds and other similar obligations (exclusive of obligations for the payment of borrowed money) or to secure liability to insurance carriers;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(f) Liens consisting of judgment or judicial attachment liens with respect to judgments the existence of which do not constitute and Event of Default;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(g) any title exceptions referred to in the title insurance policies purchased by any Loan Party in connection with the purchase of Property pursuant to the Merger Agreement, and easements, rights-of-way, zoning and other restrictions, encroachments, minor defects or other irregularities in title, and other similar encumbrances incurred in the Ordinary Course of Business which, either individually or in the aggregate, do not materially detract from the value of the Property subject thereto or interfere in any material respect with the ordinary conduct of the businesses of any Loan Party or any Subsidiary of any Loan Party;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(h) Liens on any Property acquired or held by any Loan Party or any Subsidiary of any Loan Party securing Indebtedness incurred or assumed for the purpose of financing (or refinancing) all or any part of the cost of acquiring such Property and permitted under <u>Section 7.05(d)</u>; <u>provided</u> that

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(i) any such Lien attaches to such Property concurrently with or within 30 days after the acquisition thereof, (ii) such Lien attaches solely to the Property so acquired in such transaction and any accession thereto and proceeds thereof, and (iii) the principal amount of the debt secured thereby does not exceed 100% of the cost of such Property;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(i) Liens securing Capital Lease Obligations permitted under <u>Section 7.05(d)</u>;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(j) any interest or title of a lessor or sublessor under any lease permitted by this Agreement and matters affecting the interest or title of a lessor or sublessor to any leased Property;

------

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(k) Liens arising from precautionary UCC financing statements filed under any lease permitted by this Agreement;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(l) licenses, sublicenses, leases or subleases granted to third parties in the Ordinary Course of Business not interfering in any material respect with the business of the Loan Parties or any of their Subsidiaries;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(m) Liens in favor of collecting banks arising by operation of law under Section 4-210 of the UCC or, with respect to collecting banks located in the State of New York, under Section 4-208 of the UCC;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(n) Liens (including the right of set-off) in favor of a bank or other depository institution arising as a matter of law encumbering deposits;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(o) Liens arising out of consignment or similar arrangements for the sale of goods entered into by the Parent Borrower or any of its Subsidiaries in the Ordinary Course of Business;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(p) Liens arising by operation of law or contract on insurance policies and proceeds thereof to secure premiums payable thereunder;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(q) Liens in favor of customs and revenue authorities arising as a matter of law which secure payment of customs duties in connection with the importation of goods in the Ordinary Course of Business;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(r) other Liens not described above on assets not constituting Collateral that secure obligations other than Indebtedness, <u>provided</u> that the aggregate outstanding amount of the obligations secured thereby does not exceed $2,500,000 in the aggregate at any one time;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(s) Liens on assets of a Subsidiary acquired in connection with a Permitted Acquisition so long as such Liens were not incurred in anticipation of such Permitted Acquisition and are either Permitted Liens hereunder or encumber assets of such Subsidiary (other than the Stock, Accounts or Inventory of such Subsidiary) with a value not in excess of $5,000,000;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(t) ground leases in respect of real property on which facilities owned or leased by any Loan Party or any of its Subsidiaries are located;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(u) subject to the terms of the Intercreditor Agreements, Liens securing Indebtedness permitted under <u>Section 7.05(g)</u> and any Permitted Refinancing thereof;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(v) Liens on assets of Foreign Subsidiaries (including Steinway and Sons, but only for so long as it is not a Loan Party hereunder) to secure Indebtedness permitted by <u>Section 7.05</u>; and

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(w) the right, title and interest of NYCIDA to the property located at 19th and Steinway Place pursuant to (i) the Guaranty Agreement, dated as of June 1, 1999 from Steinway to the NYCIDA, (ii) the PILOT Escrow Agreement, dated as of June 1, 1999, by and among Steinway, the NYCIDA and the United States Trust Company and (iii) the Lease Agreement, dated as of June 1, 1999 between Steinway and the NYCIDA.

------

Section 7.02 <u>Disposition of Assets</u>. No Loan Party shall, and no Loan Party shall suffer or permit any of its Subsidiaries to, directly or indirectly, sell, assign, lease, convey, transfer or otherwise dispose of (whether in one or a series of transactions) any Property (including the Stock of any Subsidiary of any Loan Party, whether in a public or a private offering or otherwise, and accounts and notes receivable, with or without recourse) or enter into any agreement to do any of the foregoing (except subject to compliance with, or termination of, this Agreement), except:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a) dispositions of inventory, or used, worn-out or surplus equipment or defaulted receivables for collection, all in the Ordinary Course of Business;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b) dispositions not otherwise permitted hereunder which are made for fair market value (excluding Accounts, Inventory and notes receivable); <u>provided</u>, that (i) at the time of any disposition, no Event of Default shall exist or shall result from such disposition, (ii) not less than 75% of the aggregate sales price from such disposition shall be paid in cash, (iii) such dispositions are made for fair market value, (iv) the requirements of Section 2.05(b)(ii) <u>and, after the incurrence of the Permitted Term Debt, the provisions of the Permitted Term Debt Documents governing the application of Net Cash Proceeds (or any similar term in such Permitted Term Debt Documents) of the Dispositions together with any other applicable provisions of such Permitted Term Debt Documents, in each case</u>, to the extent applicable, are complied with in connection therewith, <u>provided</u> that, all Net Cash Proceeds received from dispositions in any Fiscal Year under this clause (b) in an aggregate amount in excess of $7,500,000 per annum shall be paid in accordance with Section 2.03(b) of the Term Credit Agreement, and (v) after giving effect to such disposition, the Loan Parties are in compliance on a pro forma basis with the covenant set forth in <u>Section 7.19</u>, recomputed for the most recent Fiscal Quarter for which financial statements have been delivered;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c) dispositions of Cash Equivalents;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(d) licenses, sublicenses, leases or subleases granted to third parties in the Ordinary Course of Business not interfering with the business of the Loan Parties or any of their Subsidiaries;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(e) dispositions constituting an Investment or Restricted Payment permitted under this Agreement;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(f) dispositions in connection with an Event of Loss; <u>provided</u> that the requirements of <u>Section 2.05(b)</u> and <u>Section 2.03(b)</u> of the Term Credit Agreement<u>, after the incurrence of the Permitted Term Debt, the provisions of the Permitted Term Debt Documents governing the application of Net Cash Proceeds (or any similar term in such Permitted Term Debt Documents), together with any other applicable provisions of such Permitted Term Debt Documents, of the Events of Loss, in each case, to the extent applicable,</u> are complied with in connection therewith;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(g) dispositions of the assets of any Non-Material Subsidiary;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(h) sale-leasebacks of real estate, machinery and equipment with a value not to exceed $10,000,000 in the aggregate;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(i) termination of a lease that is not reasonably likely to result in a Material Adverse Effect and does not result from a default by a Loan Party; and

------

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(j) any disposition described in the Structure Memorandum.

Section 7.03 <u>Consolidations and Mergers</u>. No Loan Party shall, and no Loan Party shall suffer or permit any of its Subsidiaries to, merge, consolidate with or into, or convey, transfer, lease or otherwise dispose of (whether in one transaction or in a series of transactions) all or substantially all of its assets (whether now owned or hereafter acquired) to or in favor of any Person, except upon not less than five Business Days' prior written notice to the Administrative Agent, (a) any Subsidiary of the Parent Borrower may be transferred or conveyed to, merge with, or dissolve or liquidate into, the Parent Borrower or any other Loan Party, <u>provided</u> that the Parent Borrower or such other Loan Party shall be the continuing or surviving entity and all actions required to maintain perfected Liens on the Stock of the surviving entity and other Collateral in favor of the Administrative Agent shall have been completed and (b) any Foreign Subsidiary or Excluded Subsidiary may be transferred or conveyed to, merge with or dissolve or liquidate into another Foreign Subsidiary or Excluded Subsidiary.

Section 7.04 <u>Acquisitions; Loans and Investments</u>. No Loan Party shall and no Loan Party shall suffer or permit any of its Subsidiaries to (i) purchase or acquire, or make any commitment to purchase or acquire (except subject to compliance with, or termination of, this Agreement), any Stock or Stock Equivalents, or any obligations or other securities of, or any interest in, any Person, including the establishment or creation of a Subsidiary, (ii) make or commit to make (except subject to compliance with, or termination of, this Agreement) any Acquisitions, or any other acquisition of all or substantially all of the assets of another Person, or of any business or division of any Person, including without limitation, by way of merger, consolidation or other combination, or (iii) make or purchase or commit to make or purchase (except subject to compliance with, or termination of, this Agreement), any advance, loan, extension of credit or capital contribution to or any other investment in, any Person including any Affiliate of the Parent Borrower or any Subsidiary of the Parent Borrower but excluding any trade payables arising in the Ordinary Course of Business among the Parent Borrower and its Subsidiaries (the items described in clauses (i), (ii) and (iii) are referred to as "<u>Investments</u>"), except for:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a) Investments in cash and Cash Equivalents;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b) (x) Investments consisting of (i) capital contributions by Holdings in then existing Loan Parties, (ii) extensions of credit or capital contributions by any Subsidiary of Holdings to or in (or Guarantees by such Subsidiary of Holdings of Indebtedness permitted to be incurred hereunder of) any other then existing Loan Party (other than Holdings), (iii) extensions of credit or capital contributions by the Parent Borrower or any other Loan Party (other than Holdings) to or in (or Guarantees by the Borrower or such Loan Party (other than Holdings) of Indebtedness permitted to be incurred hereunder of) any then existing Subsidiary of the Parent Borrower that is not a Loan Party not to exceed $15,000,000 in the aggregate at any time outstanding for all such extensions of credit and capital contributions in the aggregate plus any returns (including dividends, interest, distributions, returns of principal, profits on sale, repayments, income and similar amounts) actually received by the Parent Borrower or any other Loan Party in cash; <u>provided</u>, that (A) if any Loan Party executes and delivers to any other Loan Party a note (collectively, the "<u>Intercompany Notes</u>") to evidence any debt Investments described in the foregoing clauses (i), (ii) and (iii), that Intercompany Note shall be pledged and delivered to the Term Administrative Agent<u>Collateral Agent (or to the collateral agent under any Permitted Term</u> 

------

<u>Debt subject to an Intercreditor Agreement)</u> pursuant to the Pledge and Security Agreement (subject to the Term/ABL Intercreditor Agreement) as additional collateral security for the Finance Obligations; (B) the applicable Loan Party shall accurately record all intercompany transactions on its books and records; and (C) at the time any such intercompany loan or advance is made by any Loan Party to any other Loan Party and after giving effect thereto, each such Loan Party shall be Solvent; (iv) extensions of credit by any Subsidiary of the Parent Borrower that is not a Loan Party to any then existing Loan Party; provided that any such indebtedness shall be subordinated to the Finance Obligations in a manner satisfactory to the Administrative Agent, and (v) extensions of credit or capital contributions by any Subsidiary of the Parent Borrower that is not a Loan Party or (y) other Investments described in the Structure Memorandum;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c) loans and advances to employees of Loan Parties in the Ordinary Course of Business for moving, entertainment and travel expenses, drawing accounts and similar expenditures in an amount not to exceed $3,000,000 in the aggregate at any time outstanding;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(d) Investments received as the non-cash portion of consideration received in connection with transactions permitted pursuant to <u>Section 7.02(b)</u>;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(e) Investments acquired in connection with the settlement of delinquent Accounts in the Ordinary Course of Business or in connection with the bankruptcy or reorganization of suppliers or customers;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(f) Investments consisting of loans made by Holdings to officers, directors and employees which are used by such Persons to purchase simultaneously Stock (including phantom stock) or Stock Equivalents of Holdings in an amount not to exceed $10,000,000 in the aggregate at any time outstanding;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(g) Investments existing on the Second<u>Third</u> Amendment Effective Date and set forth on <u>Schedule 7.04</u>;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(h) Permitted Acquisitions;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(i) Steinway Dealer Loans in an aggregate amount not to exceed $5,000,000 at any one time outstanding;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(j) Dealer Notes;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(k) other Investments in the aggregate at any time outstanding not to exceed the sum of $10,000,000 (in the case of this clause (k), other than for the purposes described in <u>Sections 7.04(i)</u> and <u>7.04(j)</u>) plus any returns (including dividends, interest, distributions, returns of principal, profits on sale, repayments, income and similar amounts) actually received by the Parent Borrower or any Subsidiary in cash in respect of any Investments made pursuant to this Section 7.04(k)(i);

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(l) other Investments so long as either (i) the Permitted Transaction Conditions are satisfied at the time of such Investment or (ii) the aggregate amount of all such Investments made in reliance on this <u>clause (l)</u> shall not exceed the sum of (x) $10,000,000 and (y) the cumulative amount of Net Issuance Proceeds of all Qualifying Equity Issuances (other than any Specified Equity Contribution) made after the Second Amendment Effective Date and Not Otherwise Applied;

------

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(m) intercompany loans between Subsidiaries that are not Loan Parties;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(n) Guarantees by Subsidiaries that are not Loan Parties permitted by <u>Section 7.05(b)</u>;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(o) Guarantees by the Borrower or any Subsidiary of operating leases (other than Capital Lease Obligations) or of other obligations that do not constitute Indebtedness, in each case entered into by the Borrower or any Subsidiary in the ordinary course of business;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(p) Guarantees permitted under <u>Section 7.05</u> (except to the extent such Guarantee is expressly subject to this <u>Section 7.04</u>); and

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(q) purchase or acquisition of inventory of Steinway dealers in the Ordinary Course of Business.

Section 7.05 <u>Limitation on Indebtedness</u>. No Loan Party shall, and no Loan Party shall suffer or permit any of its Subsidiaries to, create, incur, assume, permit to exist, or otherwise become or remain directly or indirectly liable with respect to, any Indebtedness, except:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a) Indebtedness incurred pursuant to this Agreement;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b) Guarantees (i) by any Loan Party of any Indebtedness of the Borrowers or any other Loan Party permitted to be incurred under this Agreement, (ii) by the Borrowers or any other Loan Party of Indebtedness otherwise permitted hereunder of any Subsidiary that is not a Loan Party to the extent such Guarantees are permitted by <u>Section 7.04</u> (other than <u>Section 7.04(p)</u>), (iii) by any Subsidiary that is not a Loan Party of Indebtedness of another Subsidiary that is not a Loan Party, and (iv) by the Borrowers of Indebtedness of Subsidiaries that are not Loan Parties incurred for working capital purposes in the Ordinary Course of Business on ordinary business terms so long as such Indebtedness is permitted to be incurred under <u>Sections 7.05(j)</u> or <u>(l)</u> to the extent such Guarantees are permitted by <u>Section 7.04</u> (other than <u>Section 7.04(p)</u>); provided, that Guarantees by the Borrowers or any other Loan Party under this <u>Section 7.05(b)</u> of any other Indebtedness of a person that is subordinated to other Indebtedness of such person (I) shall be expressly subordinated to the Finance Obligations under this Agreement to at least the same extent as such underlying Indebtedness is subordinated and (II) shall not be guaranteed by any Subsidiary (other than a Borrower) unless such Subsidiary has also provided a Guarantee of the Finance Obligations pursuant to the Guaranty;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c) Indebtedness existing on the Second<u>Third</u> Amendment Effective Date and set forth in <u>Schedule 7.05</u> including Permitted Refinancings thereof;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(d) (i) Indebtedness not to exceed $5,000,000 in the aggregate at any time outstanding, consisting of Capital Lease Obligations or secured by Liens permitted by <u>Section 7.01(h)</u> and Permitted Refinancings thereof and (ii) additional Capital Lease Obligations as a result of the sale and leasebacks permitted pursuant to Section 7.02(h);

------

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(e) Indebtedness consisting of the financing of insurance premiums in the Ordinary Course of Business;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(f) unsecured intercompany Indebtedness permitted pursuant to <u>Section 7.04(b)</u> or otherwise described in the Structure Memorandum;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(g) subject to the Intercreditor Agreements, (i) Indebtedness under the Term Credit Agreement; <u>provided</u>, that such Indebtedness shall not exceed the Senior Term Debt Cap (as defined in the ABL/Term Intercreditor Agreement) and (ii) the Second Lien Indebtedness; <u>provided</u>, that such Indebtedness shall not exceed the Junior Term Debt Cap (as defined in the ABL/Term Intercreditor Agreement), in each case, including Permitted Refinancings thereof;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<u>(g) (i) Indebtedness incurred in the form of a term loan in an aggregate principal amount not to exceed 300% of Consolidated EBITDA as of the Measurement Period ended immediately prior to the Fiscal Quarter in which such Indebtedness would be incurred, *provided* that such Indebtedness (i) has a maturity date no earlier than one year after the Revolving Facility Maturity Date in effect at the time of incurrence, (ii) has no obligors that are not Loan Parties, (iii) is not secured by assets other than the Collateral, (iv) is secured by customary "crossing liens" on a *pari passu* basis subject to an Intercreditor Agreement and (v) is on terms and conditions not materially less favorable to the Loan Parties, taken as a whole, than the terms of the Original</u> <u>Term Credit Agreement or</u> <u>are otherwise reasonably acceptable to the Administrative Agent and (ii) any Permitted Refinancing thereof;</u>

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(h) other unsecured subordinated debt issued after the Second<u>Third</u> Amendment Effective Date by Holdings to former employees for the repurchase of their Holdings Stock so long as such debt is subject to a subordination agreement in favor of the Administrative Agent and which permit no payments of any kind other than those permitted by <u>Section 7.11(b)</u> until the Finance Obligations are paid in full and all Commitments are terminated and contain such other terms and conditions as shall be reasonably satisfactory to the Administrative Agent;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(i) other unsecured Indebtedness not exceeding in the aggregate at any time outstanding $15,000,000; <u>provided</u> that such unsecured Indebtedness (i) shall not have scheduled amortization payments of principal or be subject to mandatory redemption, repurchase, prepayment or sinking fund obligations (except for customary asset sale or change of control provisions that provide for the prior repayment in full of the Loans, the satisfaction of all Letters of Credit (either Cash Collateralized or backstopped on terms reasonably satisfactory to the Administrative Agent) and all other Finance Obligations), in each case prior to the latest <u>Revolving Facility</u> Maturity Date at the time such Indebtedness is incurred and (ii) shall not be scheduled to mature or mature prior to the date that is one hundred and eighty (180) days after the latest <u>Revolving Facility</u> Maturity Date at the time such Indebtedness is incurred;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(j) Indebtedness incurred by Foreign Subsidiaries (including Steinway and Sons, but only for so long as it is not a Loan Party hereunder) in an aggregate principal amount not to exceed $20,000,000 at any time outstanding;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(k) Indebtedness that is in existence when a Person becomes a Subsidiary or that is secured by an asset when acquired by Holdings or a Subsidiary thereof, as long as such Indebtedness was not incurred in contemplation of such Person becoming a Subsidiary or such acquisition, and does not exceed $5,000,000 in the aggregate at any time;

------

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(l) Indebtedness incurred by Foreign Subsidiaries (including Steinway and Sons, but only for so long as it is not a Loan Party hereunder) consisting of lines of credit or ordinary course working capital facilities; and

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(m) the Specified German Mortgage Debt.

Section 7.06 <u>Employee Loans and Transactions with Affiliates.</u> No Loan Party shall, and no Loan Party shall suffer or permit any of its Subsidiaries to, enter into any transaction with any Affiliate of the Parent Borrower or of any such Subsidiary, except:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a) as expressly permitted by this Agreement;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b) in the Ordinary Course of Business and pursuant to the reasonable requirements of the business of such Loan Party or such Subsidiary upon fair and reasonable terms no less favorable to such Loan Party or such Subsidiary than would be obtained in a comparable arm's length transaction with a Person not an Affiliate of the Parent Borrower or such Subsidiary;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c) loans and advances to employees of Loan Parties to the extent permitted by <u>Section 7.04(c)</u>; and

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(d) non-cash loans or advances made by Holdings to employees of Loan Parties that are simultaneously used by such Persons to purchase Stock or Stock Equivalents of Holdings.

All such transactions existing as of the Second<u>Third</u> Amendment Effective Date are described in <u>Schedule 7.06</u>.

Section 7.07 <u>Management Fees and Compensation</u>. No Loan Party shall, and no Loan Party shall permit any of its Subsidiaries to, pay any management, consulting or similar fees to any Affiliate of any Loan Party or to any officer, director or employee of any Loan Party or any Affiliate of any Loan Party or pay or reimburse Sponsor or any of its Affiliates (other than a Loan Party) for any costs, expenses and similar items except:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a) Payment of any management, consulting or similar fees to any Loan Party;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b) payment of reasonable compensation to officers and employees for actual services rendered to the Loan Parties and their Subsidiaries in the Ordinary Course of Business;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c) payment of directors' fees and reimbursement of actual out-of-pocket expenses incurred in connection with attending board of director meetings not to exceed in the aggregate, with respect to all such items, $1,500,000 in any Fiscal Year of the Parent Borrower; and

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(d) reimbursement of reasonable out-of-pocket costs and expenses to Sponsor.

------

Section 7.08 <u>Use of Proceeds</u>. No Loan Party shall, and no Loan Party shall suffer or permit any of its Subsidiaries to, use any portion of the Loan proceeds, directly or indirectly, to purchase or carry Margin Stock in a manner that would result in a violation of Regulation U of the Federal Reserve Board, or repay or otherwise refinance Indebtedness of any Loan Party or others incurred to purchase or carry Margin Stock, or otherwise in any manner which is in contravention of any Requirement of Law or in violation of this Agreement.

Section 7.09 <u>Reserved</u>.

Section 7.10 <u>Reserved</u>.

Section 7.11 <u>Restricted Payments</u>. No Loan Party shall, and no Loan Party shall suffer or permit any of its Subsidiaries to, (i) declare or make any dividend payment or other distribution of assets, properties, cash, rights, obligations or securities on account of any Stock or Stock Equivalent, (ii) purchase, redeem or otherwise acquire for value any Stock or Stock Equivalent now or hereafter outstanding or (iii) make any payment or prepayment of principal of, premium, if any, interest, fees, redemption, exchange, purchase, retirement, defeasance, sinking fund or similar payment with respect to, Subordinated Indebtedness or Indebtedness permitted pursuant to <u>Section 7.05(g)</u><u>(ii)</u> (the items described in clauses (i), (ii) and (iii) above are referred to as "<u>Restricted Payments</u>"); except that any Subsidiary of the Parent Borrower may declare and pay dividends to the Parent Borrower or any Wholly-Owned Subsidiary of the Parent Borrower, and except that:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a) Holdings may declare and make dividend payments or other distributions payable solely in its Stock or Stock Equivalent; and

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b) the Parent Borrower may make distributions to Holdings which are immediately used by Holdings to redeem from officers, directors and employees whose employment by the Loan Parties has been terminated, Stock and Stock Equivalents (or to repay subordinated notes issued in redemption of such Stock or Stock Equivalents) provided all of the following conditions are satisfied:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(i) no Default or Event of Default has occurred and is continuing or would arise as a result of such Restricted
Payment;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(ii) after giving effect to such Restricted Payment, the Loan Parties are in compliance on a pro forma basis with
the covenant set forth in <u>Section 7.19</u>, recomputed for the most recent fiscal month for which financial statements have been delivered;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(iii) the aggregate Restricted Payments permitted (x) in any Fiscal Year of the Parent Borrower shall not exceed
the sum of $3,000,000 and the aggregate amount of such Restricted Payments permitted (but not made) in prior years pursuant to this clause (iii) under this clause and (y) during the term of this Agreement shall not exceed $15,000,000;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(iv) after giving effect to such Restricted Payment, Availability is not less than the greater of $15,000,000 and
20% of the Revolving Facility Commitment;

------

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c) in the event the Parent Borrower files a consolidated, combined, unitary or similar type income Tax return with Holdings and/or the direct or indirect parent or parents of Holdings, the Parent Borrower may make distributions to Holdings and/or the direct or indirect parent or parents of Holdings to permit Holdings and/or the direct or indirect parent or parents of Holdings to pay federal and state income Taxes then due and payable, <u>provided</u>, that (i) the amount of such distribution shall not be greater than the amount of such Taxes or expenses that would have been due and payable by the Parent Borrower and its relevant Subsidiaries had the Parent Borrower not filed a consolidated, combined, unitary or similar type return with Holdings and/or the direct or indirect parent or parents of Holdings and (ii) Holdings and/or the direct or indirect parent or parents of Holdings uses such distribution promptly to pay its Taxes;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(d) the Loan Parties may make (i) payments with respect to Indebtedness permitted pursuant to <u>Section 7.05(g)(ii)</u> (A) to the extent not prohibited by the Intercreditor Agreements, (B) in respect of payments of regularly scheduled interest or (C) in respect of Permitted Refinancings thereof permitted pursuant to <u>Section 7.05(g)(ii)</u> and (ii) Restricted Payments in the amount of Waivable Mandatory Prepayments (as defined in the Term Credit Agreement) applied in accordance with clause (ii) of the last sentence of <u>Section 2.03(e)</u> of the Term Credit Agreement; <u>[reserved];</u>

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(e) the Parent Borrower may make distributions to Holdings to permit Holdings to pay amounts required to maintain its corporate or other legal existence and for other customary overhead expenses; and

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(f) the Parent Borrower may make other Restricted Payments so long as either (i) the Permitted Transaction Conditions are satisfied at the time of such Restricted Payment or (ii) the aggregate amount of all such Restricted Payments made in reliance on this <u>clause (f)</u> shall not exceed the cumulative amount of Net Issuance Proceeds of all Qualifying Equity Issuances (other than any Specified Equity Contribution) made after the Second Amendment Effective Date and Not Otherwise Applied.

