Document:

Exhibit

Exhibit 10.2

CERTAIN IDENTIFIED INFORMATION HAS BEEN EXCLUDED FROM THIS EXHIBIT BECAUSE IT IS BOTH (i) NOT MATERIAL AND (ii) WOULD BE LIKELY TO CAUSE COMPETITIVE HARM TO THE COMPANY IF PUBLICLY DISCLOSED.  SUCH EXCLUDED INFORMATION IS DENOTED BY ASTERISKS IN BRACKETS [**].

ASSET PURCHASE AGREEMENT
by and among
ROCCAT GMBH,
ROCCAT STUDIOS TAIPEI CO., LTD.,
ROCCAT ASIA PACIFIC CO., LTD.,
ROCCAT INC.,
THE STOCKHOLDERS NAMED HEREIN,
JÖLLENBECK GMBH,
FIRST WISE MEDIA GMBH
and
TBC HOLDING COMPANY LLC
____________________________
Dated as of March 11, 2019
____________________________

TABLE OF CONTENTS

	
			
	 
	 
	Page

	1.SALE OF PURCHASED ASSETS; RELATED TRANSACTIONS
	1

	 
	1.1       Sale of Purchased Assets by Sellers
	1

	 
	1.2       Assumed Liabilities, Excluded Liabilities and Excluded Assets
	3

	 
	1.3       Purchase Price
	6

	 
	1.4       VAT
	6

	 
	1.5       Purchase Price Adjustment
	7

	 
	1.6       Holdback Amount
	9

	 
	1.7       Earn Out Consideration
	10

	 
	1.8       Sales Taxes; Transfer Taxes
	11

	 
	1.9       Withholding
	11

	 
	1.10     Allocation
	12

	 
	1.11     Closing
	12

	2.REPRESENTATIONS AND WARRANTIES OF THE SELLERS
	14

	 
	2.1       Due Organization; Capitalization
	14

	 
	2.2       Authority
	15

	 
	2.3       Non‐Contravention; Consents
	15

	 
	2.4       Title to Assets; Sufficiency
	16

	 
	2.5       Financial Statements
	16

	 
	2.6       Solvency
	16

	 
	2.7       Accounts Receivable
	17

	 
	2.8       Inventory
	17

	 
	2.9       Absence Of Changes
	17

	 
	2.10     Employees; Benefit Plans
	17

	 
	2.11     Intellectual Property
	20

	 
	2.12     Tax Matters
	25

	 
	2.13     Material Contracts
	26

	 
	2.14     Sale of Products
	28

	 
	2.15     Customers and Suppliers
	28

	 
	2.16     Compliance with Laws; Permits
	28

	 
	2.17     Environmental and Safety Laws
	29

	 
	2.18     Data Privacy and Information Security
	29

	 
	2.19     Insurance
	30

	 
	2.20     Related Party Transactions
	31

	 
	2.21     Brokers
	31

	3.REPRESENTATIONS AND WARRANTIES OF THE STOCKHOLDERS
	31

	 
	3.1       Authority; Binding Nature of Agreements
	31

	 
	3.2       Non‐Contravention; Consents
	32

	 
	3.3       Certain Proceedings
	32

	 
	3.4       Discussions
	32

	4.REPRESENTATIONS AND WARRANTIES OF THE BUYER
	32

	 
	4.1       Due Organization
	32

	 
	4.2       Authority; Binding Nature of Agreements
	32

	 
	4.3       Certain Proceedings
	33

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TABLE OF CONTENTS 
(continued)

	
			
	 
	 
	Page

	5.CERTAIN PRE-CLOSING COVENANTS
	33

	 
	5.1       Conduct of the Business
	33

	 
	5.2       Access to Sellers’ Books and Records
	34

	 
	5.3       Regulatory Filings; Consents
	35

	 
	5.4       Employee Covenants
	35

	 
	5.5       Exclusive Dealing
	36

	 
	5.6       Transition Services and Distribution Agreement
	36

	 
	5.7       True Up Disclosure
	36

	6.CERTAIN POST-CLOSING COVENANTS
	37

	 
	6.1       Further Actions
	37

	 
	6.2       Confidentiality
	38

	 
	6.3       Change of Name
	38

	 
	6.4       Restrictive Covenants
	39

	 
	6.5       Employee Related Covenants
	42

	 
	6.6       Access to Books and Records
	42

	7.SURVIVAL; INDEMNIFICATION
	43

	 
	7.1       Survival of Representations and Covenants
	43

	 
	7.2       Indemnification by the Sellers and the Stockholders
	44

	 
	7.3       Indemnification by the Buyer
	46

	 
	7.4       Defense of Third-Party Claims
	47

	 
	7.5       Indemnification Claims
	48

	 
	7.6       Payment of Damages
	49

	 
	7.7       Tax Treatment of Indemnity Payments
	49

	 
	7.8       Sole Remedy
	49

	 
	7.9       Disclaimer
	50

	 
	7.10     Set-Off
	50

	 
	7.11      Indemnification Escrow
	50

	8.CONDITIONS TO CLOSING
	51

	 
	8.1       Conditions Precedent to Obligations of the Buyer
	51

	 
	8.2       Conditions Precedent to Obligations of the Sellers and Stockholders
	53

	9.TERMINATION
	53

	 
	9.1       Termination
	53

	 
	9.2       Effect of Termination
	54

	10.PARENT
	54

	 
	10.1     Parent
	54

	11.MISCELLANEOUS PROVISIONS
	54

	 
	11.1      Appointment of Sellers Representative
	54

	 
	11.2      Press Releases and Communications
	55

	 
	11.3      Fees and Expenses
	55

	 
	11.4      Attorneys’ Fees
	55

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TABLE OF CONTENTS 
(continued)

	
			
	 
	 
	Page

	 
	11.5      Notices
	55

	 
	11.6      Captions
	56

	 
	11.7      Counterparts
	56

	 
	11.8      Governing Law; Jurisdiction
	56

	 
	11.9      Successors and Assigns
	57

	 
	11.10    Waiver
	57

	 
	11.11    Amendments
	58

	 
	11.12    Severability
	58

	 
	11.13    Entire Agreement
	58

	 
	11.14    Construction
	58

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Exhibit A    Definitions
Exhibit B    Retained Accounts Receivable
Exhibit C    Accounting Principles
Exhibit D    Positioning Requirements
Exhibit E    Purchase Price Allocation
Exhibit F    Transfer Documents
Exhibit G    Inventory Accounting Principles
Exhibit H    Intellectual Property Assignments
Exhibit I    Net Revenue Principles
Exhibit J    Working Capital Target Calculation
Exhibit K    Transition Services
Exhibit L    Draft of Escrow Agreement

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ASSET PURCHASE AGREEMENT
THIS ASSET PURCHASE AGREEMENT is entered into as of March 11, 2019, by and among Roccat GmbH, a private limited company organized under the laws of Germany (“Roccat”), Roccat Studios Taipei Co., Ltd., a limited company organized under the laws of Taiwan (“RST”), Roccat Asia Pacific Co., Ltd., a limited company organized under the laws of Taiwan (“RAP”), and Roccat Inc., a Nevada corporation (“RUS,” and together with Roccat, RST, RAP and RUS, the “Sellers”), the stockholders of Roccat listed on the signature pages hereto in their capacity as such (the “Stockholders”), Jöllenbeck GmbH, a private limited company organized under the laws of Germany (“Jöllenbeck”), First Wise Media GmbH, a private limited company organized under the laws of Germany (“First Wise”), TBC Holding Company LLC, a Delaware limited liability company (the “Buyer”), and, solely for the purposes of Article 10, Turtle Beach Corporation, a Nevada corporation and ultimate parent company of the Buyer (“Parent”).
Certain capitalized terms used in this Agreement are defined in Exhibit A.
BACKGROUND
A.    Roccat is in the business of designing, developing, marketing, having manufactured, distributing, importing, exporting, and selling gaming mice, headsets, keyboards and accessories under the Roccat brand (the “Business”);
B.    Jöllenbeck, an Affiliate of Roccat, owns certain assets of the Business, which will be transferred to Roccat prior to the Closing; and
C.    The Sellers, Jöllenbeck, the Stockholders and the Buyer each desire to provide for the sale of the Purchased Assets (as defined below) and the transfer of the employment of employees related to the Business to the Buyer’s designated assignees on the terms set forth in this Agreement.

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AGREEMENT
The parties to this Agreement, intending to be legally bound, agree as follows:
Sale of Purchased Assets; Related Transactions.

1.1    Sale of Purchased Assets by Sellers.
(a)    At the Closing and on the terms and subject to the conditions set forth in this Agreement, the Sellers will sell, assign, transfer, convey, and deliver to the Buyer’s designated assignees, all of Sellers’ right, title and interest in, to, and under all assets, properties, interests and rights of every kind and description, existing as of the date of this Agreement or acquired through the Closing that relate to, or are used or held for us in connection with, the Business, free of any Encumbrances, other than the Excluded Assets (collectively the “Purchased Assets”).  At the Closing, the Buyer will accept or cause its designated affiliates to accept such sale, assignment and transfer.  The Purchased Assets include, without limitation, all of the following assets, properties, interests and rights of Sellers in:
(i)    subject to the receipt of the applicable consents set forth on Schedule 2.3, those Contracts listed on Schedule 1.1(a), which schedule may be amended at the sole discretion of the Buyer (other than to remove Contracts designated as “Take” therein (the “Accepted Contracts”)) at any time prior to Closing (the “Assigned Contracts”);
(ii)    all Accounts Receivables, including those certain past due Accounts Receivables set forth on Exhibit B (the “Past Due Receivables”) and those to be transferred to the Sellers in the Internal Asset Transfer;
(iii)    all Inventory, including Inventory to be transferred to the Sellers in the Internal Asset Transfer, other than any Excluded Inventory;
(iv)    all kiosks, store fixtures and other retail display units relating to the Seller Products to be transferred to the Sellers in the Internal Asset Transfer (the “Product Kiosks”);
(v)    all Intellectual Property and Intellectual Property rights (including all Seller IP and all of the Sellers’ rights therein);
(vi)    subject to the receipt of the applicable consents set forth on Schedule 8.1(e), all Permits;
(vii)    all personnel records and forms relating to Transferring Employees;
(viii)    subject to the receipt of the applicable consents set forth on Schedule 8.1(e), all real property that is leased, subleased, licensed to or otherwise occupied by, a Seller, including all leasehold improvements owned by a Seller and forming part thereof;
(ix)    all fixed assets and personal property (whether owned or leased) including all fixtures, trade fixtures, machinery, equipment, Systems, furniture, furnishings, vehicles and other chattels of the Sellers (including those in possession of suppliers, customers and other third parties);

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(x)    all equipment leases covering any asset used by the Sellers, including any remaining equity in existing equipment leases;
(xi)    copies of all books and records related to the Business, including, but not limited to, books of account, ledgers and general, financial and accounting records, internal financial statements, machinery and equipment maintenance files, customer lists, customer purchasing histories, price lists, distribution lists, supplier lists, production data, quality control records and procedures, research and development files, marketing materials, sales material and records (including pricing history, total sales, terms and conditions of sale, sales and pricing policies and practices), strategic plans, and any material, research or files relating to the Intellectual Property Assets and the Intellectual Property Agreements (“Books and Records”);
(xii)    to the extent related to any Purchased Asset or any Assumed Liability, all rights to any Proceedings of any nature to the extent related to the Business, whether arising by way of counterclaim or otherwise;
(xiii)    all rights under warranties, indemnities and all similar rights against third parties to the extent related to any Purchased Assets;
(xiv)    to the extent related to a Purchased Asset or an Assumed Liability all insurance benefits, including rights and proceeds, arising from or relating to the Business; and
(xv)    all goodwill and going concern value of the Business and the Purchased Assets.
(b)    The Purchased Assets will include the assets specified in the non-exclusive list of assets of the Business attached hereto as Schedule 1.1(b).  All assets specified in such list which, during the period from the date hereof up to the Closing Date, have been, or will be, sold or otherwise withdrawn from the Business in the Ordinary Course of Business and without any breach of any covenant by the Sellers provided for in this Agreement are not sold as part of the Purchased Assets.  Assets which have been, or will be, manufactured, acquired or otherwise received by the Sellers in respect of the Business during the period from the date hereon up to the Closing Date as a replacement for, or supplementary to, the assets specified in the assets list are sold under this Agreement as part of the Purchased Assets.
(c)    Subject to Section 6.1(b), without undue delay after the date hereof, the Sellers will endeavor to obtain from the counterparties to the Assigned Contracts the consents required for the transfer from the applicable Seller to the Buyer or its designee and the Buyer will assist Sellers to the extent reasonably requested and to the extent that and as long as any such consent cannot be obtained prior to or after the Closing, the Sellers will, in respect of the external relationships, remain the debtor of the relevant Assumed Liability and will comply with the Buyer ́s instructions regarding the exercise of any rights under such Assigned Contracts.

1.2    Assumed Liabilities, Excluded Liabilities and Excluded Assets.

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(a)    For purposes of this Agreement “Assumed Liabilities” means only (i) those Liabilities arising from the employment of the Business Employees, but solely to the extent required by applicable Law and subject to Sections 6.5, 7.2(b)(v) and (vi), (ii) payables and other current liabilities solely to the extent included in the final calculation of Working Capital which are not owed to any Affiliates of Sellers or to Jöllenbeck and its Affiliates and arose in the Ordinary Course of Business consistent with past practice and (iii) the obligations of the Sellers under the Assigned Contracts identified on Schedule 1.1(a)(i) to this Agreement, but only to the extent such obligations (A) arise after the Closing Date, (B) do not arise from or relate to any Breach by any Seller of any provision of any of such Assigned Contracts, (C) do not arise from or relate to any event, circumstance or condition occurring or existing on or prior to the Closing Date that, with notice or lapse of time, would constitute or result in a Breach of any of such Assigned Contracts, and (D) are ascertainable (in nature and amount) solely by reference to the express terms of such Assigned Contracts; provided, however, that notwithstanding the foregoing, and notwithstanding anything to the contrary contained in this Agreement, the “Assumed Liabilities” will not include, and the Buyer will not be required to assume or to perform or discharge any of the following (collectively, the “Excluded Liabilities”):
(i)    any Liability of the Stockholders, of Team Roccat, of Winspeed, of First Wise or of Jöllenbeck;
(ii)    any Liability of a Seller arising out of or relating to the execution, delivery or performance of any of the Transaction Agreements, including, without limitation, fees and expenses of counsel, accountants, consultants, advisers and others;
(iii)    any Liability relating to the Transactions, including transaction bonus, brokers fees, legal fees or severance obligations, of the Sellers, the Stockholders or their respective Affiliates;
(iv)    any Liabilities relating to or arising out of the Excluded Assets;
(v)    any Liability of a Seller arising from or relating to any action taken by such Seller, or any failure on the part of such Seller to take any action, at any time before, on or after the Closing Date, in connection with the operation of the Business (it being understood that an obligation incurred in the Ordinary Course of Business to deliver Seller Products after the Closing Date will not be excluded to the extent that the Accounts Receivable relating to such obligation is subtracted from current assets in the calculation of Working Capital);
(vi)    any Liability relating to Team Roccat;
(vii)    any Liabilities arising out of, in respect of or in connection with the failure by Sellers, or any of their respective Affiliates to comply with any Law;
(viii)    any Liability of a Seller arising from or relating to any claim or Proceeding against such Seller;

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(ix)    any (A) Liability of a Seller for the payment of any Tax (including, for the avoidance of doubt, any taxes or tax liabilities within the meaning of Sec. 75 of the German General Tax Code (Abgabenordnung - AO)), (B) Liability for Taxes related to the Purchased Assets, the Assumed Liabilities or the Business (including, for the avoidance of doubt, any income, profit or capital gain related tax levied on the Sellers, other Parties to this Agreement or any third-party upon the transfer of the title or the beneficial ownership in or the assignment of the Purchased Assets or the Assumed Liabilities or the Business, which, for the avoidance of doubt, shall not be interpreted to limit the Buyer’s obligation to pay additional amounts to the Sellers pursuant to Section 1.9 hereof) for any taxable period (or portion thereof) ending on or prior to the Closing Date, determined under the principles of Section 6.7(b) hereof, and (C) Liability for Taxes of a Seller that becomes a Liability of Buyer or any of its Affiliates under any transferee or successor liability or otherwise by operation of contract (other than a routine commercial contract the principal object of which is not the allocation of Taxes) or Law;
(x)    any Liability relating to the employment of the Transferring Employees and any Liabilities of a Seller with respect to any present or former employees, officers, directors, retirees, independent contractors or consultants of Sellers, including, without limitation, any Liabilities associated with any claims for wages or other benefits, bonuses, accrued vacation, pension, workers compensation, severance, retention, termination or other payments (except to the extent such exclusion would violate applicable Law), in each case, relating to any period prior to the Closing Date;
(xi)    any Liabilities of a Seller relating to any period prior to the Closing Date which arise under or in connection with any Benefit Plan of Seller (except to the extent such exclusion would violate applicable Law);
(xii)    any product Liability or similar claim for injury to a Person or property which arises out of or is based upon any express or implied representation, warranty, agreement or guaranty, or by reason of the improper performance or malfunctioning of a product, improper design or manufacture, failure to adequately package, label or warn of hazards or other related product defects of any products at any time manufactured or sold or any service;
(xiii)    any Liability arising out of any recall, design defect or similar claims of any products manufactured or sold or any service performed by Sellers;
(xiv)    any Liability of a Seller to Jöllenbeck, the Stockholders or any Related Party;
(xv)    any Indebtedness; and
(xvi)    any other Liability that is not specifically assumed pursuant to this Section 1.2(a).

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(b)    The Purchased Assets will not include the following assets (collectively, the “Excluded Assets”):
(i)    any cash or cash equivalents of the Sellers;
(ii)    any bank accounts of the Sellers;
(iii)    any Contracts not listed on Schedule 1.1(a), including those listed on Schedule 1.2(b)(iii), which schedule may be amended by the Buyer in its sole discretion (other than to add Accepted Contracts) at any time prior to Closing (the “Excluded Contracts”);
(iv)    the articles of incorporation, bylaws, or similar organizational documents of the Sellers and any minute books, stock books, books of account or other records having to do with the corporate organization of the Sellers;
(v)    any assets exclusively relating to Team Roccat;
(vi)    the inventory set forth on Schedule 1.2(b)(vi) (“Excluded Inventory”); or
(vii)    all claims and causes of action, whether or not asserted, to the extent not exclusively or primarily related to an Assumed Liability or Purchased Asset.

1.3    Purchase Price.  As consideration for the sale of the Purchased Assets to the Buyer, and subject to receipt of the items required to be delivered at Closing pursuant to Section 1.11(b), the Buyer will: (a) pay to the Sellers, by wire transfer or delivery of other immediately available funds the Closing Purchase Price (calculated based on the Estimated Net Working Capital provided by the Sellers) at the Closing and any payments required to be made pursuant to Sections 1.5, 1.6 and 1.7 (the “Contingent Payments”), (b) deliver to Mr. Korte (it being understood that the Sellers are entitled to this payment, but have directed the Buyer to make it to Mr. Korte on their behalf instead), the Stock Consideration (or cash in lieu thereof) as contemplated by Section 1.11(b)(iii) and (c) assume the Assumed Liabilities (collectively, the “Purchase Price”), plus local VAT or Transfer Taxes if applicable by Law and properly charged.

1.4    VAT.  If and to the extent that VAT shall apply under applicable Law due to the sale and transfer of Purchased Assets, it shall become payable by the Buyer in addition to the Purchase Price, unless the reverse charge procedure (Leistungsempfänger als Steuerschuldner) will apply.  The Buyer shall pay such VAT properly charged to the applicable Seller or, in the case that the reverse charge procedure shall apply, to the applicable Governmental Authority, in each case, within fifteen (15) Business Days after receipt of a proper invoice from the applicable Seller complying with the requirements of VAT Law in the applicable jurisdiction.  Should the transfer of the Purchased Assets by the Sellers qualify as transfer of a going concern (Geschäftsveräußerung im Ganzen) being out of scope of VAT, the parties hereto shall seek and cooperate to treat the sale as such and provide each other with all relevant information for that purpose and the applicable Seller will provide the Buyer within twenty (20) Business Days after the Closing Date with all documentation (including calculations) required for an adjustment of input VAT according to Section 15a German VATA.  If a VAT amount properly charged and actually payable as a consequence of the consummation of the transactions contemplated by this Agreement turns out to be higher or lower than the amount shown on the relevant invoice issued by the applicable Seller (including if no VAT has been invoiced at all) due to (i) an assessment after Closing of a Governmental Authority in charge of the applicable Seller’s or of the Buyer’s VAT affairs or (ii) for any other reason identified by the parties after Closing, the parties shall make appropriate declarations and filings with the relevant Governmental Authorities, amend any invoices (to the extent required by applicable VAT Laws), provide to the respective other party any requested information and copies of relevant documents and make any required payments to each other and the Governmental Authorities, respectively, in each case without undue delay.  In particular, if according to a determination made by a Governmental Authority in charge of the applicable Seller’s VAT affairs decides the VAT payable by the Seller is higher than shown on the relevant invoice (including if no VAT has been invoiced at all), the Buyer shall pay the corresponding shortfall amount properly charged to the applicable Seller within fifteen (15) Business Days after receipt of notification of the shortfall amount and of a corrected invoice which complies with the provisions of the VAT Laws from the applicable Seller, but not earlier than five (5) Business Days before the applicable VAT becomes due (taking into account any extension of the due date granted by the Governmental Authority).  If according to a final and unappealable determination made by a Governmental Authority in charge of the applicable Seller’s or Buyer’s VAT affairs decides the VAT payable by the Seller is lower than shown on the relevant invoice (including if no VAT should have been triggered at all), the respective Seller shall repay the corresponding excess amount to the Buyer within fifteen (15) Business Days after receipt of the corresponding final and unappealable Tax assessment notice from the Governmental Authority and provide the Buyer with a corrected invoice which complies with the provisions of the VAT Laws.