Section 7.12 <u>Change in Business</u>.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a) No Loan Party shall, and no Loan Party shall permit any of its Subsidiaries to, engage in any material line of business substantially different from those lines of business carried on by it on the Second<u>Third</u> Amendment Effective Date.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b) Holdings shall not (i) incur, directly or indirectly, any Indebtedness or any other obligation or liability whatsoever other than the Indebtedness and obligations under this Agreement, the other Loan Documents, the Term Loan Documents and the Second Lien Documents<u>any Permitted Term Debt</u> and Indebtedness permitted pursuant to <u>Section 7.05(b)</u>; (ii) create or suffer to exist any Lien upon any property or assets now owned or hereafter acquired, leased or licensed by it other than the Liens created under the Collateral Documents, the Term Loan Documents and the Second Lien Documents to which it is a party <u>securing any Permitted Term Debt</u>; (iii) engage in any business or activity or own any assets other than (A) holding shares in the Stock of the Parent Borrower; (B) performing its obligations and activities related thereto under the Loan Documents and the Related Agreements and the documents, agreements and other instruments entered into in connection therewith; (C) participating in tax, accounting and other

------

administrative activities as the parent of the consolidated group of Holdings, the Parent Borrower and the Parent Borrower's direct and indirect Subsidiaries, and other activities relating to the maintenance of its legal existence, including paying Taxes; (D) holding any cash or property received in connection with Restricted Payments permitted pursuant to <u>Section 7.11</u> pending prompt application thereof in accordance with such Section; (E) providing reasonable and customary indemnification to officers and directors; (F) issuing and offering its Stock, and incurring and paying the costs, fees and expenses in connection therewith, except to the extent any such transaction would result in an Event of Default under Section <u>8.01</u>; (G)(x) incurring and paying fees, costs and expenses related to the transactions permitted by this paragraph (b), (y) paying management fees and transaction fees to the extent permitted pursuant to <u>Section 7.07</u> and (z) otherwise incurring ordinary overhead costs and expenses (including administrative, legal, account and similar expenses); and (H) other activities incidental to the foregoing; (iv) consolidate with or merge with or into, or convey, transfer, lease or license all or substantially all its assets to, any Person; (v) sell or otherwise dispose of any Stock of the Parent Borrower; (vi) create or acquire any Subsidiary or make or own any Investment in any Person other as set forth in clause (iii)(A) above; or (vii) fail to hold itself out to the public as a legal entity separate and distinct from all other Persons.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c) Steinway and Sons shall not own any Property located in the United States other than (i) Property that shall become inventory of a Loan Party within 90 days after its presence in the United States and (ii) Property that (at fair market value) does not exceed $2,000,000 in the aggregate for all such Property described in this clause (ii).

Section 7.13 <u>Reserved</u>.

Section 7.14 <u>Changes in Accounting, Name or Jurisdiction of Organization</u>. No Loan Party shall, and no Loan Party shall suffer or permit any of its Subsidiaries to, (i) make any significant change in accounting treatment or reporting practices, except as required by GAAP, (ii) change the Fiscal Year or method for determining Fiscal Quarters of any Loan Party or of any consolidated Subsidiary of any Loan Party, (iii) change its name as it appears in official filings in its jurisdiction of organization or (iv) change its jurisdiction of organization, in the case of clauses (iii) and (iv), without at least 20 days' prior written notice to the Administrative Agent and after all actions necessary to continue the perfection of the Collateral Agent's Liens have been completed.

Section 7.15 <u>Amendments to</u> Related Agreements<u>Permitted Term Debt Documents</u>. No Loan Party shall and no Loan Party shall permit any of its Subsidiaries to (i) amend, supplement, waive or otherwise modify any provision of any Related Agreement<u>Permitted Term Debt Document</u> in a manner adverse to the Administrative Agent or the Lenders or which would reasonably be expected to have a Material Adverse Effect; <u>provided</u> that any amendment, supplement, waiver or modification of any provision of any Related Agreement<u>Permitted Term Debt Document</u> permitted pursuant to the terms of the<u>any</u> Intercreditor Agreements<u>Agreement and the definition thereof</u> shall not be considered adverse to the Administrative Agent or the Lenders or an amendment, supplement, waiver or other modification which would reasonably be expected to have a Material Adverse Effect, or (ii) take or fail to take any action under any Related Agreement that would reasonably be expected to have a Material Adverse Effect.

------

Section 7.16 <u>No Negative Pledges</u>.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a) No Loan Party shall, and no Loan Party shall permit any of its Subsidiaries to, directly or indirectly, create or otherwise cause or suffer to exist or become effective any consensual restriction or encumbrance of any kind on the ability of any such Subsidiary to pay dividends or make any other distribution on any of such Subsidiary's Stock or Stock Equivalents or to pay fees, including management fees, or make other payments and distributions to the Parent Borrower or any of its Subsidiaries other than those that exist by reason of any restriction existing under the Loan Documents or the Term Loan Documents as in effect on the date hereof<u>under any Permitted Term Debt Documents (provided that such restrictions are not more restrictive, taken as a whole, than the restrictions in the Original Term Loan Agreement) or are otherwise reasonably acceptable to the Administrative Agent</u>; <u>provided</u>, <u>however</u>, that (i) Second Lien Documents may contain restrictions on terms and conditions reasonably acceptable to the Collateral Agent and (ii) agreements governing Indebtedness incurred by Foreign Subsidiaries permitted hereby may contain customary restrictions on the assets of such Foreign Subsidiaries. No Loan Party shall, and no Loan Party shall permit any of its Subsidiaries to, directly or indirectly, enter into, assume or become subject to any Contractual Obligation prohibiting or otherwise restricting the existence of any Lien upon any of its assets in favor of the Administrative Agent, whether now owned or hereafter acquired except (i) in connection with any document or instrument governing (A) Liens permitted pursuant to <u>Section 7.01(h), 7.01(i) or 7.01(w) provided</u> that any such restriction contained therein relates only to the asset or assets subject to such permitted Liens or (B) Indebtedness permitted pursuant to <u>Section 7.05(d) or 7.05(g)</u>, (ii) customary provisions restricting subletting or assignment of any lease governing a leasehold interest, (iii) restrictions and conditions applicable to customer deposits imposed by customers of the Loan Parties under contracts entered into the Ordinary Course of Business, (iv) restrictions and conditions contained in agreements relating to the sale of assets permitted hereunder; provided such restrictions are limited to the assets being sold and (v) customary provisions in joint venture agreements relating to purchase options, rights of first refusal or call or similar rights of a third party that owns Stock or Stock Equivalents in such joint venture (excluding for greater certainty, provisions that relate to the pledge of any such Stock or Stock Equivalents in such joint venture which shall be permitted to be made in favor of the Administrative Agent); <u>provided</u> that such restrictions and conditions were not entered into in contemplation or in connection with such Person becoming a Subsidiary.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b) No Loan Party shall issue any Stock or Stock Equivalents (i) if such Issuance would result in an Event of Default under <u>Section 8.01(k)</u> and (ii) unless such Stock and Stock Equivalents are pledged to the Collateral Agent, for the benefit of the Secured Parties, as security for the Finance Obligations, on substantially the same terms and conditions as the Stock and Stock Equivalents of the Loan Parties owned by Holdings were pledged to the Collateral Agent as of the Original Closing Date.

Section 7.17 <u>Sale-Leasebacks</u>. Except as permitted under <u>Section 7.02(h)</u>, no Loan Party shall, and no Loan Party shall permit any of its Subsidiaries to, engage in a sale leaseback, synthetic lease or similar transaction involving any of its assets.

Section 7.18 <u>Amendment of Organization Documents</u>.The Loan Parties shall not amend any of its Organization Documents to (i) place any restrictions on the transfer or assignability of its Stock which would be materially adverse to the interests of the Lenders, (ii) place any limitations, directly or indirectly, on the exercise of the Administrative Agent's remedies set forth in the Pledge and Security Agreement, (iii) "opt-out" of Article 8 of the UCC for its state of organization with respect to its Stock or (iv) take any action otherwise prohibited by the Pledge and Security Agreement.

------

Section 7.19 <u>Fixed Charge Coverage Ratio</u>. If a Covenant Triggering Event occurs, Holdings shall not permit the Fixed Charge Coverage Ratio on a pro forma basis to be less than 1.00 to 1.00 for (i) the Measurement Period ended immediately prior to the Fiscal Quarter in which the Covenant Triggering Event occurs and for which financial statements have been (or are required to be) delivered under <u>Section 6.01(a)</u> or <u>(b)</u>, as applicable and (ii) each Measurement Period ending on the last day of any Fiscal Quarter while such Covenant Triggering Event is continuing and until the Fiscal Quarter during which no Default or Event of Default shall have existed and Availability shall have first exceeded 15.0% of the Revolving Facility Commitment, in each case, at all times during a period of 30 consecutive days.

**ARTICLE VIII** 

**DEFAULTS** 

Section 8.01 <u>Events of Default</u>. An Event of Default shall exist upon the occurrence of any of the following specified events or conditions (each an "<u>Event of Default</u>"):

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a)*<u>Non-Payment</u>*. Any Borrower or any other Loan Party fails to (i) pay when and as required to be paid herein, any amount of principal of any Loan, or (ii) pay within three Business Days after the same becomes due, any interest on any Loan, or any fee due hereunder, or (iii) pay within three Business Days after the same becomes due, any other amount payable hereunder or under any other Loan Document. 

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b) <u>*Covenants*</u>. Any Loan Party shall:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(i) default in the due performance or observance of any term, covenant or agreement contained in <u>Section 6.02(j)</u>, <u>6.03(a)</u>, <u>6.04(a)</u> (but only to the extent that such Section relates to the maintenance of the organization or existence of any Loan Party or any of its Subsidiaries), <u>6.06</u>, <u>6.09</u>, <u>6.10</u>, <u>6.11</u> or <u>Article VII</u>;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(ii) default in the due performance or observance of any term, covenant or agreement contained in
(A) <u>Section 6.01</u>, <u>6.02(a)</u> or <u>6.02(b)</u> and such default shall continue unremedied for a period of five Business Days after the earlier of a Responsible Officer of a Loan party becoming aware of such default or notice
thereof given by the Administrative Agent or (B) <u>Section 6.02(d)</u> and such default shall continue unremedied for a period of two Business Days after the earlier of a Responsible Officer of a Loan Party becoming aware of such default
or notice thereof given by the Administrative Agent; or

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(iii) default in the due performance or observance by it of any term, covenant or agreement (other than those
referred to in <u>subsection (a)</u>, <u>(b)(i)</u> or <u>(b)(ii)</u> of this <u>Section 8.01</u>) contained in this Agreement and such default shall continue unremedied for a period of 30 days after the earlier of a Responsible Officer of a
Loan Party becoming aware of such default or notice thereof given by the Administrative Agent.

------

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c)*<u>Other Loan Documents</u>*. Any Loan Party shall default in the due performance or observance of any term, covenant or agreement (other than those referred to in <u>subsection (a)</u> or <u>(b)</u> of this <u>Section 8.01</u>) in any of the other Loan Documents and such default shall continue unremedied for a period of 30 days after the earlier of the chief executive officer or chief financial officer of a Loan Party becoming aware of such default or notice thereof given by the Administrative Agent. 

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(d)*<u>Representations and Warranties</u>*. Any representation, warranty or statement made or deemed to be made by any Loan Party herein, in any of the other Loan Documents, or in any statement or certificate delivered or required to be delivered pursuant hereto or thereto shall prove to have been incorrect in any material respect on the date as of which it was made or deemed to have been made. 

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(e) <u>*Cross-Default*</u>.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(i) any Loan Party or any Subsidiary thereof (A) fails to make payment within five days of the due date
thereof (whether by scheduled maturity, required prepayment, acceleration, demand or otherwise), regardless of amount, in respect of the Term Credit Agreement, the Second Lien Documents <u>any Permitted Term Debt</u> or any other Indebtedness or Guarantee (other than in respect of (x) Indebtedness outstanding under the Loan Documents and (y) Rate
Contracts) having an aggregate principal amount (including undrawn committed or available amounts and including amounts owing to all creditors under any combined or syndicated credit arrangement) of more than the Threshold Amount, (B) fails to
perform or observe any other condition or covenant, or any other event shall occur or condition shall exist, under the Term Credit Agreement, the Second Lien Documents or
any <u>any Permitted Term Debt or</u> agreement or instrument relating thereto or such other Indebtedness or Guarantee having an aggregate principal
amount (including undrawn committed or available amounts and including amounts owing to all creditors under any combined or syndicated credit arrangement) of more than the Threshold Amount, if the effect of such failure, event or condition is to
cause, or to permit the holder or holders or beneficiary or beneficiaries of such Indebtedness or Guarantee (or a trustee or agent on behalf of such holder or holders or beneficiary or beneficiaries) to cause, the Term
Credit Agreement or such other Indebtedness to be declared to be due and payable prior to its stated maturity, or such Guarantee to become payable, or cash collateral in respect thereof to be demanded or (C) shall be required by
the terms of the Term Credit Agreement, the Second Lien Documents or <u>any Permitted Term Debt or</u> such other
Indebtedness or Guarantee having an aggregate principal amount (including undrawn committed or available amounts and including amounts owing to all creditors under any combined or syndicated credit arrangement) of more than the Threshold Amount to
offer to prepay or repurchase such Indebtedness or the primary Indebtedness underlying such Guarantee (or any portion thereof) prior to the stated maturity thereof; or

------

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(ii) there occurs under any Rate Contract an Early Termination Date (as defined in such Rate Contract) resulting
from (A) any event of default under such Rate Contract as to which Holdings or any of its Subsidiaries is the Defaulting Party (as defined in such Rate Contract) or (B) any Termination Event (as so defined) as to which Holdings or any of
its Subsidiaries is an Affected Party (as so defined), and, in either event, the Swap Termination Value owed by Holdings or any of its Subsidiaries as a result thereof is greater than the Threshold Amount.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(f)*<u>Insolvency Proceedings</u>*. Any Loan Party or any Subsidiary thereof institutes or consents to the institution of any proceeding under any Debtor Relief Law, or makes an assignment for the benefit of creditors; or applies for or consents to the appointment of any receiver, interim receiver, trustee, custodian, conservator, monitor, administrator, sequestrator, liquidator, rehabilitator or similar officer for it or for all or any material part of its property; or any receiver, interim receiver, trustee, custodian, conservator, monitor, administrator, sequestrator, liquidator, rehabilitator or similar officer is appointed without the application or consent of such Person and the appointment continues undischarged or unstayed for 60 calendar days; or any proceeding under any Debtor Relief Law relating to any such Person or to all or any material part of its property is instituted without the consent of such Person and continues undismissed or unstayed for 60 calendar days, or an order for relief is entered in any such proceeding. 

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(g)*<u>Inability to Pay Debts; Attachment</u>*. (i) Any Loan Party or any Subsidiary thereof becomes unable or admits in writing its inability or fails generally to pay its debts as they become due, or (ii) any writ or warrant of attachment or execution or similar process is issued or levied against all or any material part of the property of any such Person and is not released, vacated or fully bonded within 45 days after its issue or levy. 

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(h)*<u>Judgments</u>*. There is entered against any Loan Party or any Subsidiary thereof (i) one or more final judgments or orders for the payment of money in an aggregate amount (as to all such judgments and orders) exceeding the Threshold Amount (to the extent not covered by independent third-party insurance as to which the insurer is rated at least "A" by A.M. Best Company, has been notified of the potential claim and does not dispute coverage), or (ii) any one or more non-monetary final judgments that have, or could reasonably be expected to have, individually or in the aggregate, a Material Adverse Effect and, in either case of (i) and (ii), (A) enforcement proceedings are commenced by any creditor upon such judgment or order, or (B) there is a period of 20 consecutive days during which a stay of enforcement of such judgment, by reason of a pending appeal or otherwise, is not in effect. 

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(i)*<u>ERISA</u>*. One or more ERISA Events occur that individually or in the aggregate result in Liability to any Loan Party in an aggregate amount that would reasonably be expected to result in a Material Adverse Effect. 

------

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(j)*<u>Invalidity of Loan Documents</u>*. Any material provision of any Loan Document, at any time after its execution and delivery and for any reason other than as expressly permitted hereunder or thereunder or satisfaction in full of all the ABL Credit Obligations, ceases to be in full force and effect; or any Loan Party or any of its controlled Affiliates contests in any manner the validity or enforceability of any provision of any Loan Document; or any Loan Party denies that it has any or further liability under any provision of any Loan Document (other than as result of the repayment in full of the Finance Obligations), or purports to revoke, terminate or rescind any provision of any Loan Document. 

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(k) <u>*Change of Control*</u>. A Change of Control shall occur.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(l) <u>*Collateral Documents*</u>. Any Collateral Document after delivery thereof including pursuant to <u>Section 4.01</u>, <u>6.11</u> or <u>6.13</u> shall for any reason (other than pursuant to the terms thereof) cease to create a valid and perfected first priority Lien (subject to Liens permitted by <u>Section 7.01</u>) on the Collateral with an aggregate fair market value in excess of $5,000,000 purported to be covered thereby, except to the extent that any such loss of perfection or priority results from the failure of the Term Collateral Agent (<u>or the collateral agent under any Permitted Term Debt,</u> subject to the ABL/Term<u>an</u> Intercreditor Agreement) to maintain possession of certificates actually delivered to it representing securities pledged under the Pledge and Security Agreements and except to the extent that such loss is covered by a Lender's title insurance policy and the Administrative Agent shall be reasonably satisfied with the credit of such insurer.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(m) <u>*Invalidity of Subordination Provisions*</u>. The subordination provisions of either Intercreditor Agreement or any agreement or instrument governing any Subordinated Indebtedness <u>or, after the incurrence of any Permitted Term Debt, of the Intercreditor Agreement</u> shall for any reason be revoked or invalidated, or otherwise cease to be in full force and effect, or any Person shall contest in any manner the validity or enforceability thereof or deny that it has any further liability or obligation thereunder, or the ABL Credit Obligations, for any reason shall not have the priority contemplated by this Agreement, the Intercreditor Agreements or such subordination provisions <u>or the Intercreditor Agreement, if applicable</u>.

Section 8.02 <u>Remedies upon Event of Default</u>. If any Event of Default occurs and is continuing, the Administrative Agent shall, at the request of, or may, with the consent of, the Required Lenders, take any or all of the following actions:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(i) declare the commitment of each Lender to make Loans and of the L/C Issuer to issue Letters of Credit to be
terminated, whereupon such commitments and obligation shall be terminated;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(ii) declare the unpaid principal amount of all outstanding Loans and L/C Obligations, all interest accrued and
unpaid thereon, and all other amounts owing or payable hereunder or under any other Loan Document to be immediately due and payable, without presentment, demand, protest or other notice of any kind, all of which are hereby expressly waived by the
Borrowers;

------

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(iii) require the Borrowers to Cash Collateralize the L/C Obligations (in an amount equal to the Minimum Collateral
Amount with respect thereto); and

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(iv) exercise on behalf of itself and the Lenders and the L/C Issuer all rights and remedies available to it and the
Lenders under the Loan Documents;

<u>provided</u>, <u>however</u>, that upon the occurrence of an actual or deemed entry of an order for relief with respect to any Borrower or any other Loan Party under the Bankruptcy Code or any other Debtor Relief Law, the obligation of each Lender to make Loans and of the L/C Issuer to issue Letters of Credit shall automatically terminate, the unpaid principal amount of all outstanding Loans and L/C Obligations and all interest and other amounts as aforesaid shall automatically become due and payable, in each case without further act of the Administrative Agent, the L/C Issuer or any Lender.

Section 8.03 <u>Application of Funds</u>. After the exercise of remedies provided for in <u>Section 8.02</u> (or after the Loans and L/C Obligations have automatically become immediately due and payable as set forth in the proviso to <u>Section 8.02</u>), any amounts received on account of the Finance Obligations shall, subject to the provisions of <u>Section 2.15</u>, be applied by the Administrative Agent in the following order:

FIRST, to payment of that portion of the Finance Obligations constituting fees, indemnities, expenses and other amounts (including fees, charges and disbursements of counsel to the Administrative Agent and amounts payable under <u>Article III</u>) payable to the Administrative Agent in its capacity as such;

SECOND, to payment of that portion of the Finance Obligations constituting accrued and unpaid Letter of Credit Fees and unpaid principal of the Letter of Credit Borrowings, ratably among the L/C Issuers in proportion to the respective amounts described in this <u>clause Second</u> held by them;

THIRD, to payment of that portion of the Finance Obligations constituting fees, indemnities and other amounts (other than principal and interest) payable to the Lenders and L/C Issuer(s) (including fees, charges and disbursements of counsel to the respective Lenders (including fees and time charges for attorneys who may be employees of any Lender or L/C Issuer)) arising under the Loan Documents and amounts payable under <u>Article III</u>, ratably among them in proportion to the respective amounts described in this <u>clause Third</u> payable to them;

FOURTH, to the Administrative Agent for the account of the L/C Issuers, to Cash Collateralize that portion of L/C Obligations comprised of the aggregate undrawn amount of Letters of Credit to the extent not otherwise Cash Collateralized by the Borrowers pursuant to <u>Sections 2.03</u> and <u>2.16</u>;

FIFTH, to payment of that portion of the Finance Obligations constituting accrued and unpaid interest on the Loans, L/C Obligations and other ABL Credit Obligations, ratably among the Lenders and L/C Issuer(s) in proportion to the respective amounts described in this <u>clause Fifth</u> payable to them;

------

SIXTH, to payment of that portion of the Finance Obligations constituting unpaid principal of the Loans and L/C Obligations and amounts then owing under Secured Cash Management Agreements, ratably among the Lenders and L/C Issuer(s) and Cash Management Banks in proportion to the respective amounts described in this <u>clause Sixth</u> payable to them;

SEVENTH, to payment of amounts then owing under Secured Hedge Agreements, ratably among the Hedge Banks in proportion to the respective amounts described in this <u>clause Seventh</u> payable to them; <u>and</u>

EIGHTH, to the <u>obligations under any Permitted</u> Term Finance Obligations<u>Debt</u>, if any, as and to the extent required by the ABL/Term<u>an</u> Intercreditor Agreement; and

LAST, the balance, if any, after all of the Finance Obligations have been indefeasibly paid in full, to the Borrowers or as otherwise required by law.

Subject to <u>Sections 2.03(c)</u> and <u>2.16</u>, amounts used to Cash Collateralize the aggregate undrawn amount of Letters of Credit pursuant to <u>clause Fourth</u> above shall be applied to satisfy drawings under such Letters of Credit as they occur. If any amount remains on deposit as Cash Collateral after all Letters of Credit have either been fully drawn or expired, such remaining amount shall be applied to the other Finance Obligations, if any, in the order set forth above.

Notwithstanding the foregoing, Finance Obligations arising under Secured Cash Management Agreements and Secured Hedge Agreements shall be excluded from the application described above if the Administrative Agent has not received written notice thereof, together with such supporting documentation as the Administrative Agent may request, from the applicable Cash Management Bank or Hedge Bank, as the case may be. Each Cash Management Bank or Hedge Bank not a party to this Agreement that has given the notice contemplated by the preceding sentence shall, by such notice, be deemed to have acknowledged and accepted the appointment of the Administrative Agent pursuant to the terms of <u>Article IX</u> hereof for itself and its Affiliates as if a "Lender" party hereto.

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

Section 8.04 <u>Equity Cure</u>. (a) In the event the Loan Parties fail to comply with the financial covenant set forth in <u>Section 7.19</u> as of the last day of any applicable Fiscal Quarter, any cash equity contribution to the Parent Borrower (funded with proceeds of common equity issued by Holdings or other equity issued by Holdings having terms reasonably acceptable to the Administrative Agent and in any case, not constituting Disqualified Stock) on or prior to the day that is fifteen Business Days after the day on which financial statements are required to be delivered for that Fiscal Quarter (such fifteen Business Day period, the "<u>Standstill Period</u>") will, at the irrevocable election of the Parent Borrower, be included in the calculation of Consolidated EBITDA solely for the purposes of determining compliance with the Fixed Charge Coverage Ratio for the relevant Measurement Period and any portion of subsequent period that includes such Fiscal

------

Quarter (any such equity contribution so included in the calculation of Consolidated EBITDA, a "<u>Specified Equity Contribution</u>"); <u>provided</u> that (a) notice of the Parent Borrower's intent to make a Specified Equity Contribution shall be delivered no later than the day on which financial statements are required to be delivered for the applicable Fiscal Quarter, (b) in each consecutive four Fiscal Quarter period, there shall be at least two Fiscal Quarters in which no Specified Equity Contribution is made and there shall be no more than five Specified Equity Contributions made in the aggregate after the Original Closing Date, (c) the amount of any Specified Equity Contribution shall be no greater than the amount required to cause the Loan Parties to be in pro forma compliance with the Fixed Charge Coverage Ratio, (d) all Specified Equity Contributions shall be disregarded for purposes of the calculation of Consolidated EBITDA for all other purposes, including calculating basket levels, pricing and other items governed by reference to Consolidated EBITDA, (e) any Indebtedness prepaid with the proceeds of Specified Equity Contributions shall be deemed outstanding for purposes of determining compliance with the Fixed Charge Coverage Ratio for the current Fiscal Quarter and the next three Fiscal Quarters thereafter and (f) during the Standstill Period, no Borrowing shall be permitted to be made, and no Letter of Credit may be issued, amended, extended or renewed.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b) If, after giving effect to the adjustment referred to in <u>clause (a)</u> above, the Borrowers shall then be in compliance with the requirements of the financial covenant set forth in <u>Section 7.19</u>, the Borrowers shall be deemed to have satisfied such requirements as of the relevant date of determination with the same effect as though there had been no failure to comply therewith at such date, and the applicable breach or default of the financial covenant set forth in <u>Section 7.19</u> that had occurred shall be deemed cured for the purposes of this Agreement.

**ARTICLE IX** 

**AGENCY PROVISIONS** 

Section 9.01 <u>Appointment and Authority</u>.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a)*<u>Administrative Agent</u>*. Each of the Lenders and L/C Issuer(s) hereby irrevocably appoints Bank of America to act on its behalf as the Administrative Agent hereunder and under the other Loan Documents and authorizes the Administrative Agent to take such actions on its behalf and to exercise such powers as are delegated to the Administrative Agent by the terms hereof or thereof, together with such actions and powers as are reasonably incidental thereto including, without limitation, the making of one or more Agent Advances or Overadvances; <u>provided</u> that (i) the Administrative Agent agrees, solely for the benefit of the Secured Parties, to exercise its rights and privileges under the ABL/Term<u>any</u> Intercreditor Agreement after, and in accordance with, any direction to do so given by the Required Lenders and (ii) the Administrative Agent will not amend, waive or otherwise modify any provision of the ABL/Term<u>any</u> Intercreditor Agreement without the prior consent of the Required Lenders. The provisions of this Article are solely for the benefit of the Administrative Agent, L/C Issuer(s) and the Lenders, and the Borrowers 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" herein or in any other Loan Documents (or any other 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 Requirement of Law. Instead such term is used as a matter of market custom, and is intended to create or reflect only an administrative relationship between contracting parties. 

------

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b)*<u>Collateral Agent</u>*. The Administrative Agent shall also act as the "collateral agent" under the Loan Documents, and each of the Lenders (including in its capacities as a potential Hedge Bank, Cash Management Bank and L/C Issuer) hereby irrevocably appoints and authorizes the Administrative Agent to act as the agent of such Lender and L/C Issuer for purposes of acquiring, holding and enforcing any and all Liens on Collateral granted by any of the Loan Parties to secure any of the Finance Obligations, together with such powers and discretion as are reasonably incidental thereto. In this connection, the Administrative Agent, as "collateral agent" and any co-agents, sub-agents and attorneys-in-fact appointed by the Administrative Agent pursuant to <u>Section 9.05</u> for purposes of holding or enforcing any Lien on the Collateral (or any portion thereof) granted under the Collateral Documents, or for exercising any rights and remedies thereunder at the direction of the Administrative Agent), shall be entitled to the benefits of all provisions of this <u>Article IX</u> and <u>Article X</u> (including <u>Section 10.04(c)</u>, as though such co-agents, sub-agents and attorneys-in-fact were the "collateral agent" under the Loan Documents) as if set forth in full herein with respect thereto. 

Section 9.02 <u>Rights as a Lender</u>. The Person serving as the Administrative Agent hereunder shall, to the extent holding Revolving Facility Commitments or Loans hereunder, 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 the term "Lender" or "Lenders" shall, unless otherwise expressly indicated or unless the context otherwise requires, include the Person serving as the Administrative Agent hereunder in its individual capacity as a holder of Revolving Facility Commitments or Loans hereunder. Such Person and its Affiliates may accept deposits from, lend money to, own securities of, act as the financial advisor or in any other advisory capacity for and generally engage in any kind of business with the Borrowers or any Subsidiary or other Affiliate thereof as if such Person were not the Administrative Agent hereunder and without any duty to account therefor to the Lenders.

Section 9.03 <u>Exculpatory Provisions</u>. The Administrative Agent shall not have any duties or obligations except those expressly set forth herein and in the other Loan Documents, and its duties hereunder shall be administrative in nature. Without limiting the generality of the foregoing, the Administrative Agent:

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

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(ii) shall not have any duty to take any discretionary action or exercise any discretionary powers, except
discretionary rights and powers expressly contemplated hereby or by the other Loan Documents that the 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 expressly provided for herein or in the other Loan Documents); <u>provided</u> that the Administrative Agent shall not be required to take any action that, in its opinion or the opinion of its counsel, may expose the Administrative Agent to
liability or that is contrary to any Loan Document or applicable law, including for the avoidance of doubt any action that may be in violation of the automatic stay under any Debtor Relief Law or that may effect a forfeiture, modification or
termination of property of a Defaulting Lender in violation of any Debtor Relief Law; and

------

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(iii) shall not, except as expressly set forth herein and in the other Loan Documents, have any duty to disclose, and
shall not be liable for the failure to disclose, any information relating to the Borrowers or any of its Affiliates that is communicated to or obtained by the Person serving as the 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 (i) with the consent or at the request of the Required Lenders (or such other number or percentage of the Lenders as shall be necessary, or as the Administrative Agent shall believe in good faith shall be necessary, under the circumstances as provided in <u>Sections 10.01</u> and <u>8.02</u>) or (ii) in the absence of its own gross negligence or willful misconduct, as determined by a court of competent jurisdiction by a final and nonappealable<u>non-appealable</u> judgment. The Administrative Agent shall be deemed not to have knowledge of any Default unless and until notice describing such Default is given in writing to the Administrative Agent by the Parent Borrower, a Lender or an L/C Issuer.

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 this Agreement or any other Loan Document, (ii) the contents of any certificate, report or other document delivered hereunder or thereunder or in connection herewith or therewith, (iii) the performance or observance of any of the covenants, agreements or other terms or conditions set forth herein or therein or the occurrence of any Default, (iv) the validity, enforceability, effectiveness or genuineness of this Agreement, any other Loan Document or any other agreement, instrument or document, (v) the value or the sufficiency of any Collateral or (vi) the satisfaction of any condition set forth in <u>Article IV</u> or elsewhere herein, other than to confirm receipt of, and (in the case of items referred to in <u>Section 4.01</u>) whether or not it is reasonably satisfied with, items expressly required to be delivered to the Administrative Agent.

<u>The Administrative Agent does not warrant, nor accept responsibility, nor shall the Administrative Agent have any liability with respect to the administration, submission or any other matter related to any reference rate referred to herein or with respect to any rate (including, for the avoidance of doubt, the selection of such rate and any related spread or other adjustment) that is an alternative or replacement for or successor to any such rate, including, without limitation, any Benchmark Replacement (or any component of any of the foregoing), or the effect of any of the foregoing, or of any Conforming Changes. The Administrative Agent and its affiliates or other related entities may engage in transactions or other activities that affect the calculation of any reference rate referred to herein, or any alternative, successor or replacement rate, including, without limitation, any Benchmark Replacement (or any component of any of the foregoing), or any related spread or other adjustments thereto, in each case, in a manner adverse to the Borrower. The Administrative Agent may select information sources or services in its reasonable discretion to ascertain any reference rate referred to herein or any alternative, successor or replacement rate, including, without limitation, any Benchmark Replacement (or any component of any of the foregoing), in each case pursuant to the terms of this Agreement, and shall have no liability to the Borrower, any Lender or any other person or entity for damages of any kind, including direct or indirect, special, punitive, incidental or consequential damages, costs, losses or expenses (whether</u> <u>in tort, contract or otherwise and whether at law or in equity), for any error or other action or omission related to or affecting the selection, determination, or calculation of any such rate (or component thereof) provided by any such information source or service.</u>

------

Section 9.04 <u>Reliance by Administrative Agent</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 (including any electronic message, Internet or intranet website posting or other distribution) believed by it to be genuine and to have been signed, sent or otherwise authenticated by the proper Person. The Administrative Agent also may rely upon any statement made to it orally or by telephone or e-mail and believed by it to have been made by the proper Person, and shall not incur any liability for relying thereon. In determining compliance with any condition hereunder to the making of a Loan or the issuance, extension, renewal or increase of a Letter of Credit that by its terms must be fulfilled to the satisfaction of a Lender or an L/C Issuer, the Administrative Agent may presume that such condition is satisfactory to such Lender or L/C Issuer unless the Administrative Agent shall have received notice to the contrary from such Lender or L/C Issuer prior to the making of such Loan or the issuance, extension, renewal or increase of a Letter of Credit. 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 9.05 <u>Delegation of Duties</u>. The Administrative Agent may perform any and all of its duties and exercise its rights and powers hereunder or under any other Loan Document by or through any one or more sub-agents appointed by the Administrative Agent. The Administrative Agent and any such sub-agent may perform any and all of its duties and exercise its rights and powers by or through their respective Related Parties. The exculpatory provisions of this <u>Article IX</u> 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 Administrative Agent. The Administrative Agent shall not be responsible for the negligence or misconduct of any sub-agents except to the extent that a court of competent jurisdiction determines in a final and non appealable<u>non-appealable</u> judgment that the Administrative Agent acted with gross negligence or willful misconduct in the selection of such sub-agents.

Section 9.06 <u>Resignation of Administrative Agent</u>.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a) The Administrative Agent may at any time, upon 30 days' notice to the Borrowers, the Lenders and the L/C Issuer(s), resign as the Administrative Agent. Upon receipt of any such notice of resignation, the Required Lenders shall have the right, in consultation with the Parent Borrower, to appoint a successor, which shall be a bank with an office in the United States, or an Affiliate of any such bank with an office in the United States. If no such successor shall have been so appointed by the Required Lenders and shall have accepted such appointment within 30 days after the retiring Administrative Agent gives notice of its resignation, then the retiring Administrative Agent may on behalf of the Lenders and the L/C Issuer(s), appoint a successor Administrative Agent meeting the qualifications set forth above; <u>provided</u> that if the Administrative Agent shall notify the Parent Borrower, the Lenders and each L/C Issuer that no qualifying Person has accepted such appointment, then such resignation shall nonetheless become

------

effective in accordance with such notice and (i) the retiring Administrative Agent shall be discharged from its duties and obligations hereunder and under the other Loan Documents (except that in the case of any collateral security held by the Administrative Agent on behalf of the Lenders and each L/C Issuer under any of the Loan Documents, the retiring Administrative Agent shall continue to hold such collateral security until such time as a successor Administrative Agent is appointed) and (ii) all payments, communications and determinations provided to be made by, to or through the Administrative Agent shall instead be made by or to each Lender or L/C issuer directly, until such time as the Required Lenders appoint a successor Administrative Agent as provided for above in this <u>Section 9.06</u>. Upon the acceptance of a successor's appointment as Administrative Agent hereunder, such successor shall succeed to and become vested with all of the rights, powers, privileges and duties of the retiring (or retired) Administrative Agent, and the retiring Administrative Agent shall be discharged from all of its duties and obligations hereunder or under the other Loan Documents (if not already discharged therefrom as provided above in this <u>Section 9.06</u>). After the retiring Administrative Agent's resignation hereunder and under the other Loan Documents, the provisions of this Article and <u>Section 10.04</u> 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 the retiring Administrative Agent was acting as Administrative Agent.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b) Any resignation by Bank of America as Administrative Agent pursuant to this <u>Section 9.06</u> shall also constitute its resignation as L/C Issuer and Swing Line Lender. If Bank of America resigns as an L/C Issuer, it shall retain all the rights, powers, privileges and duties of an L/C Issuer hereunder with respect to all Letters of Credit issued by it which are outstanding as of the effective date of its resignation as an L/C Issuer and all L/C Obligations with respect thereto, including the right to require the Lenders to make Base Rate Loans or fund risk participations in Unreimbursed Amounts pursuant to <u>Section 2.03(c)</u>. If Bank of America resigns as Swing Line Lender, it shall retain all the rights of the Swing Line Lender provided for hereunder with respect to Swing Line Loans made by it and outstanding as of the effective date of such resignation, including the right to require the Lenders to make Base Rate Loans or fund risk participations in outstanding Swing Line Loans pursuant to <u>Section 2.04(c)</u>. Upon the appointment by the Parent Borrower of a successor L/C Issuer or Swing Line Lender hereunder (which successor shall in all cases be a Lender other than a Defaulting Lender), (a) such successor shall succeed to and become vested with all of the rights, powers, privileges and duties of the retiring L/C Issuer or Swing Line Lender, as applicable, (b) the retiring L/C Issuer and Swing Line Lender shall be discharged from all of its duties and obligations hereunder or under the other Loan Documents, and (c) the successor L/C Issuer shall issue letters of credit in substitution for the Letters of Credit, if any, issued by the retiring L/C Issuer which are outstanding at the time of such succession or make other arrangements satisfactory to Bank of America to effectively assume the obligations of Bank of America with respect to such Letters of Credit.

Section 9.07 <u>Non-Reliance on Administrative Agent and Other Lenders</u>. Each Lender and L/C Issuer acknowledges that it has, independently and without reliance upon the Administrative Agent or any other Lender or any of their Related Parties and based on such documents and information as it has deemed appropriate, made its own credit analysis and decision to enter into this Agreement. Each Lender and L/C Issuer also acknowledges that it will, independently and without reliance upon the Administrative Agent or any other Lender or any of their Related Parties and based on such documents and information as it shall from time to time deem appropriate, continue to make its own decisions in taking or not taking action under or based upon this Agreement, any other Loan Document or any related agreement or any document furnished hereunder or thereunder.

------

Section 9.08 <u>No Other Duties, Etc</u>. Anything herein to the contrary notwithstanding, none of the Joint Lead Arrangers, the Syndication Agent or any agent listed on the cover page hereof shall have any powers, duties or responsibilities under this Agreement or any of the other Loan Documents, except in its capacity, as applicable, as the Administrative Agent, the Collateral Agent, a Lender or L/C Issuer hereunder, or as expressly set forth herein.

Section 9.09 <u>Administrative Agent May File Proofs of Claim</u>. In case of the pendency of any proceeding under any Debtor Relief Law or any other judicial proceeding relative to any Loan Party, the Administrative Agent (irrespective of whether the principal of any Loan or L/C Obligation shall then be due and payable as herein expressed or by declaration or otherwise and irrespective of whether the Administrative Agent shall have made any demand on the Borrowers) shall be entitled and empowered, by intervention in such proceeding or otherwise, in each case, subject to the ABL/Term<u>any</u> Intercreditor Agreement:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(i) to file and prove a claim for the whole amount of the principal and interest owing and unpaid in respect of the
Loans, L/C Obligations and all other ABL Credit Obligations that are owing and unpaid and to file such other documents as may be necessary or advisable in order to have the claims of the Lenders, the L/C Issuers and the Administrative Agent
(including any claim for the reasonable compensation, expenses, disbursements and advances of the Lenders, the L/C Issuers and the Administrative Agent and their respective agents and counsel and all other amounts due the Lenders and the
Administrative Agent under <u>Sections 2.03(h)</u> and <u>(i)</u>, <u>2.09</u> and <u>10.04</u>) allowed in such judicial proceeding; and

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

and any custodian, receiver, assignee, trustee, liquidator, sequestrator or other similar official in any such judicial proceeding is hereby authorized by each Lender to make such payments to the Administrative Agent and, in the event that the Administrative Agent shall consent to the making of such payments directly to the Lenders, to pay to the Administrative Agent any amount due for the reasonable compensation, expenses, disbursements and advances of the Administrative Agent and its agents and counsel, and any other amounts due the Administrative Agent under <u>Sections 2.03(h)</u> and <u>(i)</u>, <u>2.09</u> and <u>10.04</u>.

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

------

Section 9.10 <u>Collateral and Guaranty Matters</u>. Each of the Lenders (including in its capacities as a potential Hedge Bank and a potential Cash Management Bank) and the L/C Issuers irrevocably authorize either or both of the Administrative Agent and the Collateral Agent, at its or their option and in its or their discretion:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(i) to release any Lien on any property granted to or held by the Administrative Agent under any Loan Document
(A) upon termination of the Aggregate Commitments and payment in full of all Finance Obligations (other than (x) contingent indemnification obligations and the expiration or termination of all Letters of Credit (other than Letters of
Credit as to which other arrangements, including cash collateralization or backstopping, reasonably satisfactory to the Administrative Agent and the L/C Issuers shall have been made), and (y) obligations and liabilities under Secured Hedge
Agreements and Secured Cash Management Agreements as to which arrangements satisfactory to the applicable Hedge Bank or Cash Management Bank, as applicable, shall have been made), (B) that is sold or to be sold as part of or in connection with
any sale permitted hereunder or under any other Loan Document or (C) if approved, authorized or ratified in writing in accordance with <u>Section 10.01</u>;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(ii) to release any Guarantor from its obligations under the Guaranties if such Person ceases to be a Subsidiary or
becomes an Excluded Subsidiary as a result of a transaction permitted hereunder; and

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(iii) to subordinate any Lien on any property granted to or held by the Administrative Agent under any Finance
Document to the holder of any Lien on such property that is permitted by <u>Section 7.01(h)</u>.

Upon request by the Administrative Agent at any time, the Required Lenders will confirm in writing the Administrative Agent's and/or the Collateral Agent's authority to release or subordinate its interest in particular types or items of property, or to release any Guarantor from its obligations under the Guaranties pursuant to this <u>Section 9.10</u>. In each case as specified in this <u>Section 9.10</u>, the Administrative Agent or the Collateral Agent, as applicable, will, at the Borrowers' expense, execute and deliver to the applicable Loan Party such documents as such Loan Party may reasonably request to evidence the release of such item of Collateral from the assignment and security interest granted under the Collateral Documents or to subordinate its interest in such item, or to release such Guarantor from its obligations under the Guaranties, in each case in accordance with the terms of the Loan Documents and this <u>Section 9.10</u>.

The Administrative Agent shall not be responsible for or have a duty to ascertain or inquire into any representation or warranty regarding the existence, value or collectability of the Collateral, the existence, priority or perfection of the Administrative Agent's Lien thereon, or any certificate prepared by any Loan Party in connection therewith, nor shall the Administrative Agent be responsible or liable to the Lenders for any failure to monitor or maintain any portion of the Collateral.

------

Section 9.11 <u>Secured Hedge Agreements and Secured Cash Management Agreements</u>. Except as otherwise expressly set forth herein or in any Guaranty or any Collateral Document, no Hedge Bank or Cash Management Bank that obtains the benefits of <u>Section 8.03</u>, any Guaranty or any Collateral by virtue of the provisions hereof or of any Guaranty or any Collateral Document shall have any right to notice of any action or to consent to, direct or object to any action hereunder or under any other Loan Document or otherwise in respect of the Collateral (including the release or impairment of any Collateral) other than in its capacity as a Lender and, in such case, only to the extent expressly provided in the Loan Documents. Notwithstanding any other provision of this <u>Article IX</u> to the contrary, the Administrative Agent shall not be required to verify the payment of, or that other satisfactory arrangements have been made with respect to, Finance Obligations arising under Secured Hedge Agreements and Secured Cash Management Agreements unless the Administrative Agent has received written notice of such Finance Obligations, together with such supporting documentation as the Administrative Agent may request, from the Hedge Bank or Cash Management Bank, as applicable.

Section 9.12 <u>Certain Representations</u>.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a) Each Lender (x) represents and warrants, as of the date such Person became a Lender party hereto, to, and (y) covenants, from the date such Person became a Lender party hereto to the date such Person ceases being a Lender party hereto, for the benefit of, the Administrative Agent, and each other Lead Arranger and their respective Affiliates, and not, for the avoidance of doubt, to or for the benefit of the Borrower or any other Loan Party, that at least one of the following is and will be true:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(i) such Lender is not using "plan assets" (within the meaning of 29 CFR § 2510.3-101, as modified
by Section 3(42) of ERISA) of one or more Employee Benefit Plans in connection with the Loans, the Letters of Credit or the Revolving Facility Commitments,

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(ii) the transaction exemption set forth in one or more PTEs, such as PTE 84-14 (a class exemption for certain
transactions determined by independent qualified professional asset managers), PTE 95-60 (a class exemption for certain transactions involving insurance company general accounts), PTE 90-1 (a class exemption for certain transactions involving
insurance company pooled separate accounts), PTE 91-38 (a class exemption for certain transactions involving bank collective investment funds) or PTE 96-23 (a class exemption for certain transactions determined by in-house asset managers), is
applicable with respect to such Lender's entrance into, participation in, administration of and performance of the Loans, the Letters of Credit, the Revolving Facility Commitments and this Agreement,

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(iii) (A) such Lender is an investment fund managed by a "Qualified Professional Asset Manager" (within the
meaning of Part VI of PTE 84-14), (B) such Qualified Professional Asset Manager made the investment decision on behalf of such Lender to enter into, participate in, administer and perform the Loans, the Letters of Credit, the Revolving Facility
Commitments and this Agreement, (C) the entrance into, participation in,

------

administration of and performance of the Loans, the Letters of Credit, the Revolving Facility Commitments and this Agreement satisfies the requirements of sub-sections (b) through (g) of Part I of PTE 84-14 and (D) to the best knowledge of such Lender, the requirements of subsection (a) of Part I of PTE 84-14 are satisfied with respect to such Lender's entrance into, participation in, administration of and performance of the Loans, the Letters of Credit, the Revolving Facility Commitments and this Agreement, or

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(iv) such other representation, warranty and covenant as may be agreed in writing between the Administrative Agent,
in its sole discretion, and such Lender.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b) In addition, unless sub-clause (i) in the immediately preceding clause (a) is true with respect to a Lender or such Lender has not provided another representation, warranty and covenant as provided in sub-clause (iv) in the immediately preceding clause (a), such Lender further (x) represents and warrants, as of the date such Person became a Lender party hereto, to, and (y) covenants, from the date such Person became a Lender party hereto to the date such Person ceases being a Lender party hereto, for the benefit of, the Administrative Agent, and each other Lead Arranger and their respective Affiliates, and not, for the avoidance of doubt, to or for the benefit of the Borrower or any other Loan Party, that:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(i) none of the Administrative Agent, or any other Lead Arranger or any of their respective Affiliates is a
fiduciary with respect to the assets of such Lender (including in connection with the reservation or exercise of any rights by the Administrative Agent under this Agreement, any Loan Document or any documents related to hereto or thereto),

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(ii) the Person making the investment decision on behalf of such Lender with respect to the entrance into,
participation in, administration of and performance of the Loans, the Letters of Credit, the Revolving Facility Commitments and this Agreement is independent (within the meaning of 29 CFR § 2510.3-21) and is a bank, an insurance carrier, an
investment adviser, a broker-dealer or other person that holds, or has under management or control, total assets of at least $50 million, in each case as described in 29 CFR § 2510.3-21(c)(1)(i)(A)-(E),

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(iii) the Person making the investment decision on behalf of such Lender with respect to the entrance into,
participation in, administration of and performance of the Loans, the Letters of Credit, the Revolving Facility Commitments and this Agreement is capable of evaluating investment risks independently, both in general and with regard to particular
transactions and investment strategies (including in respect of the Obligations),

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(iv) the Person making the investment decision on behalf of such Lender with respect to the entrance into,
participation in, administration of and performance of the Loans, the Letters of Credit, the Revolving Facility Commitments and this Agreement is a fiduciary under ERISA or the Code, or both, with respect to the Loans, the Letters of Credit, the
Revolving Facility Commitments and this Agreement and is responsible for exercising independent judgment in evaluating the transactions hereunder, and

------

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(v) no fee or other compensation is being paid directly to the Administrative Agent, or any other Lead Arranger or
any their respective Affiliates for investment advice (as opposed to other services) in connection with the Loans, the Letters of Credit, the Revolving Facility Commitments or this Agreement.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c) The Administrative Agent and each other Lead Arranger hereby informs the Lenders that each such Person is not undertaking to provide impartial investment advice, or to give advice in a fiduciary capacity, in connection with the transactions contemplated hereby, and that such Person has a financial interest in the transactions contemplated hereby in that such Person or an Affiliate thereof (i) may receive interest or other payments with respect to the Loans, the Letters of Credit, the Revolving Facility Commitments and this Agreement, (ii) may recognize a gain if it extended the Loans, the Letters of Credit or the Revolving Facility Commitments for an amount less than the amount being paid for an interest in the Loans, the Letters of Credit or the Revolving Facility Commitments by such Lender or (iii) may receive fees or other payments in connection with the transactions contemplated hereby, the Loan Documents or otherwise, including structuring fees, commitment fees, arrangement fees, facility fees, upfront fees, underwriting fees, ticking fees, agency fees, administrative agent or collateral agent fees, utilization fees, minimum usage fees, letter of credit fees, fronting fees, deal-away or alternate transaction fees, amendment fees, processing fees, term out premiums, banker's acceptance fees, breakage or other early termination fees or fees similar to the foregoing.

<u>Section 9.13 Recovery of Erroneous Payments.</u>

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<u>(a) With respect to any payment that the Administrative Agent makes for the account of the Lenders or any L/C Issuer hereunder as to which the Administrative Agent determines (which determination shall be conclusive absent manifest error) that any of the following applies (such payment referred to as the "Rescindable Amount"): (1) the Borrower has not in fact made such payment; (2) the Administrative Agent has made a payment in excess of the amount so paid by the Borrower (whether or not then owed); or (3) the Administrative agent has for any reason otherwise erroneously made such payment; then each of the Lenders or the applicable L/C Issuers, as the case may be, severally agrees to repay to the Administrative Agent forthwith on demand the Rescindable Amount so distributed to such Lender or such L/C Issuer, in immediately available funds with interest thereon, for each day from and including the date such amount is distributed to it to but excluding the date of payment to the Administrative Agent, at the greater of the Federal Funds Rate and a rate determined by the Administrative Agent in accordance with banking industry rules on interbank compensation.</u>

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<u>(b) Without limitation of any other provision in this Agreement, if at any time the Administrative Agent makes a payment hereunder in error to any Lender, whether or not in respect of an Obligation due and owing by the Borrower at such time, where such payment is a Rescindable Amount, then in any such event, each Lender receiving a Rescindable Amount severally agrees to repay to the Administrative Agent forthwith on demand the Rescindable Amount received by such</u> 

------

<u>Lender in immediately available funds in the currency so received, with interest thereon, for each day from and including the date such Rescindable Amount is received by it to but excluding the date of payment to the Administrative Agent, at the greater of the Federal Funds Rate and a rate determined by the Administrative Agent in accordance with banking industry rules on interbank compensation. Each Lender irrevocably waives any and all defenses, including any "discharge for value" (under which a creditor might otherwise claim a right to retain funds mistakenly paid by a third party in respect of a debt owed by another) or similar defense to its obligation to return any Rescindable Amount. The Administrative Agent shall inform each Lender promptly upon determining that any payment made to such Lender comprised, in whole or in part, a Rescindable Amount.</u>

**ARTICLE X** 

**MISCELLANEOUS** 

Section 10.01 <u>Amendments, Etc</u>. No amendment or waiver of any provision of this Agreement or any other Loan Document, and no consent to any departure by the Borrowers or any other Loan Party therefrom, shall be effective unless in writing signed by the Required Lenders (or by the Administrative Agent with the consent or ratification of the Required Lenders or such other number or percentage of Lenders as may be specified herein) and the Borrowers or the applicable Loan Party, as the case may be, and acknowledged by the Administrative Agent, and each such waiver or consent shall be effective only in the specific instance and for the specific purpose for which given; <u>provided</u> that (x) the Administrative Agent and the Borrowers may, with the consent of the other, amend, modify or supplement this Agreement and any other Loan Document to cure any ambiguity, omission, typographical error, mistake, defect or inconsistency if such amendment, modification or supplement does not adversely affect the rights of any Agent, any Lender or any L/C Issuer and (y) no such amendment, waiver or consent shall:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(i) (A) waive any condition set forth in <u>Section 4.01</u> without the written consent of each Lender or
(B) without limiting the generality of the preceding <u>clause (A)</u>, waive any condition set forth in <u>Section 4.02</u> as to any Credit Event under the Facility (it being understood that the waiver of any Default or Event of Default
or the amendment or waiver of any covenant or representation contained herein shall not constitute a waiver of any condition set forth in <u>Section 4.01</u> or <u>Section 4.02</u>);

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(ii) extend or increase the Revolving Facility Commitment of any Lender (or reinstate any Revolving Facility
Commitment terminated pursuant to <u>Section 8.02</u>) without the written consent of such Lender;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(iii) postpone any date fixed by this Agreement or any other Loan Document for any payment (excluding mandatory
prepayments) of principal, interest, fees or other amounts due to the Lenders (or any of them) hereunder or under such other Loan Document without the written consent of each Lender entitled to such payment;

------

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(iv) reduce the principal of, or the rate of interest specified herein on, any Loan or Letter of Credit Borrowing,
or (subject to <u>clause (ii)</u> of the second proviso to this <u>Section 10.01</u>) any fees or other amounts payable hereunder or under any other Loan Document without the written consent of each Lender entitled to such amount; <u>provided</u>, <u>however</u>, that only the consent of the Required Lenders shall be necessary to amend the definition of "Default Rate" or to waive any obligation of the Borrowers to pay interest or Letter of Credit Fees at the Default
Rate;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(v) change <u>Section 2.13</u> or <u>Section 8.03</u> in a manner that would alter the pro rata sharing
of payments required thereby without the written consent of each Lender (it being agreed that fees in connection with Permitted Amendments do not constitute non-pro rata payments under <u>Sections 2.13</u> or <u>8.03</u>);

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(vi) change any provision of this <u>Section 10.01</u> or the definition of "Required Lenders" or any
other provision hereof specifying the number or percentage of Lenders required to amend, waive or otherwise modify any rights hereunder or make any determination or grant any consent hereunder, without the written consent of each Lender;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(vii) release all or substantially all of the Collateral in any transaction or series of related transactions,
without the written consent of each Lender; <u>provided</u> that the Collateral Agent may, without consent from any other Lender, release any Collateral that is sold or transferred by a Loan Party in compliance with <u>Section 7.05</u> or
released in compliance with <u>Section 9.10(i)</u> or <u>(ii)</u> or otherwise as expressly provided in the Loan Documents;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(viii) release all or substantially all of the value of the Guaranties, without the written consent of each Lender,
except to the extent the release of any Subsidiary from the Guaranties is permitted pursuant to <u>Section 9.10</u> (in which case such release may be made by the Administrative Agent acting alone) or as otherwise expressly provided in the Loan
Documents, or release any Borrower without the written consent of each Lender;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(ix) increase the advance rates set forth in the definition of Borrowing Base without the consent of each Lender; or

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(x) except as otherwise set forth in the definitions of Eligible Accounts and Eligible Inventory, modify the
eligibility criteria in respect of the Borrowing Base, or add new asset categories to the Borrowing Base, or otherwise cause the Borrowing Base availability under the Facility to be increased beyond the level permissible under this Agreement as then
in effect, in each case without the written consent of each Lender.

and <u>provided</u>, <u>further</u>, that: (i) no amendment, waiver or consent shall, unless in writing and signed by each applicable L/C Issuer in addition to the Lenders required above, affect the rights or duties of such L/C Issuer under this Agreement or any Issuer Document relating to any Letter of Credit issued or to be issued by it; (ii) no amendment, waiver or consent shall, unless in writing and

------

signed by the Swing Line Lender in addition to the Lenders required above, affect the rights or duties of the Swing Line Lender under this Agreement; (iii) no amendment, waiver or consent shall, unless in writing and signed by the Administrative Agent in addition to the Lenders required above, affect the rights or duties of the Administrative Agent under this Agreement or any other Loan Document; and (iii) the <u>Third Amendment Fee Letter, the</u> Fee Letter and the Closing Fee Letter may be amended, or rights or privileges thereunder waived, in a writing executed only by the parties thereto. Notwithstanding anything to the contrary herein, no Defaulting Lender shall have any right to approve or disapprove any amendment, waiver or consent hereunder (and any amendment, waiver or consent which by its terms requires the consent of all Lenders or each affected Lender may be effected with the consent of the applicable Lenders other than Defaulting Lenders), except that (x) the Revolving Facility Commitment of any Defaulting Lender may not be increased or extended without the consent of such Lender and (y) any waiver, amendment or modification requiring the consent of all Lenders or each affected Lender that by its terms affects any Defaulting Lender more adversely than other affected Lenders shall require the consent of such Defaulting Lender.