1.5    Purchase Price Adjustment.
(a)    At least five (5) Business Days prior to the Closing Date, the Sellers will prepare and deliver to the Buyer a good‐faith estimate of the Closing Purchase Price (the “Estimated Purchase Price”), including, but not limited to, an estimate of the Closing Working Capital (the “Estimated Closing Working Capital”), and the Buyer will have the right to review and approve such estimates (such approval not to be unreasonably withheld).
(b)    As promptly as practicable after the Closing, but in no event later than ninety (90) days after the Closing Date, the Buyer will prepare and deliver to the Sellers Representative a statement (the “Closing Statement”) setting forth the Buyer’s calculation of the Closing Purchase Price, including each of the components thereof, as of 12:01 a.m. Pacific Time on the Closing Date.
(c)    The Estimated Purchase Price and Closing Statement will be prepared, and the Closing Purchase Price will be determined, in accordance with the accounting methods, policies, practices, procedures, conventions, categorizations, definitions, principles, judgments, assumptions, techniques or estimation methods with respect to financial statements, their classification or presentation or otherwise (including with respect to the nature of accounts, level of reserves or level of accruals) that are set forth in Exhibit C.
(d)    The Buyer will (i) permit Roccat and its Representatives to have reasonable access to the documents (including work papers, schedules, financial statements, memoranda, etc.) pertaining to or used in connection with the preparation of the Closing Statement and the Buyer’s calculation of the Closing Purchase Price and provide Roccat with copies thereof (as reasonably requested by Roccat and subject to the entry into customary confidentiality and non-reliance agreements) and (ii) provide Roccat and its Representatives reasonable access to the Buyer’s employees and advisors.  If Roccat disagrees with any part of the Buyer’s calculation of the Closing Purchase Price as set forth on the Closing Statement, Roccat will, within sixty (60) days after the receipt of the Closing Statement, notify the Buyer in writing of such disagreement by setting forth the Sellers Representative’s calculation of the Closing Purchase Price, including each of the components thereof, and describing in reasonable detail the basis for such disagreement (an “Objection Notice”).  If an Objection Notice is delivered to the Buyer, then the Buyer and Roccat will negotiate in good faith to resolve their disagreements with respect to the computation of the Closing Purchase Price.  In the event that the Buyer and Roccat are unable to resolve all such disagreements within thirty (30) days after the Buyer’s receipt of such Objection Notice, the Buyer and Roccat will submit such remaining disagreements to Ernst & Young, or if Ernst & Young is unavailable, such other valuation firm of national repute reasonably acceptable to the Buyer and Roccat (the “Valuation Firm”).
(e)    The Valuation Firm will make a final and binding determination with respect to the computation of the Closing Purchase Price, including each of the components thereof, to the extent such amounts are in dispute, in accordance with the guidelines and procedures set forth in this Agreement and in Exhibit C.  The Buyer and Roccat will cooperate with the Valuation Firm during the term of its engagement and will use commercially reasonable efforts to cause the Valuation Firm to resolve all remaining disagreements with respect to the computation of the Closing Purchase Price, including each of the components thereof, as soon as practicable.  The Valuation Firm will consider only those items and amounts in the respective calculations of the Closing Purchase Price of the Buyer and Roccat, including each of the components thereof, that are identified as being items and amounts to which the Buyer and Roccat have been unable to agree.  In resolving any disputed item, the Valuation Firm may not assign a value to any item greater than the greatest value for such item claimed by either party or less than the smallest value for such item claimed by either party.  The Valuation Firm’s determination of the Closing Purchase Price, including each of the components thereof, will be based solely on written materials submitted by the Buyer and Roccat (i.e., not on independent review) and on the definitions included herein.  The determination of the Valuation Firm will be conclusive and binding upon the parties hereto and will not be subject to appeal or further review.
(f)    The costs and expenses of the Valuation Firm in determining the Closing Purchase Price, including each of the components thereof, will be borne by the Buyer, on the one hand, and the Sellers, on the other hand, based upon the percentage which the portion of the contested amount not awarded to each party bears to the amount actually contested by such party.  For example, if the Buyer claims the Closing Purchase Price is one thousand euros (€1,000) less than the amount determined by the Sellers, and the Sellers contest only five hundred euros (€500) of the amount claimed by the Buyer, and if the Valuation Firm ultimately resolves the dispute by awarding the Buyer three hundred euros (€300) of the five hundred euros (€500) contested, then the costs and expenses of the Valuation Firm will be allocated sixty percent (60%) (i.e., 300 ÷ 500) to the Sellers, in the aggregate, and forty percent (40%) (i.e., 200 ÷ 500) to the Buyer.  Prior to the Valuation Firm’s determination of Closing Purchase Price, (i) the Buyer, on the one hand, and the Sellers, on the other hand, will each pay fifty percent (50%) of any retainer paid to the Valuation Firm and (ii) during the engagement of the Valuation Firm, the Valuation Firm will bill fifty percent (50%) of the total charges to each of the Buyer, on the one hand, and the Sellers, on the other hand.  In connection with the Valuation Firm’s determination of Closing Purchase Price, the Valuation Firm will also determine, pursuant to the terms of the first and second sentences of this Section 1.5(f), and taking into account all fees and expenses already paid by each of the Buyer, on the one hand, and the Sellers, on the other hand, as of the date of such determination, the allocation of its fees and expenses between the Buyer and the Sellers, which such determination will be conclusive and binding upon the parties hereto.
(g)    Within five (5) Business Days after the Closing Purchase Price, including each of the components thereof, is finally determined pursuant to this Section 1.5:
(i)    if the Closing Purchase Price as finally determined pursuant to this Section 1.5 is less than the Estimated Purchase Price, then the Buyer and the Sellers will cause the Escrow Agent to:  (A) pay to the Buyer a portion of the Adjustment Escrow Amount (the “Buyer Adjustment Amount”) equal to such deficiency (and if the Adjustment Escrow Fund is insufficient, the Buyer may elect (at its sole discretion) to require that the Sellers or Stockholders pay the remainder of such deficiency), have the Sellers cause the Escrow Agent to pay the remainder of such deficiency from the Indemnification Escrow Amount or collect the remainder of such deficiency from the Holdback Amount (or some combination thereof), and (B) pay to the Sellers the amount (if any) by which the amount of the Adjustment Escrow Amount is greater than the Buyer Adjustment Amount; and
(ii)    if the Closing Purchase Price as finally determined pursuant to this Section 1.5 is greater than the Estimated Purchase Price (the amount of such deficiency, the “Seller Adjustment Amount”), then (A) the Buyer will pay to the Sellers the Seller Adjustment Amount, and (B) the Buyer and the Sellers will cause the Escrow Agent to pay to the Sellers the Adjustment Escrow Amount.
All payments to be made pursuant to this Section 1.5 will (x) be treated by all parties for tax purposes as adjustments to the Closing Purchase Price and (y) be made by wire transfer of immediately available funds to the account(s) designated by the Buyer or the Sellers, as applicable.

1.6    Holdback Amount.
(a)    The Closing Purchase Price paid at Closing will reflect a deduction equal to the Holdback Amount as may be increased pursuant to Schedule 1.6.  Within 90 days following the first anniversary of the Closing Date, the Buyer will determine the aggregate amounts related to, incurred or paid in connection with or resulting from returns of, and credits related to, Roccat products or merchandise that were sold prior to the Closing (the “Return Expense”) and will provide the Sellers Representative with a written statement setting forth its calculation of the Return Expense (the “Returns Statement”).
(b)    If the Sellers disagrees with any part of the Buyer’s calculation of the Return Expense as set forth in the Returns Statement, Roccat will, within thirty (30) days after the receipt of the Returns Statement with the Sellers Representative, notify the Buyer in writing of such disagreement by setting forth the Sellers’s calculation of the Return Expense, including each of the components thereof, and describing in reasonable detail the basis for such disagreement.  In the event that the Buyer and Roccat are unable to resolve all such disagreements within thirty (30) days after the Sellers Representative’s receipt of the Returns Statement, the Buyer and Roccat will submit such remaining disagreements to the Valuation Firm.  The Valuation Firm will make a final and binding determination with respect to the computation of the Return Expense, to the extent such amounts are in dispute.  The Valuation Firm will consider only those items and amounts in the respective calculations of the Return Expense of the Buyer and Roccat, including each of the components thereof, that are identified as being items and amounts to which the Buyer and Roccat have been unable to agree.  In resolving any disputed item, the Valuation Firm may not assign a value to any item greater than the greatest value for such item claimed by either party or less than the smallest value for such item claimed by either party.  The Valuation Firm’s determination of the Return Expense, including each of the components thereof, will be based solely on written materials submitted by the Buyer and Roccat (i.e., not on independent review) and on the definitions included herein.  The determination of the Valuation Firm will be conclusive and binding upon the parties hereto and will not be subject to appeal or further review.  The costs and expenses of the Valuation Firm in determining the Return Expense will be borne by the Buyer and the Sellers consistent with the methodology set forth in Section 1.5(f).
(c)    If the final determination of the Return Expense is less than the Holdback Amount, then the Buyer will (i) retain an amount equal to the Return Expense, and (ii) pay to the Sellers the amount (if any) by which the amount of the Holdback Amount is greater than the Return Expense.  If the final determination of the Return Expense is greater than the Holdback Amount, then the Buyer will (i) retain the Holdback Amount, and (ii) be entitled to recover any excess from the Indemnification Escrow Amount or by setting off against any Contingent Payments.

1.7    Earn Out Consideration.  Following the Closing, the Sellers will be entitled to receive from the Buyer additional amounts based on the occurrence of certain other events as described in this Section 1.7; provided, that, the Sellers intend to distribute those amounts specified in subsections (b) and (c) below to Mr. Korte and accordingly direct the Buyer to make any such payments to Mr. Korte on their behalf in satisfaction of the Buyer’s obligations with respect thereto.  For the avoidance of doubt, the amounts set forth in Sections 1.7(a) and (b) are intended to be independent such that the total aggregate amount payable pursuant under the two Sections is €1,500,000.
(a)    If Net Revenue during the twelve-month period ending December 31, 2019 is [**], then the Sellers will be entitled to receive [**], with such amount earned pursuant to this Section 1.7(a) not to exceed €1,000,000 in the aggregate.  Any amounts earned pursuant to this Section 1.7(a) will be paid in cash on or prior to March 31, 2020.
(b)    If Net Revenue during the twelve-month period ending December 31, 2019 is [**], then the Sellers will be entitled to receive [**], with such amount earned pursuant to this Section 1.7(b) not to exceed €500,000 in the aggregate.  Any amounts earned pursuant to this Section 1.7(b) will be paid on or prior to March 31, 2020 and may be paid at the option of the Buyer in cash or shares of common stock of Parent (calculated using the 10-day volume weighted average price per share of Parent stock immediately prior to the date of issuance).
(c)    If the Net Revenue during the twelve-month period ending December 31, 2020 is [**], then the Sellers will be entitled to receive [**].  Any amounts earned pursuant to this Section 1.7(c) will be paid on or prior to March 31, 2021 and may be paid at the option of the Buyer in cash or shares of common stock of Parent Corporation (calculated using the 10-day volume weighted average price per share of Parent Corporation stock immediately prior to the date of issuance).
(d)    Following the Closing, if during the period ending on the date that is [**] from the Closing Date (the “Positioning Period”), the retail positioning requirements set forth in Exhibit D (the “Positioning Guidelines”) are achieved and maintained (and no actions inconsistent with the Positioning Guidelines are taken by the Sellers, Stockholders or their respective Affiliates) for the duration of such period, then the Sellers will be entitled to receive [**].  Any amounts earned pursuant to this Section 1.7(d) will be paid in cash on or prior the date that is three (3) months following the conclusion of the Positioning Period.
(e)    Following the Closing, if, during the period ending on the date that is [**] from the Closing Date (the “AR Period”), the Buyer is able to collect Past Due Receivables on behalf of the Sellers, then the Sellers will be entitled to receive [**] of any such amounts actually collected by the Buyer, which will be deemed to be in full satisfaction of any such Past Due Receivable; provided, however, that in no event will the amounts paid to the Sellers pursuant to this Section 1.7(e) exceed [**] of the aggregate amounts listed in Exhibit B with respect to the Past Due Receivables.  Any amounts earned pursuant to this Section 1.7(e) will be paid in cash on the date that is six (6) months following the conclusion of the AR Period (or if such date is not a Business Day, the following Business Day).  Following the Closing, none of the Sellers, Jöllenbeck, Stockholders or their respective Affiliates will (i) transfer, sell, assign, pledge or hypothecate any Past Due Receivable, (ii) collect or seek payment with respect to any Past Due Receivable unless requested by the Buyer, (iii) otherwise exercise any right or remedy with respect to any Past Due Receivable or (iv) fail to forgive in full all Past Due Receivables after the AR Period.
(f)    On or prior to the date that is [**] following the Closing Date, the Buyer shall deliver to Mr. Korte €100,000 worth of shares of Parent (with such number of shares calculated using the 10-day volume weighted average price per share of Parent stock immediately prior to the date of issuance); it being understood that the Sellers are entitled to this payment, but have directed the Seller to make such payment to Mr. Korte on their behalf instead.
(g)    Sellers acknowledge that (i) upon the closing of the transactions contemplated hereby, the Buyer has the right to operate the Purchased Assets and the Business in any way that the Buyer deems appropriate in the Buyer’s sole discretion, (ii) the Buyer has no obligation to operate the Purchased Assets and the Business in order to achieve any amounts set forth in this Section 1.7 or to maximize the amount of payments hereunder, (iii) the Buyer is under no obligation to continue to manufacture any product or product line(s), (iv) the amounts contemplated by this Section 1.7 are speculative and subject to numerous factors outside the control of the Buyer, (v) there is no assurance that Seller will receive any such amounts and Buyer has not promised nor projected such amounts, (vi) the Buyer owes no fiduciary duty or express or implied duty to the Sellers, including an implied duty of good faith and fair dealing, and (vii) the parties solely intend the express provisions of this Agreement to govern their contractual relationship and Sellers hereby waive any fiduciary duty or express or implied duty of the Buyer to the Sellers, including an implied duty of good faith and fair dealing; provided, that, the Buyer will not take any action in bad faith for the sole purpose of reducing the amount of its payment obligations under this Section 1.7.

1.8    Sales Taxes; Transfer Taxes.  The Buyer will bear and pay any Transfer Taxes (other than VAT described in Section 1.4 hereof) that may become payable in connection with the sale of the Purchased Assets to the Buyer or its designated affiliates or in connection with any of the other Transactions.  Each party shall use reasonable efforts to avail itself of any available exemptions from any such Taxes, and to cooperate with the other parties in providing any information and documentation that may be necessary to obtain such exemptions.

1.9    Withholding.  The Buyer will pay the Purchase Price free and clear of all withholding Taxes unless the Buyer is required to deduct and withhold under any provision of any Laws, in which case Buyer will gross up Seller for any such withholding Taxes.  Each party shall use reasonable efforts to avail itself of any available exemptions from any such Taxes, and to cooperate with the other parties in providing any information and documentation that may be necessary to obtain such exemptions and/or to mitigate, reduce or eliminate any withholding Tax required to be withheld by the Buyer.

1.10    Allocation.  During the Interim Period and prior to Closing, the Buyer will propose an allocation of the consideration referred to in this Section 1 amongst the Sellers and the Purchased Assets for Tax purposes consistent with the principles in Exhibit E hereto and will deliver such proposed allocation to the Sellers Representative.  The proposed final allocation will be subject to the review and comment of the Sellers Representative, and the Buyer will consider any comments of Seller Representative to the extent such comments are consistent with this Agreement and the principles in Exhibit E hereto.  Any disputes among the parties regarding the allocation shall be resolved in accordance with the principles and procedures set forth in Section 1.5 hereof.  Such allocation will be deemed final after approval by the Sellers, which approval will not be unreasonably withheld or delayed, or resolution pursuant to the dispute resolution procedures set forth in Section 1.5 hereof (the “Allocation”) and will be conclusive and binding upon the parties, and no Seller will file any Tax Return or other document with, or make any statement or declaration to, any Governmental Authority that is inconsistent with such Allocation unless otherwise required by applicable Law.  The Allocation shall be adjusted by the parties accordingly to the extent necessary as adjustments to the Purchase Price are made pursuant to this Agreement.  In the event that the Allocation is disputed by any Governmental Authority, the party receiving notice of such dispute will promptly notify the other parties hereto concerning the existence and resolution of such dispute.

1.11    Closing.
(a)    Closing Date.  The closing of the Transactions (the “Closing”) will take place through the electronic transmission of signature pages and other required deliveries at 10:00 a.m. Eastern Standard time on the fifth Business Day following full satisfaction or due waiver of all of the closing conditions set forth in Section 8 (other than those to be satisfied at the Closing) or on such other date as is mutually agreed to in writing by the Buyer, the Sellers, and the Stockholders.  For purposes of this Agreement, the “Closing Date” means the time and date as of which the Closing takes place.
(b)    Deliverables by Buyer.  Subject to fulfillment or waiver of the conditions set forth in Section 8, at or prior to the Closing, the Buyer will deliver (or cause to be delivered) to the Sellers Representative originals, or copies if specified, of the following agreements, documents and other items:
(i)    such bills of sale, endorsements, assignments, assumptions, and other documents as may be necessary or appropriate to assign, convey, transfer and deliver to the Buyer or the Buyer’s assignees good and valid title to the Purchased Assets free of any Encumbrances other than those imposed by the Buyer, including, without limitation, Intellectual Property Assignments, lease assignments and local transfer documents in the forms attached as Exhibit F (the “Transfer Documents”) properly executed (if necessary) by the Buyer;
(ii)    the Closing Purchase Price by wire transfer of immediately available funds to the accounts of the Sellers designated by the Sellers Representative at least five (5) Business Days prior to Closing in accordance with the Allocation;
(iii)    the Stock Consideration or, at the Buyer’s option, €800,000 in cash in lieu thereof to such accounts as may be designated by Mr. Korte at least five (5) Business Days prior to Closing;
(iv)    the Buyer will repay, or cause to be repaid, on behalf of the Sellers and their respective subsidiaries, all amounts necessary to discharge fully the then‐outstanding balance of all Indebtedness identified on Schedule 1.11(b)(iv) by wire transfer of immediately available funds to the account(s) designated by the holders of such Indebtedness;
(v)    the Transition Services Agreement executed by the Buyer;
(vi)    the Escrow Agreement executed by the Buyer and the Escrow Agent;
(vii)    the Adjustment Escrow Amount to the Escrow Agent for deposit into an escrow account established pursuant to the terms of the Escrow Agreement (the “Escrow Account”);
(viii)    the Indemnification Escrow Amount to the Escrow Agent for deposit into the Escrow Account;
(ix)    a certificate of the Secretary or an Assistant Secretary (or equivalent officer) of the Buyer certifying that attached thereto are true and complete copies of all resolutions adopted by the board of directors of the Buyer approving the Transactions and that all such resolutions are in full force and effect; and
(x)    a certificate signed by an officer of the Buyer certifying that the conditions specified in Section 8.2 have been satisfied.
(c)    Deliveries by Sellers and Stockholders.  Subject to fulfillment or waiver of the conditions set forth in Section 8, at or prior to the Closing, the Sellers and Stockholders will deliver (or cause to be delivered) to the Buyer originals or copies, if specified, of the following:
(i)    evidence of the Internal Asset Transfer and copies of all executed documents related thereto;
(ii)    evidence of the Winspeed IP Transfer and copies of all executed documents related thereto;
(iii)    properly executed Transfer Documents;
(iv)    the Transition Services Agreement executed by the Sellers, Jöllenbeck, First Wise, and Winspeed;
(v)    the Escrow Agreement executed by Roccat;
(vi)    the Korte Employment Agreement executed by Mr. Korte;
(vii)    from each Seller that is a “U.S. person” within the meaning of Section 7701(a)(30) of the Code, an IRS Form W-9 and a properly executed statement for purposes of satisfying the Buyer’s obligations under Treasury Regulation Section 1.1445-2(b)(2) and/or Section 1446(f), if applicable, in the form and substance satisfactory to the Buyer, dated as of the Closing Date;
(viii)    a properly executed IRS Form W-8 from each Seller that is not a “U.S. person” within the meaning of Section 7701(a)(30);
(ix)    the Inventory ready to be transferred in the manner contemplated by, and to the locations set forth in, the Transition Services Agreement or as otherwise specified in writing by the Buyer;
(x)    such other customary instruments of transfer, assumption, filings or documents, in form and substance reasonably satisfactory to Buyer, as may be required to give effect to this Agreement;
(xi)    true and complete copies of all resolutions adopted by the Stockholders approving the Transactions;
(xii)    a certificate signed by an officer of each Seller certifying that the conditions specified in Section 8.1 have been satisfied;
(xiii)    a shareholders resolution of Roccat in the notarial form confirming the conclusion of this agreement;
(xiv)    evidence that the Sellers have used commercially reasonable efforts to implement the GDPR compliance plan attached as Schedule 1.11(c)(xiv);
(xv)    a true and correct listing of each action, filing, and payment that must be taken or made on or before the date that is ninety (90) days after the date hereof in order to maintain each applicable item of Registered IP in full force and effect; and
(xvi)    the unaudited entity level financial statements of the Sellers as of February 28, 2019.