Notwithstanding any provision herein to the contrary, the Borrowers may, by written notice by the Parent Borrower to the Administrative Agent from time to time, make one or more offers (each, a "<u>Loan Modification Offer</u>") to all the Lenders to make one or more Permitted Amendments (as defined below) pursuant to procedures reasonably specified by the Administrative Agent and reasonably acceptable to the Parent Borrower. Such notice shall set forth (i) the terms and conditions of the requested Permitted Amendment and (ii) the date on which such Permitted Amendment is requested to become effective (which shall not be less than 10 Business Days nor more than 30 Business Days after the date of such notice) (or such shorter periods as are acceptable to the Administrative Agent). Permitted Amendments shall become effective only with respect to the Loans of those Lenders that accept the applicable Loan Modification Offer (such Lenders, the "<u>Accepting Lenders</u>"). Each Borrower and each Accepting Lender shall execute and deliver to the Administrative Agent an agreement in form and substance satisfactory to the Administrative Agent giving effect to the Permitted Amendment (a "<u>Loan Modification Agreement</u>") and such other documentation as the Administrative Agent shall reasonably specify to evidence the acceptance of the Permitted Amendments and the terms and conditions thereof. The Administrative Agent shall promptly notify each Lender as to the effectiveness of each Loan Modification Agreement. Each of the parties hereto hereby agrees that, upon the effectiveness of any Loan Modification Agreement, this Agreement shall be deemed amended to the extent (but only to the extent) necessary to reflect the existence and terms of the Permitted Amendment evidenced thereby and only with respect to the Loans and Revolving Facility Commitment of the Accepting Lenders. Notwithstanding the foregoing, no Permitted Amendment shall become effective under this paragraph unless the Administrative Agent, to the extent so reasonably requested by the Administrative Agent, shall have received corporate documents, officers' certificates or legal opinions consistent with those delivered on the Original Closing Date under <u>Section 4.01</u>. As used in this paragraph, "<u>Permitted Amendments</u>" shall be limited to (i) an extension of the final maturity date of the Loans of the Accepting Lenders (<u>provided</u> that such extension may not result in having more than two additional final maturity dates in any year, or more than three additional final maturity dates at any time, under this Agreement without the consent of the Administrative Agent), (ii) a reduction, elimination or extension, of the scheduled amortization of the applicable Loans of the Accepting Lenders, (iii) a change in rate of interest (including a change to the Applicable Rate and any provision establishing

------

a minimum rate), premium, or other amount with respect to the applicable Loans of the Accepting Lenders and/or a change in the payment of fees to the Accepting Lenders and/or a change in the payment of fees to the Accepting Lenders (such change and/or payments to be in the form of cash, Stock or other property to the extent not prohibited by this Agreement) and (iv) any other amendment to a Loan Document required to give effect to the Permitted Amendments described in <u>clauses (i)</u> through <u>(iii)</u> of this sentence.

If any Lender does not consent to a proposed amendment, waiver, consent or release with respect to any Loan Document that requires the consent of each Lender and that has been approved by the Required Lenders, the Parent Borrower may replace such non-consenting Lender in accordance with <u>Section 10.13</u>; <u>provided</u> that such amendment, waiver, consent or release can be effected as a result of the assignment contemplated by such Section (together with all other such assignments required by the Parent Borrower to be made pursuant thereto).

Section 10.02 <u>Notices; Effectiveness; Electronic Communication</u>.

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

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(i) if to a Borrower, the Administrative Agent, L/C Issuer or Swing Line Lender, to the address, telecopier number,
electronic mail address or telephone number specified for such Person on <u>Schedule 10.02</u>; and

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(ii) if to any other Lender, to the address, telecopier number, electronic mail address or telephone number
specified in its Administrative Questionnaire (including, as appropriate, notices delivered solely to the Person designated by a lender on its Administrative Questionnaire then in effect for the delivery of notices that may contain non-public
information relating to the Borrowers).

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

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b) <u>*Electronic Communications*</u>. Notices and other communications to the Lenders and L/C Issuers hereunder may be delivered or furnished by electronic communication (including e-mail and Internet or intranet websites) pursuant to procedures approved by the Administrative Agent; <u>provided</u> that the foregoing shall not apply to notices to any Lender or L/C Issuer pursuant to <u>Article II</u> if such Lender or L/C Issuer has notified the Administrative Agent that it is incapable of receiving notices under such Article by electronic communication. The Administrative Agent or the Parent Borrower may, in its discretion, agree to accept notices and other communications to it hereunder by electronic communications 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 prescribes, (i) notices and other communications sent to an e-mail address shall be deemed received upon the sender's receipt of an acknowledgement from the intended recipient (such as by the "return receipt requested" function, as available, return e-mail or other written acknowledgement); <u>provided</u> that if such notice or other communication is not sent during the normal business hours of the recipient, such notice or communication shall be deemed to have been sent at the opening of business on the next business day for the recipient, and (ii) notices or communications posted to an Internet or intranet website shall be deemed received upon the deemed receipt by the intended recipient at its e-mail address as described in the foregoing <u>clause (i)</u> of notification that such notice or communication is available and identifying the website address therefor.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c)*<u>The Platform</u>*. THE PLATFORM IS PROVIDED "AS IS" AND "AS AVAILABLE." THE AGENT PARTIES (AS DEFINED BELOW) DO NOT WARRANT THE ACCURACY OR COMPLETENESS OF THE BORROWER MATERIALS OR THE ADEQUACY OF THE PLATFORM AND EXPRESSLY DISCLAIM LIABILITY FOR ERRORS IN OR OMISSIONS FROM THE BORROWER MATERIALS. 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 BORROWER MATERIALS OR THE PLATFORM. In no event shall the Administrative Agent or any of its Related Parties (collectively, "<u>Agent Parties</u>") have any liability to Holdings, any Borrower, any Lender, any L/C Issuer or any other Person for losses, claims, damages, liabilities or expenses of any kind (whether in tort, contract or otherwise) arising out of any Loan Party's or the Administrative Agent's transmission of Borrower Materials or notices through the Platform, any other electronic platform, electronic messaging service, or electronic telecommunications or other information transmission systems, except for direct or "economic" (as such term is used in Title 18, United States Code, Section 1030(g)) (as opposed to special, indirect, consequential or punitive) losses, claims, damages, liabilities or expenses to the extent that such losses, claims, damages, liabilities or expenses (x) are determined by a court of competent jurisdiction by a final an nonappealable<u>and non-appealable</u> judgment to have resulted from the gross negligence or willful misconduct of such Agent Party or (y) result from a claim brought by Holdings, any Borrower or any other Loan Party against an Indemnitee for material breach of such Indemnitee's obligations hereunder or under any other Loan Document in respect of Borrower Materials made available through electronic telecommunications or other information transmission systems, if Holdings, such Borrower or such Loan Party has obtained a final and nonappealable<u>non-appealable</u> judgment in its favor on such claim as determined by a court of competent jurisdiction; <u>provided</u>, <u>however</u>, that in no event shall any Agent Party have any liability to Holdings any Borrower, any Lender or any other Person for indirect, special, incidental, consequential or punitive damages (as opposed to such direct or "economic" damages).

------

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(d)*<u>Change of Address, Etc</u>*. Each of the Borrowers and the Administrative Agent may change its address, telecopier or telephone number for notices and other communications hereunder by notice to the other parties hereto. Each other Lender and L/C Issuer may change its address, telecopier or telephone number for notices and other communications hereunder by notice to the Parent Borrower and the Administrative Agent. In addition, each Lender and L/C Issuer agrees to notify the Administrative Agent from time to time to ensure that the Administrative Agent has on record (i) an effective address, contact name, telephone number, telecopier number and electronic mail address to which notices and other communications may be sent and (ii) accurate wire instructions for such Lender or L/C Issuer. Furthermore, each Public Lender agrees to cause at least one individual at or on behalf of such Public Lender to at all times have selected the "Private Side Information" or similar designation on the content declaration screen of the Platform in order to enable such Public Lender or its delegate, in accordance with such Public Lender's compliance procedures and applicable Requirement of Law, including United States Federal and state securities Requirements of Law, to make reference to Borrower Materials that are not made available through the "Public Side Information" portion of the Platform and that may contain MNPI with respect to the Borrowers or their securities for purposes of United States federal or state securities laws. 

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(e)*<u>Reliance by Administrative Agent, Lenders and L/C Issuer</u>*. The Administrative Agent, the L/C Issuers and the Lenders shall be entitled to rely and act upon any notices (including telephonic notices) purportedly given by or on behalf of the Borrowers or any other Loan Party even if (i) such notices were not made in a manner specified herein, were incomplete or were not preceded or followed by any other form of notice specified herein or (ii) the terms thereof, as understood by the recipient, varied from any confirmation thereof. The Borrowers shall, jointly and severally, indemnify the Administrative Agent, each L/C Issuer, each Lender and the Related Parties of each of them from all losses, costs, expenses and liabilities resulting from the reliance by such Person on each notice purportedly given by or on behalf of the Borrowers. All telephonic notices to and other communications with the Administrative Agent may be recorded by the Administrative Agent, and each of the parties hereto hereby consents to such recording. 

Section 10.03 <u>No Waiver; Cumulative Remedies; Enforcement</u>. No failure by any Lender, L/C Issuer or by the Administrative Agent to exercise, and no delay by any such Person in exercising, any right, remedy, power or privilege hereunder shall operate as a waiver thereof; nor shall any single or partial exercise of any right, remedy, power or privilege hereunder preclude any other or further exercise thereof or the exercise of any other right, remedy, power or privilege. The rights, remedies, powers and privileges herein provided are cumulative and not exclusive of any rights, remedies, powers and privileges provided by Requirement of Law.

Notwithstanding anything to the contrary contained herein or in any other Loan Document, the authority to enforce rights and remedies hereunder and under the other Loan Documents against the Loan Parties or any of them shall be vested exclusively in, and all actions and proceedings at law in connection with such enforcement shall be instituted and maintained exclusively by, the Administrative Agent in accordance with <u>Section 8.02</u> for the benefit of all the Lenders and the L/C Issuers; <u>provided</u>, <u>however</u>, that the foregoing shall not prohibit (i) the Administrative Agent from exercising on its own behalf the rights and remedies that inure to its benefit (solely in its capacity as Administrative Agent) hereunder and under the other Loan Documents, (ii) any L/C Issuer or the Swing Line Lender from exercising the rights and remedies that inure to its benefit

------

(solely in its capacity as L/C Issuer or Swing Line Lender, as the case may be) hereunder and under the other Loan Documents, (iii) subject in all cases to the ABL/Term<u>any</u> Intercreditor Agreement, any Lender from exercising setoff rights in accordance with <u>Section 10.08</u> (subject to the terms of <u>Section 2.10</u>), (iv) subject in all cases to the ABL/Term<u>any</u> Intercreditor Agreement, any Lender from filing proofs of claim or appearing and filing pleadings on its own behalf during the pendency of a proceeding relative to any Loan Party under any Debtor Relief Law or (v) any L/C Issuer from exercising the rights and remedies that inure to its benefit solely in its capacity as L/C Issuer hereunder and under the other Loan Documents; <u>provided</u>, <u>further</u>, that if at any time there is no Person acting as Administrative Agent hereunder and under the other Loan Documents, then (x) the Required Lenders shall have the rights otherwise ascribed to the Administrative Agent pursuant to <u>Section 8.02</u> and (y) in addition to the matters set forth in <u>clauses (ii)</u>, <u>(iii) (iv)</u> and (v) of the preceding proviso and subject to <u>Section 2.10</u>, any Lender may, with the consent of the Required Lenders, enforce any rights and remedies available to it and as authorized by the Required Lenders.

Section 10.04 <u>Expenses; Indemnity; Damage Waiver</u>.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a)*<u>Costs and Expenses</u>*. Holdings and each of the Borrowers, jointly and severally, agree to pay (i) all reasonable and invoiced 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 of the credit facilities provided for herein, the preparation, negotiation, execution, delivery and administration of this Agreement and the other Loan Documents or any amendments, modifications or waivers (including any proposed amendments, modifications or waivers) of the provisions hereof or thereof (whether or not the transactions contemplated hereby or thereby shall be consummated), (ii) all reasonable and documented out-of-pocket expenses incurred by any L/C Issuer in connection with the issuance, amendment, renewal or extension of any Letter of Credit or any demand for payment thereunder and (iii) all reasonable and invoiced out-of-pocket expenses incurred by the Administrative Agent, any Lead Arranger, any Lender or any L/C Issuer (including the fees, charges and disbursements of any counsel for the Administrative Agent, any Lender or any L/C Issuer), in connection with the enforcement or protection of its rights (A) in connection with this Agreement and the other Loan Documents, including its rights under this <u>Section 10.04</u>, or (B) in connection with the Loans and Letters of Credit made hereunder, including all such invoiced out-of-pocket expenses incurred during any workout, restructuring or negotiations in respect of such Loans or Letters of Credit; <u>provided</u> that Holdings and the Borrowers shall not be required to reimburse the legal fees and expenses of more than one outside counsel (in addition to any special counsel and up to one local counsel in each applicable local jurisdiction) for all Persons indemnified under this <u>subsection (a)</u> unless, in the reasonable opinion of those indemnified Persons seeking reimbursement of such legal fees and expenses under this <u>subsection (a)</u>, representation of all such indemnified persons would be inappropriate due to the existence of an actual or potential conflict of interest, in which case Holdings and the Borrowers shall only be required to reimburse the invoiced out-of-pocket legal fees and expenses of no more than such minimum number of additional outside counsel for the indemnified persons as is necessary to avoid any actual or potential conflict of interest. 

------

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b) <u>*Indemnification*</u>. Holdings and each Borrower, jointly and severally, shall indemnify the Administrative Agent (and any sub-agent thereof), the Lead Arranger, each Lender, each L/C Issuer and each Related Party of any of the foregoing Persons (each such Person being called an "<u>Indemnitee</u>") against, and hold each Indemnitee harmless from, any and all actual losses, claims, damages, liabilities and related expenses (including the reasonable fees, out-of-pocket charges and disbursements of any outside counsel for any Indemnitee), incurred by any Indemnitee or asserted against any Indemnitee by any third party or by any Borrower or any other Loan Party arising out of, in connection with, or as a result of (i) the execution or delivery of this Agreement, any other Loan Document or any agreement or instrument contemplated hereby or thereby, the performance by the parties hereto of their respective obligations hereunder or thereunder or the consummation of the transactions contemplated hereby or thereby or, in the case of the Administrative Agent (and any sub-agent thereof) and its Related Parties only, the administration of this Agreement and the other Loan Documents, (ii) any Loan or Letter of Credit or the use or proposed use of the proceeds therefrom (including any refusal by an L/C Issuer 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), (iii) any actual or alleged presence or release of Hazardous Materials on or from any property owned or operated by any Borrower or any of its Subsidiaries, or any liability under Environmental Laws related in any way to any Borrower or any of its Subsidiaries, or (iv) any actual or prospective claim, litigation, investigation or proceeding brought by a third party or by any Borrower or any other Loan Party or any Borrower's or such Loan Party's directors, shareholders or creditors, and regardless of whether any Indemnitee is a party thereto; <u>provided</u> that such indemnity shall not, as to any Indemnitee, be available to the extent that such losses, claims, damages, liabilities or related expenses are determined by a court of competent jurisdiction by final and non-appealable judgment to have resulted from the gross negligence or willful misconduct of such Indemnitee; <u>provided further</u> that Holdings, the Borrowers and the other Loan Parties shall not be required to reimburse the legal fees and expenses of more than one outside counsel (in addition to any reasonably necessary special counsel and up to one local counsel in each applicable local jurisdiction) for all Indemnitees unless, in the reasonable opinion of such indemnified Persons seeking indemnity under this <u>subsection (b)</u>, representation of all such Indemnitees would be inappropriate due to the existence of an actual or potential conflict of interest, in which case Holdings and the Borrowers shall only be required to reimburse the invoiced out-of-pocket fees and expenses of no more than such minimum number of additional outside counsel for the Indemnitees as is necessary to avoid any actual or potential conflict of interest.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c)*<u>Reimbursement by Lenders</u>*. To the extent that Holdings and the Borrowers for any reason fail indefeasibly to pay any amount required under <u>subsection (a)</u> or <u>(b)</u> of this <u>Section 10.04</u> to be paid by it or them to the Administrative Agent (or any sub-agent thereof), any L/C Issuer, the Swing Line Lender or any Related Party of any of the foregoing, each Lender and each L/C Issuer severally agrees to pay to the Administrative Agent (or any such sub-agent), the Swing Line Lender or such Related Party, as the case may be, such Lender's Revolving Facility Percentage (determined as of the time that the applicable unreimbursed expense or indemnity payment is sought) of such unpaid amount; <u>provided</u> that the unreimbursed expense or indemnified loss, claim, damage, liability or related expense, as the case may be, was incurred by or asserted against the Administrative Agent (or any such sub-agent), an L/C Issuer or the Swing Line Lender in its capacity as such, or against any Related Party of any of the foregoing acting for the Administrative Agent (or any such sub-agent) in connection with such capacity. The obligations of the Lenders under this <u>subsection (c)</u> are subject to the provisions of <u>Section 2.12(d)</u>. 

------

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(d) <u>*Waiver of Consequential Damages*</u>. To the fullest extent permitted by applicable Requirement of Law, Holdings and the Borrowers shall not assert, and hereby waives, and acknowledges that no other Person shall have, any claim against any Indemnitee, on any theory of liability, for special, indirect, consequential or punitive damages (as opposed to direct or actual damages) arising out of, in connection with, or as a result of, this Agreement, any other Loan Document or any agreement or instrument contemplated hereby, the transactions contemplated hereby or thereby, any Loan or Letter of Credit or the use of the proceeds thereof. No Indemnitee referred to in <u>subsection (b)</u> above shall be liable for any damages arising from the use by unintended recipients of any information or other materials distributed by it through telecommunications, electronic or other information transmission systems in connection with this Agreement or the other Loan Documents or the transactions contemplated hereby or thereby other than for direct or actual damages resulting from the gross negligence or willful misconduct of such Indemnitee as determined by a final and nonappealable<u>non-appealable</u> judgment of a court of competent jurisdiction.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(e)*<u>Payments</u>*. All amounts due under this <u>Section 10.04</u> shall be payable not later than fifteen Business Days after written demand therefor, including a reasonable detail of such amount to be paid.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(f)*<u>Survival</u>*. The agreements in this <u>Section 10.04</u> and the indemnity provisions of <u>Section 10.02(e)</u> shall survive the resignation of the Administrative Agent, any L/C Issuer and the Swing Line Lender, the replacement of any Lender, the termination of the Aggregate Commitments and the repayment, satisfaction or discharge of all the other ABL Credit Obligations.

Section 10.05 <u>Payments Set Aside</u>. To the extent that any payment by or on behalf of the Borrowers or any other Loan Party is made to the Administrative Agent, any L/C Issuer or any Lender, or the Administrative Agent, L/C Issuer or any Lender exercises its right of set-off, and such payment or the proceeds of such set-off or any part thereof is subsequently invalidated, declared to be fraudulent or preferential, set aside or required (including pursuant to any settlement entered into by the Administrative Agent, such L/C Issuer or such Lender in its discretion) to be repaid to a trustee, receiver or any other party, in connection with any proceeding under any Debtor Relief Law or otherwise, then (i) to the extent of such recovery, the obligation or part thereof originally intended to be satisfied shall be revived and continued in full force and effect as if such payment had not been made or such set-off had not occurred, and (ii) each Lender and L/C Issuer severally agrees to pay to the Administrative Agent upon demand its applicable share of any amount so recovered from or repaid by the Administrative Agent, plus interest thereon from the date of such demand to the date such payment is made at a rate per annum equal to the Federal Funds Rate from time to time in effect. The obligations of the Lenders under <u>clause (ii)</u> of the preceding sentence shall survive the payment in full of the ABL Credit Obligations and the termination of this Agreement.

Section 10.06 <u>Successors and Assigns</u>.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a) <u>*Successors and Assigns Generally*</u>. The provisions of this Agreement shall be binding upon and inure to the benefit of the parties hereto and their respective successors and assigns permitted hereby, except that neither the Borrowers nor any other Loan Party may assign or otherwise transfer any of its rights or obligations hereunder without the prior written consent of the Administrative Agent and each Lender and no Lender may assign or otherwise transfer any of its rights or obligations hereunder except (i) to an assignee in accordance with the provisions of

------

 <u>Section 10.06(b)</u>, (ii) by way of participation in accordance with the provisions of <u>Section 10.06(d)</u>, or (iii) by way of pledge or assignment of a security interest subject to the restrictions of <u>Section 10.06(e)</u> (and any other attempted assignment or transfer by any party hereto shall be null and void). Nothing in this Agreement, expressed or implied, shall be construed to confer upon any Person (other than the parties hereto, their respective successors and assigns permitted hereby, Participants to the extent provided in <u>subsection (d)</u> of this <u>Section 10.06</u> and, to the extent expressly contemplated hereby, the Related Parties of each of the Administrative Agent 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;(b)*<u>Assignments by Lenders</u>*. Any Lender may at any time assign to one or more assignees all or a portion of its rights and obligations under this Agreement (including all or a portion of its Revolving Facility Commitment(s) and the Loans (including for purposes of this <u>Section 10.06(b)</u>, participations in L/C Obligations) at the time owing to it); <u>provided</u> that any such assignment shall be subject to the following conditions: 

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(i) <u>*Minimum Amounts*</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;&nbsp;&nbsp;&nbsp;&nbsp;(A) in the case of an assignment of the entire remaining amount of the assigning Lender's Revolving Facility Commitment and the Loans at the time owing to it or in the case of an assignment to a Lender, an Affiliate of a Lender or an Approved Fund, no minimum amount need be assigned; 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;(B) in any case not described in <u>subsection (b)(i)(A)</u> of this <u>Section 10.06</u>, the aggregate amount of the Revolving Facility Commitment (which for this purpose includes Loans outstanding thereunder) or, if the Revolving Facility Commitment is not then in effect, the principal outstanding balance of the Loans of the assigning Lender subject to each such assignment, determined as of the date the Assignment and Assumption with respect to such assignment is delivered to the Administrative Agent or, if "Trade Date" is specified in the Assignment and Assumption, as of the Trade Date, shall not be less than $1,000,000, unless each of the Administrative Agent and, so long as no Event of Default has occurred and is continuing, the Parent Borrower otherwise consents (each such consent not to be unreasonably withheld or delayed); <u>provided</u>, <u>however</u>, that concurrent assignments to members of an Assignee Group and concurrent assignments from members of an Assignee Group to a single Eligible Assignee (or to an Eligible Assignee and members of its Assignee Group) will be treated as a single assignment for purposes of determining whether such minimum amount has been met;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(ii) <u>*Proportionate Amounts*</u> . 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 with respect to the Revolving Facility Loans or the Revolving Facility Commitment assigned, except that this clause (ii) shall not (A) apply to the Swing
Line Lender's rights and obligations in respect of Swing Line Loans or (B) prohibit any Lender from assigning all or a portion of its rights and obligations among separate Facilities and any facilities provided pursuant the second
paragraph of Section 10.01 on a non-pro rata basis.