2.    Representations and Warranties of the Sellers.  Each of the Sellers represents and warrants, to and for the benefit of the Buyer Indemnitees, that the statements in this Section 2 are true and correct as of the date of this Agreement and as of the Closing Date, except as set forth in the schedules accompanying this Section 2 (each, a “Schedule” and, collectively, the “Disclosure Schedules”).  Capitalized terms used in the Disclosure Schedules and not otherwise defined therein have the meanings given to them in this Agreement.

2.1    Due Organization; Capitalization.
(a)    Roccat is a corporation duly organized, validly existing and in good standing under the laws of Germany.  Roccat is duly qualified or licensed to transact business and is in good standing as a foreign company in each jurisdiction where the character of its activities requires such qualification, except where the failure to be so qualified, individually or in the aggregate, is not reasonably likely to have an adverse effect on the Business or Purchased Assets.
(b)    Each of RST, RAP and RUS (collectively, the “Roccat Subsidiaries”) is a duly organized, validly existing and in good standing under the laws of its jurisdiction of formation.  Each of the Roccat Subsidiaries is duly qualified or licensed to transact business and is in good standing as a foreign company or as a company with foreign investment, as applicable, in each jurisdiction where the character of its activities requires such qualification, except where the failure to be so qualified, individually or in the aggregate, is not reasonably likely to have an adverse effect on the Business or Purchased Assets.

2.2    Authority.  Each Seller has full corporate power and authority to enter into this Agreement and the Ancillary Documents to which a Seller is a party, to carry out its obligations hereunder and thereunder and to consummate the transactions contemplated hereby and thereby.  The execution and delivery by each Seller of this Agreement and any Ancillary Document to which such Seller is a party, the performance by such Seller of its obligations hereunder and thereunder and the consummation by such Seller of the transactions contemplated hereby and thereby have been duly authorized by all requisite corporate action on the part of such Seller.  This Agreement has been duly executed and delivered by each Seller, and (assuming due authorization, execution and delivery by the other parties hereto) this Agreement constitutes a legal, valid and binding obligation of such Seller enforceable against such Seller in accordance with its terms.  When each Ancillary Document to which a Seller is or will be a party has been duly executed and delivered by such Seller (assuming due authorization, execution and delivery by each other party thereto), such Ancillary Document will constitute a legal and binding obligation of such Seller enforceable against it in accordance with its terms.

2.3    Non‐Contravention; Consents.  Except as set forth on Schedule 2.3, neither the execution and delivery of any of the Transaction Agreements by the Sellers, nor the consummation or performance of any of the Transactions by the Sellers, will directly or indirectly (with or without notice or lapse of time):
(a)    conflict with any provision of the charter, certificate of incorporation, by-laws or other organizational documents of a Seller;
(b)    contravene, conflict with or result in a violation of, or give any Governmental Authority or other Person the right to challenge any of the Transactions or to exercise any remedy or obtain any relief under, any Law or any Order to which a Seller or any of the Purchased Assets, is subject; or
(c)    except for any statutory rights under section 613a German Civil Code, require the consent, notice or other action by any Person under, conflict with, result in a violation or breach of, constitute a default or an event that, with or without notice or lapse of time or both, would constitute a default under, result in the acceleration of or create in any party the right to accelerate, terminate, modify or cancel any Contract or Permit to which a Seller is a party or by which a Seller or the Business is bound or to which any of the Purchased Assets are subject; or
(d)    result in the creation or imposition of any Encumbrance on the Purchased Assets.
No consent, approval, Permit, Order, declaration or filing with, or notice to, any Governmental Authority is required by or with respect to a Seller in connection with the execution and delivery of this Agreement or any of the Ancillary Documents and the consummation of any of the Transactions.  There is no Proceeding that has been commenced against any of the Sellers that challenges, or may have the effect of preventing, delaying, making illegal or otherwise interfering with, any of the Transactions and to the Sellers Knowledge, no such Proceeding has been threatened.

2.4    Title to Assets; Sufficiency.
(a)    The Sellers own, and have good and valid title to, all of the Purchased Assets (other than assets that are the subject of the Internal Asset Transfer and the Winspeed IP Transfer prior to the transfer contemplated thereby) free and clear of any Encumbrances other than Permitted Encumbrances.  Schedule 2.4(a) identifies all of the Purchased Assets that are being leased or licensed to the Sellers, if any, except for the Intellectual Property, which are separately described in Section 2.11 and the corresponding Disclosure Schedules.
(b)    Other than the Contracts set forth on Schedule 1.2(b)(iii) and the Excluded Inventory, the Purchased Assets, taken together with the services provided under the Transition Services Agreement, will collectively constitute, as of the Closing Date, all of the properties, rights, interests and other tangible and intangible assets necessary to enable the Buyer to conduct its business in the manner in which the Business is currently being conducted.  The Purchased Assets do not consist of any real property or any interest in real property.  None of the Excluded Assets are material to the Business.

2.5    Financial Statements.  The Sellers have delivered to the Buyer the unaudited, pro forma consolidated balance sheets of the Sellers as of May 31, 2018, 2017 and 2016, and the related pro forma, unaudited statements of profits and losses of the balance sheet of the Business as of December 31st, 2018 (the “Interim Financial Statements” and together with the Audited Financial Statements, the “Financial Statements”).  The Financial Statements are accurate and complete in all respects, and present fairly the financial position of the Sellers as of the date thereof and the results of operations.  The Financial Statements have been prepared in accordance with German GAAP (Bilanzrechtsmodernisierungsgesetz – BilMoG), U.S. GAAP or Taiwanese GAAP standards, as applicable, applied on a consistent basis throughout the period covered.

2.6    Solvency.  No Seller is now Insolvent and no Seller will be rendered Insolvent by any of the Transactions.  No Seller has, at any time, (i) made a general assignment for the benefit of creditors, (ii) filed, or had filed against it, any bankruptcy petition or similar filing, (iii) suffered the attachment or other judicial seizure of all or a substantial portion of its assets, (iv) admitted in writing its inability to pay its debts as they become due, or (v) taken or been the subject of any action that may have an adverse effect on its ability to comply with or perform any of its covenants or obligations under any of the Transaction Agreements.

2.7    Accounts Receivable.  The accounts or notes receivable held by Sellers related to the Business, and any security, claim, remedy or other right related to any of the foregoing (“Accounts Receivable”): (a) have arisen from bona fide transactions entered into by Sellers involving the sale of goods or the rendering of services in the Ordinary Course of Business consistent with past practice; (b) constitute only valid, undisputed claims of a Seller not subject to claims of set-off or other defenses or counterclaims other than normal cash discounts accrued in the Ordinary Course of Business consistent with past practice; and (c) are collectible in full within 90 days after billing.

2.8    Inventory.  All inventory, finished goods, raw materials, work in progress, packaging, supplies, parts and other inventories related to the Business (“Inventory”) consist of a quality and quantity usable and salable in the Ordinary Course of Business consistent with past practice, except for obsolete, damaged, defective or slow-moving items that have been written off or written down to fair market value or for which adequate reserves have been established (consistent with Exhibit G).  All Inventory is free and clear of all Encumbrances, and no Inventory is held on a consignment basis.  The quantities of each item of Inventory (whether raw materials, work-in-process or finished goods) are not excessive, but are reasonable in the present circumstances of the Business.

2.9    Absence Of Changes.  Since December 31, 2018:
(a)    there has not been any adverse change in, and no event has occurred that could reasonably be expected to have a material adverse effect on, the condition, assets, liabilities, operations, financial performance, or net income of the Sellers or the Business;
(b)    the Sellers have not taken any action that would have required the consent of the Buyer if taken during the Interim Period; and
(c)    the Seller has not agreed, committed or offered (in writing or otherwise) to take any of the actions referred to above.

2.10    Employees; Benefit Plans.
(a)    Schedule 2.10(a) contains a list of all persons who are employees of the Business (“Business Employees”) as of the date hereof, including any employee who is on a leave of absence of any nature, paid or unpaid, authorized or unauthorized, and sets forth for each such individual the following: (i) name; (ii) title or position (including whether full-time or part-time); (iii) hire or retention date; (iv) current annual base compensation rate or contract fee; (v) commission, bonus or other incentive-based compensation; and (vi) a description of the statutorily required and fringe benefits provided to each such individual as of the date hereof.  All compensation, including wages, commissions, bonuses, stock option or grant, other compensation, social insurances and pension, contributable for and/or payable to all Business Employees for services performed, except for bonuses, commissions and other compensation with an assessment period which has not ended on or prior to the date hereof have been paid in full and there are no outstanding agreements, understandings or commitments of Sellers with respect to any compensation, commissions or bonuses.
(b)    Sellers are not, and have never been, a party to, bound by, or negotiating any collective bargaining agreement or other Contract with a union, works council or labor organization (collectively, “Union”), and Sellers have not been approached by, had contact with, or negotiated with any Union representing or purporting to represent any Business Employee, and, to the Sellers Knowledge, no Union or group of Business Employees is seeking or has sought to organize Business Employees for the purpose of collective bargaining.  There has never been, nor has there been any threat of, any strike, slowdown, work stoppage, lockout, concerted refusal to work overtime or other similar labor disruption or dispute affecting the Business or any Business Employees.
(c)    Sellers are and have been in compliance with all applicable Laws pertaining to employment and employment practices to the extent they relate to Business Employees, including all Laws relating to labor relations, equal employment opportunities, fair employment practices, employment discrimination, harassment, retaliation, reasonable accommodation, disability rights or benefits, immigration, wages, hours, overtime compensation, child labor, hiring, promotion and termination of employees, working conditions, break periods, privacy, health and safety, workers compensation, leaves of absence, paid sick leave, unemployment insurance, labor insurance, required health insurance and pension contribution.  All individuals characterized and treated by Sellers as consultants or independent contractors of the Business are properly treated as independent contractors under all applicable Laws.  There are no Proceedings against a Seller pending, or to the Sellers Knowledge, threatened to be brought or filed, by or with any Governmental Authority or arbitrator in connection with the employment of any current or former Business Employee or applicant of the Business, including, without limitation, any charge, investigation or claim relating to unfair labor practices, equal employment opportunities, fair employment practices, employment discrimination, harassment, retaliation, reasonable accommodation, disability rights or benefits, immigration, wages, hours, overtime compensation, employee classification, child labor, hiring, promotion and termination of employees, working conditions, meal and break periods, privacy, health and safety, workers compensation, leaves of absence, paid sick leave, unemployment insurance, labor insurance, required health insurance, pension contribution or any other employment related matter arising under applicable Laws.
(d)    Schedule 2.10(d) contains a true and complete list of each pension, benefit, labor insurance, required health insurance, retirement, compensation, employment, consulting, profit-sharing, deferred compensation, incentive, bonus, performance award, phantom equity, stock or stock-based, change in control, retention, severance, vacation, paid time off (PTO), medical, vision, dental, disability, welfare, cafeteria, fringe-benefit and other similar agreement, plan, policy, program or arrangement (and any amendments thereto), in each case whether or not reduced to writing and whether funded or unfunded, which is or has been maintained, sponsored, contributed to, or required to be contributed to by a Seller for the benefit of any Business Employee, officer or director of the Business or any spouse or dependent of such individual, or under which a Seller has or may have any Liability, or with respect to which the Buyer or any of its Affiliates would reasonably be expected to have any Liability, contingent or otherwise (each, a “Benefit Plan”).
(e)    With respect to each Benefit Plan, Sellers have made available to the Buyer accurate, current and complete copies of each of the following: (i) where the Benefit Plan has been reduced to writing, the plan document together with all amendments; (ii) where the Benefit Plan has not been reduced to writing, a written summary of all material plan terms; (iii) where applicable, copies of any trust agreements or other funding arrangements, custodial agreements, insurance policies and contracts, administration agreements and similar agreements, and investment management or investment advisory agreements, now in effect or required in the future as a result of the transactions contemplated by this Agreement or otherwise; (iv) copies of any summary plan descriptions, summaries of material modifications, summaries of benefits and coverage, employee handbooks and any other written communications (or a description of any oral communications) relating to any Benefit Plan; (v) actuarial valuations and reports related to any Benefit Plans with respect to the most recently completed plan years; and (vi) copies of material notices, letters or other correspondence from any Governmental Authority relating to a Benefit Plan.
(f)    Each Benefit Plan and any related trust has been established, administered and maintained in accordance with its terms and in compliance with all applicable Law.  All benefits, contributions and premiums relating to each Benefit Plan have been timely paid in accordance with the terms of such Benefit Plan and all applicable Laws and accounting principles, and all benefits accrued under any unfunded Benefit Plan have been paid, accrued or otherwise adequately reserved to the extent required by, and in accordance with IFRS.
(g)    There is no pending or, to Sellers Knowledge, threatened Proceeding relating to a Benefit Plan (other than routine claims for benefits), and no Benefit Plan has been the subject of an examination or audit by a Governmental Authority or the subject of an application or filing under, or is a participant in, an amnesty, voluntary compliance, self-correction or similar program sponsored by any Governmental Authority.
(h)    There has been no amendment to, announcement by a Seller or any of its Affiliates relating to, or change in employee participation or coverage under, any Benefit Plan or collective bargaining agreement that would increase the annual expense of maintaining such plan above the level of the expense incurred for the most recently completed fiscal year (other than on a de minimis basis) with respect to any Business Employee, director, consultant or independent contractor of the Business, as applicable.  Neither Sellers nor any of their Affiliates has any commitment or obligation or has made any representations to any Business Employee, director or officer, of the Business, whether or not legally binding, to adopt, amend, modify or terminate any Benefit Plan or any collective bargaining agreement.
(i)    Neither the execution of this Agreement nor any of the Transactions will (either alone or upon the occurrence of any additional or subsequent events): (i) entitle any Business Employee, director or officer of the Business to severance pay or any other payment; (ii) accelerate the time of payment, funding or vesting, or increase the amount of compensation (including stock-based compensation) due to any such individual; or (iii) increase the amount payable under or result in any other material obligation pursuant to any Benefit Plan.