------

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(iii) *<u>Required Consents</u>* . No consent shall be required for any assignment except to the extent required
by <u>subsection (b)(i)(B)</u> of this <u>Section 10.06</u> and, in addition:

&nbsp;&nbsp;&nbsp;&nbsp;&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 consent of the Parent Borrower (such consent not to be unreasonably withheld or delayed) shall be required unless (1) an Event of Default has occurred and is continuing at the time of such assignment or (2) such assignment is to a Lender, an Affiliate of a Lender or an Approved Fund; <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 Business Days after having received notice thereof; and <u>provided</u>, <u>further</u>, that the Parent Borrower's consent shall not be required during the primary syndication of the Facility;

&nbsp;&nbsp;&nbsp;&nbsp;&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 consent of the Administrative Agent (such consent not to be unreasonably withheld or delayed) shall be required for assignments in respect of (i) any Revolving Facility Commitment if such assignment is to a Person that is not a Lender with a Revolving Facility Commitment, an Affiliate of such Lender or an Approved Fund with respect to such Lender or (ii) any Loan to a Person that is not a Lender, an Affiliate of a Lender or an Approved Fund; 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;(C) the consent of each L/C Issuer and the Swing Line Lender (such consent not to be unreasonably withheld or delayed) shall be required for any assignment in respect of the Facility.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(iv) <u>*Assignment and Assumption*</u> . The parties to each assignment shall execute and deliver to the
Administrative Agent an Assignment and Assumption, together with a processing and recordation fee in the amount of $3,500 (treating multiple, simultaneous assignments within an Assignee Group as a single assignment); <u>provided</u>, <u>however</u>,
that the Administrative Agent may, in its sole discretion, elect to waive such processing and recordation fee in the case of any assignment. The assignee, if it is not a Lender, shall deliver to the Administrative Agent an Administrative
Questionnaire.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(v) <u>*No Assignment to Certain Persons*</u> . No such assignment shall be made (i) to any Borrower or
any of the Borrowers' Affiliates or Subsidiaries (other than as set forth in <u>Section 10.06(g)</u>), (ii) to any Defaulting Lender or any of its Subsidiaries, or any Person who, upon becoming a Lender hereunder, would constitute any
of the foregoing Persons described in this <u>clause (ii)</u> or (iii) to a natural person.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(vi) <u>*Certain Additional Payments*</u> . In connection with any assignment of rights and obligations of any
Defaulting Lender hereunder, no such assignment shall be effective unless and until, in addition to the other conditions thereto set forth herein, the parties to the assignment shall make such additional payments to the Administrative Agent in an
aggregate amount sufficient, upon distribution thereof as appropriate (which may be outright payment,

------

purchases by the assignee of participations or subparticipations, or other compensating actions, including funding, with the consent of the Parent Borrower and the Administrative Agent, the applicable pro rata share of Loans previously requested but not funded by the Defaulting Lender, to each of which the applicable assignee and assignor hereby irrevocably consent), to (x) pay and satisfy in full all payment liabilities then owed by such Defaulting Lender to the Administrative Agent or any Lender hereunder (and interest accrued thereon) and (y) acquire (and fund as appropriate) its full pro rata share of all Loans and participations in Letters of Credit and Swing Line Loans in accordance with its Revolving Facility Percentage. Notwithstanding the foregoing, in the event that any assignment of rights and obligations of any Defaulting Lender hereunder shall become effective under applicable Requirement of Law without compliance with the provisions of this paragraph, then the assignee of such interest shall be deemed to be a Defaulting Lender for all purposes of this Agreement until such compliance occurs.

Subject to acceptance and recording thereof by the Administrative Agent pursuant to <u>subsection (c)</u> of this <u>Section 10.06</u>, from and after the effective date specified in each Assignment and Assumption, the assignee thereunder shall be a party to this Agreement and, to the extent of the interest assigned by such Assignment and Assumption, have the rights and obligations of a Lender under this Agreement, and the assigning Lender thereunder shall, to the extent of the interest assigned by such Assignment and Assumption, be released from its obligations under this Agreement (and, in the case of an Assignment and Assumption covering all of the assigning Lender's rights and obligations under this Agreement, such Lender shall cease to be a party hereto but shall continue to be entitled to the benefits of <u>Sections 3.01</u>, <u>3.04</u>, <u>3.05</u> and <u>10.04</u> with respect to facts and circumstances occurring prior to the effective date of such assignment); <u>provided</u>, 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. Upon request to the Parent Borrower, the Borrowers (at their expense) shall execute and deliver a Note to the assignee Lender. Any assignment or transfer by a Lender of rights or obligations under this Agreement that does not comply with this subsection shall be treated for purposes of this Agreement as a sale by such Lender of a participation in such rights and obligations in accordance with <u>Section 10.06(d)</u>.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c) <u>*Register*</u>. The Administrative Agent, acting solely for this purpose as an agent of the Borrowers (and such agency being solely for Tax purposes), shall maintain at the Administrative Agent's Office a copy of each Assignment and Assumption delivered to it (or the equivalent thereof in electronic form) and a register for the recordation of the names and addresses of the Lenders and L/C Issuers, and the Revolving Facility Commitment of, and principal amounts (and stated interest) of the Loans and Letter of Credit Borrowings owing to, each Lender and L/C Issuer pursuant to the terms hereof from time to time (the "<u>Register</u>"). The entries in the Register shall be conclusive absent manifest error, and the Borrowers, the Administrative Agent, the Lenders and the L/C Issuer may treat each Person whose name is recorded in the Register pursuant to the terms hereof as a Lender or L/C Issuer hereunder for all purposes of this Agreement, notwithstanding notice to the contrary. In addition, the Administrative Agent shall maintain on the Register information regarding the designation, and revocation of designation, of any Lender as a Defaulting Lender. The Register shall be available for inspection by the Borrowers and any Lender, at any reasonable time and from time to time upon reasonable prior notice.

------

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(d)*<u>Participations</u>*. Any Lender may at any time, without the consent of, or notice to, any Borrower or the Administrative Agent, sell participations to any Person (other than a natural person, a Defaulting Lender, any Borrower or any of the Borrowers' Affiliates or Subsidiaries) (each, a "<u>Participant</u>") in all or a portion of such Lender's rights and/or obligations under this Agreement (including all or a portion of its Revolving Facility Commitment and/or the Loans (including such Lender's participation in L/C Obligations and/or Swing Line 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 Lenders and the L/C Issuer 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, waiver or other modification described in <u>clause (y)</u> of the first proviso to <u>Section 10.01</u> that affects such Participant. Subject to subsection (c) of this Section, the Borrowers agree that each Participant shall be entitled to the benefits and subject to the requirements of <u>Sections 3.01</u>, <u>3.04</u> and <u>3.05</u> to the same extent as if it were a Lender and had acquired its interest by assignment pursuant to <u>Section 10.06(b)</u> (it being understood that the documentation required under <u>Section 3.01(e)</u> shall be delivered to the Lender who sells the participation) to the same extent as if it were a Lender and had acquired its interest by assignment pursuant to <u>paragraph (b)</u> of this Section; <u>provided</u> that such Participant agrees to be subject to the provisions of <u>Sections 3.06</u> and <u>10.13</u> as if it were an assignee under <u>paragraph (b)</u> of this Section. Each Lender that sells a participation agrees, at the Parent Borrower's request and expense, to use reasonable efforts to cooperate with the Parent Borrower to effectuate the provisions of <u>Section 3.06</u> with respect to any Participant. To the extent permitted by law, each Participant also shall be entitled to the benefits of <u>Section 10.08</u> as though it were a Lender, <u>provided</u> such Participant agrees to be subject to <u>Section 2.11</u> 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 the Loan Documents (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 any 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 under Section 5f.103-1(c) of the United States Treasury Regulations. The entries in the Participant Register shall be conclusive absent manifest error, and such Lender shall treat each Person whose name is recorded in the Participant Register as the owner of such participation for all purposes of this Agreement notwithstanding any notice to the contrary. For the avoidance of doubt, the 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;(e)*<u>Limitation Upon Participant Rights</u>*. A Participant shall not be entitled to receive any greater payment under <u>Section 3.01</u> or <u>3.04</u> than the applicable Lender would have been entitled to receive with respect to the participation sold to such Participant, unless the sale of the participation to such Participant is made with the Parent Borrower's prior written consent. A Participant that would be a Foreign Lender if it were a Lender shall not be entitled to the benefits of <u>Section 3.01</u> unless the Parent Borrower is notified of the participation sold to such Participant and such Participant agrees, for the benefit of the Borrowers, to comply with <u>Section 3.01(e)</u> as though it were a Lender. 

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(f)*<u>Certain Pledges</u>*. Any Lender may at any time pledge or assign a security interest in all or any portion of its rights under this Agreement (including under its Note, if any) to secure obligations of such Lender, including any pledge or assignment to secure obligations to a Federal Reserve Bank; <u>provided</u> that no such pledge or assignment shall release such Lender from any of its obligations hereunder or substitute any such pledgee or assignee for such Lender as a party hereto. 

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(g)*<u>Resignation as an L/C Issuer or Swing Line Lender after Assignment</u>*. Notwithstanding anything to the contrary contained herein, if at any time Bank of America assigns all of its Revolving Facility Commitment and Loans pursuant to <u>Section 10.06(b)</u>, Bank of America may, (i) upon 30 days' notice to the Parent Borrower and the Lenders, resign as an L/C Issuer and/or (ii) upon 30 days' notice to the Parent Borrower, resign as Swing Line Lender. In the event of any such resignation as an L/C Issuer or Swing Line Lender, the Parent Borrower shall be entitled to appoint from among the Lenders a successor L/C Issuer or Swing Line Lender hereunder; <u>provided</u>, <u>however</u>, that no failure by the Parent Borrower to appoint any such successor shall affect the resignation of Bank of America as an L/C Issuer or Swing Line Lender. If Bank of America resigns as an L/C Issuer, it shall retain all the rights, powers, privileges and duties of an L/C Issuer hereunder with respect to all Letters of Credit issued by it which remain outstanding as of the effective date of its resignation as an L/C Issuer and all L/C Obligations with respect thereto (including the right to require the Lenders to make Base Rate Loans or fund risk participations in Unreimbursed Amounts pursuant to <u>Section 2.03(c)</u>). If Bank of America resigns as the Swing Line Lender, it shall retain all the rights of the Swing Line Lender provided for hereunder with respect to Swing Line Loans made by it and outstanding as of the effective date of such resignation, including the right to require the Lenders to make Base Rate Loans or fund risk participations in outstanding Swing Line Loans pursuant to Section 2.04(c). Upon the appointment of a successor L/C Issuer and/or Swing Line Lender, (i) such successor shall succeed to and become vested with all of the rights, powers, privileges and duties of the retiring L/C Issuer or Swing Line Lender, as the case may be, and (ii) the successor L/C Issuer shall issue letters of credit in substitution for the Letters of Credit, if any, issued by the retiring L/C Issuer and remaining outstanding at the time of such succession or make other arrangements satisfactory to Bank of America to effectively assume the obligations of Bank of America with respect to such Letters of Credit. 

Section 10.07 <u>Treatment of Certain Information; Confidentiality</u>. Each of the Administrative Agent, the L/C Issuers and the Lenders agrees to maintain the confidentiality of the Information, except that Information (as defined below) may be disclosed: (i) to its Affiliates and to it and its Affiliates' respective partners, directors, officers, employees, agents, trustees, advisors and representatives (it being understood that the Persons to whom such disclosure is made

------

will be informed of the confidential nature of such Information and instructed to keep such Information confidential); (ii) to the extent required or requested by any regulatory authority purporting to have jurisdiction over it (including any self-regulatory authority, such as the National Association of Insurance Commissioners) in which case the Administrative Agent, L/C Issuer or such Lender, as applicable, shall use reasonable efforts ((x) to the extent legally permissible but (y) not in the case of any such requests which are part of, or arise out of, normal reporting or review procedures to, or examination by, any such regulatory authority) to notify the Parent Borrower prior to such disclosure; (iii) to the extent required by applicable Laws or regulations or by any subpoena or similar legal process in which case the Administrative Agent, such L/C Issuer or such Lender, as applicable, shall use reasonable efforts (to the extent permitted) to notify the Parent Borrower prior to such disclosure; (iv) to any other party hereto; (v) in connection with the exercise of any remedies hereunder or under any other Loan Document or any action or proceeding relating to this Agreement or any other Loan Document or the enforcement of rights hereunder or thereunder, (vi) subject to an agreement containing provisions substantially the same as those of this <u>Section 10.07</u>, to (A) any assignee of or Participant in, or any prospective assignee of or Participant in, any of its rights or obligations under this Agreement or (B) any actual or prospective counterparty (or its advisors) to any swap or derivative transaction relating to the Borrowers and their obligations, (vii) on a confidential basis to (A) any ratings agency in connection with rating Holdings, the Borrowers or their Subsidiaries or the credit facilities provided hereunder or (B) the CUSIP Service Bureau or any similar agency in connection with the issuance and monitoring of CUSIP numbers or other market identifiers with respect to the credit facilities provided hereunder, (viii) with the consent of the Parent Borrower or (ix) to the extent such Information (A) becomes publicly available other than as a result of a breach of this <u>Section 10.07</u> or (B) becomes available to the Administrative Agent, any Lender or any of their respective Affiliates on a nonconfidential basis (to their knowledge) from a source other than the Borrowers. For purposes of this <u>Section 10.07</u>, "<u>Information</u>" means all information received from Holdings or any of its Subsidiaries relating to any of them or any of their respective businesses, other than any such information that is available to the Administrative Agent or any Lender on a nonconfidential basis prior to disclosure by Holdings or any of its Subsidiaries; <u>provided</u> that, in the case of information received from Holdings or any of its Subsidiaries after the date hereof, such information is clearly identified at the time of delivery as confidential or delivered pursuant to <u>Section 6.01</u>, <u>6.02</u> or <u>6.03</u> hereof. Any Person required to maintain the confidentiality of Information as provided in this <u>Section 10.07</u> 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. Notwithstanding the foregoing, any Agent and any Lender may place advertisements in financial and other newspapers and periodicals or on a home page or similar place for dissemination of information on the Internet or worldwide web as it may choose, and circulate similar promotional materials, after the closing of the transactions contemplated by this Agreement in the form of a "tombstone" or otherwise describing the names of the Loan Parties, or any of them, and the amount, type and closing date of such transactions, all at their sole expense.

Each of the Administrative Agent, L/C Issuer and the Lenders acknowledges that (i) the Information may include MNPI concerning Holdings, the Borrowers or one or more Subsidiaries, as the case may be, (ii) it has developed compliance procedures regarding the use of MNPI and (iii) it will handle such MNPI in accordance with applicable Requirements of Law, including federal and state securities Requirements of Law.

------

Section 10.08 <u>Right of Setoff</u>. If an Event of Default shall have occurred and be continuing, each Lender and each L/C Issuer and each of their respective Affiliates is hereby authorized at any time and from time to time, to the fullest extent permitted by applicable Requirement of Law (subject to the provisions of the ABL/Term<u>any</u> Intercreditor Agreement, if applicable) to set off and apply any and all deposits (general or special, time or demand, provisional or final, in whatever currency) at any time held and other obligations (in whatever currency) at any time owing by such Lender or L/C Issuer or any such Affiliate to or for the credit or the account of the Borrowers or any other Loan Party against any and all of the obligations of the Borrowers or such Loan Party now or hereafter existing under this Agreement or any other Loan Document to such Lender or L/C Issuer, irrespective of whether or not such Lender shall have made any demand under this Agreement or any other Loan Document and although such obligations of the Borrowers or such Loan Party may be contingent or unmatured or are owed to a branch or office of such Lender or L/C Issuer different from the branch or office holding such deposit or obligated on such indebtedness; <u>provided</u>, that in the event that any Defaulting Lender shall exercise any such right of setoff, (x) all amounts so set off shall be paid over immediately to the Administrative Agent for further application in accordance with the provisions of <u>Section 2.15</u> and, pending such payment, shall be segregated by such Defaulting Lender from its other funds and deemed held in trust for the benefit of the Administrative Agent, the L/C Issuers and the Lenders, and (y) the Defaulting Lender shall provide promptly to the Administrative Agent a statement describing in reasonable detail the Finance Obligations owing to such Defaulting Lender as to which it exercised such right of setoff. The rights of each Lender, each L/C Issuer and their respective Affiliates under this <u>Section 10.08</u> are in addition to other rights and remedies (including other rights of setoff) that such Lender, L/C Issuer or their respective Affiliates may have. Each Lender and each L/C Issuer agrees to notify the Parent Borrower and the Administrative Agent promptly after any such setoff and application; <u>provided</u> that the failure to give such notice shall not affect the validity of such setoff and application.

Section 10.09 <u>Interest Rate Limitation</u>. Notwithstanding anything to the contrary contained in any Loan Document, the interest paid or agreed to be paid under the Loan Documents shall not exceed the maximum rate of non-usurious interest permitted by applicable Requirements of Law (the "<u>Maximum Rate</u>"). If the Administrative Agent or any Lender shall receive interest in an amount that exceeds the Maximum Rate, the excess interest shall be applied to the principal of the Loans or, if it exceeds such unpaid principal, refunded to the Borrowers. In determining whether the interest contracted for, charged, or received by the Administrative Agent or a Lender exceeds the Maximum Rate, such Person may, to the extent permitted by applicable Requirement of Law, (i) characterize any payment that is not principal as an expense, fee, or premium rather than interest, (ii) exclude voluntary prepayments and the effects thereof and (iii) amortize, prorate, allocate, and spread in equal or unequal parts the total amount of interest throughout the contemplated term of the ABL Credit Obligations hereunder.

Section 10.10 <u>Counterparts; Integration; Effectiveness</u>. This Agreement may be executed in counterparts (and by different parties hereto in different counterparts), each of which shall constitute an original, but all of which when taken together shall constitute a single contract. This Agreement and the other Loan Documents constitute the entire contract among the parties relating to the subject matter hereof and supersede any and all previous agreements and understandings, oral or written, relating to the subject matter hereof. Except as provided in <u>Section 4.01</u>, 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 that, when taken together, bear the signatures of each of the other parties hereto. Delivery of an executed counterpart of a signature page of<u>to</u> this Agreement by telecopy or other electronic imaging means shall be effective as delivery of a manually executed counterpart of this Agreement.

------

Section 10.11 <u>Survival of Representations and Warranties</u>. All representations and warranties made hereunder and in any other Loan Document or other document delivered pursuant hereto or thereto or in connection herewith or therewith shall survive the execution and delivery hereof and thereof. Such representations and warranties have been or will be relied upon by the Administrative Agent, each Lender and each L/C Issuer, regardless of any investigation made by any Agent, any Lender or any L/C Issuer or on their behalf and notwithstanding that the Administrative Agent, any Lender or any L/C Issuer may have had notice or knowledge of any Default or Event of Default at the time of any Borrowing, and shall continue in full force and effect as long as any Loan or any other ABL Credit Obligation shall remain unpaid or unsatisfied or any Letter of Credit shall remain outstanding.

Section 10.12 <u>Severability</u>. If any provision of this Agreement or the other Loan Documents is held to be illegal, invalid or unenforceable, (i) the legality, validity and enforceability of the remaining provisions of this Agreement and the other Loan Documents shall not be affected or impaired thereby and (ii) the parties shall endeavor in good faith negotiations to replace the illegal, invalid or unenforceable provisions with valid provisions the economic effect of which comes as close as possible to that of the illegal, invalid or unenforceable provisions. The invalidity of a provision in a particular jurisdiction shall not invalidate or render unenforceable such provision in any other jurisdiction. Without limiting the foregoing provisions of this <u>Section 10.12</u>, if and to the extent that the enforceability of any provisions in this Agreement relating to Defaulting Lenders shall be limited by Debtor Relief Laws, as determined in good faith by the Administrative Agent, then such provisions shall be deemed to be in effect only to the extent not so limited.

Section 10.13 <u>Replacement of Lenders</u>. If any Lender requests compensation under <u>Section 3.04</u>, or if the Borrowers are required to pay any additional amount to any Lender or any Governmental Authority for the account of any Lender pursuant to <u>Sections 3.06</u> or <u>3.01</u>, or if any Lender is a Defaulting Lender, or if any Lender is a non-consenting Lender that may be replaced pursuant to the final paragraph of <u>Section 10.01</u> or if any other circumstance exists hereunder that gives the Parent Borrower the right to replace a Lender as a party hereto, then the Parent Borrower may, at its sole expense and effort, upon notice to such Lender and the Administrative Agent, require such Lender to assign and delegate, without recourse (in accordance with and subject to the restrictions contained in, and consents required by, <u>Section 10.06</u>), all of its interests, rights (other than its existing rights to payments pursuant to <u>Sections 3.01</u> and <u>3.04</u>) and obligations under this Agreement and the related Loan Documents to an assignee that shall assume such obligations (which assignee may be another Lender, if a Lender accepts such assignment), <u>provided</u> that:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(i) the Parent Borrower shall have paid to the Administrative Agent the assignment fee specified in <u>Section 10.06(b)</u>;

------

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(ii) such Lender shall have received payment of an amount equal to 100% of the outstanding principal of its Loans,
accrued interest thereon, accrued fees and all other amounts payable to it hereunder and under the other Loan Documents (including any amounts under <u>Section 3.05</u>) from the assignee (to the extent of such outstanding principal and accrued
interest and fees) or the Parent Borrower (in the case of all other amounts);

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(iii) in the case of any assignment resulting from a claim for compensation under <u>Section 3.04</u> or
payments required to be made pursuant to <u>Section 3.01</u>, such assignment will result in a reduction in such compensation or payments thereafter; and

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(iv) such assignment does not conflict with applicable Requirements of Law.

A Lender shall not be required to make any such assignment or delegation if, prior thereto, as a result of a waiver by such Lender or otherwise, the circumstances entitling the Borrowers to require such assignment and delegation cease to apply. Each Lender agrees that, if the Borrowers elect to replace such Lender in accordance with this Section, it shall promptly execute and deliver to the Administrative Agent an Assignment and Assumption to evidence such sale and purchase and shall deliver to the Administrative Agent any Note (if Notes have been issued in respect of such Lender's Loans) subject to such Assignment and Assumption; <u>provided</u> that the failure of any such non-consenting Lender to execute an Assignment and Assumption shall not render such sale and purchase (and the corresponding assignment) invalid and such assignment shall be recorded in the Register.

Section 10.14 <u>Governing Law; Jurisdiction Etc</u>.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a)*<u>Governing Law</u>*. THIS AGREEMENT AND THE OTHER LOAN DOCUMENTS AND THE RIGHTS AND OBLIGATIONS OF THE PARTIES HEREUNDER AND THEREUNDER SHALL BE GOVERNED BY AND CONSTRUED AND INTERPRETED IN ACCORDANCE WITH THE INTERNAL LAWS OF THE STATE OF NEW YORK (INCLUDING, WITHOUT LIMITATION, SECTION 5-1401 OF THE GENERAL OBLIGATIONS LAW OF THE STATE OF NEW YORK); <u>PROVIDED</u>, <u>HOWEVER</u>, THAT IF THE LAWS OF ANY JURISDICTION OTHER THAN NEW YORK SHALL GOVERN IN REGARD TO THE VALIDITY, PERFECTION OR EFFECT OF PERFECTION OF ANY LIEN OR IN REGARD TO PROCEDURAL MATTERS AFFECTING ENFORCEMENT OF ANY LIENS IN COLLATERAL, SUCH LAWS OF SUCH OTHER JURISDICTIONS SHALL CONTINUE TO APPLY TO THAT EXTENT. 

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b) <u>*Submission to Jurisdiction*</u>. HOLDINGS, EACH BORROWER, EACH AGENT, EACH LENDER AND EACH L/C ISSUER EACH IRREVOCABLY AND UNCONDITIONALLY SUBMITS, FOR ITSELF AND ITS PROPERTY, TO THE EXCLUSIVE JURISDICTION OF THE COURTS OF THE STATE OF NEW YORK SITTING IN NEW YORK CITY IN THE BOROUGH OF MANHATTAN AND OF THE UNITED STATES DISTRICT COURT OF THE SOUTHERN DISTRICT OF NEW YORK, AND ANY APPELLATE COURT FROM ANY THEREOF, IN ANY ACTION OR PROCEEDING ARISING OUT OF OR RELATING TO THIS AGREEMENT OR ANY OTHER LOAN

------

DOCUMENT, OR FOR RECOGNITION OR ENFORCEMENT OF ANY JUDGMENT, AND EACH OF THE PARTIES HERETO IRREVOCABLY AND UNCONDITIONALLY AGREES THAT ALL CLAIMS IN RESPECT OF ANY SUCH ACTION OR PROCEEDING MAY BE HEARD AND DETERMINED IN SUCH NEW YORK STATE COURT OR, TO THE FULLEST EXTENT PERMITTED BY APPLICABLE 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. EACH PARTY HERETO AGREES THAT THE AGENTS, THE JOINT LEAD ARRANGERS, L/C ISSUERS AND LENDERS RETAIN THE RIGHT TO SERVE PROCESS IN ANY OTHER MANNER PERMITTED BY LAW OR TO BRING PROCEEDINGS AGAINST ANY LOAN PARTY IN THE COURTS OF ANY OTHER JURISDICTION IN CONNECTION WITH THE EXERCISE OF ANY RIGHTS HEREUNDER OR UNDER ANY COLLATERAL DOCUMENT OR ANY OTHER LOAN DOCUMENT OR THE ENFORCEMENT OF ANY JUDGMENT.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c)*<u>Waiver of Venue</u>*. EACH BORROWER AND EACH OTHER LOAN PARTY 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 <u>PARAGRAPH (B)</u> OF THIS <u>SECTION 10.14</u>. 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;(d)*<u>Service of Process</u>*. EACH PARTY HERETO IRREVOCABLY CONSENTS TO SERVICE OF PROCESS IN THE MANNER PROVIDED FOR NOTICES IN <u>SECTION 10.02</u>. NOTHING IN THIS AGREEMENT WILL AFFECT THE RIGHT OF ANY PARTY HERETO TO SERVE PROCESS IN ANY OTHER MANNER PERMITTED BY APPLICABLE LAW. 