2.11    Intellectual Property.
(a)    Products and Services.  Schedule 2.11(a) accurately identifies and describes each Seller Product designed, developed, manufactured, marketed, distributed, provided, licensed, or sold as of the date of this Agreement.
(b)    Seller Owned IP.  Schedule 2.11(b)(i) accurately identifies: (A) each item of Registered IP; (B) the jurisdiction in which such item of Registered IP has been registered or filed and the applicable registration or serial number; and (C) any other Person that has an ownership interest (if any) in such item of Registered IP and the nature of such ownership interest.  Schedule 2.11(b)(ii) accurately identified each item of unregistered Intellectual Property material to the operation of the Business.  The Sellers have made available to the Buyer complete and accurate copies of all applications, correspondence with any Governmental Authority, and other material documents related to each such item of Registered IP, and at the Buyer’s request, the Sellers will cooperate in good faith to facilitate such transfer of documents.
(c)    Inbound Licenses.  Schedule 2.11(c) accurately identifies: (i) each Contract pursuant to which any Intellectual Property is or has been licensed, sold, assigned, or otherwise conveyed or provided to a Seller (other than (A) inventions assignments and similar agreements between a Seller and its employees on such Seller’s standard form thereof (copies of which have been provided to Buyer), and (B) non-exclusive “shrink wrap,” or “click wrap” or similar generally commercially available end user licenses on standard terms to third-party software for the Seller’s internal use, that is not customized, incorporated into, or used in the development, manufacturing, testing, distribution, maintenance, or support of, any Seller Product and that is not otherwise material to such the Business that in each case, have incurred total license or other fees of less than $50,000 (such licenses in (B) collectively, “Off-the-Shelf Licenses”)); and (ii) whether the licenses or rights granted to the applicable Seller(s) in each such Contract are exclusive or non-exclusive.
(d)    Outbound Licenses.  Other than the license for the use of the name “ROCCAT” from Roccat to Roccat Studio Games, which will be terminated prior to Closing, and for the use of the trademarks “ROCCAT” and “BinBao” from Roccat to Winspeed as a supplier for the use with further suppliers and as a distributor pursuant to a Contract that is terminable by Roccat at any time without payment or other consideration due, there exists no Contract pursuant to which any Person has been granted any license under, or otherwise has received or acquired any right (whether or not currently exercisable) or interest in, any Seller IP, neither exclusive nor non-exclusive.
(e)    The Contracts set forth on Schedule 2.11(c) and Schedule 2.11(d), together with the employee agreements described in Section 2.11(c)(i)(A) and the Off-the-Shelf Licenses are collectively referred to as the “Business IP Agreements.”  Each Business IP Agreement is valid and binding on the applicable Seller in accordance with its terms and is in full force and effect.  The applicable Seller is not, and to the Sellers Knowledge, no other party thereto is in breach of or default under (or is alleged to be in breach of or default under), or has provided or received any notice of breach or default of or any intention to terminate, any Business IP Agreement.  To the Sellers Knowledge, no event or circumstance has occurred that, with notice or lapse of time or both, would constitute an event of default under any Business IP Agreement or result in a termination thereof or would cause or permit the acceleration or other changes of any right or obligation or the loss of any benefit thereunder.  Except for the Business IP Agreements, none of the Sellers are bound by, and no Seller IP is subject to, any Contract containing any covenant or other provision that in any way limits or restricts the ability of the Sellers to use, exploit, assert, or enforce any Seller IP anywhere in the world.
(f)    Royalty Obligations.  Schedule 2.11(f) contains a complete and accurate list and summary of all royalties, fees, commissions, and other amounts that may be payable by the Sellers (irrespective of whether or not the Sellers have paid, is paying or intends to pay such amounts) to any other Person (other than sales commissions paid to employees according to each Seller’s standard commissions plan) upon or for the manufacture, sale, or distribution of any Seller Product or the use of any Seller IP.  For the avoidance of doubt, Schedule 2.11(f) does not require the disclosure of any commissions payable for distribution services by the Sellers to the extent that such agreement does not provide for the payment of any commissions or royalties with respect to any Intellectual Property.
(g)    Ownership Free and Clear.  Except for the Seller Owned IP, none of the Sellers own any Intellectual Property necessary to carry out the Business.  Except for the Excluded Assets and the Seller Owned IP, none of the Sellers own any Intellectual Property related to the Business.  The Sellers solely and exclusively own all right, title (including, with respect to the Registered IP, record title), and interest to and in all of the Seller Owned IP free and clear of any Encumbrances (other than licenses and rights granted pursuant to the Contracts identified in Schedule 2.11(d)), and have a valid right to use all other Seller IP.  Each of the Sellers has taken reasonable and necessary steps to protect and maintain the proprietary nature of each item of Seller Owned IP.  Without limiting the generality of any of the foregoing:
(i)    Employees and Contractors.  Each Person who is or was an employee or contractor of the Sellers and who is or was involved in the creation or development of any Seller Product or Seller IP has signed a valid, enforceable agreement containing an assignment of Intellectual Property pertaining to such Seller Product or Seller IP to the Seller and confidentiality provisions protecting the Seller IP.  No current or former Affiliate, stockholder, member, officer, director, or employee of a Seller has any claim, right (whether or not currently exercisable), or interest to or in any Seller IP or owns or licenses any Intellectual Property that constitutes or that is used in, needed for the conduct of or material to, or that otherwise relates to the Business of the Sellers as presently conducted or as proposed to be conducted.  No Business Employee is (a) bound by or otherwise subject to any Contract restricting such Business Employee from performing his/her duties for such Seller or (b) in breach of any Contract with any former employer or other Person concerning Intellectual Property or confidentiality due to his/her activities as an employee of such Seller.
(ii)    Government Rights.  No funding, facilities, or personnel of any Governmental Authority or any public or private university, college, or other educational or research institution were used, directly or indirectly, to develop or create, in whole or in part, any Seller IP.
(iii)    Protection of Proprietary Information.  The Sellers have taken reasonable steps to maintain the confidentiality of and otherwise protect and enforce its rights in all of the Trade Secrets included in the Seller Owned IP (and the Trade Secrets of any other Person to whom the applicable Seller has an obligation to maintain the Trade Secrets of such Person as confidential), including any such confidential and proprietary information pertaining to the Sellers, the Business, or any Seller Product.
(iv)    Past IP Dispositions.  Except as set forth on Schedule 2.11(g)(iv), no Seller has assigned or otherwise transferred ownership of, or agreed to assign or otherwise transfer ownership of, and Intellectual Property to any other Person.
(h)    Valid and Enforceable.  All Seller Owned IP, and to the Sellers Knowledge, all other Seller IP, is valid, subsisting, and enforceable.  Without limiting the generality of the foregoing:
(i)    Misuse and Inequitable Conduct.  No Seller has engaged in patent or copyright misuse or any fraud or inequitable conduct in connection with any Seller IP (including any that is Registered IP).
(ii)    Trademarks.  To the Sellers Knowledge, no Trademark owned, used, or applied for by any of the Sellers infringes, conflicts or interferes with any Trademark owned, used, or applied for by any other Person within Europe, the US, and Asia, and to the Sellers Knowledge, any Trademark owned, used, or applied for by any other Person outside of Europe, the US, and Asia.  No event or circumstance (including a failure to exercise adequate quality controls and an assignment in gross without the accompanying goodwill) has occurred or exists that has resulted in, or could reasonably be expected to result in, the abandonment of any Trademark (whether registered or unregistered) owned, used, or applied for by the Sellers.
(iii)    Legal Requirements and Deadlines.  To the Sellers Knowledge, each item of Registered IP is and at all times has been in compliance with all Laws and all filings, payments, and other actions required to be made or taken to maintain such item of Seller Owned IP in full force and effect have been made by the applicable deadline.  No application for any Registered IP filed by or on behalf of a Seller has been abandoned, allowed to lapse, or rejected (other than a rejection of claims in a patent application pursuant to an Office Action issued by the United States Patent & Trademark Office (or foreign equivalent) in the normal course of prosecution of such patent application).
(iv)    Interference Proceedings and Similar Claims.  No interference, opposition, reissue, reexamination, or other Proceeding is or has been pending or, to the Sellers Knowledge, threatened, in which the scope, validity, or enforceability of any Seller IP is being, has been or could reasonably be expected to be contested or challenged.  To the Sellers Knowledge, there is no basis for a claim that any Seller IP is invalid or unenforceable, other than those raised in office actions or similar documents issued by the U.S. Patent and Trademark Office (or foreign equivalent) in the normal course of prosecution of the applicable Registered IP.
(i)    Third-Party Infringement of Seller IP.  To the Sellers Knowledge, no Person has infringed, misappropriated, or otherwise violated, and no Person is currently infringing, misappropriating, or otherwise violating, any Seller IP.  Schedule 2.11(i) accurately identifies (and the Sellers have provided to the Buyer a complete and accurate copy of) each letter or other written or electronic communication or correspondence that has been sent or otherwise delivered by or to the Sellers or any representative of the Sellers regarding any actual, alleged, or suspected infringement or misappropriation of any Seller IP, and provides a brief description of the current status of the matter referred to in such letter, communication, or correspondence.
(j)    Effects of This Transaction.  The Seller IP owned or used by any of the Sellers immediately prior to the Closing will be owned or available for use (as applicable) by the Buyer on identical terms and conditions immediately after the Closing.  Neither the execution, delivery, or performance of this Agreement (or any of the Ancillary Documents) nor the consummation of any of the transactions contemplated by this Agreement (or any of the Ancillary Documents) will, with or without notice or lapse of time, result in, or give any other Person the right or option to cause or declare, (i) a loss of, or Encumbrance on, any Seller IP; (ii) the release, disclosure, or delivery of any Seller IP by or to any escrow agent or other Person; or (iii) the grant, assignment, or transfer to any other Person of any license or other right or interest under, to, or in any of the Seller IP.  The Seller Owned IP together with the Intellectual Property licensed by Sellers under the Business IP Agreements set forth in Schedule 2.11(c) constitute all Intellectual Property used in or necessary for the conduct of the Business as currently conducted and proposed to be conducted.
(k)    No Infringement of Third-Party IP Rights.  To the Sellers Knowledge, no Seller has ever infringed (directly, contributorily, by inducement, or otherwise), misappropriated, or otherwise violated or made unlawful use of any Intellectual Property of any other Person or engaged in unfair competition.  To the Sellers Knowledge, no Seller Product, and no method or process used in the manufacturing of any Seller Product, infringes, violates, or makes unlawful use of any Intellectual Property of, or contains any Intellectual Property misappropriated from, any other Person.  To the Sellers Knowledge there is no legitimate basis for a claim that a Seller or any Seller Product has infringed or misappropriated any Intellectual Property of another Person or engaged in unfair competition or that any Seller Product, or any method or process used in the manufacturing of any Seller Product, infringes, violates, or makes unlawful use of any Intellectual Property of, or contains any Intellectual Property misappropriated from, any other Person.  Without limiting the generality of the foregoing:
(i)    Infringement Claims.  No infringement, misappropriation, or similar claim or Proceeding is pending or, to Sellers Knowledge, threatened against the Sellers or against any other Person who is or may be entitled to be indemnified, defended, held harmless, or reimbursed by the Sellers with respect to such claim or Proceeding.  No Seller has ever received any notice or other communication (in writing or otherwise) relating to any actual, alleged, or suspected infringement, misappropriation, or violation by such Seller, any of its directors, employees or agents, or any Seller Product of any Intellectual Property of another Person, including any letter or other communication suggesting or offering that such Seller obtain a license to any Intellectual Property of another Person.
(ii)    Other Infringement Liability.  The Sellers are not bound by any Contract to indemnify, defend, hold harmless, or reimburse any other Person with respect to, or otherwise assumed or agreed to discharge or otherwise take responsibility for, any existing or potential intellectual property infringement, misappropriation, or similar claim (other than indemnification provisions in standard forms of Contracts of Seller previously provided to the Buyer).
(iii)    Infringement Claims Affecting Inbound IP.  To the Sellers Knowledge, no claim or Proceeding involving any Intellectual Property licensed to the Sellers is pending or has been threatened, except for any such claim or Proceeding that, if adversely determined, would not adversely affect (a) the use or exploitation of such Intellectual Property by any of the Sellers, or (b) the design, development, manufacturing, marketing, distribution, provision, licensing or sale of any Seller Product.
(l)    Bugs.  None of the software (including firmware and other software embedded in hardware devices) owned, developed (or currently being developed), used, marketed, distributed, licensed, or sold by the Seller (including any software that is part of, is distributed with, or is used in the design, development, manufacturing, production, distribution, testing, maintenance, or support of any Seller Product, but excluding any third-party software that is licensed pursuant to any Off-the-Shelf License) (collectively, “Seller Software”) (i) contains any bug, defect, or error (including any bug, defect, or error relating to or resulting from the display, manipulation, processing, storage, transmission, or use of date data) that materially and adversely affects the use, functionality, or performance of such Seller Software or any product or system containing or used in conjunction with such Seller Software; or (ii) fails to comply in any material respect with any applicable warranty or other contractual commitment relating to the use, functionality, or performance of such Seller Software or the Sellers have provided to the Buyer a complete and accurate list of all known bugs, defects, and errors in each version of the Seller Software.
(m)    Harmful Code.  No Seller Software contains any “back door,” “drop dead device,” “time bomb,” “Trojan horse,” “virus,” or “worm” (as such terms are commonly understood in the software industry) or any other code designed or intended to have, or capable of performing, any of the following functions: (i) disrupting, disabling, harming, or otherwise impeding in any manner the operation of, or providing unauthorized access to, a computer system or network or other device on which such code is stored or installed; or (ii) damaging or destroying any data or file without the user’s consent.
(n)    Seller Software; Source Code.  All Seller Software, and software pursuant to Off-the-Shelf Licenses used by any of the Sellers is properly licensed and is not a “bootleg” version or copy.  To the Sellers Knowledge, the Seller Software and other information technology used to operate the Business:  (A) are in satisfactory working order and are scalable to meet current and reasonably anticipated capacity; (B) have appropriate security, back-ups, disaster recovery arrangements, and hardware and software support and maintenance to minimize the risk of material error, breakdown, failure, or security breach occurring and to ensure if such event does occur it does not cause a material disruption to the operation of the Business; and (C) have not suffered any material error, breakdown, failure, or security breach in the last twenty-four (24) months that has caused disruption or damage to the operation of the Business or that was potentially reportable to any Governmental Authority.
(o)    Source Code.
(i)    No source code for any Seller Software has been delivered, licensed, or made available to any escrow agent or other Person who is not, as of the date of this Agreement, an employee of a Seller.  No Seller has a duty or obligation (whether present, contingent, or otherwise) to deliver, license, or make available the source code for any Seller Software to any escrow agent or other Person.  To the Sellers Knowledge no event has occurred, and no circumstance or condition exists, that (with or without notice or lapse of time) will, or could reasonably be expected to, result in the delivery, license, or disclosure of the source code for any Seller Software to any other Person.
(ii)    To the Sellers Knowledge, Schedule 2.11(o)(ii) accurately identifies and describes (A) each item of Open Source Code that is contained in, distributed with, or used in the development of the Seller Products or from which any part of any Seller Product is derived, (B) the applicable license terms for each such item of Open Source Code, and (C) the Seller Product or Seller Products to which each such item of Open Source Code relates.
(iii)    No Seller Product contains, is derived from, is distributed with, or is being or was developed using Open Source Code that is licensed under any terms that: (A) impose or could impose a requirement or condition that any Seller Product or part thereof (I) be disclosed or distributed in source code form, (II) be licensed for the purpose of making modifications or derivative works, or (III) be redistributable at no charge; or (B) otherwise impose or could impose any material limitation, restriction, or condition on the right or ability of the Sellers to use or distribute any Seller Product.

2.12    Tax Matters.
(a)    The Sellers have timely filed all Tax Returns required to be filed under applicable Laws related to the Purchased Assets and the Business.  All such Tax Returns were correct and complete in all material respects and have been prepared in substantial compliance with all applicable Laws.  All Taxes owing by the Sellers with respect to the Purchased Assets and the Business, whether or not shown on any Tax Return, have been timely paid in accordance with applicable Law.  No Seller is currently the beneficiary of any extension of time within which to file any Tax Return.  No claim has ever been received by a Seller from a Governmental Authority in a jurisdiction where such Seller does not file Tax Returns that it is or may be subject to taxation by that jurisdiction.  There are no Encumbrances for Taxes (other than Taxes not yet due and payable) upon any of the Purchased Assets.
(b)    Each Seller has timely withheld and paid all material Taxes required to have been withheld and paid in connection with any amounts paid to any Business Employee, creditor, stockholder, or other third party and has timely complied with all information reporting requirements in respect thereof.
(c)    None of the Assumed Liabilities is a Contract or other obligation that will, or could reasonably be expected to, give rise directly or indirectly to payment of any amount that would not be deductible pursuant to Section 280G of the Code.  No representation or covenant made pursuant to this Section 2.12(c) is intended to guarantee the existence of any Tax attribute of the Purchased Assets or the Business for any taxable period (or portion thereof) beginning after the Closing Date, as determined pursuant to Section 6.7(b) hereof.
(d)    No Seller has been a member of any affiliated group filing a consolidated U.S. federal income Tax Return (or comparable state, local or non-U.S. consolidated, joint or unitary state income Tax Return).  Neither the Sellers nor the Stockholder has any liability for the Taxes of any Person under Treasury Regulations Section 1.1502 – 6 (or any similar provision of state, local or foreign law), as a transferee or successor, by Contract or otherwise.  None of the Purchased Assets of a Seller that is a “foreign person” (within the meaning of Section 1.1445-2(b)(2) of the Treasury Regulations) constitutes a “United States real property interest” within the meaning of Section 897(c) of the Code or an interest in a partnership conducting a trade or business within the United States.
(e)    There are no agreements or consents currently in effect for the waiver of any statute of limitations or extension of time with respect to an assessment or collection of any material Taxes related to the Purchased Assets or the Business, other than an extension arising out of an extension of the due date for filing a Tax Return.
(f)    There are no examinations, audits, actions, proceedings, investigations, disputes, assessments or claims pending regarding Taxes of the Business or the Purchased Assets that would reasonably be expected to result in a material increase in Taxes with respect to the Business or the Purchased Assets for any taxable period ending after the Closing Date.

2.13    Material Contracts.
(a)    Schedule 2.13(a) identifies each Contract to which a Seller is party or by which the Purchased Assets are or may become bound, that is related to the Business and:
(i)    that requires a payment by any party in excess of, or a series of payments that in the aggregate exceed, $50,000 per annum;
(ii)    pursuant to which any Seller has made or will be required to make loans or advances, or has or will have incurred Indebtedness, in an amount equal to or greater than $50,000 or has become a guarantor or surety or pledged its credit for or otherwise become responsible with respect to any undertaking of another Person;
(iii)    that limits, in any material respect, the ability of any of the Sellers or any of their Affiliates to engage in any line of business or compete with any Person or in any area;
(iv)    that has as a counterparty any Governmental Authority;
(v)    that is a lease of real property;
(vi)    that is a lease or similar Contract relating to any tangible personal property owned by any third party involving payment of more than $50,000 per annum (unless terminable without payment, other Liability, forfeit or transfer upon no more than sixty (60) days’ notice);
(vii)    that contains outstanding obligations relating to the settlement of any Proceeding;
(viii)    that is with a Related Party (other than any such Contract that is an employment agreement previously provided to the Buyer or is for compensation in the Ordinary Course of Business to such Person);
(ix)    that cannot be terminated (including by the Buyer after the Closing) without the incurrence of any payment, other Liability, forfeit or transfer, within thirty (30) days of the date of notice of termination;
(x)    that binds any party to any exclusive business arrangements, including any sole source agreements;
(xi)    that was not entered into in the Ordinary Course of Business;
(xii)    that is necessary to the operation of the Business or that is otherwise material to the Business; or
(xiii)    that is related to Benefit Plans.
(b)    The Sellers have delivered to the Buyer accurate and complete copies of all such Contracts identified in Schedule 2.13(a), including all amendments thereto, but excluding any Contracts with consultants of the Sellers, which such Contracts shall be deemed Excluded Contracts.  Each such Contract is in full force and effect and constitutes a legal, valid and binding obligation of the applicable Seller and, to the Sellers Knowledge, each other party thereto, and is enforceable against the applicable Seller and, to the Sellers Knowledge, each such other party, in accordance with its terms.
(c)    Except as set forth in Schedule 2.13(c):  (i) no Seller has violated or breached, or declared or committed any default under, any Contract required to be identified in Schedule 2.13(a), and, to Sellers Knowledge, no other Person has violated or breached, or declared or committed any default under, any such Contract; (ii) to the Sellers Knowledge, no event has occurred, and no circumstance or condition exists, that might (with or without notice or lapse of time) (A) result in a violation or breach of any of the provisions of any such Contract, (B) give any Person the right to declare a default or exercise any remedy under any such Contract, (C) give any Person the right to accelerate the maturity or performance of any such Contract, or (D) give any Person the right to cancel, terminate or modify any such Contract; (iii) no Seller has received any notice or other communication (in writing or otherwise) regarding any actual, alleged, possible or potential violation or breach of, or default under, any such Contract; and (iv) no Seller has waived any right under any such Contract.  No Seller has guaranteed or otherwise agreed to cause, insure or become liable for, and no Seller has never pledged any of its assets to secure, the performance or payment of any obligation or other Liability of any other Person.  The performance by the Sellers of the Contracts required to be identified in Schedule 2.13(a) have not resulted in any violation of or failure to comply with any Law.  No Person is renegotiating, or has the right to renegotiate, any amount paid or payable to a Seller pursuant to any Contracts required to be identified in Schedule 2.13(a).  To the Sellers Knowledge, no party to a Contract required to be identified in Schedule 2.13(a) could reasonably be expected to object to (X) the assignment to the Buyer of any right under such Contract or (Y) the delegation to or performance by the Buyer of any obligation under such Contract.

2.14    Sale of Products.  Except as set forth in Schedule 2.14, no product manufactured or sold by the Sellers has been the subject of any recall or other similar action or any product Liability or similar claim for injury to a Person or property which arises out of or is based upon any express or implied representation, warranty, agreement or guaranty, or by reason of the improper performance or malfunctioning of a product, improper design or manufacture, failure to adequately package, label or warn of hazards or other related product defects of any products at any time manufactured or sold or any service; and, to the Sellers Knowledge, no event has occurred, and no condition or circumstance exists, that might (with or without notice or lapse of time) give rise to or serve as a basis for any such recall or other similar action relating to any such product.

2.15    Customers and Suppliers.
(a)    Schedule 2.15(a) sets forth with respect to the Business (i) each customer who has paid aggregate consideration to the Sellers, in the aggregated, for goods or services rendered in an amount greater than or equal to €500,000 in the most recent fiscal year (collectively, the “Material Customers”); and (ii) the amount of consideration paid by each Material Customer during such periods.  No Seller has received any notice, and has no reason to believe, that any of the Material Customers has ceased, or intends to cease after the Closing, to use the goods or services of the Business or to otherwise terminate or materially reduce its relationship with the Business.
(b)    Schedule 2.15(b) sets forth with respect to the Business (i) each supplier to whom the Sellers, in the aggregate, have paid consideration for goods or services rendered in an amount greater than or equal to €500,000 in most recent fiscal year (collectively, the “Material Suppliers”); and (ii) the amount of purchases from each Material Supplier during such periods.  No Seller has received any notice, and has no reason to believe, that any of the Material Suppliers has ceased, or intends to cease, to supply goods or services to the Business or to otherwise terminate or materially reduce its relationship with the Business.

2.16    Compliance with Laws; Permits.  Each Seller has complied, and is now complying, with all Laws applicable to the conduct of the Business as currently conducted or the ownership and use of the Purchased Assets.  Schedule 2.16 identifies each Permit that is held by a Seller.  The Sellers have delivered to the Buyer accurate and complete copies of all of the Permits identified in Schedule 2.16, including all renewals thereof and all amendments thereto.  Each Permit identified or required to be identified in Schedule 2.16 is valid and in full force and effect.  Each Seller is and has at all times been in full compliance with all of the terms and requirements of each Permit applicable to such Seller and identified or required to be identified in Schedule 2.16.  To the Sellers Knowledge, no event has occurred, and no condition or circumstance exists, that might (with or without notice or lapse of time) (a) constitute or result directly or indirectly in a violation of or a failure to comply with any term or requirement of any Permit identified or required to be identified in Schedule 2.16, or (b) result directly or indirectly in the revocation, withdrawal, suspension, cancellation, termination or modification of any Permit identified or required to be identified in Schedule 2.16.  The Permits identified in Schedule 2.16 constitute all of the Permits necessary (x) to enable the Sellers to operate the Business in the manner in which the Business is currently being conducted and in the manner in which such Business is proposed to be conducted, and (y) to permit the Sellers to own and use their assets in the manner in which they are currently owned and used and in the manner in which they are proposed to be owned and used.  The Sellers have delivered to the Buyer an accurate and complete copy of each report, study, survey or other document to which any of the Sellers has access that addresses or otherwise relates to the compliance of the Sellers with, or the applicability to the Sellers of, any Law.  To Sellers Knowledge, no Governmental Authority has proposed or is considering any Law that, if adopted or otherwise put into effect, (i) may have an adverse effect on the business, condition, assets, liabilities, operations, financial performance, net income or prospects of the Sellers or on the ability of the Sellers to comply with or perform any covenant or obligation under any of the Transaction Agreements, or (ii) may have the effect of preventing, delaying, making illegal or otherwise interfering with any of the Transactions.

2.17    Environmental and Safety Laws.  No Seller is in violation of or has violated any applicable Law relating to the environment or occupational health and safety, and no material expenditures are or will be required in order to comply with any such Law.