Section 10.15 <u>Waiver of Jury Trial</u>. EACH PARTY HERETO HEREBY IRREVOCABLY 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 OR 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, AGENT OR ATTORNEY OF ANY OTHER PERSON HAS REPRESENTED, EXPRESSLY OR OTHERWISE, THAT SUCH OTHER PERSON WOULD NOT, IN THE EVENT OF LITIGATION, SEEK TO ENFORCE THE FOREGOING WAIVER AND (B) ACKNOWLEDGES THAT IT AND THE OTHER PARTIES HERETO HAVE BEEN INDUCED TO ENTER INTO THIS AGREEMENT AND THE OTHER LOAN DOCUMENTS BY, AMONG OTHER THINGS, THE MUTUAL WAIVERS AND CERTIFICATIONS IN THIS <u>SECTION 10.15</u>.

------

Section 10.16 <u>No Advisory or Fiduciary Responsibility</u>. In connection with all aspects of each transaction contemplated hereby (including in connection with any amendment, waiver or other modification hereof or of any other Loan Document), the Borrowers acknowledge and agree, and acknowledge their respective Affiliates' understanding, that: (i) (A) the arranging and other services regarding this Agreement provided by the Administrative Agent, the Syndication Agent and the Joint Lead Arrangers are arm's-length commercial transactions between the Borrowers and their respective Affiliates, on the one hand, and the Administrative Agent, the Syndication Agent and the Joint Lead Arrangers, on the other hand, (B) the Borrowers have consulted their own legal, accounting, regulatory and tax advisors to the extent they have deemed appropriate, and (C) the Borrowers are capable of evaluating, and understand and accept, the terms, risks and conditions of the transactions contemplated hereby and by the other Loan Documents; (ii) (A) the Administrative Agent, the Syndication Agent and the Joint Lead Arrangers each is and has been acting solely as a principal and, except as expressly agreed in writing by the relevant parties, has not been, is not, and will not be acting as an advisor, agent or fiduciary for the Borrowers or any of their Affiliates, or any other Person and (B) none of the Administrative Agent, the Syndication or the Joint Lead Arrangers has any obligation to the Borrowers or any of their respective Affiliates with respect to the transactions contemplated hereby except those obligations expressly set forth herein and in the other Loan Documents; and (iii) the Administrative Agent, the Syndication Agent and the Joint Lead Arrangers and their respective Affiliates may be engaged in a broad range of transactions that involve interests that differ from those of the Borrowers and their Affiliates, and none of the Administrative Agent, the Syndication Agent or the Joint Lead Arrangers has any obligation to disclose any of such interests to the Borrowers or their respective Affiliates. To the fullest extent permitted by Law, the Borrowers hereby waive and release any claims that it may have against the Administrative Agent, the Syndication Agent and the Joint Lead Arrangers with respect to any breach or alleged breach of agency or fiduciary duty in connection with any aspect of any transaction contemplated hereby.

Section 10.17 <u>Electronic Execution of Assignments and Certain Other Documents</u>. The words "execution," "signed," "signature," and words of like import in or related to any document to be signed in connection with this Agreement and the transactions contemplated hereby (including without limitation Assignment and Assumptions, amendments or other modifications, Committed Loan Notices, Swingline Loan Notices, waivers and consents) shall be deemed to include electronic signatures, the electronic matching of assignment terms and contract formations on electronic platforms approved by the Administrative Agent or the keeping of records in electronic form, each of which shall be of the same legal effect, validity or enforceability as a manually executed signature or the use of a paper-based recordkeeping system, as the case may be, to the extent and as provided for in any applicable law, including the Federal Electronic Signatures in Global and National Commerce Act, the New York State Electronic Signatures and Records Act, or any other similar state laws based on the Uniform Electronic Transactions Act; <u>provided</u> that notwithstanding anything contained herein to the contrary the Administrative Agent is under no obligation to agree to accept electronic signatures in any form or in any format unless expressly agreed to by the Administrative Agent pursuant to procedures approved by it.

------

Section 10.18 <u>Patriot Act Notice</u>. Each Lender that is subject to the Patriot Act and the Administrative Agent (for itself and not on behalf of any Lender) hereby notifies the Borrowers that pursuant to the requirements of the Patriot Act, it is required to obtain, verify and record information that identifies each Borrower, which information includes the name and address of each Borrower and other information that will allow such Lender or the Administrative Agent, as applicable, to identify each Borrower in accordance with the Patriot Act. The Borrowers shall, promptly following a request by the Administrative Agent or any Lender, provide all documentation and other information that the Administrative Agent or such Lender requests in order to comply with its ongoing obligations under applicable "know your customer" an anti-money laundering rules and regulations, including the Patriot Act.

Section 10.19 <u>ABL/Term</u> <u>Intercreditor Agreement</u>. Each Lender party hereto understands, acknowledges and agrees that<u>,</u> <u>in the case of any</u> <u>Permitted Term Debt,</u> it is the intention of the parties hereto that each of the Finance Obligations and the <u>obligations under such Permitted</u> Term Finance Obligations<u>Debt</u> are intended to constitute a distinct and separate class from the other, and, as between each of the ABL Credit Parties and the Term <u>"</u>Secured Parties<u>" under any Permitted Term Debt</u>, it is the intention of the parties that so<u>, as</u> long as there is no Second Lien<u>junior lien</u> Indebtedness outstanding, (i) the Finance Obligations (including all post-petition interest with respect thereto) <u>shall</u> have a first priority security interest in all ABL Priority Collateral and the <u>obligations under the Permitted</u> Term Finance Obligations<u>Debt</u> (including all post-petition interest with respect thereto) <u>shall</u> have a second priority security interest in all <u>such</u> ABL Priority Collateral and (ii) the <u>obligations under the Permitted</u> Term Finance Obligations<u>Debt</u> (including all post-petition interest with respect thereto) <u>shall</u> have a first priority security interest in all <u>"</u>Term Priority Collateral and that the Finance Obligations (including all post-petition interest with respect thereto) have a second priority security interest in all Term Priority Collateral<u>" (as defined in any</u> <u>Intercreditor Agreement)</u>. Each Lender further understands, acknowledges and agrees that the provisions setting forth the priorities as between the ABL Credit Parties and the Term <u>"</u>Secured Parties are<u>" under any Permitted Term Debt shall be as</u> set forth in the ABL/Term Intercreditor Agreement.

Each Lender agrees that it will be bound by, and will take no actions contrary to, the provisions of the ABL/Term<u>any</u> Intercreditor Agreement. Each Lender authorizes and instructs the Administrative Agent and the Collateral Agent to enter into the<u>any</u> Collateral Documents and the ABL/Term<u>any</u> Intercreditor Agreement on behalf of such Lender and to take all actions (and execute all documents) required (or deemed advisable) by the Administrative Agent or the Collateral Agent in accordance with the terms of the Collateral Documents and the ABL/Term<u>any</u> Intercreditor Agreement.

The provisions of this <u>Section 10.19</u> are not intended to summarize all relevant provisions of the ABL/Term Intercreditor Agreement<u>, a form of which is attached hereto as Exhibit H-1</u>. Reference must be made to the ABL/Term<u>any</u> Intercreditor Agreement to understand all terms and conditions thereof. Each Lender is responsible for making its own analysis and review of the ABL/Term<u>such</u> Intercreditor Agreement and the terms and provision thereof, and neither the Administrative Agent nor the Collateral Agent or any of their respective affiliates, representatives, advisors, attorneys or other Person makes any representation to any Lender as to the sufficiency or advisability of the provisions contained in the ABL/Term<u>such</u> Intercreditor Agreement.

------

Section 10.20 <u>Judgment Currency</u>. If for the purpose of obtaining judgment in any court it is necessary to convert an amount due hereunder in the currency in which it is due (the "<u>Original Currency</u>") into another currency (the "<u>Second Currency</u>"), the rate of exchange applied shall be that at which, in accordance with normal banking procedures, the Administrative Agent could purchase in the New York foreign exchange market, the Original Currency with the Second Currency on the date two Business Days preceding that on which judgment is given. Each Loan Party agrees that its obligation in respect of any Original Currency due from it hereunder shall, notwithstanding any judgment or payment in such other currency, be discharged only to the extent that, on the Business Day following the date the Agent receives payment of any sum so adjudged to be due hereunder in the Second Currency, the Administrative Agent may, in accordance with normal banking procedures, purchase, in the New York foreign exchange market, the Original Currency with the amount of the Second Currency so paid; and if the amount of the Original Currency so purchased or could have been so purchased is less than the amount originally due in the Original Currency, each Loan Party agrees as a separate obligation and notwithstanding any such payment or judgment to indemnify the Administrative Agent against such loss. The term "rate of exchange" in this <u>Section 10.20</u> means the spot rate at which the Administrative Agent, in accordance with normal practices, is able on the relevant date to purchase the Original Currency with the Second Currency, and includes any premium and costs of exchange payable in connection with such purchase.

Section 10.21 <u>Field Audit and Examination Reports; Disclaimer by Lenders</u>. By signing this Agreement, each Lender: (i) is deemed to have requested that the Administrative Agent furnish such Lender, promptly after it becomes available, a copy of each field audit or examination report (each a "<u>Report</u>" and collectively, "<u>Reports</u>") prepared by or on behalf of the Administrative Agent; (ii) expressly agrees and acknowledges that neither Bank of America nor the Administrative Agent (A) makes any representation or warranty as to the accuracy of any Report, or (B) shall be liable for any information contained in any Report; (iii) expressly agrees and acknowledges that the Reports are not comprehensive audits or examinations, that the Administrative Agent, Bank of America or other party performing any audit or examination will inspect only specific information regarding the Borrowers and will rely significantly upon the Borrowers' books and records, as well as on representations of the Borrowers' personnel; (iv) agrees to keep all Reports confidential and strictly for its internal use, and not to distribute except to its participants, or use any Report in any other manner; and (v) without limiting the generality of any other indemnification provision contained in this Agreement, agrees: (A) to hold the Administrative Agent and any such other Lender preparing a Report harmless from any action the indemnifying Lender may take or conclusion the indemnifying Lender may reach or draw from any Report in connection with any loans or other credit accommodations that the indemnifying Lender has made or may make to the Borrowers, or the indemnifying Lender's participation in, or the indemnifying Lender's purchase of, a loan or loans of the Borrowers; and (B) to pay and protect, and indemnify, defend, and hold the Administrative Agent and any such other Lender preparing a Report harmless from and against, the claims, actions, proceedings, damages, costs, expenses, and other amounts incurred by or on behalf of the Administrative Agent and any such other Lender preparing a Report as the direct or indirect result of any third parties who might obtain all or part of any Report through the indemnifying Lender.

Section 10.22 <u>Additional Borrowers</u>. Subject to any applicable limitations set forth in the other Loan Documents and notwithstanding anything to the contrary herein, upon the request of the Parent Borrower from time to time, any direct or indirect Wholly Owned Subsidiary that is a Domestic Subsidiary may become a Borrower hereunder, effective upon the execution and delivery to the Administrative Agent (a) by such Subsidiary, of (i) an instrument of accession or joinder and amendments or joinders to any outstanding Notes issued under <u>Section 2.11</u> and (ii)

------

any other Collateral Documents and other documents that such Domestic Subsidiary would be required to deliver pursuant to <u>Section 6.13</u> if it were becoming a guarantor (with such modifications thereto as are reasonably necessary to accommodate such Subsidiary becoming a Borrower and not a guarantor), and (b) by Holdings and each Subsidiary Guarantor, reaffirmations from each of their respective Guaranties under the Loan Documents.

Section 10.23 <u>Acknowledgement and Consent to Bail-In of EEA Financial Institutions</u>. Notwithstanding<u>Solely to the extent any Lender or L/C Issuer that is an Affected Financial Institution is a party to this Agreement and notwithstanding</u> 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 Lender <u>or L/C Issuer</u> that is an EEA<u>Affected</u> Financial Institution arising under any Loan Document, to the extent such liability is unsecured, may be subject to the write-down and conversion powers of an EEA<u>Write-Down and Conversion Powers of the applicable</u> Resolution Authority and agrees and consents to, and acknowledges and agrees to be bound by:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a) the application of any Write-Down and Conversion Powers by an EEA<u>the applicable</u> Resolution Authority to any such liabilities arising hereunder which may be payable to it by any Lender <u>or L/C Issuer</u> that is an EEA<u>Affected</u> Financial Institution; and

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b) the effects of any Bail-in<u>Bail-In</u> Action on any such liability, including, if applicable:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(i) 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) a conversion of all, or a portion of, such liability into shares or other instruments of ownership in such EEA <u>Affected</u> Financial Institution, its parent undertaking, 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) the variation of the terms of such liability in connection with the exercise of the write-down and conversion powers of any EEA <u>Write-Down and Conversion Powers of the applicable</u> Resolution
Authority.

<u>Section 10.24 Acknowledgement Regarding Any Supported QFCs. To the extent that the Loan Documents provide support, through a guarantee or otherwise, for any Rate Contract or any other agreement or instrument that is a QFC (such support, "QFC Credit Support", and each such QFC, a "Supported QFC"), 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.S. Special Resolution Regimes") 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):</u>

------

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<u>(a) 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 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.</u>

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<u>(b) As used in this Section 10.24, the following terms have the following meanings:</u>

<u>"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.</u>

<u>"Covered Entity" means any of the following: (i) a "covered entity" as that term is defined in, and interpreted in accordance with, 12 C.F.R. § 252.82(b); (ii) a "covered bank" as that term is defined in, and interpreted in accordance with, 12 C.F.R. § 47.3(b); or (iii) a "covered FSI" as that term is defined in, and interpreted in accordance with, 12 C.F.R. § 382.2(b).</u>

<u>"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.</u>

<u>"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).</u>

[Signature Pages Follow]

------

IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be duly executed by their respective authorized officers as of the day and year first above written.

---

| | |
|:---|:---|
| PIANISSIMO HOLDINGS CORP. | PIANISSIMO HOLDINGS CORP. |
| By: |  |
|  | Name: |
|  | Title: |
| PIANISSIMO ACQUISITION CORP. | PIANISSIMO ACQUISITION CORP. |
| By: |  |
|  | Name: |
|  | Title: |
| The undersigned hereby acknowledges and agrees that upon the effectiveness of the Closing Date Acquisition it will succeed by operation of law to all of the rights and obligations of AcquisitionCo set forth herein or in any other Loan Document and that all references herein and therein to the "Parent Borrower" and the "Borrower" shall thereupon be deemed to be references to the undersigned, as applicable: | The undersigned hereby acknowledges and agrees that upon the effectiveness of the Closing Date Acquisition it will succeed by operation of law to all of the rights and obligations of AcquisitionCo set forth herein or in any other Loan Document and that all references herein and therein to the "Parent Borrower" and the "Borrower" shall thereupon be deemed to be references to the undersigned, as applicable: |
| STEINWAY MUSICAL INSTRUMENTS, INC. | STEINWAY MUSICAL INSTRUMENTS, INC. |
| By: |  |
|  | Name: |
|  | Title: |
| STEINWAY, INC. | STEINWAY, INC. |
| By: |  |
|  | Name: |
|  | Title: |

---

[Signature Page to the ABL Credit Agreement]

------

---

| | |
|:---|:---|
| CONN-SELMER, INC. | CONN-SELMER, INC. |
| By: |  |
|  | Name: |
|  | Title: |
| BANK OF AMERICA, N.A., as Administrative Agent | BANK OF AMERICA, N.A., as Administrative Agent |
| By: |  |
|  | Name: |
|  | Title: |
| DEUTSCHE BANK SECURITIES INC., as Syndication Agent | DEUTSCHE BANK SECURITIES INC., as Syndication Agent |
| By: |  |
|  | Name: |
|  | Title: |
| BANK OF AMERICA, N.A.,<br> as Lender | BANK OF AMERICA, N.A.,<br> as Lender |
| By: |  |
|  | Name: |
|  | Title: |
| DEUTSCHE BANK AG NEW YORK BRANCH,<br> as Lender | DEUTSCHE BANK AG NEW YORK BRANCH,<br> as Lender |
| By: |  |
|  | Name: |
|  | Title: |

---

[Signature Page to the ABL Credit Agreement]

------

**EXHIBIT A-1** 

------

SCHEDULES

---

| | |
|:---|:---|
| Schedule 2.01 | Commitments and Revolving Facility Percentage |
| Schedule 2.03 | Existing Letters of Credit |
| Schedule 5.05 | Litigation; Tax Matters |
| Schedule 5.07 | ERISA |
| Schedule 5.09 | Ownership of Property; Liens |
| Schedule 5.10 | Taxes |
| Schedule 5.11(a) | Historical Financial Statements |
| Schedule 5.12 | Environmental |
| Schedule 5.15 | Labor Relations |
| Schedule 5.16 | Intellectual Property |
| Schedule 5.17 | Brokers' and Transaction Fees |
| Schedule 5.18 | Insurance |
| Schedule 5.19 | Ventures, Subsidiaries and Affiliates; Outstanding Stock |
| Schedule 5.20 | Jurisdiction of Organization; Chief Executive Office |
| Schedule 5.26(c) | Mortgaged Properties |
| Schedule 6.13 | Guarantors |
| Schedule 6.15 | Post-Closing Obligations |
| Schedule 7.01 | Liens |
| Schedule 7.04 | Investments |
| Schedule 7.05 | Continuing Indebtedness |
| Schedule 7.06 | Transactions with Affiliates |
| Schedule 10.02 | Administrative Agent's Office; Certain Addresses for Notices |

---

## Exhibit 10.17

**Exhibit 10.17** 

**Agreement** 

**relating to a** 

**Borrowing Base Facility** 

**between** 

**Steinway & Sons, New York, Hamburg Branch** 

**Rondenbarg 10** 

**22525 Hamburg** 

- hereinafter referred to as the "**Borrower**" and, together with the Co-Borrowers, the "**Borrowers**" -

**And** 

**Commerzbank Aktiengesellschaft** 

**Kaiserstraße 16** 

**60311 Frankfurt am Main** 

- hereinafter referred to as the "**Bank**" -

**With** 

**Steinway Retail Deutschland GmbH, Rondenbarg 10, 22525 Hamburg and** 

**Louis Renner GmbH, Max Planck Straße 18-24, 7116 Gärtringen as collateral providers** 

**- together with the Borrower, hereinafter referred to as the "Borrowing Base Providers" -** 

**Whereas:** 

The Borrowing Base Providers and the Bank enter into the following borrowing base facility agreement (hereinafter referred to as the "**Agreement**"). A Borrowing Base facility is a special type of working capital finance where the maximum amount available for drawdown is directly dependent on the periodically determined value of the current assets and — in this specific case — certain fixed assets serving as collateral, in particular inventory and trade receivables (the "**Borrowing Base**").

------

It is agreed as follows:

**1.** **AMOUNT AND PURPOSE OF THE CREDIT FACILITY** 

1.1 The Bank makes available to the Borrower a Borrowing Base Facility the credit amount of which actually
available for drawdown is dependent on the periodically determined Borrowing Base, however limited to

**EUR 30,000,000.00** 

(in words: Euro thirty million)

(the "**Credit Commitment**").

1.2 The available credit amount is calculated on the basis of the Borrowing Base pursuant to Clause 8 hereof
(*Borrowing Base*). The calculation is made monthly on the basis of the Borrowing Base Reports provided by the Borrower. The credit amount available to the Borrower for the Borrowing Base Application Period is the lesser amount in EUR of:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a) the Borrowing Base confirmed from time to time by the Bank, deducted by the aggregate credit limits allocated
to Co-Borrowers by way of Loan Transfer Order pursuant to Clause 2.4, and

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b) the Credit Commitment.

(the "**Available Credit Facility**").

1.3 The Borrowers shall use the Available Credit Facility exclusively for the financing of general corporate
purposes, including working capital requirements and investments in digitalization.

**2.** **UTILISATION AND TRANSFER OF EXISTING CREDIT UTILISATION** 

2.1 The Available Credit Facility may be utilised by the Borrower, and if applicable and within the limits set in
the in the respective Loan Transfer Order, by a Co-Borrower

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(1) by way of an overdraft facility in Euro;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(2) by way of money market loans in Euro up to an amount not exceeding 70% of the Credit Commitment;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(3) by way of guarantees in Euro up to an amount of EUR 3,000,000.00, provided that those guarantees are directly
linked to the working capital to be financed; and

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(4) for the issuance of import letters of credit in EUR up to an amount of EUR 5,000,000.00, provided that those
import letters of credit are directly linked to the working capital to be financed.

Utilisations of the Borrower (for the avoidance of doubt, not of the Co-Borrowers) via overdraft facilities or for the issuance of letters of credit can also be made in the following foreign currencies as long and to the extent that these are freely available and convertible for the Bank:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• USD.

The aggregate amount of utilisations by the Borrower shall not exceed the Available Credit Facility at any time. The aggregate amount of utilisations by any Co-Borrower shall not exceed its credit limit allocated under the respective Loan Transfer Order at any time. The limitations for individual types of utilisation are to be observed by the Borrower.

------

2.2 If — for instance in the event of utilisation in foreign currency — the aggregate amount of
utilisations exceeds the Available Credit Facility at that time, the Borrower shall be obliged to reduce the utilisation immediately so that it does not exceed the Available Credit Facility. If this is not immediately possible due to the type of
utilisation (e.g. in the case of guarantees), the Borrower shall provide cash collateral to the Bank, i.e. deposit a cash amount necessary to cover the sum by which the aggregate amount of utilisations exceed the Available Credit Facility, in an
account held with the Bank in the name of the Borrower and pledged to the Bank with first rank.

In order to determine whether, as a result of exchange rate fluctuations, the aggregate amount of utilisations exceeds the credit facility, the EUR counter value of the utilisations in foreign currency is calculated on each Business Day on the basis of the mean rate of exchange. The mean rate of exchange is the rate fixed by the Bank as the mean rate between the buying and the selling rate for the respective foreign currency against the euro at or about 1 p.m. local time in Frankfurt am Main on each business day and which is then published on its internet sites http://www.commerzbank.de under Research > Kursinformationen > Devisenkurse.

Business day means a day other than a Saturday and Sunday on which banks are open for general business in Frankfurt am Main.

2.3 Within the facility agreement dated 19.01.2012 between the Bank and the Borrower and its respective amendments,
the Borrower has utilised overdraft facilities, money market loans, guarantees as well as documentary letters of credit ()"**Existing Utilisation** "). From the effective date of this Agreement pursuant to Clause 15.1 below, the Existing
Utilisation shall be transferred to and continued as utilisations under this Agreement. It shall then be deemed to be drawn hereunder and the amount available for utilisation shall be reduced by the amount of the Existing Utilisation. The terms and
conditions of this Agreement shall be fully applicable to the Existing Utilisation, except for the agreements concerning tenor and interest rate of existing money market loans as well as fees of existing guarantees and documentary letters of credit
which are not yet discharged on the effective date of this Agreement, for which the conditions previously agreed shall continue to apply.

2.4 Utilizations under this credit facility by co-borrowers ()"**Co-Borrower** ")

2.4.1 Utilizations under this credit facility by the Co-Borrowers shall be
subject to the following conditions:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• The Borrower provides to the Bank a loan transfer order in accordance with Annex VI ()"**Loan Transfer Order** "),

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• the Bank has received a Declaration of Accession from the Co-Borrower signed in a legally binding manner in accordance with Annex VII to this Agreement (including any further documents requested by the Bank), and

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• the Bank accepts the Loan Transfer Order and consents to the Co-Borrower's accession to the Agreement.

2.4.2 The Bank shall not be obliged to accept a Loan Transfer Order and/or a Declaration of Accession and to grant a Co-Borrower corresponding credits. The Bank will inform the Borrower without delay if it refuses to accept a Loan Transfer Order and/or Declaration of Accession. Otherwise, the Loan Transfer Order and the
corresponding Declaration of Accession shall be deemed to be accepted. The acceptance or rejection, as the case may be, of the Loan Transfer Order shall automatically be deemed to be also an acceptance or rejection of the Declaration of Accession.
The Borrower will inform the Co-Borrower about the acceptance or rejection.

------

2.4.3 As soon as the conditions pursuant to No. 2.4.1 are met for each Co-Borrower, the Co-Borrowers will become borrowers to this Agreement subject to the conditions laid out in the Loan Transfer Order and the corresponding Declaration of
Accession. The credit products used by the Co-Borrowers will be booked in their own accounts.

2.4.4 Co-Borrowers shall not be entitled to amend, rescind or terminate the
Agreement in whole, to give, cancel or change Loan Transfer Orders and to receive information on the account balances of the other Co-Borrowers as well as of the Borrower. However, each Co-Borrower may repay credits utilized by it in accordance with the conditions applicable thereto and then withdraw from the Agreement (for the avoidance of doubt solely in their capacity as Co-Borrowers and not as Borrowing Base Provider or Co-Debtor), by giving notice of termination. The amount which then becomes available may be utilized by the Borrower itself
or distributed to other Co-Borrowers.

2.4.5 The Bank is only prepared to make credits available to the Co-Borrowers, if the Borrower fully assumes the risk resulting from these credits. Therefore the Borrower hereby assumes a guarantee ()"**Steinway Guarantee**") towards the Bank as security for any
existing and future, including contingent claims, to which the Bank is or becomes entitled under this Agreement following the Bank's acceptance of a Loan Transfer Order and/or a Declaration of Accession by the respective Co-Borrower.

Under the Steinway Guarantee, the Borrower irrevocably and unconditionally undertakes to pay to the Bank any amount, including interest and costs, owed by any one or several of its Co-Borrowers under a credit specified in Annex VI. The Borrower undertakes to make payment in the currency in which the respective obligation of the Co-Borrower concerned is denominated. If this is not possible for reasons of foreign exchange law, the Borrower shall pay to the Bank the countervalue of the currency claim in EUR, converted at the middle rate of exchange on the date of payment.

The Bank may demand payment from the Borrower under the Steinway Guarantee, if one or several of the Co-Borrowers have failed to meet their contractual obligations, have failed to meet them in due time, in the agreed manner or in the currency agreed on conclusion of the agreement ("**Default**"). Prior to its demand for payment under the Steinway Guarantee against the Borrower, the Bank shall not be obliged to enforce the corresponding amounts towards the Co-Borrower concerned in court or out of court, to first realise other security, if any, or to await the results of any insolvency or similar proceedings.

The payment obligation shall be valid irrespective of any objections or defences which may be raised by the relevant Co-Borrower, or the reasons for non-payment by that Co-Borrower. It shall be effective, even if the Agreement or agreement on an individual transaction between the Bank and the Co-Borrower concerned proves to be not legally valid. Furthermore, it is not relevant whether the Default is attributable to the Co-Borrower concerned or is due to measures of third parties, including restrictions by public authorities or legal restrictions.