2.18    Data Privacy and Information Security.
(a)    In connection with the collection, storage, transfer (including, without limitation, any transfer across national borders), disclosure, and/or use of any information that identifies or is reasonably likely to identify an individual, including, without limitation, any customers, prospective customers, employees and/or other third parties (collectively “Personal Information”), the Sellers are and have been in compliance with all Laws, the requirements of any contract or other agreements to which a Seller is a party, and all applicable industry or self-regulatory standards which a Seller has agreed to comply with or otherwise represents that it complies.
(b)    Each Seller has implemented and maintains commercially reasonable physical, technical, organizational and administrative security measures and policies to protect the confidentiality, availability, and integrity of all Personal Information, such Seller’s systems, and other confidential or sensitive information.  Each Seller has ensured that any individual or Entity performing services for such Seller has implemented and maintained reasonable and appropriate physical, technical, organizational, and administrative security measures to preserve the confidentiality, availability, and integrity of the all Personal Information, such Seller’s systems, and other confidential or sensitive information.  No Seller has experienced any (i) unauthorized access to or material unavailability of any of the systems or information technology assets maintained by or for such Seller, or (ii) actual or reasonably suspected unauthorized access to, or acquisition, handling, disclosure, or other processing of any Personal Information maintained or processed by or for such Seller (each, a “Security Incident”).  Each Seller is and has been in compliance in all material respects with all Laws relating to data loss, theft and breach of security notification obligations.  Each Seller has promptly (A) taken appropriate actions to address all known or suspected Security Incidents and (B) remedied the cause of any Security Incidents.
(c)    Each Seller has in the previous five (5) years, periodically and regularly, conducted reasonable assessments to identify security vulnerabilities in its products, services, and software.  To each Seller’s Knowledge, no security vulnerabilities exist in any of such Seller’s services, products, or software implemented by such Seller or any of its customers, which present a material risk of a Security Incident.
(d)    Each Seller has implemented and maintains external-facing and internal privacy policies, procedures, representations and promises relating to the collection, use, storage, disclosure, transmission, disposal, protection, and other processing of Personal Information and other confidential or sensitive data (the “Privacy Policies”).  Accurate, current copies of all Privacy Policies have been provided and the privacy and information security practices of each Seller and the Business conform, and at times have conformed, in all material respects, to the respective Privacy Policies.  Each of the Sellers has at all times: (i) complied with all applicable Laws, as well as its own Privacy Policies, including any obligations under Title V of the Gramm-Leach-Bliley Act, as amended (15 U.S.C. §§ 6801 et seq.), the Fair Credit Reporting Act, as amended (15 U.S.C. §§ 1681 et seq.), and the European Union’s General Data Protection Regulation, as well as any laws and regulations in the EEA Member States promulgated under any of the foregoing (“GDPR”); and (ii) registered with applicable data protection agencies as may be required.
(e)    With respect to any Personal Information obtained by third parties other than the individuals to whom the Personal Information pertains, each Seller has conducted appropriate due diligence and implemented contractual obligations ensuring that such third parties collect, use, process, and disclose such Personal Information in compliance with all applicable Laws and the third party’s privacy notices, statements and representations, and that such third parties have taken all necessary steps to secure appropriate rights to such Personal Information to enable such Seller to collect, use, disclose, and process such Personal Information for such Seller’s general and specific business purposes.
(f)    No person or Entity (including any foreign or domestic Governmental Authority) has made or commenced any complaint, order, action, hearing, claim, investigation, charge, inquiry, or demand relating to any Seller’s practices with respect to (i) the collection, use, retention, disclosure, transfer, storage, disposal, or other processing of Personal Information by such Seller or for which such Seller is responsible; or (ii) the security, confidentiality, availability, or integrity of Personal Information.

2.19    Insurance.  Schedule 2.19 sets forth (a) a true and complete list of all current policies or binders of fire, liability, product liability, umbrella liability, real and personal property, workers compensation, vehicular, fiduciary liability and other casualty and property insurance maintained by any Seller or its Affiliates and relating to the Business, the Purchased Assets or the Assumed Liabilities (collectively, the “Insurance Policies”); and (b) with respect to the Business, the Purchased Assets or the Assumed Liabilities, a list of all pending claims and the claims history for the Sellers.  There are no claims related to the Business, the Purchased Assets or the Assumed Liabilities pending under any such Insurance Policies as to which coverage has been questioned, denied or disputed or in respect of which there is an outstanding reservation of rights.  No Seller or any of their respective Affiliates has received any written notice of cancellation of, premium increase with respect to, or alteration of coverage under, any of such Insurance Policies.  All such Insurance Policies (x) are in full force and effect and enforceable in accordance with their terms; (y) are provided by carriers who are financially solvent; and (z) have not been subject to any lapse in coverage.  The Insurance Policies are of the type and in the amounts customarily carried by Persons conducting a business similar to the Business and are sufficient for compliance with all applicable Laws and Contracts to which any Seller is a party or by which any Seller is bound.

2.20    Related Party Transactions.  No securityholder, officer, director, principal, manager or employee of a Seller or any of their respective Affiliates (or any relative thereof), Related Person or any other Person in which any securityholder, officer, director, principal, manager or employee of a Seller has a financial interest (each, a “Related Party”): (a) has any direct or indirect interest of any nature in any of the Purchased Assets; (b) except for employment relationships and the payment of compensation and benefits in the Ordinary Course of Business, is a party to any Contract with any Seller (each a “Related Party Transaction”); or (c) possesses, directly or indirectly, any material financial interests in, or is a director, officer, principal, manager or employee of, any Person which is a material client, supplier, customer, lessor, lessee or competitor of the Sellers (other than Winspeed, First Wise and Jöllenbeck).  No Seller has made any loans or advances or capital contributions to any Related Party, except advances for travel expenses to officers and employees in the Ordinary Course of Business.

2.21    Brokers.  Except for CatCap GmbH, no broker, finder or investment banker is entitled to any brokerage, finder’s or other fee or commission in connection with the transactions contemplated by this Agreement based upon arrangements made by or on behalf of the Sellers or the Stockholders.

3.    Representations and Warranties of the Stockholders.  Each of the Stockholders represents and warrants, to and for the benefit of the Buyer Indemnitees, that the statements in this Section 3 are true and correct as of the date of this Agreement and as of the Closing Date.

3.1    Authority; Binding Nature of Agreements.  Such Stockholder has the right, power, authority, and capacity to enter into and to perform its obligations under each of the Transaction Agreements to which he is or may become a party; and the execution, delivery and performance by the Stockholder of the Transaction Agreements to which he is or may become a party have been duly authorized.  This Agreement has been duly executed and delivered by such Stockholder, and (assuming due authorization, execution and delivery by the other parties hereto) this Agreement constitutes a legal, valid and binding obligation of such Stockholder enforceable against such Stockholder in accordance with its terms, subject to (a) laws of general application relating to bankruptcy, insolvency and the relief of debtors, and (b) rules of law governing specific enforcement, injunctive relief and other equitable remedies.  When each Ancillary Document to which such Stockholder is or will be a party has been duly executed and delivered by such Stockholder (in such Stockholder’s capacity as a stockholder of Roccat and assuming due authorization, execution and delivery by each other party thereto), such Ancillary Document will constitute a legal and binding obligation of such Stockholder enforceable against it in accordance with its terms, subject to (a) laws of general application relating to bankruptcy, insolvency and the relief of debtors, and (b) rules of law governing specific enforcement, injunctive relief and other equitable remedies.

3.2    Non‐Contravention; Consents.  Neither the execution and delivery of any of the Transaction Agreements the Stockholder, nor the consummation or performance of any of the Transactions by the Stockholder, will directly or indirectly (with or without notice or lapse of time):
(a)    contravene, conflict with or result in a violation of, or give any Governmental Authority or other Person the right to challenge any of the Transactions or to exercise any remedy or obtain any relief under, any Law or any Order to which the Stockholder is subject (in such Stockholder’s capacity as a stockholder of Roccat); or
(b)    contravene, conflict with or result in a violation or breach of, or result in a default under, any provision of any Contracts to which the Stockholder is a party.

3.3    Certain Proceedings.  There is no Proceeding that has been commenced against such Stockholder that challenges, or may have the effect of preventing, delaying, making illegal or otherwise interfering with, any of the Transactions.  To the Stockholder’s Knowledge, no such Proceeding has been threatened.

3.4    Discussions.  Neither such Stockholder nor any Representative of such Stockholder is engaged, directly or indirectly, in any discussions or negotiations with any other Person relating to any solicitation or submission of any expression of interest, inquiry, proposal or offer from any Person (other than Buyer) relating to a possible acquisition of any of the Sellers or the assets of such Seller (other than sales of inventory in the Ordinary Course of Business), in each case, whether by way of business combination, reorganization or similar transaction.

4.    Representations and Warranties of the Buyer.  The Buyer represents and warrants, to and for the benefit of the Sellers and the Stockholders, that the statements in this Section 4 are true and correct as of the date of this Agreement and as of the Closing Date:

4.1    Due Organization.  The Buyer is a corporation duly organized, validly existing and in good standing under the laws of the State of Delaware.  The Buyer is duly qualified or licensed to transact business and is in good standing as a foreign company in each jurisdiction where the character of its activities requires such qualification, except where the failure to be so qualified, individually or in the aggregate, is not reasonably likely to have a material adverse effect on the Buyer’s business.

4.2    Authority; Binding Nature of Agreements.  The Buyer has the right, power and authority to enter into and perform its obligations under each of the Transaction Agreements to which it is or may become a party; and the execution, delivery and performance by the Buyer of the Transaction Agreements to which it is or may become a party have been duly authorized by all necessary action on the part of the Buyer, its board of directors and its officers.  This Agreement has been duly executed and delivered by the Buyer, and (assuming due authorization, execution and delivery by the other parties hereto) this Agreement constitutes a legal, valid and binding obligation of the Buyer enforceable against the Buyer in accordance with its terms, subject to (a) laws of general application relating to bankruptcy, insolvency and the relief of debtors, and (b) rules of law governing specific enforcement, injunctive relief and other equitable remedies.  When each Ancillary Document to which the Buyer is or will be a party has been duly executed and delivered by the Buyer (assuming due authorization, execution and delivery by each other party thereto), such Ancillary Document will constitute a legal and binding obligation of the Buyer enforceable against it in accordance with its terms, subject to (a) laws of general application relating to bankruptcy, insolvency and the relief of debtors, and (b) rules of law governing specific enforcement, injunctive relief and other equitable remedies.

4.3    Certain Proceedings.  There is no Proceeding that has been commenced against the Buyer and that challenges, or may have the effect of preventing, delaying, making illegal or otherwise interfering with, any of the Transactions.  To the Buyer’s knowledge, no such Proceeding has been threatened.

5.    Certain Pre-Closing Covenants.

5.1    Conduct of the Business.
(a)    From the date hereof until the Closing Date or the earlier termination of this Agreement (the “Interim Period”), the Sellers will conduct the Business in the Ordinary Course of Business and use reasonable best efforts, to (i) preserve the Intellectual Property and goodwill of the Business (including its relationships with its suppliers, contractors, licensors, manufacturers, customers, distributors or others having business relations with the Business) and (ii) keep available the services of the employees of Sellers and others who provide substantial services with respect to the Business; provided, that, the Sellers will not be required to renew any design rights for Seller Products that have reached the end of their product cycles.
(b)    During the Interim Period, except as otherwise explicitly specified in this Agreement or as consented to in writing by the Buyer (such consent not to be unreasonably withheld, delayed or conditioned), the Sellers will:
(i)    not amend or propose to amend the respective certificates of incorporation, bylaws, certificates of formation or limited liability company agreements or other organizational documents of the Sellers in any manner;
(ii)    not issue, sell, pledge, transfer or dispose of, or agree to issue, sell pledge, transfer or dispose of, any shares of capital stock or other equity interests of the Sellers;
(iii)    not (A) grant to any Business Employee an increase in compensation or benefits, except (I) for regularly scheduled pay increases, promotions, and bonuses made in the Ordinary Course of Business or (II) as may be required by Law or the terms of any Benefit Plan; (B) modify or establish any Benefit Plan (or any arrangement that would constitute a Benefit Plan, if adopted), except to the extent required by Law or the terms of any Benefit Plan or contract; (C) terminate the employment of any Business Employee in the position of vice president or above or in a research and development or technical function, other than for cause;
(iv)    not sell, lease, transfer or otherwise dispose of, any material property or assets of the Sellers, except for the sale, lease, transfer or disposition of inventory in the Ordinary Course of Business;
(v)    not enter into any Contract that would have been required to be disclosed on Schedule 2.13(a) if such Contract existed as of the date hereof;
(vi)    except for amendments in the Ordinary Course of Business, not amend or terminate (except for a termination resulting from the expiration of a Contract in accordance with its terms or its earlier termination resulting from the exercise by a Seller of a right available to it under such Contract, including as a result of the exercise of any remedy for a breach or default by the counterparty to such Contract) any Assigned Contract;
(vii)    not amend, cancel, waive, modify, transfer or otherwise dispose of any rights in, to or for the use of any Intellectual Property, except for terminations in accordance with the respective terms of any of the foregoing that expire in accordance with their terms or otherwise in the Ordinary Course of Business;
(viii)    not acquire any business or Person, by merger or consolidation, purchase of assets or equity interests, or by any other manner, in a single transaction or a series of related transactions;
(ix)    not form, contribute capital to, make a loan to or enter into any transactions with, a joint venture;
(x)    not make or change any method of accounting or auditing practice, including any working capital procedures or practices, other than changes required as a result of changes in IFRS or applicable Law;
(xi)    not make or change any material election in respect of Taxes, settle, compromise or otherwise pay any material Tax in connection with an audit, claim, investigation, inquiry or other proceeding in respect of Taxes, surrender any claim for refund of a material amount of Taxes, file an amended material Tax Return, or take any other position or action in respect of Taxes that would have the result of materially increasing Buyer’s liability for Taxes of the Business or related to the Acquired Assets for any taxable period (or portion thereof) ending after the Closing Date; and
(xii)    not authorize, or commit or agree to take any action described in this Section 5.1.

5.2    Access to Sellers’ Books and Records.  During the Interim Period, the Sellers will, consistent with applicable Laws, provide the Buyer and its Representatives with reasonable access at all reasonable times and upon reasonable advance notice to the offices, properties, books and records of the Sellers in order for the Buyer to have the opportunity to make such investigation as it reasonably desires to make of the affairs of the Sellers with respect to the Business, the Purchased Assets and Assumed Liabilities; provided, that such access does not unreasonably interfere with the normal operations of the Sellers; provided, further, that all requests for access will be directed to Roccat.  Additionally, the Sellers will provide to the Buyer true and complete copies of all written Contracts that are required to be listed on Schedule 2.13(a), to the extent not provided prior to the date hereof, at least 10 Business Days prior to the Closing.

5.3    Regulatory Filings; Consents.
(a)    Each party hereto will, as promptly as possible, (i) make, or cause or be made, all filings and submissions required under any Law applicable to such party or any of its Affiliates; and (ii) use reasonable best efforts to obtain, or cause to be obtained, all consents, authorizations, orders and approvals from all Governmental Authorities that may be or become necessary for its execution and delivery of this Agreement and the performance of its obligations pursuant to this Agreement and the Ancillary Documents.  Each party will cooperate fully with the other party and its Affiliates in promptly seeking to obtain all such consents, authorizations, orders and approvals.  The parties hereto will not willfully take any action that will have the effect of delaying, impairing or impeding the receipt of any required consents, authorizations, orders and approvals.
(b)    The Sellers will use reasonable best efforts to give all notices to, and obtain all consents from, all third parties that are described in Schedule 2.3 by the Closing.  During the Interim Period, the Sellers and Stockholders will use reasonable best efforts to take such actions as are necessary to expeditiously satisfy the closing conditions set forth in Section 8.1 hereof and the Buyer will use reasonable best efforts to take such actions as are necessary to expeditiously satisfy the closing conditions set forth in Section 8.2 hereof.

5.4    Employee Covenants.
(a)    Transfer of Employment.  In cases where applicable Law does not require the automatic transfer of employment of Business Employees in connection with the consummation of the Transactions, unless provided otherwise in this Agreement, the Buyer or any of its Affiliates may make an offer of employment to each such Business Employee, to be effective as of the Closing Date, at the same terms and conditions of employment provided by the applicable Seller (except to the extent they violate or do not comply with applicable Law) to such Business Employee immediately prior to the Closing Date.  To the extent that applicable Law provides for the automatic transfer of employment of Business Employees in connection with the consummation of the Transactions, which the Parties understand will be the case with respect to all Business Employees based in the European Union (except for René Korte): (A) the applicable Seller and the Buyer or the applicable Affiliate will offer tripartite agreements reflecting such automatic transfer of employment to such Business Employees before Closing regardless of whether or not the above understanding of the Parties will turn out to be correct, (B) the Buyer or the applicable Affiliate will assume and honor all terms and conditions of employment with respect to each such Business Employee, regardless of whether or not such Business Employee has signed the above tripartite agreement, and (C) the Sellers and the Buyer agree to take such actions as are reasonably necessary such that the employment of each such Business Employee will transfer to the Buyer or any of its Affiliates as a matter of Law as of the Closing Date.  Any Business Employee: (i) whose employment is to transfer, or was transferred, automatically from a Seller to the Buyer or any of its Affiliates other than those that object to such transfer of employment in accordance with applicable Law, or (ii) who accepts employment with the Buyer or any of its Affiliates is hereinafter referred to as a “Transferring Employee.”
(b)    Employee Notifications.  Where required under applicable Law, the Sellers and the Buyer will prior to the Closing Date properly and timely notify, or where appropriate, consult or negotiate with, employees, Unions, employee representatives, or any relevant governmental agencies concerning the transactions contemplated by this Agreement in accordance with applicable Law.  Any required notifications to Business Employees will be timely provided by the Sellers, with such notifications subject to the prior review and reasonable timely comment of the Buyer.  The Sellers and the Buyer will each contribute any information required for the notifications under applicable Law.  The Sellers agree that the information they contribute to such notifications will be correct and complete information, and the Buyer agrees that the information it contributes to such notifications will also be correct and complete.  The date of the notifications will be mutually agreed to by the Sellers and the Buyer.  The notifications may be updated and/or amended upon the reasonable agreement of the Sellers and the Buyer.
(c)    Objecting Employees.  Should any Transferring Employee, whose employment is to transfer, or was transferred, automatically from a Seller to the Buyer or any of its Affiliates, object to such automatic transfer of employment to the Buyer or any of its Affiliates in accordance with applicable Law, such Transferring Employee will discontinue to be a Transferring Employee with effect from the Closing Date or the date of receipt of such objection by the applicable Seller or the Buyer or any of its Affiliates, whichever is earlier.

5.5    Exclusive Dealing.  During the Interim Period, the Sellers and the Stockholders will not, and will cause their Representatives not to, take any action to encourage, initiate or engage in discussions or negotiations with, or provide any information to, any Person (other than the Buyer and its Affiliates and Representatives) concerning any acquisition or merger involving any of the Sellers, the sale of substantially all of the assets of any Seller, or a similar transaction.

5.6    Transition Services and Distribution Agreement.  Prior to Closing, the parties will negotiate in good faith (x) a transition services agreement (the “Transition Services Agreement”) in customary form for comparable transactions reasonably acceptable to the parties thereto (a sample form is attached as Exhibit K-1) including the services identified on Exhibit K-2 and shall negotiate with respect to any additional services are currently provided to the Sellers by affiliates or third parties that Buyer may request during the Interim Period; provided, that all such services will be available (i) until at least [**] (at the Buyer’s option) and (ii) at a cost no greater, and on such other terms no less beneficial, than extended to the Sellers today or listed in Exhibit K-3 and (y) a distribution agreement in customary form and substance reasonably acceptable to the parties thereto and including those terms and conditions set forth in Exhibit K-4 and at no higher cost than as set forth on Exhibit K-5.

5.7    True Up Disclosure.  During the Interim Period but no later than 10 Business Days prior to Closing, the Sellers will have the right (but not the obligation) to supplement or amend the Disclosure Schedules solely with respect to Section 2 hereto (other than with respect to the Fundamental Representations) with respect to any matter that (i) first arises after the date hereof and of which the Sellers had no Knowledge prior to the date hereof, (ii) did not result from a breach of any of the covenants set forth herein, any Law or any Contract, (iii) if occurring or known at the date of this Agreement, would have been required to be set forth or described in the Disclosure Schedules and (iv) would, absent such supplement or amendment, result in the failure of the condition set forth in Section 8.1(a), by delivering a written notice thereof to the Buyer describing such matter in reasonable detail, identifying the specific representations and warranties to which such Schedule Supplement relates and stating that the Buyer has the right to terminate the Agreement pursuant to Section 9.1(b)(i) as a result of such matter (each a “Schedule Supplement”).  No disclosure in any such Schedule Supplement will be deemed to cure any inaccuracy in or breach of any representation or warranty contained in this Agreement, including for purposes of the indemnification or termination rights contained in this Agreement or of determining whether or not the conditions set forth in Section 8.1(a) have been satisfied; provided, however, that if the Buyer has the right to, but does not elect to, terminate this Agreement within 10 Business Days of its receipt of such Schedule Supplement, then the Buyer will be deemed to have waived its right to terminate this Agreement with respect to such matter and its right to indemnification under Section 7.2(b)(i) (other than with respect to the Fundamental Representations) with respect to such matter.

6.    Certain Post-Closing Covenants.

6.1    Further Actions.
(a)    From and after the Closing Date, the Sellers and the Stockholders will cooperate with the Buyer and the Buyer’s Affiliates and Representatives, and will execute and deliver such documents and take such other actions as the Buyer may reasonably request, for the purpose of evidencing and consummating the Transactions and putting the Buyer and its designated assignees in possession and control of all of the Purchased Assets.  Without limiting the generality of the foregoing, from and after the Closing Date, the Sellers will promptly remit to the Buyer or its designated assignees any funds that are received by the Sellers and that are included in, or that represent payment of receivables included in, the Purchased Assets.  Each Seller: (i) hereby irrevocably authorizes the Buyer or its designated assignees, at all times on and after the Closing Date, to endorse in the name of such Seller any check or other instrument that is made payable to such Seller and that represents funds included in, or that represents the payment of any receivable included in, the Purchased Assets; and (ii) hereby irrevocably nominates, constitutes and appoints the Buyer or its designated assignees as the true and lawful attorney-in-fact of such Seller (with full power of substitution) effective as of the Closing Date, and hereby authorizes the Buyer or its designated assignees, in the name of and on behalf of such Seller, to execute, deliver, acknowledge, certify, file and record any document, to institute and prosecute any Proceeding and to take any other action (on or at any time after the Closing Date) that the Buyer may deem appropriate for the purpose of (A) collecting, asserting, enforcing or perfecting any claim, right or interest of any kind that is included in or relates to any of the Purchased Assets, (B) defending or compromising any claim or Proceeding relating to any of the Purchased Assets, or (C) otherwise carrying out or facilitating any of the Transactions.  The power of attorney referred to in the preceding sentence is and will be coupled with an interest and will be irrevocable, and will survive the dissolution or insolvency of any such Seller.
(b)    If, in the case of any Assigned Contract, a required Consent has not been obtained (or otherwise is not in full force and effect) as of the Closing, the Seller and the Stockholders will use their reasonable best efforts to obtain such Consent as promptly as practicable after the Closing.  Buyer and its designated assignees will not be obliged to enter into or agree to a Consent which would make the rights or obligations of the Buyer in respect of the Contract concerned less favorable than those rights or obligations were before the Consent.  Neither this Agreement nor any other Transaction Agreement will constitute a sale, assignment, assumption, transfer, conveyance or delivery, or an attempted sale, assignment, assumption, transfer, conveyance or delivery, of any Assigned Contract as to which a required Consent has not been obtained as of the Closing Date.  From and after the Closing Date, until any such Consent is obtained, the Sellers and the Stockholder will cooperate and agree to act after the Closing as the agent of Buyer and its designated assignees and otherwise cooperate with the Buyer and its designated assignees in any lawful arrangement designed to provide the Buyer and its designated assignees with the benefits of such Assigned Contract at no cost to Buyer or its designated assignees in excess of the cost the Buyer or its designated assignees would have incurred (without modification of the terms of such Assigned Contract) if such Consent had been obtained prior to Closing, including by enabling Buyer and its designated assignees to enforce rights under such Assigned Contract.  The Buyer shall perform the obligations of the applicable Seller under such Assigned Contracts (but only to the extent such obligations constitute Assumed Liabilities) on behalf of such Seller from and after the Closing Date and each Seller shall hold in trust for and pay to the Buyer promptly upon receipt thereof all income, proceeds and other monies received by such Seller under such Assigned Contracts.  Sellers will continue to comply with such Assigned Contracts and will not amend, modify, terminate or otherwise take any action under such Assigned Contracts that could adversely affect the Buyer without the Buyer’s prior written consent.  If and when such Consent is obtained, the transfer of such Assigned Contract will be effected in accordance with the terms of this Agreement as if such Consent had been obtained prior to the Closing.

6.2    Confidentiality.  The Sellers, Jöllenbeck, and the Stockholders will ensure that, on and at all times after the Closing Date: (a) no press release or other publicity concerning any of the Transactions is issued or otherwise disseminated by or on behalf of the Sellers, Jöllenbeck, or the Stockholders without the Buyer’s prior written consent; (b) Sellers, Jöllenbeck, and the Stockholders continue to keep the terms of this Agreement and the other Transaction Agreements strictly confidential; and (c) the Sellers, Jöllenbeck, and the Stockholders keep strictly confidential, and the Sellers, Jöllenbeck, and the Stockholders do not use or disclose to any other Person, any non‐public document or other information that relates directly or indirectly to the Purchased Assets, the Assigned Contracts, the Assumed Liabilities, the Buyer or any Affiliate of the Buyer.  The Sellers, Jöllenbeck, and the Stockholders acknowledge and agree that Buyer, as a subsidiary of a publicly traded company, will be permitted to make and file certain statements regarding the Transactions and Transaction Agreements.

6.3    Change of Name.  Immediately after the Closing, in connection with the acquisition of the Purchased Assets, including with respect to rights in the “Roccat” Trademark, each Seller will (and will cause its Affiliates and licensees to) cease using and change its name to a name that does not include the word “Roccat,” any other Trademark included in the Seller Owned IP, or any similar variation of any of the foregoing, and that is reasonably satisfactory to the Buyer.  For purposes of this Agreement, such Affiliates and licensees of Sellers include but are not limited to Team Roccat and Roccat Studio Games.

6.4    Restrictive Covenants.
(a)    Each Seller, Stockholder, First Wise and Jöllenbeck (each, a “Restricted Party,” and collectively the “Restricted Parties”) hereby acknowledges and agrees that such Restricted Party is familiar with the Business, and that the Buyer and its Affiliates would be irreparably damaged if the Restricted Party were to provide services to any Person competing with the Business or a competing business and that such competition by the Restricted Party would result in a significant loss of goodwill by the Buyer and its Affiliates.  Each Restricted Party further acknowledges and agrees that the covenants and agreements set forth in this Section 6.4 were and are a material inducement to the Buyer to enter into this Agreement and to perform its obligations hereunder, and that the Buyer would not obtain the benefit of the bargain set forth in this Agreement as specifically negotiated if any Restricted Party breached the provisions of this Section 6.4.  Each Stockholder further acknowledges that such Stockholder’s services have been and will be of special, unique and extraordinary value to the Business.  Therefore, in further consideration of the Purchase Price payable to the Sellers and the Stockholders hereunder (from which the Sellers and Stockholders will derive substantial direct and indirect benefit), and for other good and valuable consideration, the receipt and sufficiency of which is hereby acknowledged, each Restricted Party hereby covenants and agrees as follows:
(i)    From the Closing Date until [**] (or [**] with respect to Mr. Korte) after the Closing Date (the “Non-compete Period”), each Restricted Party will not (and each will cause each of its agents, Affiliates, which for the avoidance of doubt, includes First Wise, and each of its then-current employees, officers, directors, however not beyond the term of each such employee’s, officer’s or director’s employment, (collectively, the “Controlled Persons”) not to) directly or indirectly own any interest in, manage, control, participate in (whether as an officer, manager, employee, partner, agent, representative or otherwise), consult with, render services for, or in any other manner engage anywhere in the world, with any enterprise engaged in or competitive with the Business or engaged in the development, manufacture, distribution or sale of any products (including, but not limited to, any “Original Design Manufacturer” or “Contract Manufacturer” products) that are similar to or compete with products sold by the Business, including any Roccat Product or gaming headset (the “Restricted Business”); notwithstanding the foregoing:
		
	A.
	subject to compliance with the Positioning Guidelines during the Positioning Period, Jöllenbeck and First Wise may continue to distribute and sell the products listed on Schedule 6.4(a)(i)(A);

		
	B.
	subject to compliance with the Positioning Guidelines during the Positioning Period, Jöllenbeck and First Wise may have manufactured and may distribute and sell products under the “Speedlink” Trademark (or other Trademark then-owned by Jöllenbeck or First Wise), that are (x) manufactured and purchased from “Original Equipment Manufacturers,” (y) generally available from such manufacturers for purchase by third parties to be customized with their own branding and other superficial characteristics (but not functional or other custom specifications) and (z) [**] (the “OEM Products”);

		
	C.
	subject to compliance with the Positioning Guidelines during the Positioning Period, Jöllenbeck and First Wise may distribute Corsair products, Imtron products, and Creative Labs products;

		
	D.
	following the conclusion of the Positioning Period, Jöllenbeck and First Wise may distribute products of unaffiliated third parties that may be competitive with the Business, but may not, for the avoidance of doubt, develop or manufacture (or be involved in the development or manufacture) of any products that may be competitive (other than the OEM Products).

(ii)    During the Non-compete Period, each Restricted Party will not (and will cause each of its Controlled Persons not to) directly, or indirectly through another Person, solicit, aid or induce any employee, representative or agent of the Buyer or any of its subsidiaries or affiliates (each a, “Covered Person”) to leave such employment or retention or to accept employment with or render services to or with any other person, firm, corporation or other Entity unaffiliated with the Buyer or hire or retain any such Covered Person, or take any action to materially assist or aid any other person, firm, corporation or other Entity in identifying, hiring or soliciting any such Covered Person.  A Covered Person will be deemed subject to this Section 6.4(a)(ii) while so employed or retained by the Buyer or any of its Affiliates and for a period of [**] thereafter.
(iii)    During the Non-compete Period, each Restricted Party agrees that the Restricted Party will not (and will cause each of its Controlled Persons not to), directly or indirectly, individually or on behalf of any other Person, solicit, aid or induce any current or former customer, suppliers, or distributors of the Business to reduce or adversely alter the business conducted with the Buyer or its Affiliates in the operation of the Business.
(iv)    From and after the Closing, each Restricted Party will not (and will cause each of its Controlled Persons not to) make, negative comments or otherwise disparage the Business, the Buyer and its Affiliates, the Purchased Assets, the Seller Products and any of officers, directors, employees, shareholders, agents or products of the Buyer and its Affiliates.  The foregoing will not be violated by truthful statements in response to legal process, required governmental testimony or filings, administrative or arbitral proceedings (including, without limitation, depositions in connection with such proceedings).
(v)    During the Positioning Period, each Restricted Party will (and will cause its Controlled Persons to) comply with the Positioning Guidelines.
(b)    After the Closing Date, the Sellers will promptly destroy all Excluded Inventory listed as “C3” Inventory and deliver a certificate executed by the respective officers of each Seller attesting to the destruction of such Excluded Inventory to the Buyer and be entitled to sell the remaining Excluded Inventory existing as of the Closing Date (the “Limited Sale Products”) a period of [**] after the Closing Date (the “Sell-Off Period”), so long as such sales are conducted as follows: (i) any such sales will only be through online channels and not through any distributor or physical retail store; (ii) all such online channels will be disclosed to the Buyer; (iii) records of such sales will be provided to the Buyer at the Buyer’s request; (iv) no sale of a Limited Sale Product will reflect or be at a discount of more than [**]; and (v) no Excluded Inventory with a history of quality problems, including any with return rates of [**] will be a Limited Sale Product.  In connection with such sales and solely during the Sell-Off Period, Seller may continue to use the “Roccat” Trademark and the other Trademarks included in the Seller Owned IP that are currently used in the Business as of the Closing Date, solely to the extent that such Trademark appears on any Limited Sale Product existing on the Closing Date.  In no event will any of the Sellers increase the nature or scope of any use of such Trademarks during the Sell-Off Period.  Upon the expiration of the Sell-Off Period, each Seller will destroy any remaining inventory bearing the “Roccat” Trademark (or any other Trademark included in the Seller Owned IP) then in such Seller’s possession or control and provide to the Buyer a certificate executed by the respective officers of each Seller attesting to the destruction or other disposal of the Authorized Products.  Each Seller hereby agrees to indemnify the Buyer Indemnitees from and against any and all Damages incurred or suffered in connection with or resulting from, any use of such Trademarks during the Sell-Off Period.
(c)    If, at the time of enforcement of the covenants contained in this Section 6.4 (the “Restrictive Covenants”), a court will hold that the duration, scope or area restrictions stated herein are unreasonable under circumstances then existing, the parties agree that the maximum duration, scope or area reasonable under such circumstances will be substituted for the stated duration, scope or area and that the court will be allowed and directed to revise the restrictions contained herein to cover the maximum period, scope and area permitted by applicable Laws.  The Restricted Parties have consulted with legal counsel regarding the Restrictive Covenants and based on such consultation have determined and hereby acknowledges that the Restrictive Covenants are reasonable in terms of duration, scope and area restrictions and are necessary to protect the goodwill of the Business and the substantial investment in the Business made by the Buyer hereunder and the nature of the Business is such that it is not conducted with respect to geographical boundaries.
(d)    If any Restricted Party or any Affiliate of such Restricted Party breaches any of the Restrictive Covenants, the Buyer will have the right and remedy to have the Restrictive Covenants specifically enforced by any court of competent jurisdiction and obtain (i) a decree or order of specific performance to enforce the observance and performance of such Restrictive Covenant, and (ii) an injunction restraining such breach or threatened breach, in each case, the obligation to obtain, furnish or post any bond or similar instrument, it being agreed that any breach or threatened breach of the Restrictive Covenants would cause irreparable injury to the Buyer and that money damages would not provide an adequate remedy to the Buyer.
(e)    In the event that the Buyer becomes aware of any breach or violation by any Restricted Party of any of the Restrictive Covenants, the Buyer agrees to provide such Restricted Party written notice of such breach or violation.  If such Restricted Party (x) is not a Seller and (y) fails to cure any such breach or violation as soon as practicable upon receipt of any such notice from Buyer, the Buyer hereby agrees to seek specific performance with respect to such alleged breach or violation of the Restrictive Covenants consistent with Section 6.4(d) prior to asserting a claim for indemnification pursuant to Section 7 with respect to such breach.
(f)    In the event of any breach or violation by any Restricted Party of any of the Restrictive Covenants, the time period of such covenant with respect to such Person will be tolled until such breach or violation is resolved.

6.5    Employee Related Covenants.
(a)    Notwithstanding any automatic transfer of employment, Sellers will be solely responsible, and Buyer will have no obligations whatsoever for, any compensation or other amounts payable to any current or former employee, officer, director, independent contractor or consultant of the Business, any Business Employee or Transferring Employee, including, without limitation, hourly pay, commission, bonus, salary, accrued vacation, fringe, pension or profit sharing benefits or severance pay for any period relating to the service with Seller at any time on or prior to the Closing Date.  In the absence of an automatic transfer of employment of such Business Employee, the Sellers will pay all amounts to all such persons who may be entitled, on or prior to the Closing Date.  In the event of an automatic transfer of employment of any Business Employee, the Sellers will reimburse the Buyer for the pro-rata share of any such amount paid by Buyer or any of its Affiliates to such Transferring Employee that relates to any period of service with a Seller on or prior to the Closing Date.
(b)    Notwithstanding any automatic transfer of employment, the Sellers will remain solely responsible for the satisfaction of all claims for medical, dental, life insurance, health accident or disability benefits brought by or in respect of current or former employees, officers, directors, independent contractors or consultants of the Business or the spouses, dependents or beneficiaries thereof, which claims relate to events occurring on or prior to the Closing Date.  Notwithstanding any automatic transfer of employment, the Sellers also will remain solely responsible for all worker’s compensation claims of any current or former employees, officers, directors, independent contractors or consultants of the Business which relate to events occurring on or prior to the Closing Date.  Sellers will pay, or cause to be paid, all such amounts as and when due.
(c)    Effective as soon as practicable following the Closing Date, Sellers, or any applicable Affiliate, will effect a transfer of assets and liabilities from any defined contribution retirement plan that it maintains, to the defined contribution retirement plan maintained by the Buyer, with respect to those employees of the Business who become employed by Buyer, or an Affiliate of Buyer, in connection with the transactions contemplated by this Agreement.

6.6    Access to Books and Records.  The Buyer and Sellers agree to furnish or cause to be furnished to each other, upon request, as promptly as practicable, such information and assistance relating directly to the Purchased Assets or the Business (including, in each case, access to books and records, employees, contractors and representatives) as is reasonably necessary for the making of any required filing with a Governmental Authority, the filing of all Tax Returns, the making of any election related to Taxes, the preparation for any audit by any Governmental Authority, and the prosecution or defense of any Proceeding, including those related to any Tax Return; provided, however, that if such requested information is contained within a document containing any unrelated information, only portions pertaining to such relevant information will be furnished.

6.7    Tax Matters.
(a)    The Buyer will prepare, or cause to be prepared, and file, or cause to be filed, all Tax Returns in respect of the Purchased Assets or the Business that are required to be filed after the Closing Date (other than Tax Returns of a Seller, which will be prepared exclusively by such Seller, and Seller will pay all Taxes shown as due on, or otherwise payable with respect to, any such Tax Return, excluding VAT and Transfer Taxes related to the signing and execution of this Agreement and which are to be borne by the Buyer) .
(b)    For purposes of this Section 6.7 and otherwise under this Agreement, other than with respect to Transfer Taxes or VAT imposed with respect to the acquisition of the Purchased Assets, in order to apportion appropriately any Taxes relating to the Purchased Assets or the Business for a taxable period that includes, but does not end on, the Closing Date (a “Straddle Period”), including refunds of, or credits in lieu thereof attributable to, such Taxes, the Parties will, to the extent permitted or required under applicable Law, treat the Closing Date as the last day of any taxable period beginning on or prior to such date for all Tax purposes.  In any case where applicable Law does not permit any Seller (with respect to the Business) to treat the Closing Date as the last day of the taxable period, the amount of any Taxes for the portion of any Straddle Period ending on and including the Closing Date will (x), in the case of any Tax based upon or related to income, gains, receipts, employment, sales, use, or other Taxes imposed on a non-periodic basis, be based on an interim closing of the books as of the end of the Closing Date (and for such purpose, the taxable period of any pass-through entity or controlled foreign corporation (within the meaning of the Code) will be deemed to terminate at such time), provided, however, that exemptions, allowances or deductions that are calculated on an annual basis (including depreciation and amortization deductions) will be allocated between the period ending on and including the Closing Date and the period after the Closing Date in proportion to the number of days in each such period, and (y), in the case of property, ad valorem and other Taxes imposed on a periodic basis, be deemed to be the amount of such Taxes for the entire taxable period multiplied by a fraction the numerator of which is the number of days in the taxable period ending on and including the Closing Date and the denominator of which is the number of days in the entire taxable period.

7.    Survival; Indemnification.

7.1    Survival of Representations and Covenants.
(a)    Except as set forth in Sections 7.1(c) and 7.1(d), the representations and warranties of the Sellers, the Stockholders, and the Buyer will expire upon that date that is [**] after the Closing Date (the “Expiration Date”); provided, however, that if an request for indemnification under this Section 7 relating to any such representation or warranty is given to the Indemnifying Party on or prior to the Expiration Date, then, notwithstanding anything to the contrary contained in this Section 7.1, the claims asserted in such request for indemnification will not so expire, but rather will remain in full force and effect until such time as such claims have been fully and finally resolved.
(b)    The representations, warranties, covenants and obligations of any Indemnifying Party, and the rights and remedies that may be exercised by any Indemnitee, will not be limited or otherwise affected by or as a result of any information furnished to, or any investigation made by or any knowledge of, any Indemnitee or any of its Representatives.
(c)    Subject to Section 7.1(d), the representations and warranties set forth in Sections 2.10 (Employees; Benefit Plans), 2.11 (Intellectual Property), and 2.16 (Compliance with Laws; Permits) will expire upon that date that is [**] after the Closing Date (the “Extended Date”); provided, however, that if an request for indemnification under this Section 7 relating to any such representation or warranty is given to the Sellers on or prior to such date, then, notwithstanding anything to the contrary contained in this Section 7.1(b), the claims asserted in such request for indemnification will not so expire, but rather will remain in full force and effect until such time as such claims have been fully and finally resolved.  The representations and warranties set forth in Sections 2.1 (Due Organization; Capitalization), 2.2 (Authority), 2.3(a) (Non-Contravention; Consents), 2.4 (Title to Assets; Sufficiency), 2.6 (Solvency), 2.20 (Related Party Transactions), 2.21 (Brokers), 3 (Representations and Warranties of the Stockholders) and 4 (Representations and Warranties of the Buyer) (the “Fundamental Representations”) will upon that date that is [**] after the Closing Date.
(d)    Notwithstanding anything to the contrary contained in Section 7.1(b) (and without limiting the generality of anything contained in Section 7.1(a)), if there is any fraudulent misrepresentation by the Sellers in Section 2 of this Agreement or fraudulent misrepresentation by a Stockholder in Section 3 of this Agreement, then such fraudulent misrepresentation will not expire, but rather will remain in full force and effect for an unlimited period of time (regardless of whether any request for indemnification under this Section 7 relating to such representation or warranty is ever given).
(e)    It is the express intent of the parties that, if the applicable survival period for an item as contemplated by this Section 7.1 is shorter than the statute of limitations that would otherwise have been applicable to such item, then, by contract, the applicable statute of limitations with respect to such item shall be reduced to the shortened survival period contemplated hereby.  The parties further acknowledge that the time periods set forth in this Section 7.1 for the assertion of claims under this Agreement are the result of arms’-length negotiation among the parties and that they intend for the time periods to be enforced as agreed by the parties.