This Steinway Guarantee shall only expire after the obligations of all Co-Borrowers towards the Bank have been repaid and discharged finally and irrevocably. In particular, it shall not already expire if a loan or utilization granted to the Co-Borrower is repaid only temporarily or, as determined subsequently, not with final legal effect, or if a Co-Borrower is no longer specified in the applicable Annex VI, or the credit amount originally assigned to it has been reduced, as long as it has not yet met its obligations towards the Bank in full.

------

2.4.6 The Borrower shall be authorised to reduce or to fully cancel the credit limit allocated to a respective Co-Borrower at any time by sending the Bank an updated version of Annex VI signed by the Borrower provided that the reduction of the individual credit limit below the currently applicable utilization of the Co-Borrower shall not be permitted. The Steinway Guarantee for amounts actually utilised shall remain in effect until final repayment or discharge of the Bank, irrespective of such notification and the change of
Annex VI. This shall also apply if any guarantees issued for Co-Borrowers continue to exist even after a reduction of the limit or a cancellation of the Co-Borrower. The
Borrower will also notify the affected Co-Borrowers thereof. Any changes shall only become effective towards the Bank — subject to the provisions in Clauses 2.4.1 and 2.4.2 — ten banking days after
the receipt of a corresponding notification. Each updated Annex VI contains a list of all Loan Transfer Orders to Co-Borrowers so provided to the Bank by the Borrower, subdivided according to name of the Co-Borrower, type of utilization and amount of limits.

2.4.7 The Borrower may also request to introduce a new Co-Borrower or to
increase the credit limit allocated to existing Co-Borrowers. Any introduction of a new Co-Borrower or any increase of a credit limit already allocated is subject to the
Bank's prior written approval. Clause 2.4.5 and 2.4.6 shall apply mutatis mutandis.

2.4.8 The Borrower will sign any amendments to this Agreement or new loan agreements to which utilizations of a Co-Borrower under this Agreement shall be transferred, on its own behalf and also as representative on behalf of and for the account of the Co-Borrowers that have joined this
Agreement.

**3.** **Interest and fees / conditions of utilisation** 

3.1 Overdraft facility in Euro

The Borrowers shall pay interest on utilizations on the current account (overdraft facility) now and until further notice at a rate of 3.25% p.a.

The Bank shall provide the Borrowers with a monthly statement of interest together with the balance statement for the current account.

Interest payments shall be due monthly in arrears on the last day of each calendar month.

If the most recently published average monthly rate for three months' EURIBOR deposits increases by more than 0.25 per cent compared to the average monthly rate determined in the previous month of the last interest adjustment or interest agreement, the Bank shall be entitled to raise the agreed interest rate according with the change of the average monthly rate. The Bank shall reduce the agreed interest rate accordingly, if the average monthly rate for three months' EURIBOR deposits decreases by more than 0.25 per cent.

If the EURIBOR's essential calculation base changes or can no longer be determined temporarily or permanently, the bank will use the reference interest rate that replaces the EURIBOR or another suitable reference interest rate ("replacement reference interest rate"). The Bank will inform the Borrowers of the replacement reference interest rate in due course.

Interest rate changes shall become effective upon notification to the Borrowers immediately after publication of the above-mentioned change of the average monthly rate. The interest rate change may also be communicated in the form of printing the notification on the bank statement of the account which is used for utilisation of the credit facility.

In the event of an increase of the contractually agreed interest rate for overdraft facilities, the Borrowers may terminate the loan with immediate effect within a period of six weeks after notification of the change. If any of the Borrowers terminates a loan, the increased agreed interest rate shall not be applied to the terminated loan. The Bank shall grant the Borrowers an adequate period for the settlement of the loan.

------

3.2 Overdraft facility in foreign currency

The Borrower shall pay interest at a rate equal to LIBOR plus a margin of 3.25% p. a. on utilizations on the current account (overdraft facility) now and until further notice in USD. If LIBOR is 0 % or less than 0 %, the Borrower shall pay interest at a rate equal to the margin. LIBOR for utilisations in USD means the interest rate published on Reuters page "LIBOR01" (or any successor to that page) on each banking day as "overnight rate" for utilisations in the respective currency with a term from the day of the publication until the next banking day.

If the LIBOR's essential calculation base changes or may no longer be determined temporarily or permanently, the Bank will use the reference interest rate which replaces the LIBOR or another suitable reference interest rate ("replacement reference interest rate"). The Bank will inform the Borrower of the replacement reference interest rate in due course.

For the purposes of this paragraph, a banking day shall be any day except Saturday and Sunday on which commercial banks in London and the principal financial centre of the country of the relevant currency are open for business.

Interest payments shall be due on a monthly basis in arrears on the last day of each calendar month.

The Bank shall provide the Borrower with a monthly statement of interest together with the balance statement for the current account.

3.3 If and to the extent that the aggregate amount of all utilizations exceeds the amount of the Available Credit
Facility and the bank tolerates the respective overdraft of the Available Credit Facility ("tolerated overdraft"), the Borrower shall pay overdraft interest for the respective tolerated overdraft (day-end balance) on the current account (overdraft facility) until the determination of the next respective day-end balance in the amount of the contractual interest
rate applicable on that day for utilizations on the current account (overdraft facility) plus a surcharge of 5 % p. a.

Overdraft interest payments shall be due on a monthly basis in arrears on the last day of each calendar month.

The Bank shall provide the Borrower with a monthly statement of overdraft interest together with the balance statement for the current account.

Neither the above provisions nor the occurrence of tolerated overdrafts shall entitle the Borrower to any toleration/granting of corresponding overdrafts of the Available Credit Facility.

In the case of any discrepancies between the above provisions and any other agreements on overdraft interest between the Bank and the Borrower the above provisions shall prevail.

3.4 Money market loans

Money market loans may be utilised in EUR.

Money market loans may have terms (interest periods) of one month or three months. Subject to the Bank's consent, differing terms are possible in the specific case. The term of a money market loan may not exceed the term of the credit facility granted hereunder.

Every money market loan is to be repaid in EUR on its maturity together with the respective interest thereon. If a money market loan is due on a day which is not a business day, the term of that money market loan will instead end on the next business day in that calendar month (if there is one) or the preceding business day (if there is not).

------

The nominal amount of a money market loan must have a minimum amount of EUR 1,000,000.00 or, if higher, an integral multiple of EUR 100,000.00.

For money market loans in EUR, the Bank charges the Borrowers interest at the EURIBOR plus a margin of 2.25 per cent. p.a. on the respective money market loan. If the EURIBOR rate is 0 % or less than 0 %, the Borrowers shall pay interest at a rate equal to the margin.

EURIBOR means the interest rate published on Reuters page "EURIBOR" (or any successor to that page) for deposits in Euro in the interbank market with a comparable term two banking days prior to disbursement of a money market loan.

If the EURIBOR's essential calculation base changes or may no longer be determined temporarily or permanently, the Bank will use the reference interest rate which replaces the EURIBOR or another suitable reference interest rate ("replacement reference interest rate"). The Bank will inform the Borrowers of the replacement reference interest rate in due course.

For the purpose of fixing the interest rate for the respective money market loan, the Borrowers shall send the Bank a Utilisation Request specifying the amount and currency of the money market loan, the disbursement date and the term thereof not later than 10 a.m. (local time in Frankfurt am Main) on the day that is two business days prior to the day on which the loan is to be disbursed.

Business day means a day other than a Saturday and Sunday on which banks are open for general business in Frankfurt am Main.

If the EURIBOR cannot be determined on the day that is two business days prior to the day of disbursement of a money market loan, the parties shall negotiate on the interest rate and the term of the respective money market loan. The Bank shall not be obliged to disburse the money market loan until an agreement is reached. If such agreement on the interest rate and the term cannot be reached within 15 days, the Bank shall not be obliged to grant the money market loan.

3.5 Guarantees

Under the credit facility, the Bank may be instructed to issue prepayment guarantees provided that they are directly linked with the working capital to be financed.

The Bank reserves the right to refuse at its discretion the issuance of a guarantee on an individual basis due to the risks which may arise from the wording, the tenor, the beneficiary and or the underlying transaction.

All other conditions will be agreed upon the Borrower or Co-Borrower instructing the Bank to issue a guarantee. In case an agreement cannot be reached, the Bank is not obliged to issue the guarantee.

The guarantee fee for each guarantee shall be payable quarterly in advance on the last day of the previous quarter. The Bank charges the Borrowers the fee for the current remaining quarter upon issuance of the guarantee on a pro-rata temporis basis.

The Bank charges EUR 75.00 per guarantee for the execution of a guarantee document and EUR 50.00 for each amendment per guarantee.

In addition, the Bank's "General Conditions for Guarantee Business" shall apply which are enclosed herewith

------

3.6 Documentary import letters of credit

Under the credit facility, the Bank may be instructed to issue documentary import letters of credit provided that they are directly linked with the working capital to be financed.

The conditions for each individual documentary letter of credit are always agreed upon separately when giving an instruction to issue a documentary letter of credit. If an agreement cannot be obtained, the Bank shall not be obliged to issue the documentary letter of credit.

3.7 Other fees

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a) Commitment fee

From the effective date of this Agreement, a commitment fee at the rate of 0.3 per cent. p.a. on the undrawn balance of the Credit Commitment is agreed between the Borrowers and the Bank. The commitment fee shall be due for payment monthly in arrears on the last day of each calendar month.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b) Fees

In addition to the interest, commissions and fees agreed above, the Borrower shall pay the Bank the following fees in connection with the Borrowing Base Facility:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(i) a non-recurring arrangement fee of 0.7% of the Credit Commitment
(" **Arrangement Fee** "). The Arrangement Fee is due and payable five business days after the signing of this Agreement,

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(ii) an annual fee for the annual Borrowing Base audit and for the ongoing duties of the Bank within the scope of
the periodical Borrowing Base determination of EUR 15,000.00 ()"**Borrowing Base Monitoring Fee** "). The Borrowing Base Monitoring Fee is due and payable on a pro-rata temporis basis 14 business
days after the signing of this Agreement and thereafter on the fifth business days in January of each calendar year.

3.8 Method of calculation

Unless expressly agreed otherwise, interest, commission and other fees shall be calculated on the basis of "act/360", i.e. the actual number of days elapsed and a year of 360 days.

3.9 Debit authorisation

The Bank may debit interest, commission and other fees payable under this Clause 3 to any current account of the Borrower, or, as the case may be, of any Co-Borrower, held with the Bank.

**4.** **Costs and Expenses** 

The Borrower shall promptly on demand pay the Bank the amount of all costs and expenses (including legal fees) reasonably incurred by it

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a) in connection with the preparation, negotiation, printing and execution of this Agreement and all security
agreements (including legal opinions);

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b) in connection with the evaluation, negotiation and execution of amendments, waivers or consents requested by
the Borrower or the Guarantor;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c) in connection with the administration or the total or partial release of security; or

------

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(d) in connection with the preservation of or enforcement of any rights (including measurese of enforcing or
liquidation of securities) under this Agreement and/or any security agreement.

**5.** **Term / Repayment of utilisation** 

5.1 The Credit Commitment is granted until 31.01.2023.

5.2 During the term of the Credit Commitment, drawings on current account may be repaid at any time. Other
utilisations may only be repaid at the end of the term agreed from time to time or in accordance with any special conditions which may be applicable to them.

If, after determination of the Borrowing Base pursuant to Clause 8 (*Borrowing Base*), the aggregate of all outstanding utilisation of the Borrower exceeds the Available Credit Facility, the Borrower shall be obliged to repay the excess amount to the Bank within three business days after receipt of the Borrowing Base Confirmation pursuant to Clause 8.3 (*Borrowing Base Confirmation*) without an explicit or separate payment request being required. If repayment is not possible at short notice due to the type of utilisation, the Borrower shall be obliged to pay an amount equal to the excess amount to an account held with the Bank in the name of the Borrower and pledged to the Bank with first rank within the above-mentioned period.

If, after determination of the Borrowing Base pursuant to Clause 8 (*Borrowing Base*), the aggregate credit limits allocated to the Co-Borrowers under respective Loan Transfer Orders exceed the Borrowing Base, the Borrower shall promptly reduce these credit limits so that the reduced credit limits are covered by the Borrowing Base. Such reduced credit limits shall become effective three business days after receipt of the Borrowing Base Confirmation. If, after such reduction of credit limits, utilizations from any Co-Borrower exceeds its respective credit limit, such utilizations shall immediately be repaid so that they are covered by the respective credit limit. If repayment is not possible at short notice due to the type of utilisation, the Borrower shall be obliged to pay an amount equal to the excess amount to an account held with the Bank in the name of the Borrower and pledged to the Bank with first rank within the above-mentioned period.

If the Borrower does not comply with the aforementioned obligation to reduce allocated credit limits, to repay the excess amount or to deposit the required amount in a pledged account, the Bank may immediately notify the Co-Debtors and the Parent without separate prior notification of the Borrowing Base Providers or the Borrowers. Further rights which the Bank may have resulting from this Agreement and/or the security documents shall remain unaffected.

The above shall not apply if the Borrower proves to the Bank's satisfaction by submitting a new Borrowing Base Report that

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a) the Borrowing Base has increased again in the meantime compared to the Borrowing Base Report last submitted;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b) the outstanding utilisation does not exceed the Available Credit Facility;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c) the credit limits allocated to Co-Borrowers do not exceed the Borrowing
Base; and

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(d) the Bank has confirmed the new Borrowing Base to the Borrower.

5.3 At the end of the term of the Credit Commitment, all outstanding utilisations of the Borrowers shall be repaid
in one sum. If a fixed term has been agreed for money market loans, these loans shall be repaid at the end of the agreed term, except in the event of termination for cause.

------

5.4 If the Bank has issued guarantees or documentary letters of credit by order of the Borrowers, the Borrowers
shall release the Bank at the end of the Credit Commitment's term from its obligations under the guarantees or documentary letters of credit that are still outstanding. If the Borrowers fail to comply with their obligation to release the Bank
within a reasonable period of time set by the Bank, the Borrowers shall pay to the Bank a cash amount in the sum and currency of the exposure from guarantees or documentary letters of credit to secure the Bank's claim to the reimbursement of
expenses.

**6.** **Payments/Taxes** 

6.1 All payments to be made by the Borrowers under this Agreement shall be made free and clear of and without
deduction for or on account of any taxes, duties, levies or imposts ()"**Tax**" or "**Taxes**") unless the Borrowers are compelled by law to make payment subject to such Taxes. If any Taxes or amounts in respect thereof must
be deducted from any amounts payable or paid by the Borrowers, the Borrowers shall pay such additional amounts as may be necessary to ensure that the Bank receives a net amount equal to the full amount which it would have received had payment not
been made subject to such Taxes.

All Taxes in respect of this Agreement and any amounts paid or payable hereunder shall be paid by the Borrowers when due and in any event prior to the date on which penalties attach thereto. As soon as possible, in any event within 30 days, after each payment by the Borrowers hereunder of Tax or in respect of Taxes, the Borrowers shall deliver to the Bank evidence (including all relevant Tax receipts) that such Tax has been duly remitted to the appropriate authority.

**7.** **Security** 

7.1 The following — already provided or still to be provided by the Borrowing Base Providers — shall
serve as security for the Bank's claims arising under or in relation to this Agreement:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a) Transfer of ownership by way of security under German law (*Sicherungsübereignung*) of all present
and future raw materials and supplies as well as work in progress and finished goods including merchandise and packing material of the Borrowing Base Providers;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b) Transfer of ownership by way of security under German law (*Sicherungsübereignung*) of all
Concert & Artist instruments of the Borrower and Steinway Retail Deutschland GmbH;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c) Assignment by way of security (*Sicherungszession*) under German law of the claims to the insurance
benefits under insurances in respect of the inventory of the Borrowing Base Providers;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(d) Assignment by way of security (*Sicherungszession*) under German law of all present and future trade
receivables of the Borrowing Base Providers against German and international debtors;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(e) Assignment by way of security (*Sicherungszession*) under German law of the claims to the insurance
benefits under credit insurance in respect of the trade receivables of the Borrowing Base Providers; and

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(f) Security interest in trade marks owned by the Borrower.

7.2 The Bank shall receive the following additional security from third parties as collateral for the Bank's
claims arising under or in relation to this Agreement

------

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a) USD 23,000,000.00 guarantee from Steinway Musical Instruments Inc., Wilmington, USA (the
" **Parent** ").

7.3 To the extent that the proceeds from an enforcement of the security pursuant to Clause 7.1 above are not
sufficient to satisfy the Bank's claims under this Agreement, the Bank may also seek satisfaction from the enforcement of the following security from third parties which is primarily granted in order to secure the Bank's claims under the
EUR 20 million instalment loan agreement entered into between the Borrower and the Bank on or around the date of this Agreement:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a) EUR 5,000,000.00 registered land charge with in rem enforcement clause on the property in Max Planck Road 18,
20, 22, 24 in Gärtringen, recorded in the Land Registery of Gärtringen Blatt 8128, owner Louis Renner GmbH, Gärtringen. This land charge may not be subordinated to any third-party rights;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b) EUR 4,000, 0000.00 registered land charge with in rem enforcement clause on the property of Louis Renner GmbH,
Gärtringen recorded in the Land Registry of Meuselwitz Folio 2724. This land charge may not be subordinated to any third-party rights;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c) EUR 5,112,918.81 registered land charge with in rem and personal enforcement clause on the Borrower's
property recorded in the Land Registery of Ottensen, District Court Hamburg-Altona, Folio 4735. This land charge may not be subordinated to any third-party rights;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(d) EUR 1,022,583.76 registered land charge with in rem and personal enforcement clause on the Borrower's
property recorded in the Land Registery of Ottensen, District Court Hamburg-Altona, Folio 4735. This land charge may be subordinated to the following third-party rights: In Division III: Previous land charge of EUR 5,112.918,81 with in rem and
personal enforcement clause.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(e) EUR 7,864,497.43 registered land charge with in rem and personal enforcement clause on the Borrower's
property recorded in the Land Registry of Ottensen, District Court Hamburg-Altona, Folio 4735. This land charge may be subordinated to the following third-party rights: In Division III: Previous land charge of EUR 5,112.918,81 and EUR 1,022,583,76
with in rem and personal enforcement clause.

7.4 The details of the provisions of security have been/will be agreed upon conclusion of the respective security
agreement.

7.5 For the discharge of the Borrowers' obligations hereunder,

Steinway Retail Deutschland GmbH, Landsberger Str. 336, 80867 München, Louis Renner GmbH, Max-Planck-Str. 18-24, 71116 Gärtringen and Boston Piano GmbH, Rondenbarg 12, 22525 Hamburg

shall be liable as joint and several debtors by way of an accession to the Borrower's obligations under this Facility Agreement. The Bank may advise the Co-Debtor(s) of the balances of the loan accounts at its/their request. The Borrower shall not be entitled to claim acquiescence / granting of overdrafts of the committed credit facility on account of the Co-Debtor(s) assuming liability beyond the amount of the credit facility.

**8.** **Borrowing Base** 

8.1 Definition of Borrowing Base

------

"**Borrowing Base**" is defined as the loan value agreed, confirmed by the Bank and expressed in Euro, of those economic goods of the Borrowing Base Providers in which the Bank acquires a (prior-ranking) security interest under the separate security agreements concluded or still to be concluded, and which are included in the periodical calculation of the Borrowing Base according to the Calculation Scheme pursuant to ANNEX I (*Calculation Scheme Borrowing Base*).

8.2 Borrowing Base reporting

The Borrowing Base is calculated monthly on the basis of the Borrowing Base Reports provided by the Borrower. The Borrowing Base Report is the Borrowing Base Providers' status report for the calculation of the Borrowing Base which must be filed in the form according to ANNEX II (*Report for the calculation of the Borrowing Base*). The accompanying documents to be transmitted to the Bank are stated in ANNEX I (*Calculation Scheme Borrowing Base*), specifically letter b). The borrowing base calculated by the Borrower from time to time is shown there as "**Borrowing Base total**". The Borrowing Base shall be the aggregate of the "**Borrowing Base totals**" from all Borrowing Base Providers, provided that the Bank confirms such calculation in accordance with Clause 8.3.

Reporting date is always the last day of the month (the "**Reporting Date**"). The Borrower shall be obliged to make the Borrowing Base Report, available to the Bank by 12 a.m. on the 15. business day of each month at the latest (the "**Delivery Date**").

A Borrowing Base Report, duly signed by the Borrower in a legally binding manner, shall be sent by e-mail, together with the accompanying documents attached thereto (including the relevant pdf file of the duly signed Borrowing Base Report), to the following e-mail address of the Bank:

borrowing.base@commerzbank.com

8.3 Borrowing Base Confirmation

After checking the documents submitted by the Borrower in due time as to plausibility, the Bank shall send the Borrower by the 17th business day after the Reporting Date a Borrowing Base Confirmation by e-mail (including the relevant Borrowing Base Confirmation in the form of a pdf-file attached). A Borrowing Base Confirmation is the Bank's confirmation by which it notifies the Borrower about the amount of the Borrowing Base calculated on the basis of the Borrowing Base Report for the Borrowing Base Application Period and thus also determines the amount of the Available Credit Facility applicable from time to time.

The Borrowing Base Confirmation shall be sent to the following e-mail addresses of the Borrower:

CHoefermann@steinway.de

For this purpose, the Borrower authorizes Christoph Höfermann to receive the Borrowing Base Confirmation. The Borrower is obliged to inform the Bank immediately, if such authority is withdrawn and nominate a new person authorized to receive the Borrowing Base Confirmation (including his or her e-mail address). If an authorization is withdrawn, such withdrawal shall be deemed to be effective vis a vis the Bank only upon it having come to the Bank's attention. Until receipt of the withdrawal by the Bank and nomination of a new authorized person, the Bank is entitled to send the Borrowing Base Confirmation to the persons(s) hitherto known to it as authorized person(s).

A Borrowing Base Confirmation shall be deemed to be received by the Borrower upon the Borrower in return confirms having received such Borrowing Base Confirmation.

------

A business day within the meaning of this clause shall be any day other than a Saturday and Sunday on which banks are open for general business in Frankfurt am Main.

8.4 Borrowing Base Application Period

"**Borrowing Base Application Period**" shall be the period commencing on the 18th business day of each month and ending at the end of the 17th business day of the next following month. If a Borrowing Base Application Period ends without a new Borrowing Base Confirmation being sent by the Bank because the Borrowing Base Report was not submitted or not submitted correctly, the Bank shall be entitled to set the Borrowing Base to "zero". The obligation pursuant to Clause 0 shall apply. The Bank will inform the Borrower without delay, if it considers a Borrowing Base Report to be incorrect.

8.5 Calculation Scheme / Haircuts

The Calculation Scheme Borrowing Base in ANNEX I is the result of the agreements made with the Borrower following the audit activities carried out by the Bank at the Borrowing Base Providers' premises and their most important storage facilities. Both the Borrower and the Bank may demand a change in the haircuts stated in ANNEX I (*Calculation Scheme Borrowing Base*) under letter c), if they do not or no longer adequately reflect the underlying loan value of the assets serving as security in total or individually, or if the objective circumstances applicable for the valuation have changed materially or threaten to change materially in the foreseeable future.

8.6 Borrowing Base Recurring Audit

At least once in each calendar year, an audit of the data transmitted by the Borrower to the Bank as well as of the security will be performed by the Bank or a third party instructed by the Bank at the Borrowing Base Providers' premises locally or at the premises of a third party where the assets serving as security or parts thereof are stored, at the Borrower's costs (Borrowing Base Recurring Audit). The Borrowing Base Providers are required to perform any acts and issue any declarations which make this audit possible for the Bank or the third party instructed by the Bank and to refrain from any acts obstructing the audit.

The Bank shall be authorised at any time to carry out further audits of the data transmitted by the Borrowing Base Providers as well as of the security if there are reasonable doubts as to the completeness and/or correctness of the transmitted data. In the event that the audit shows that the doubts were unfounded, the Bank shall bear the costs of the audit, otherwise the Borrower.

8.7 Unencumbered security

The Borrowing Base Providers are obliged to present to the Bank once per year as per the end of its fiscal year a written confirmation of its auditors that the security as per Clause 7 of this Agreement are free from any liens and encumbrances in favour of other banks or leasing or factoring companies.

**9.** **Representations and warranties** 

The Borrower represents that with the exception of the documents set out in no. 14.1, no corporate, governmental or other public consents, authorisations or approvals are required in connection with the granting and repayment of the credit facility pursuant to the laws of the State of New York and US federal law.

**10.** **Covenants** 

10.1 Minimum capital ratio

------

The capital ratio during the term of this Agreement shall be at least 20 % at all times on the reporting dates.

The definition and calculation of the capital ratio are set forth in Annex III to this Agreement, in particular code 83006.

The basis for the calculation shall be the individual financial statement ("*Bericht über die prüferische Durchsicht des Berichtspakets*") of the Borrower for the relevant financial year, using the same accounting and valuation methodology as in previous years.

The Borrower shall prove compliance with the above covenant to the Bank by submitting the financial statements and confirm such compliance in writing. The relevant documents shall each be submitted to the Bank immediately on completion and without special request, but no later than nine months after the end of the relevant financial year, and shall always be prepared in accordance with the same accounting and valuation methods. Should the accounting and valuation methods generally change, the Borrower shall notify the Bank thereof and deliver to the Bank with the first set of financial statements applying the new methods a description of any change in form and substance as may be reasonably required by the Bank to make an accurate comparison between the financial position indicated in the delivered financial statements and the previously delivered financial statements.

10.2 The Borrowing Base Providers shall be obliged to collect their trade receivables which are the subject to the
assignments as per Clause 0 through their accounts held with the Bank. The Borrowing Base Providers will instruct their contracting parties accordingly and adjust the payment details in their invoices correspondingly.

10.3 The Borrowing Base Providers are obliged to ensure that the Bank's claims with respect to the Loan will
rank at least pari passu with the claims of other creditors of the Borrowing Base Providers. Should the Borrowing Base Providers provide security to other creditors by which those would be better secured than the Bank, the Borrowing Base Providers
will allow beforehand or simultaneously that the Bank participates in this security in the same rank or offer equivalent and equally ranking security. Prior to a restructuring of short term unsecured credit agreements into longer term secured credit
agreements, the Borrower will offer to the Bank a restructuring of the Borrower's obligations to the Bank including the respective security. The Borrowing Base Providers confirm to the Bank that prior to the Effectiveness of the Agreement they
have not provided security to other creditors with similar credit facilities by which those creditors would be ranking higher than the Bank.