7.2    Indemnification by the Sellers and the Stockholders.
(a)    Each Stockholder (collectively, the “Stockholder Indemnifying Parties”) and each of Jöllenbeck and First Wise, severally and not jointly, will hold harmless and indemnify each of the Buyer Indemnitees from and against, and will compensate and reimburse each of the Buyer Indemnitees for, any Damages that are suffered or incurred by any of the Buyer Indemnitees or to which any of the Buyer Indemnitees may otherwise become subject at any time (regardless of whether or not such Damages relate to any Third-Party Claim) and that arise from or are caused by any Breach of any representation or warranty made by such Stockholder in Section 3 of this Agreement or any Breach of any covenant or obligation of such Stockholder, Jöllenbeck or First Wise (as applicable) contained in any of the Transaction Agreements.  The maximum aggregate liability of the Stockholders, Jöllenbeck and First Wise to Buyer Indemnitees pursuant to this Section 7 will be [**].
(b)    Subject to Section 7.2(e) hereof, the Sellers and each of Jöllenbeck and First Wise (collectively, the “Seller Indemnifying Parties”), jointly and severally, will hold harmless and indemnify each of the Buyer Indemnitees from and against, and will compensate and reimburse each of the Buyer Indemnitees for, any Damages that are suffered or incurred by any of the Buyer Indemnitees or to which any of the Buyer Indemnitees may otherwise become subject at any time (regardless of whether or not such Damages relate to any Third‐Party Claim) and that arise from or are caused by:
(i)    any Breach of any representation or warranty made by the Sellers in this Agreement, the disclosure schedule or any certificate delivered pursuant hereto or any agreement or other document contemplated hereby;
(ii)    any Breach of any covenant or obligation of the Sellers contained in any of the Transaction Agreements;
(iii)    any Excluded Liability;
(iv)    any Liability of the Sellers other than the Assumed Liabilities;
(v)    any Liabilities of a Seller with respect to any present or former employees, officers, directors, retirees, independent contractors or consultants of Sellers, including, without limitation, any Liabilities associated with any claims for wages or other benefits, bonuses, accrued vacation, pension, workers compensation, severance, retention, termination or other payments, other than with respect to bonuses payable for the portion of the assessment period following the Closing;
(vi)    any Liabilities of a Seller arising under or in connection with any Benefit Plan of such Seller;
(vii)    Any Liability related to non-compliance with GDPR by Sellers;
(viii)    any successful Proceeding relating to any Breach, alleged Breach, Liability or matter of the type referred to in foregoing sub-clauses above (including any Proceeding commenced by any Buyer Indemnitee for the purpose of enforcing any of its rights under this Section 7.2(b)).
(c)    The Buyer Indemnitees will not be entitled to recover under this Agreement for any Damages arising from or relating to Section 7.2(b)(i) (other than with respect to Breaches of the Fundamental Representations) unless the aggregate Damages for all such Breaches exceeds [**] (the “Basket”) (at which point Buyer Indemnitees will be entitled to indemnification from and against all Damages) or with respect to any individual claim (or series of related claims) for Damages of less than [**] (the “Mini-Basket”), and any Damages subject to the Mini-Basket shall not be included in the calculation of the Basket.  The Buyer Indemnitees will not be entitled to recover under this Agreement for any Damages arising from or relating to Section 7.2(b)(i) for any Damages in excess of [**] (the “Cap”), except that, to the extent any such Damages arise from a Breach of Fundamental Representations or from fraudulent representation by the Sellers in Section 2 of this Agreement, the maximum aggregate liability of the Sellers to Buyer Indemnitees pursuant to Section 7.2(b)(i) of this Agreement will be [**].  The Buyer Indemnitees will not be entitled to recover under this Agreement for any Damages arising from or relating to Section 7.2(b)(i) with respect to any current liability to the extent it was included in the final calculation of Closing Working Capital.
(d)    For purposes of Section 7.2(b)(i), in determining whether there has been a breach of any representation or warranty, and in calculating the amount of any Damages, (x) all qualifications in such representation or warranty referencing the terms “material,” “materiality,” or other terms of similar import or effect, and (y) the qualifications of “to the Sellers Knowledge” in the first two sentences of Section 2.11(k) will be disregarded.
(e)    Notwithstanding anything to the contrary in this Agreement:
(i)    In no event shall any Stockholder Indemnifying Party’s indemnity obligations for Damages under Section 7.2(a) exceed, in the aggregate, the portion of the Closing Purchase Price actually received by such Stockholder Indemnifying Party together with any amounts that, but for indemnity claims by any Buyer Indemnified Party satisfied out of the Escrow Amount, or the Contingent Payments (including, for the avoidance of doubt, the Adjustment Escrow Amount), would have been payable to such Stockholder Indemnifying Party out of the Escrow Amount or the Contingent Payments (including, for the avoidance of doubt, the Adjustment Escrow Amount), other than with respect to any claim against a Stockholder for misrepresentation by such Stockholder in Section 3 of this Agreement or any claim against a Stockholder for a Breach by such Stockholder of any covenant of such Stockholder set forth in any Transaction Agreement.
(ii)    In no event shall Jöllenbeck’s and/or First Wise’s indemnity obligations for Damages under Section 7.2(b) exceed, in the aggregate, [**].
(iii)    In no event shall Mr. Korte’s indemnity obligations for Damages under Section 7.2(b) exceed, in the aggregate, [**].
(iv)    Subject to the final sentence of Section 7.8, recourse by the Buyer Indemnitees to the Indemnity Escrow Amount and the Contingent Payments (including, for the avoidance of doubt, the Adjustment Escrow Amount) shall be the Buyer Indemnitees’ sole and exclusive remedy and recourse against the Stockholders under this Agreement for Damages resulting from the matters referred to in Section 7.2(b).  For the avoidance of doubt, absent actual fraud, no Person shall be liable to Buyer or any other Person with respect to any distribution of Closing Purchase Price, Escrow Amount, Holdback Amount or other Contingent Payments (including, for the avoidance of doubt, the Adjustment Escrow Amount) under any theory of “fraudulent conveyance” or other similar claims.

7.3    Indemnification by the Buyer.
(a)    The Buyer and the Parent, jointly and severally (collectively in such capacity, the “Buyer Indemnifying Party”), will hold harmless and indemnify each of the Seller Indemnitees from and against, and will compensate and reimburse each of the Seller Indemnitees for, any Damages that are suffered or incurred by any of the Seller Indemnitees or to which any of the Seller Indemnitees may otherwise become subject at any time (regardless of whether or not such Damages relate to any Third‐Party Claim) and that arise from or are caused by:
(i)    any Breach of any representation or warranty made by the Buyer in this Agreement, any disclosure schedule or certificate delivered pursuant hereto or any agreement or other document contemplated hereby;
(ii)    any Breach of any covenant or obligation of the Buyer or Parent contained in any of the Transaction Agreements;
(iii)    any Liability relating to any Assumed Liability;
(iv)    any successful Proceeding relating to any Breach, alleged Breach, Liability or matter of the type referred to in sub-clauses above (including any Proceeding commenced by any Seller Indemnitee for the purpose of enforcing any of its rights under this Section 7.3(a)).
(v)    For purposes of Section 7.3(a)(i), in determining whether there has been a breach of any representation or warranty, and in calculating the amount of any Damages, all qualifications in such representation or warranty referencing the terms “material,” “materiality,” or other terms of similar import or effect will be disregarded.

7.4    Defense of Third-Party Claims.
(a)    In the event of the assertion or commencement by any Person (other than any Buyer Indemnitee or Seller Indemnitee) of any claim or Proceeding (whether against the Buyer, any other Buyer Indemnitee, the Sellers, the Stockholders, any other Seller Indemnitee, or against any other Person) with respect to which a Seller Indemnifying Party, a Stockholder Indemnifying Party or the Buyer Indemnifying Party, as applicable (the “Indemnifying Party”), may become obligated to indemnify, hold harmless, compensate or reimburse any Buyer Indemnitee or Seller Indemnitee, as applicable (the “Indemnitee”), pursuant to this Section 7 (a “Third-Party Claim”), the Indemnitee will promptly, but in no event more than thirty (30) days following such Indemnitee’s receipt of a Third-Party Claim, notify the Indemnifying Party (provided that where the Indemnifying Party is a Seller Indemnifying Party or a Stockholder Indemnifying Party, Indemnitee needs to provide such notice only to the Sellers Representative) in writing of such Third-Party Claim (“Notice of Claim”); provided, however, that a failure by an Indemnitee to provide timely notice will not affect the rights or obligations of such Indemnitee except to the extent that such failure results in material prejudice to the Indemnifying Party with respect to such Third-Party Claim.  The Notice of Claim will (i) state that the Indemnitee has paid or properly accrued Damages or anticipates that it will incur liability for Damages for which such Indemnitee is entitled to indemnification pursuant to this Agreement (if applicable) and (ii) specify in reasonable detail each individual item of Damage included in the amount so stated (taking into account the information then known to the Indemnitee), the date such item was paid or properly accrued (if applicable), the basis for any anticipated Damage and the nature of the misrepresentation, breach of warranty, breach of covenant or claim to which each such item is related (taking into account the information then known to the Indemnitee) and the computation of the amount to which such Indemnitee claims to be entitled hereunder.  The Indemnitee will enclose with the Notice of Claim a copy of all papers served with respect to such Third-Party Claim, if any, and any other available documents evidencing such Third-Party Claim.
(b)    The Indemnifying Party will have the right, but not the obligation, upon notice delivered to the Indemnified Party, to assume the defense or prosecution of such Third-Party Claim and any litigation resulting therefrom with counsel of its choice and at its sole cost and expense (a “Third-Party Defense”); provided that the Indemnifying Party will not be entitled to undertake a Third-Party Defense and, if the Indemnified Party is entitled to indemnification under this Section 7 with respect to such Third-Party Claim, the Indemnifying Party will pay the fees and expenses of counsel retained by the Indemnitee in connection therewith, if (i) the claim or demand relates to or arises in connection with any criminal Legal Proceeding, indictment or allegation or regulatory enforcement action, (ii) the claim or demand seeks an injunction or equitable relief against the Indemnitee or any of its Related Parties, (iii) there are legal defenses available to the Indemnified Party that are different from or additional to those available to the Indemnifying Party, (iv) the claim or demand is asserted by or on behalf of a Person that is a supplier or customer of the Indemnitee, (v) the claim or demand alleges or relates to any product liability claims, (vi) the claim or demand relates to any Intellectual Property or Intellectual Property rights included in the Purchased Assets or (vii) the claim or demand would reasonably be expected to adversely affect the Business or the business or reputation of the Buyer Indemnitees.
(c)    If the Indemnifying Party validly assumes the Third-Party Defense in accordance herewith, (i) the Indemnitee may retain separate co-counsel at its sole cost and expense (subject to the below) and participate in the defense of the Third-Party Claim, (ii) the Indemnifying Party will proceed to defend such claim or Proceeding in a diligent manner with counsel reasonably satisfactory to the Indemnitee; (iii) the Indemnifying Party will keep the Indemnitee informed of all material developments and events relating to such claim or Proceeding; (iv) the Indemnitee will have the right to participate in the defense of such claim or Proceeding at its own cost; (v) the Indemnifying Party will not settle, adjust or compromise such claim or Proceeding without the prior written consent of the Indemnitee; and (vi) the Indemnitee may at any time (notwithstanding the prior designation of the Indemnifying Party to assume the defense of such claim or Proceeding) assume the defense of such claim or Proceeding if Indemnifying Party fails to diligently defend such claim or Proceeding.
(d)    If the Indemnifying Party is entitled to, but does not, assume the Third-Party Defense, the Indemnitee will be entitled to assume the Third-Party Defense at the expense of the Indemnifying Party upon and delivery of notice to such effect to the Indemnifying Party (provided that where the Indemnifying Party is a Seller Indemnifying Party or Stockholder Indemnifying Party, Indemnitee needs to provide such notice only to the Sellers Representative).

7.5    Indemnification Claims.  An Indemnitee will notify in writing the Indemnifying Party (provided that where the Indemnifying Party is a Seller Indemnifying Party, Indemnitee needs to provide such notice only to the Sellers Representative) of its discovery of any matter that does not involve a Third-Party Claim and with respect to which the Indemnifying Party may become obligated to indemnify, hold harmless, compensate or reimburse the Indemnitee and such notice will (i) state that the Indemnitee has paid or properly accrued Damages or anticipates that it will incur liability for Damages for which such Indemnitee is entitled to indemnification pursuant to this Agreement (if applicable) and (ii) specify in reasonable detail each individual item of Damages included in the amount so stated (taking into account the information then known to the Indemnitee), the date such item was paid or properly accrued (if applicable), the basis for any anticipated liability and the nature of the misrepresentation, breach of warranty, breach of covenant or claim to which each such item is related (taking into account the information then known to the Indemnitee) and the computation of the amount to which such Indemnitee claims to be entitled hereunder.  The failure to give such written notice will not, however, relieve the Indemnifying Party of its indemnification obligations, except and only to the extent that the Indemnifying Party is materially harmed by reason of such failure.

7.6    Payment of Damages.  Subject to the terms and conditions of this Section 7, any indemnification payment to which Buyer or Buyer Indemnitees is entitled under this Agreement as a result of any Damages incurred and subject to indemnification pursuant to this Section 7 may be satisfied (at the Buyer’s election and without duplication) by (a) recouping such Damages from the Indemnification Escrow Amount or the Adjustment Escrow Amount in accordance with the terms of the Escrow Agreement, (b) setting off such Damages against any Contingent Payments, (c) seeking recourse for such Damages directly against the Sellers, (d) seeking recourse for such Damages directly against the Stockholder Indemnifying Parties or (e) any combination of the foregoing; provided, that, with respect to any Damages arising from or relating to Section 7.2(b), the Buyer and Buyer Indemnitees agree to seek recourse directly against the Stockholder Indemnifying Parties only to the extent that sub-clauses (a) through (c) above have not provided them the full amount of indemnification for such Damages to which they may be entitled under this Section 7.  In addition to the foregoing, with respect to any claim against a Stockholder for misrepresentation by such Stockholder in Section 3 of this Agreement or any claim against a Stockholder, Jöllenbeck and/or First Wise (as applicable) for a Breach by such Stockholder, Jöllenbeck and/or First Wise (as applicable) of any covenant of such Stockholder, Jöllenbeck and/or First Wise (as applicable) set forth in any Transaction Agreement, Buyer may elect to seek recourse for such Damages directly against such Stockholder, Jöllenbeck and/or First Wise (as applicable).

7.7    Tax Treatment of Indemnity Payments.  The Parties will treat any indemnity payment made under this Agreement as an adjustment to the Purchase Price for all Tax purposes unless otherwise required pursuant to a final determination within the meaning of Section 1313 of the Code, or any analogous provision of applicable state, local or non-U.S. Law.

7.8    Sole Remedy.  Other than with respect to any claim against a Seller for fraudulent misrepresentation in Section 3 of this Agreement by such Seller or any claim against a Stockholder for fraudulent misrepresentation in Section 4 of this Agreement by such Stockholder and subject to Section 6.4(d), the right to indemnification under this Section 7, subject to all of the terms, conditions and limitations hereof, will constitute the sole and exclusive right and remedy available to any party hereto (or any specified third-party beneficiary) with respect to all damages or losses of whatever kind and nature, in law, equity or otherwise, known or unknown, which the Buyer has now or may have in the future, including without limitation for any damages or losses attributable to any inaccuracy or breach of any representation or warranty, or any failure to perform the covenants, agreements or undertakings contained in any Transaction Agreement, any disclosure schedule or certificate delivered pursuant hereto or any agreement or other document contemplated hereby, and no party (and no Affiliate of any party) may commence any suit, action or proceeding against any other party hereto or any of their respective Affiliates with respect to the subject matter of this Agreement, whether in contract, tort or otherwise, except to enforce such party’s express rights under this Section 7.  Nothing in this Section 7 limits any Person’s right to seek and obtain any equitable relief to which any Person may be entitled, including specific performance to enforce the observance and performance of any covenants contained herein, or to seek any remedy on account of any party’s fraudulent or criminal conduct.

7.9    Disclaimer.  None of the parties hereto, their respective affiliates or any of their respective officers, directors, employees, advisors or representatives have made any representations or warranties, express or implied, of any nature whatsoever in connection to the transactions contemplated hereby other than those representations and warranties expressly set forth in this Agreement.

7.10    Set-Off.  Subject to the applicable terms and conditions of this Section 7 and the Transaction Agreements, the Buyer shall be entitled to set-off any amounts due to any other party hereto against amounts due from such other party, including from the Contingent Payments (including, for the avoidance of doubt, the Adjustment Escrow Amount).  Upon the occurrence of any event or existence of any condition has resulted in a claim for indemnification under this Section 7, such party may, subject to the applicable terms and conditions of this Section 7 and the Transaction Agreements, withhold from amounts otherwise due hereunder an amount equal to such party’s reasonable estimate of the amount of such indemnification claim until such time as the actual amount of such claim, the right of indemnification and the right of set-off hereunder is determined.

7.11    Indemnification Escrow.
(a)    The parties agree that the Indemnification Escrow shall be released as contemplated by this Section 7.11.  Within five (5) Business Days after the Expiration Date, the Buyer and Roccat will deliver joint written instructions to the Escrow Agent directing the Escrow Agent to release to the Sellers any amounts in the Indemnification Escrow Account in excess of the sum of (x) [**] (being [**] of the original Indemnification Escrow Amount) plus (y) the aggregate amount of all unresolved indemnification claims by Buyer Indemnitees and within five (5) Business Days after the Extended Date, the Buyer and Roccat will deliver joint written instructions to the Escrow Agent directing the Escrow Agent to release to the Sellers the remaining amounts of the Indemnification Escrow subject to the following conditions.
(b)    For the avoidance of doubt, the Buyer and Roccat agree that no joint instructions contemplated by this Section 7.11 shall be delivered to the Escrow Agent with respect to any amount that is subject to a claim for indemnification which has been delivered in accordance with this Section 7.11.  Upon the resolution of any such claim, either by mutual agreement of the parties or upon a final determination of an arbitrator as contemplated by Section 11.8, then the Buyer and Roccat shall deliver a joint written instruction to the Escrow Agent regarding (i) any Damages to be paid to the Buyer from the Indemnification Escrow Account or (ii) any portion of the Indemnification Escrow Account to be paid to the Sellers which otherwise should have been released to such parties on the Expiration Date or Extended Date, but for such claim.
(c)    Prior to Closing, the parties will negotiate in good faith an escrow agreement (the “Escrow Agreement”) in customary form for comparable transactions reasonably acceptable to the parties thereto (the draft currently under negotiation is attached as Exhibit L) reflecting the provisions of this Section 7.11.  The parties agree that they will issue any joint instructions to the Escrow Agent that are required to issue under this Agreement or under the Escrow Agreement promptly and without undue delay.