10.4 The Borrower is obliged to immediately inform the Bank about existing and future agreements with other
creditors on the compliance of financial covenants and to treat the Bank in an equal manner concerning the agreement and compliance with financial covenants. Should the Borrower wish to agree financial covenants with other creditors, the Borrower
will offer an amendment to this Agreement concerning the compliance with financial covenants by which the Bank would be in the same position as the other creditors concerning the compliance with financial covenants. The Borrower confirms to the Bank
that prior to the Effectiveness of this Agreement it has not agreed on the compliance with financial covenants with other creditors.

10.5 The Borrower covenants to maintain its main production facility for the production of Steinway concert and
upright pianos (the "**Products**") in Hamburg for the lifetime of the Agreement. The Borrower further covenants to maintain its present sales area responsibility, being the delivery of Products to local sales entities covering the
European and the Asian market, in particular China.

------

10.6 If the obligations listed above are not complied with by the Borrowing Base Providers and/or the financial
covenants stipulated above are not complied with or compliance with the covenants is not confirmed or not confirmed in due time by the submission of relevant documents, the Bank shall set a deadline for the Borrower or, as the case may be, the
Borrowing Base Providers, to remedy this breach, if the breach is, in the opinion of a reasonable businessman ()"*ordentlicher Kaufmann* "), capable of remedy within 30 days. If a deadline for remedial action has not been set or if the
set deadline has unsuccessfully expired, the Bank shall be initially entitled to require the Borrower to provide or increase bankable securities to secure the claims of the Bank under this Agreement. Further rights that may accrue to the Bank under
this Agreement, other agreements or according to its General Terms and Conditions, shall remain unaffected.

10.7 Basis for the granting of credit is furthermore that the current structure of the ownership and/or control of
the Borrowers and the Borrowing Base Providers remains unchanged. Therefore, if there is a "**Change of Control**" during the term of this Agreement, the Bank is entitled to terminate this Agreement. The Borrower is obliged to inform
the Bank immediately upon the occurrence of a "Change of Control" and the Bank shall give notice to the Borrower whether or it avails itself of such termination right within twenty (20) Business Days following receipt of the
Borrower's notice stating that a such "Change of Control" has occurred (or such longer period the Borrower and the Bank may agree on). In case the Bank makes use of its termination right, it shall terminate the Loan with a notice
period of at least twenty (20) Business Days.

For the purposes of this Clause 10.7, "Change of Control" means that there is any change in the structure of the ownership and/or control any of the Borrowers or any Borrowing Base Provider such that the Guarantor, (i) does no longer directly or indirectly hold 75 per cent or more of the capital interests in and voting rights of any of the Borrowers or of each of the Borrowing Base Providers or (ii) does no longer have a controlling influence on any of the

Borrowers or on all of the Borrowing Base Providers (as per section 290 para 2 of the German Commercial Code). A controlling influence can be assumed, if the appointment of the management board of any of the Borrower or of the respective Borrowing Base Provider is controlled.

**11.** **Disclosure of the financial situation / reporting** 

11.1 The Borrower shall keep the Bank informed of its financial situation and that of the Parent and that of its
associated companies, if any, on a timely basis, and shall submit the following documents to the Bank within the periods below in each case without special request:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• as soon as available, but not later than 90 days after the end of each respective fiscal year the Parent's
audited consolidated and unaudited consolidating financial statements including balance sheets, income statements and cash flows duly signed in a legally binding manner by Borrowers management;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• as soon as available, but not later than 45 days after the end of each of the first three fiscal quarters of each
respective fiscal year a financial report of the Parent including but not limited to financial statements and management reports;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• as soon as available, but not later than 45 days after the last day of each respective fiscal year projections of
the Parent on a consolidated basis and consolidating form for the forthcoming fiscal year;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• as soon as available, but in any event within 90 days after the end of the respective financial year, a financial
statement of the Borrower's German branch similar to the report provided by Crowe dated February 15, 2019 (*Bericht über die prüferische Durchsicht des Berichtspakets*) duly signed by the auditor;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• as soon as available, but not later than 45 days after the end of each of the first three fiscal quarters of each
respective fiscal year a full set of report of the Borrower's German branch, including but not limited to financial statements and management reports;

------

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• as soon as available, but in any event within 90 days after the end of the respective financial year, projections
of the Borrower's German branch for the forthcoming fiscal year;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• as soon as available, but in any event within 90 days after the end of the respective financial year, a
compliance certificate in accordance with Clause 10.1 duly signed in a legally binding manner by Borrowers' management;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• in the event of any financial statement of the Borrowing Base Providers is required by law or is performed
voluntarily, the Borrower shall present the annual financial statements in an audited form together with any audit reports, as soon as available;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• upon the Bank's request, any other documents required under § 18 of the German Banking Act or any other
relevant regulatory provisions as well as other documents containing information on the Borrowing Base Providers' or the Parent's financial condition.

**12.** **Termination for cause without notice** 

In addition to the rights of termination to which the Bank is entitled pursuant to its General Business Conditions, statutory regulations and/or — if covenants have been agreed — under the term Covenants, the Bank may terminate this Agreement and any transactions concluded thereunder for cause without notice if any of the Borrowers fails to comply with its contractual obligations to submit documents concerning its financial condition or those of the Parent or the Co-Debtors, provided that the Bank has notified the Borrower of any non-compliance with its obligations arising under Clause 8 above and the Borrower having failed to remedy such non-compliance within a period of twenty (20) Business Days following receipt of the Bank's notice.

**13.** **Transfer clause** 

13.1 The Bank undertakes not to exercise its right to assign or pledge, in full or in part, the claims due to it
under this Agreement — if applicable, including any pertaining security — to third parties, except for the cases provided for in Clause 13.2, and not to sell, assign or pledge such claims to one or more third parties as long as:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a) the financial situation of the Borrower or the economic value of a security provided for the loan does not
deteriorate or threaten to deteriorate materially which would endanger repayment of the loan even upon realisation of the security, and

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b) all amounts owed under this Agreement and the individual transactions entered into thereunder are (re)paid when
due in compliance with the agreements made.

13.2 Notwithstanding the aforementioned provisions, the Bank may, even if the conditions stated there have been met,

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a) assign or pledge its claims under this Agreement in whole or in part to (i) a member of the European
System of Central Banks (e.g. the Deutsche Bundesbank) or (ii) a bank providing investment aid (Förderbank) (e.g. *KfW-Kreditanstalt fur Wiederaufbau* or the European Investment Bank EIB), or
(iii) any other company of the Commerzbank Group, or

------

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b) insure the economic risk of lending with third parties or transfer it to third parties in full or in part (e.g.
by means of credit derivatives, asset-backed securities transactions or risk sub-participations).

13.3 In the event of a transfer or pledge of claims to the Deutsche Bundesbank, the Borrower shall provide annual
financial statements and/or information on its own financial situation at the Deutsche Bundesbank's request.

13.4 For the purpose of transferring claims or the economic risk of lending pursuant to Clause 13.2 and in the event
that the conditions stated in Clause 13.1 are no longer met, the Borrower releases the Bank from its duty of banking secrecy to the extent required. The Bank is authorised to pass on the required information to the third party and to those persons
involved in the transfer for technical or legal reasons, e.g. rating agencies or auditors. Prior to passing on the information, the Bank shall bind such third parties and the other above-mentioned persons to secrecy by means of a confidentiality
agreement on all data concerning the Borrower and the guarantor, if any, unless such obligation already exists by virtue of statutory or professional regulations.

**14.** **Conditions precedent** 

14.1 The credit facility may be utilised by the Borrower as soon as this Agreement has come into full force and
effect according to Clause 15 (*Effectiveness of the Agreement*), no events of default have occurred and the following additional conditions are complied with:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a) submission of the first Borrowing Base Report by the Borrower,

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b) confirmation of the Borrowing Base by the Bank,

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c) compliance with all KYC (know your customer) requirements concerning the Borrowers and the Co-Debtors,

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(d) receipt by the Bank of the original of the Agreement signed by the Borrower and the Borrowing Base Providers in
a legally binding manner;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(e) provision of the agreed security;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(f) receipt by the Bank of a certified copy of the Borrower's Articles of Incorporation including any
amendments thereto, issued by the Secretary of State of the U.S. state within the registered seat of the Borrower is located. The certified copy shall be certified to be a true copy under the hand and seal of office of the Secretary of State;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(g) receipt by the Bank of a Certificate of Good Standing with a recent date, issued by the Secretary of State of
the U.S. state within the registered seat of the Borrower is located;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(h) receipt by the Bank of a copy of the current version of the By-Laws of
the Borrower;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(i) receipt by the Bank of a copy of the list of current directors and officers of the Borrower;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(j) receipt by the Bank of a copy of the resolutions adopted by the Board of Directors of the Borrower approving
and authorizing the entering into the Agreement;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(k) presentation of a legal opinion addressed to the Bank as per ANNEX IV (or another form agreed with the Bank)
issued by a legal counsel acceptable to the Bank;

------

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(l) receipt by the Bank of a certified copy of the Parent's Articles of Incorporation including any amendments
thereto, issued by the Secretary of State of the U.S. state within the registered seat of the Parent is located. The certified copy shall be certified to be a true copy under the hand and seal of office of the Secretary of State; receipt by the Bank
of a Certificate of Good Standing with a recent date, issued by the Secretary of State within the registered seat of the Parent is located;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(m) receipt by the Bank of a copy of the current version of the By-Laws of
the Parent;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(n) receipt by the Bank of a copy of the list of current directors and officers of the Parent;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(o) receipt by the Bank of a copy of the resolutions adopted by the Board of Directors of the Parent approving and
authorizing the entering into the guarantee agreement;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(p) presentation of a legal opinion addressed to the Bank as per ANNEX V (or another form agreed with the Bank)
issued by a legal counsel acceptable to the Bank in relation to guarantee agreement.

14.2 The Bank may allow utilisation of the credit facility in specific cases even before all conditions precedents
have been met. However, this shall not release the Borrower from the obligation to comply with the conditions precedent, especially the provision of security, unless the Bank has expressly waived this in writing.

14.3 If provided third-party security is terminated or withdrawn, the Bank shall no longer be obliged to disburse
the credit from the date of receipt of the notice of termination or withdrawal.

14.4 The facility agreement dated 19.01.2012 for EUR 8 million including all amendments shall be cancelled by
mutual consent upon effectiveness of this Agreement. Any existing utilisations still outstanding thereunder shall be transferred to this Agreement according to Clause 0 and continued thereunder.

**15.** **Effectiveness of the Agreement / cancellation of existing Agreements** 

15.1 This Agreement shall become effective once the Bank has received

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• the original of this Agreement countersigned by the Borrower in a legally binding manner;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• the original of the Declaration of Accesion countersigned by Boston Piano GmbH in a legally binding manner.

15.2 The facility agreement dated 19.01.2012 between the Bank and the Borrower shall be terminated upon the
effectiveness of this Agreement pursuant to Clause 15.1 above. Any utilizations still outstanding thereunder shall be transferred to this Agreement pursuant to Clause 2.3 above.

**16.** **Other** 

The Borrowing Base Providers agree to the transmission of the Borrowing Base Reports by e-mail. The Borrowing Base Providers are aware of the fact that confidentiality is not fully guaranteed with regard to this form of transmission.

**17.** **Limitation** 

With the exception of claims for damages, the Bank's claims under this Agreement shall become statute-barred after five years only. The five-year term shall start at the end of the year in which the claim became due.

------

**18.** **Obligation of the Bank to maintain its offer** 

The Bank will consider itself bound to the offer submitted by this Agreement until 31.03.2020.

**19.** **Severability** 

Should any provision of this Agreement be legally invalid or unenforceable in whole or in part, the other provisions of this Agreement shall remain in force.

**20.** **Currency indemnity** 

If any sum due from the Borrowers hereunder (a "**Sum**"), or any order, judgment or award given or made in relation to a Sum, has to be converted from the currency (the "**First Currency**") in which that Sum is payable into another currency (the "**Second Currency**") for the purpose of:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a) making or filing a claim or proof against the Borrower;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b) obtaining or enforcing an order, judgment or award in relation to any litigation or arbitration proceedings,

The Borrower shall as an independent obligation, within three business days of demand, indemnify the Bank against any cost, loss or liability arising out of or as a result of the conversion including any discrepancy between (i) the rate of exchange used to convert that Sum from the First Currency into the Second Currency and (ii) the rate or rates of exchange available to the Bank at the time of its receipt of that Sum.

The Borrower waives any right it may have in any jurisdiction to pay any amount hereunder in a currency or currency unit other than that in which it is expressed to be payable.

**21.** **Choice of law / place of performance / venue / costs / process agent** 

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(1) This Agreement and all non-contractual obligations arising thereunder
or in connection therewith shall be governed by the law of the Federal Republic of Germany.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(2) Place of performance is Frankfurt am Main, Germany.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(3) For any disputes arising out of or in connection with this Agreement or any non-contractual obligations in connection therewith the courts in Frankfurt am Main, Germany shall have jurisdiction. Nothing in this clause shall limit the Bank's right to bring proceedings against the
Borrower in the courts which have jurisdiction in the Borrower's place of business or on behalf of its assets or for any other reason.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(4) The Borrower undertakes to reimburse to the Bank all costs and expenses incurred in connection with this
Agreement in judicial and extra-judicial proceedings outside the Federal Republic of Germany.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(5) The Borrower hereby irrevocably authorises, Steinway Retail Deutschland GmbH, Landsberger Str. 336, 80867
München, Federal Republic of Germany, ()"**Process Agent**") to accept service in any and all legal matters in connection with this agreement, including proceedings before courts in the Federal Republic of Germany, and undertakes to
present to the Bank a declaration from the Process Agent confirming acceptance of this authorisation. If, for any reason, the Process Agent does not accept service of process any more, the Borrower shall immediately inform the Bank and authorise
another person to accept service. Nothing in this paragraph shall affect the Bank's right to serve legal process in any other manner permitted by law.

------

**22.** **Application of the Bank's General Business Conditions** 

The Bank's General Business Conditions and the Conditions for Guarantee Business which are attached hereto shall apply in addition.

**23.** **Annexes** 

The following Annexes shall constitute an integral part hereof:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a) ANNEX I (Calculation Scheme Borrowing Base)

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b) ANNEX II (Status Report for the Calculation of the Borrowing Base)

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c) ANNEX III (Financial Covenant)

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(d) ANNEX IV (Legal Opinion)

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(e) ANNEX V (Legal Opinion re guarantee)

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(f) ANNEX VI (Loan Transfer Order)

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(g) ANNEX VIIa (Declaration of Accession)

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(h) ANNEX VIIb (Declaration of Accession for Boston Piano GmbH)

---

| | |
|:---|:---|
| (Place, date) | (Commerzbank Aktiengesellschaft) |
| (Place, date) | (Steinway & Sons Inc., Hamburg Branch) |
| (Place, date) | (Steinway Retail Deutschland GmbH) |
| (Place, date) | (Louis Renner GmbH) |

---

------

**Assumption of Joint Liability** 

Steinway Retail Deutschland GmbH ("**Co-Debtor**") herewith assumes joint liability for the debt of the Borrower under the above Facility Agreement for EUR 30,000,000.00 dated 18.03.2020 as Co-Debtor, thus becoming jointly and severally liable along with the Borrower pursuant to § 421 of the German Civil Code (BGB) for all current and future claims that the Bank may have vis-a-vis the Borrower by virtue of the Facility Agreement hereunder including, but not limited to, any overdrafts on the committed facility amount of up to 20 %. The Bank shall advise the balances of the Borrower's loan accounts if requested to do so by the Co-Debtor. This assumption of joint liability shall not entitle the Co-Debtor to draw down the credit facility itself.

      <br> (Place, date))

**Assumption of Joint Liability** 

Louis Renner GmbH ("**Co-Debtor**") herewith assumes joint liability for the debt of the Borrower under the above Facility Agreement for EUR 30,000,000.00 dated 18.03.2020 as Co-Debtor, thus becoming jointly and severally liable along with the Borrower pursuant to § 421 of the German Civil Code (BGB) for all current and future claims that the Bank may have vis-à-vis the Borrower by virtue of the Facility Agreement hereunder including, but not limited to, any overdrafts on the committed facility amount of up to 20 %. The Bank shall advise the balances of the Borrower's loan accounts if requested to do so by the Co-Debtor. This assumption of joint liability shall not entitle the Co-Debtor to draw down the credit facility itself.

      <br> (Place, date))

**Assumption of Joint Liability** 

Boston Piano GmbH ("**Co-Debtor**") herewith assumes joint liability for the debt of the Borrower under the above Facility Agreement for EUR 30,000,000.00 dated 18.03.2020 as Co-Debtor, thus becoming jointly and severally liable along with the Borrower pursuant to § 421 of the German Civil Code (BGB) for all current and future claims that the Bank may have vis-a-vis the Borrower by virtue of the Facility Agreement hereunder including, but not limited to, any overdrafts on the committed facility amount of up to 20 %. The Bank shall advise the balances of the Borrower's loan accounts if requested to do so by the Co-Debtor. This assumption of joint liability shall not entitle the Co-Debtor to draw down the credit facility itself.

      <br> (Place, date))

## Exhibit 10.18

**Exhibit 10.18**![LOGO](g212165page006.jpg)

First addendum

to the Agreement

relating to a

Borrowing Base Facility

between

Steinway & Sons, New York ,

Hamburg Branch

Rondenbarg 10

22525 Hamburg

- hereinafter referred to as the

**„Borrower"** and, together with the Co-

Borrowers, the **"Borrowers" -**

und

COMMERZBANK Aktiengesellschaft

Kaiserstraße 16

60311 Frankfurt am Main

- hereinafter referred to as the

**"Bank"** -

------

**Whereas:** 

The Borrowing Base Providers and the Bank have entered into a borrowing base facility agreement (hereinafter referred to as the "**Agreement**") as of March 20, 2020. The following addendum to the Agreement is hereby concluded:

1. **Term** 

Clause 5, paragraph 5.1 of the Agreement is revised as follows:

"5.1 The Credit Commitment is granted until January 30, 2026 („Maturity Date"). The Borrower may request two extensions of the Maturity Date for one further year respectively pursuant to the following conditions:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a) The Borrower may request that the respective Maturity Date of the Agreement shall be extended for a further
period of one year by giving written notice (the „ **Extension Request**") to the Bank not more than 540 days and not less than 90 days before the Maturity Date.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b) The Bank may, in its sole discretion, consider whether it accepts such an Extension Request. The Bank has to
confirm to the Borrower not less than 30 days after receipt of the Extension Request whether it will extend the respective Maturity Date as requested. This confirmation must be made in writing; otherwise, it shall be deemed not to have been granted.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c) If the Bank has agreed to an Extension Request as per paragraph 5.1 (b), the respective Maturity Date will be
extended accordingly."

2. **Interest** 

Clause 3.2 of the Agreement shall be revised and shall have the following wording:

"3.2 Overdraft facility in foreign currency

The Borrower shall pay interest now and until further notice at a rate equal to SOFR plus a margin of 3,25 % p. a. on utilizations on the current account (overdraft facility) in USD. If SOFR is 0 % or less than 0 %, the Borrower shall pay interest at a rate equal to the margin.

SOFR (hereinafter also referred to as the "Reference Rate") means the interest rate provided by the Federal Reserve Bank of New York (the "Fed") (or any successor administrator) and published on the Fed`s website https://apps.newyorkfed.org/markets/autorates/SOFR (or any successor to that page) for lending transactions in USD. The SOFR shall be published on the above mentioned website one banking day after the day on which the Fed determines a SOFR. For days on which no SOFR is published by the Fed, the last published SOFR shall be used for the calculation of interest. For the purposes of this paragraph, a banking day shall be any day except Saturday and Sunday on which commercial banks in New York are open for business.

If the essential calculation bases of one of the above mentioned Reference Rates change or may no longer be determined temporarily or permanently, the Bank will use the reference interest rate which replaces the respective Reference Rate or another suitable reference interest rate ("Replacement Reference Interest Rate"). The Bank will inform the Borrower of the Replacement Reference Interest Rate in due course.

3. **Fee** 

The Borrower shall pay the Bank a non-recurring fee of 0.6% of the Credit Commitment (Amendment Fee). The Amendment Fee is due and payable five business days after the signing of this addendum.

4. **Other Agreements** 

All other agreements of the Agreement shall remain unaffected.

5. **Obligation of the Bank to maintain its offer / Effectiveness of the Addendum** 

The Bank will consider itself bound to the offer made in this Addendum until June 30, 2022.

This Addendum to the Agreement shall only enter into force once the following conditions have been met:

page 2/4

------

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• Receipt by the Bank of the original of the Addendum signed by the Borrower and the Co-Debtors in a legally valid and binding form; or

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• Receipt of an e-mail of the Borrower and the Co-Debtors with a pdf version of the Addendum signed by the Borrower and the Co-Debtors in a legally valid and binding form at the following e-mail address of the Bank:

GS-OC-KBC-Hamburg2@commerzbank.com

In the latter case, the Borrower will for evidence send the Bank the original of the Addendum signed by the Borrower and the Co-Debtors in a legally valid and binding form.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• Receipt of the following documents acceptable to the Bank:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• receipt by the Bank of a certified copy of the Borrower's Articles of Incorporation including any amendments
thereto, issued by the Secretary of State of the U.S. state within the registered seat of the Borrower is located. The certified copy shall be certified to be a true copy under the hand and seal of office of the Secretary of State;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• receipt by the Bank of a Certificate of Good Standing with a recent date, issued by the Secretary of State of the
U.S. state within the registered seat of the Borrower is located;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• receipt by the Bank of a copy of the current version of the By-Laws of
the Borrower;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• receipt by the Bank of a copy of the list of current directors and officers of the Borrower;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• receipt by the Bank of a copy of the resolutions adopted by the Board of Directors of the Borrower approving and
authorizing the entering into the Agreement;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• presentation of a legal opinion addressed to the Bank as per ANNEX IV of the Agreement (or another form agreed
with the Bank) issued by a legal counsel acceptable to the Bank;

---

| | | |
|:---|:---|:---|
| Hamburg, 23.06.2022 | COMMERZBANK Aktiengesellschaft | COMMERZBANK Aktiengesellschaft |
| (Place and 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;/s/ Patrick Muschter | /s/ Frederike Wilharm |
|  | Steinway & Sons<br> Zweigniederlassung der Firma | Steinway & Sons<br> Zweigniederlassung der Firma |
|  | Steinway & Sons<br> Zweigniederlassung der Firma | Steinway & Sons<br> Zweigniederlassung der Firma |
| Hamburg, 22.06.2022 | Steinway & Sons in New York | Steinway & Sons in New York |
| (place and date) | (Steinway & Sons New York. Hamburg Branch) | (Steinway & Sons New York. Hamburg Branch) |
|  | /s/ Guido Zimmermann | /s/ Olaf Gube |
|  | (Name(s) in letters) |  |

---

page 3/4

------

![LOGO](g212165page006.jpg)

**Assumption of Joint Liability** 

Steinway Retail Deutschland GmbH („Co-Debtor") herewith assumes joint liability for the conditions of the addendum to the Agreement dated March 20, 2020 for EUR 30,000,00.00 and confirms that it continues to be jointly and severally liable along with the Borrower pursuant to § 421 of the German Civil Code (BGB).

---

| | | |
|:---|:---|:---|
| Hamburg, 22.6.2022 | Steinway Retail Deutschland GmbH | Steinway Retail Deutschland GmbH |
| (Place and |  |  |
| date) |  |  |
|  | /s/ Guido Zimmerman | /s/ Christoph Höfermann |
|  | (Name(s) in letters) |  |

---

Louis Renner GmbH („Co-Debtor") herewith assumes joint liability for the conditions of the addendum to the

Agreement dated March 20, 2020 for EUR 30,000,00.00 and confirms that it continues to be jointly and severally liable along with the Borrower pursuant to § 421 of the German Civil Code (BGB).

---

| | |
|:---|:---|
| Hamburg, 22.6.2022 | Louis Renner GmbH |
| (place and |  |
| date) |  |
|  | /s/ Guido Zimmerman /s/ Olaf Gube |
|  | (Name(s) in letters) |

---

Boston Piano GmbH („Co-Debtor") herewith assumes joint liability for the conditions of the addendum to the

Agreement dated March 20, 2020 for EUR 30,000,00.00 and confirms that it continues to be jointly and severally liable along with the Borrower pursuant to § 421 of the German Civil Code (BGB).

---

| | | |
|:---|:---|:---|
| Hamburg, 22.6.2022 | Boston Piano GmbH | Boston Piano GmbH |
| (place and |  |  |
| date) |  |  |
|  | /s/ Guido Zimmerman | /s/ Christoph Höfermann |
|  | (Name(s) in letters) |  |

---

page 4/4

## Exhibit 21.1

**Exhibit 21.1** 

**Subsidiaries of Steinway Musical Instruments Holdings, Inc.** 

---

| | |
|:---|:---|
| **Name** | **State or Other<br>Jurisdiction of<br>Incorporation or<br>Organization** |
|  Steinway Musical Instruments, Inc. | Delaware |
|  Conn-Selmer, Inc. | Delaware |
|  Steinway, Inc. | Delaware |
|  Steinway and Sons (aka Steinway & Sons) | New York |
|  The O.S. Kelly Company | Ohio |
|  Steinway Austria GmbH | Austria |
|  Conn-Selmer Musical Instrument Tianjin Co., Ltd. | China |
|  Steinway Piano Asia Co., Ltd. | China |
|  Shanghai Renner Piano Action Parts Co. Ltd. | China |
|  Steinway & Sons France | France |
|  Louis Renner GmbH | Germany |
|  Renner, Megenhardt & Co. GmbH | Germany |
|  Boston Piano GmbH | Germany |
|  Steinway Retail Deutschland GmbH | Germany |
|  Kluge Klaviaturen GmbH | Germany |
|  Steinway & Sons Japan, Ltd. | Japan |
|  Kluge Klawiatury, Sp.z.o.o. | Poland |
|  Conn-Selmer Europe Limited | United Kingdom |
|  Steinway & Sons Italy s.r.l. | Italy |

---

## Exhibit 23.2

**Exhibit 23.2** 

CONSENT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

We consent to the use in this Registration Statement of Steinway Musical Instruments Holdings, Inc. on Form S-1 Amendment No. 3 of our report dated March 17, 2023 on the consolidated financial statements of Steinway Musical Instruments Holdings, Inc. and to the reference to us under the heading "Experts" in the prospectus.

/s/ Crowe LLP

Livingston, New Jersey

March 17, 2023