8.    Conditions to Closing.

8.1    Conditions Precedent to Obligations of the Buyer.  The obligation of the Buyer to consummate the transactions contemplated by this Agreement is subject to the fulfillment, at or prior to the Closing, of the following conditions, any one or more of which may be waived in writing by the Buyer (in its sole and absolute discretion), it being understood that such conditions are included for the exclusive benefit of the Buyer:
(a)    (i) the Fundamental Representations are true and correct in all respects as of the date of this Agreement and the Closing Date as of the Closing Date as if made on such date (except that those representations and warranties which refer to facts existing at a specific date need only be true and correct as of such date) and (ii) the representations and warranties set forth in Sections 2 and 3 (other than the Fundamental Representations) are true and correct as of the date of this Agreement and as of the Closing Date as if made on such date (except that those representations and warranties which refer to facts existing at a specific date need only be true and correct as of such date) other than for any failures to be true and correct (disregarding any references to “material” or “materiality” contained in such representations and warranties) as of the Closing Date that would not reasonably be expected to result in Damages, including lost profits, in excess of [**] in the aggregate;
(b)    the Sellers and Stockholders have performed, as applicable, in all material respects all of the covenants and agreements required to be performed by the Sellers and Stockholders under this Agreement at or prior to the Closing; it being understood that for the purposes of this Section 8.1(b), the Sellers and the Stockholders will not be deemed to have failed to perform a covenants in all material respects if the applicable party cures such failure prior to the Closing;
(c)    Jöllenbeck has sold, assigned, transferred, conveyed, and delivered to Roccat, pursuant to transfer documents in form and substance reasonably satisfactory to the Buyer, all of Jöllenbeck’s right, title and interest in the Accounts Receivable, Inventory, and Product Kiosks owned or held by Jöllenbeck and relating to the Business (the “Internal Asset Transfer”);
(d)    the Sellers have delivered to the Buyer duly executed counterparts to the Ancillary Documents and such other documents and deliveries set forth in Section 8.1(d);
(e)    the receipt of any regulatory approvals set forth on Schedule 8.1(e) and delivery of evidence thereof reasonably satisfactory to the Buyer;
(f)    the receipt of those certain consents and approvals set forth on Schedule 8.1(f) and delivery of evidence thereof reasonably satisfactory to the Buyer;
(g)    the acceptance of employment with the Buyer or its Affiliates by at least [**] of the Business Employees that are not administrative employees or European sales representatives;
(h)    the receipt of an employment agreement between the Buyer or any of its Affiliates and René Korte in form and substance reasonably acceptable to the parties thereto and generally consistent with the draft currently being negotiated by the parties thereto;
(i)    all Encumbrances relating to the Purchased Assets have been released in full and the Sellers have delivered to the Buyer written evidence, in form satisfactory to the Buyer, of the release of such Encumbrances;
(j)    the successful achievement (as reasonably determined by the Buyer) by the Sellers of the implementation targets set forth on Schedule 8.1(j) with respect to the business enterprise system software selected by the Buyer;
(k)    the satisfactory establishment and expansion (as reasonably determined by the Buyer) of the capabilities of the financial reporting group of the Business;
(l)    the full and complete termination of all intercompany agreements, arrangements and transactions, other than those set forth on Schedule 8.1(l) (which schedule may be amended at the sole discretion of the Buyer at any time prior to the Closing), and the delivery by of a full release with respect to any related claims;
(m)    entry into written replacements with respect to existing oral Contracts set forth on Schedule 8.1(m) (which schedule may be amended at the sole discretion of the Buyer at any time prior to the Closing to add oral Contracts for which the complete terms and conditions were not disclosed in writing to the Buyer prior to the date) in form and substance reasonably satisfactory to the Buyer and delivery of evidence thereof to the Buyer;
(n)    the amendment, termination or replacement of the Contracts set forth on Schedule 8.1(n) (which schedule may be amended at the sole discretion of the Buyer at any time prior to Closing), in form and substance reasonably satisfactory to the Buyer and delivery of evidence thereof to the Buyer;
(o)    a physical inventory of all Inventory included in Purchased Assets by the Buyer and its Representatives or a balance confirmation for the Inventory which is stored in ships;
(p)    the Buyer has received all Permits that are necessary for it and its Affiliates to conduct the Business as conducted by the Sellers as of the Closing Date;
(q)    the completion and delivery to the Buyer of the unaudited, consolidated pro forma financial statements (including balance sheet) of the Sellers as of, and for the nine-month period ending, February 28, 2019, in form and substance reasonably satisfactory to the Buyer and in accordance with German GAAP (Bilanzrechtsmodernisierungsgesetz – BilMoG);
(r)    Winspeed has sold, assigned, transferred, conveyed, and delivered to Roccat, pursuant to transfer documents in form and substance reasonably satisfactory to the Buyer, all of Winspeed’s right, title and interest in any Intellectual Property that Winspeed owns as a result of the services it provided to, or the work that it undertook on behalf of, the Sellers (the “Winspeed IP Transfer”); and
(s)    there has not occurred a material adverse change to the financial condition or results of operations of the Sellers and the Business since the date of this Agreement, and no event or events has occurred that, individually or in the aggregate, with or without the lapse of time, could reasonably be expected to result in a such a change.

8.2    Conditions Precedent to Obligations of the Sellers and Stockholders.  The obligations of the Sellers and Stockholders to consummate the transactions contemplated by this Agreement are subject to the fulfillment, at or prior to the Closing, of the following conditions (any one or more of which may be waived in writing by Roccat), it being understood that such conditions are included for the exclusive benefit of the Sellers and the Stockholders:
(a)    the representations and warranties set forth in Section 4 are true and correct in all respects as of the date of this Agreement and as of the Closing Date as if made on such date (except that those representations and warranties which refer to facts existing at a specific date need only be true and correct as of such date);
(b)    the Buyer has performed in all material respects all of the covenants and agreements required to be performed by the Buyer under this Agreement at or prior to the Closing; it being understood that for the purposes of this Section 8.2(b), the Buyer will not be deemed to have failed to perform a covenants in all material respects if the Buyer cures such failure prior to the Closing; and
(c)    the Buyer has delivered to Seller duly executed counterparts to the Ancillary Documents and such other documents and deliveries set forth in Section 1.11(b); and
(d)    the Buyer has established affiliated entities in Germany and Taiwan.

9.    Termination.

9.1    Termination.  This Agreement may be terminated at any time prior to the Closing Date as follows and in no other manner:
(a)    by mutual written consent of the Buyer, on the one hand, and the Sellers Representative, on the other hand;
(b)    by the Buyer by written notice to the Sellers Representative if:
(i)    the Buyer is not then in material breach of any provision of this Agreement and there has been a material breach, inaccuracy in or failure to perform any representation, warranty, covenant or agreement made by a Seller or Stockholder pursuant to this Agreement that would give rise to the failure of any of the conditions specified in Section 8.1 (including under Section 8.1(a)(ii), as determined, for the avoidance of doubt, with reference to the [**] condition set forth therein to the extent applicable) and such breach, inaccuracy or failure has not been cured within ten days of the Sellers Representative receipt of written notice of such breach from the Buyer; or
(ii)    any of the conditions set forth in Section 8.1 have not been, or if it becomes apparent that any of such conditions will not be, fulfilled by May 31, 2019, unless such failure is due to the failure of the Buyer to perform or comply with any of the covenants, agreements or conditions hereof to be performed or complied with by it prior to the Closing;
(c)    by the Sellers Representative by written notice to the Buyer if:
(i)    no Seller or Stockholder is then in material breach of any provision of this Agreement and there has been a breach, inaccuracy in or failure to perform any representation, warranty, covenant or agreement made by the Buyer pursuant to this Agreement that would give rise to the failure of any of the conditions specified in Section 8.2 and such breach, inaccuracy or failure has not been cured by the Buyer within ten days of the Buyer’s receipt of written notice of such breach from the Sellers Representative; or
(ii)    any of the conditions set forth in Section 8.2 have not been, or if it becomes apparent that any of such conditions will not be, fulfilled by May 31, 2019, unless such failure is due to the failure of the Sellers or Stockholders to perform or comply with any of the covenants, agreements or conditions hereof to be performed or complied with by them prior to the Closing; or
(d)    by the Buyer or Sellers Representative in the event that (i) there is any Law that makes consummation of the transactions contemplated by this Agreement illegal or otherwise prohibited or (ii) any Governmental Authority has issued an Order restraining or enjoining the transactions contemplated by this Agreement, and such Order has become final and non-appealable.

9.2    Effect of Termination.  In the event this Agreement is terminated pursuant to Section 9.1, all rights and obligations of the parties will terminate without any liability of a party to the other parties; provided, however, that the provisions set forth in Sections 9.2, 11.7 and 11.8 will survive the termination of this Agreement indefinitely; provided, however, that termination will not relieve any party from Liability for any intentional or willful breaches of this Agreement prior to the date of termination.

10.    Parent.

10.1    Parent will cause the Buyer to perform its obligations under this Agreement and will be liable for any payment obligations hereunder to the extent the Buyer fails to satisfy such payment obligations.

11.    Miscellaneous Provisions.

11.1    Appointment of Sellers Representative.  By their execution and delivery of this Agreement, each Seller and Stockholder hereby appoint LUTZ ABEL Rechtsanwalts PartG mbB as their agent, representative and attorney-in-fact (the “Sellers Representative”) and Sellers Representative agrees to act as the Sellers Representative.  Sellers Representative will, on behalf of the Sellers and Stockholders: (i) give and receive notices and communications, and (ii) perform other functions specified in this Agreement.  Any notices delivered to Sellers Representative pursuant to this Agreement will be deemed delivered to all of the Sellers and Stockholders.  The Buyer may rely upon any such decision, act, consent or instruction of the Sellers Representative as being the decision, act, consent or instruction of all of the Sellers and Stockholders, and the Buyer is hereby relieved from any liability to any Person for any acts done in accordance with such decision, act, consent or instruction of the Sellers Representative.

11.2    Press Releases and Communications.  No press release or public announcement related to this Agreement or the Transaction, or, prior to the Closing, any other announcement or communication (other than by the Buyer, its Affiliates, or any of their respective officers, employees, representatives and agents in the Ordinary Course of Business) will be issued or made without the approval of the Buyer; provided, however, in connection with the press release or other public announcement to be made by the Buyer announcing the execution of this Agreement or announcing the Closing of the Transaction, the Sellers Representative will have the right to review and comment on such press release or announcement prior to publication, and the Buyer will take into account all reasonable comments provided thereby.

11.3    Fees and Expenses.  Each party to this Agreement will bear and pay all fees, costs and expenses (including legal fees and accounting fees) that have been incurred or that are incurred by such party in connection with the transactions contemplated by this Agreement.

11.4    Attorneys’ Fees.  If any legal action or other legal proceeding relating to any of the Transaction Agreements or the enforcement of any provision of any of the Transaction Agreements is brought against any party to this Agreement, the prevailing party will be entitled to recover reasonable attorneys’ fees, costs and disbursements (in addition to any other relief to which the prevailing party may be entitled) subject to Section 7.2.

11.5    Notices.  Any notice or other communication required or permitted to be delivered to any party under this Agreement will be in writing and be deemed properly delivered, given and received (a) upon receipt when delivered by hand, (b) upon transmission, if sent by electronic transmission (in each case with receipt verified by electronic mail), or (c) one (1) business day after being sent by overnight courier or express delivery service (with proof of delivery), provided that in each case the notice or other communication is sent to the address or facsimile telephone number set forth beneath the name of such party below (or to such other address or facsimile telephone number as such party specifies in a written notice given to the other parties hereto):
	
	
	if to the Sellers, the Stockholders, Jöllenbeck and First Wise Media to the Sellers Representative:

	 

	LUTZ ABEL Rechtsanwalt PartG mbB
Caffamacherreihe 8
20355 Hamburg – Germany
Attn: Dr. Lorenz Jellinghaus

	Facsimile: 0049-040-300699699

	Email: Jellinghaus@lutzabel.com

	 

	with a copy to:

	Jöllenbeck GmbH
Kreuzberg 2
27404 Weertzen - Germany
Email: tim.joellenbeck@jb.eu

	 

	if to the Buyer:

	 

	Turtle Beach Corporation

	11011 Via Frontera, Suite A
San Diego, CA 92127

	 

	with a copy to:

	 

	Morgan, Lewis & Bockius LLP

	1111 Pennsylvania Avenue, NW

	Washington, D.C. 20004

	Attn: Tony Chan

	Facsimile: 202.739.3001

	Email: tony.chan@morganlewis.com

11.6    Captions.  All section titles or captions contained in this Agreement and the table of contents hereof are for convenience of reference only, will not be deemed to be a part of this Agreement and will not be referred to in connection with the construction or interpretation of this Agreement.

11.7    Counterparts.  This Agreement may be executed in several counterparts, each of which will constitute an original and all of which, when taken together, will constitute one agreement.

11.8    Governing Law; Jurisdiction.  All issues and questions concerning the construction, validity, interpretation and enforceability of this Agreement and the exhibits and schedules hereto, and all claims and disputes arising hereunder or thereunder or in connection herewith or therewith, whether purporting to be sound in contract or tort, or at law or in equity, will be governed by, and construed in accordance with, the laws of the State of New York, without giving effect to any choice of law or conflict of law rules or provisions (whether of the State of New York or any other jurisdiction) that would cause the application of the laws of any jurisdiction other than the State of New York.  If any dispute, controversy or claim arises out of or in connection with this Agreement, including any question regarding its existence, validity, termination, breach or interpretation or any dispute regarding the validity, amount or liability for any claim arising hereunder, the Buyer, the Sellers, and the Stockholders will use all commercially reasonable efforts to resolve the matter amicably.  If, within twenty (20) days of written notice of dispute arising in connection with the Agreement, the applicable parties are unable to resolve such dispute, then dispute will be, upon the application of any applicable party, referred to and finally resolved by arbitration under the Rules of Arbitration (the Rules) in force at the date of this Agreement of the International Chamber of Commerce International Court of Arbitration (ICC) and will be administered by the ICC.  The seat, or legal place, of arbitration will be Paris, France.  The language to be used in the arbitration proceedings will be English and all submissions will be made in English.  New York law will be applicable to the merits of such dispute.  The tribunal will consist of one arbitrator mutually agreed to by the applicable parties.  Each party hereto acknowledges and agrees that the arbitrator will have the power to grant any legal or equitable remedy or relief available, including injunctive relief, whether interim and/or final, and specific performance, and any measures ordered by the arbitrator may be specifically enforced by any court of competent jurisdiction.  Each party hereto retains the right to seek interim or provisional measures, including injunctive relief and including pre-arbitral attachments or injunctions, from any court of competent jurisdiction, and any such request will not be deemed incompatible with the agreement to arbitrate.  In furtherance of the foregoing, each of the parties hereto (a) waives the defense of inconvenient forum, (b) agrees not to commence any suit, action or other proceeding arising out of this Agreement or any transactions contemplated hereby other than in any such court, and (c) agrees that a final judgment in any such suit, action or other proceeding will be conclusive and may be enforced in other jurisdictions by suit or judgment or in any other manner provided by law.

11.9    Successors and Assigns.  This Agreement will be binding upon each of the parties hereto and the respective successors and assigns (if any) of the foregoing.  This Agreement will inure to the benefit of each of the parties hereto and the respective successors and assigns (if any) of the foregoing.  Notwithstanding the foregoing, neither the Sellers nor the Stockholders may assign this Agreement or any rights or obligations hereunder to any other Person without the prior written consent of the Buyer and any attempt to do so will be null and void.  The Buyer may assign any or all of its rights and delegate any or all of its obligations hereunder, including its rights to purchase any portion of the Purchased Assets or its obligations to assume any Assumed Liability, in whole or in part, to any of its Affiliates or to a purchaser of all or substantially all of the assets of the Buyer, in which case, such assignment and delegation will constitute a novation of all duties, obligations and Liabilities of the Buyer with respect to such delegation.

11.10    Waiver.
(a)    Except as specifically set forth herein, the rights and remedies of the parties are cumulative and not alternative.  No failure on the part of any Person to exercise any power, right, privilege or remedy under this Agreement, and no delay on the part of any Person in exercising any power, right, privilege or remedy under this Agreement, will operate as a waiver of such power, right, privilege or remedy; and no single or partial exercise of any such power, right, privilege or remedy will preclude any other or further exercise thereof or of any other power, right, privilege or remedy.
(b)    No Person will be deemed to have waived any claim arising out of this Agreement, or any power, right, privilege or remedy under this Agreement, unless the waiver of such claim, power, right, privilege or remedy is expressly set forth in a written instrument duly executed and delivered on behalf of such Person; and any such waiver will not be applicable or have any effect except in the specific instance in which it is given.

11.11    Amendments.  This Agreement may not be amended, modified, altered or supplemented other than by means of a written instrument duly executed and delivered on behalf of the Buyer, each of the Sellers, and each of the Stockholders.

11.12    Severability.  Any term or provision of this Agreement that is invalid or unenforceable in any situation in any jurisdiction will not affect the validity or enforceability of the remaining terms and provisions hereof or the validity or enforceability of the offending term or provision in any other situation or in any other jurisdiction.  If the final judgment of the arbitrator declares that any term or provision hereof is invalid or unenforceable, the parties hereto agree that the arbitrator making such determination will have the power to limit the term or provision, to delete specific words or phrases, or to replace any invalid or unenforceable term or provision with a term or provision that is valid and enforceable and that comes closest to expressing the intention of the invalid or unenforceable term or provision, and this Agreement will be enforceable as so modified.  In the event such arbitrator does not exercise the power granted to it in the prior sentence, the parties hereto agree to replace such invalid or unenforceable term or provision with a valid and enforceable term or provision that will achieve, to the extent possible, the economic, business and other purposes of such invalid or unenforceable term.

11.13    Entire Agreement.  The Transaction Agreements set forth the entire understanding of the parties relating to the subject matter thereof and supersede all prior agreements and understandings among or between any of the parties relating to the subject matter thereof.  This Agreement will not confer any rights or remedies upon any Person other than the parties hereto and their respective successors and permitted assigns, other than Section 7 (which will be for the benefit of the Persons set forth therein).

11.14    Construction.
(a)    For purposes of this Agreement, whenever the context requires:  the singular number will include the plural, and vice versa; the masculine gender will include the feminine and neuter genders; the feminine gender will include the masculine and neuter genders; and the neuter gender will include the masculine and feminine genders.
(b)    The parties hereto agree that any rule of construction to the effect that ambiguities are to be resolved against the drafting party will not be applied in the construction or interpretation of this Agreement.
(c)    As used in this Agreement, the words “include” and “including,” and variations thereof, will not be deemed to be terms of limitation, but rather will be deemed to be followed by the words “without limitation.”
(d)    Except as otherwise indicated, all references in this Agreement to “Sections” and “Exhibits” are intended to refer to Sections of this Agreement and Exhibits to this Agreement.
(e)    The paragraph headings in this Agreement are for convenience of reference only and will not be deemed to alter or affect any provision of this Agreement.
[THE REMAINDER OF THIS PAGE INTENTIONALLY LEFT BLANK]

The parties to this Agreement have caused this Agreement to be executed and delivered as of the date first written above.
	
	
	SELLERS:

	 

	 

	 

	 

	 

	 

	 

	 

	ROCCAT GMBH
ROCCAT STUDIOS TAIPEI CO., LTD.
ROCCAT ASIA PACIFIC CO., LTD.
ROCCAT INC.

	 

	 

	By:   

	Name:  René Korte

	Title:  Managing Director of each Seller

	 

	 

	STOCKHOLDERS:

	 

	 

	 

	Name:  René Korte

	 

	 

	 

	Name:  Tim Jöllenbeck

	 

	 

	 

	Name:  Michael Eisenblatter

	 

	BUYER:

	 

	TBC HOLDING COMPANY LLC

	 

	 

	By:     

	Name:

	Title:

	 

	 

	TURTLE BEACH CORPORATION

	 

	 

	By:     

	Name:

	Title:

	 

	 

	 

	 

	 

	JÖLLENBECK GMBH

	 

	 

	By:   

	Name:  Tim Jöllenbeck

	Title:   Managing Director

	FIRST WISE MEDIA GMBH

	 

	 

	By

	Name:  Tim Jöllenbeck and Michael Eisenblätter

	Title:    CEO

EXHIBIT A
CERTAIN DEFINITIONS
For purposes of the Agreement (including this Exhibit A):
“Accounts Receivable” has the meaning set forth in Section 2.7.
“Adjustment Escrow Amount” means an amount equal to [**].
“Affiliate” of a Person means any other Person that directly or indirectly, through one or more intermediaries, controls, is controlled by, or is under common control with, such Person.  The term “control” (including the terms “controlled by” and “under common control with”) 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 securities, by contract or otherwise.
“Agreement” means the Asset Purchase Agreement to which this Exhibit A is attached, as it may be amended from time to time.
“Allocation” has the meaning specified in Section 1.10.
“Ancillary Documents” means the Escrow Agreement, the Transfer Documents, the Transition Services Agreement, and the other agreements, instruments and documents required to be delivered at the Closing.
“AR Period” has the meaning set forth in Section 1.7(e).
“Assigned Contracts” has the meaning set forth in Section 1.1.
“Assumed Liabilities” has the meaning set forth in Section 1.2(a).
“Authorized Products” has the meaning set forth in Section 6.4(b).
“Authorized Sales Period” has the meaning set forth in Section 6.4(b).
“Basket” has the meaning set forth in Section 7.2(c).
“Benefit Plan” has the meaning set forth in Section 2.10(d).
“Books and Records” has the meaning set forth in Section 1.1(a).
“Breach” of a representation, warranty, covenant, obligation or other provision means any inaccuracy in or breach (including any inadvertent or innocent breach) of, or any failure (including any inadvertent failure) to comply with or perform, such representation, warranty, covenant, obligation or other provision, and the term “Breach” will be deemed to refer to any such inaccuracy, breach, failure, claim or circumstance.
“Business” has the meaning set forth in the recitals.
“Business Employee” has the meaning set forth in Section 2.10(a).
“Business IP Agreements” has the meaning set forth in Section 2.11(e).
“Buyer” has the meaning specified in the preamble.
“Buyer Adjustment Amount” has the meaning specified in Section 1.5(g)(i)(A).
“Buyer Indemnifying Party” has the meaning set forth in Section 7.3(a).
“Buyer Indemnitees” means the following Persons: (a) the Buyer; (b) the Buyer’s current and future Affiliates; (c) the respective Representatives of the Persons referred to in clauses “(a)” and “(b)” above; and (d) the respective successors and assigns of the Persons referred to in clauses “(a)”, “(b)” and “(c)” above.
“Cap” has the meaning set forth in Section 7.2(c).
“Closing” has the meaning specified in Section 1.11(a).
“Closing Date” has the meaning specified in Section 1.11(a).
“Closing Purchase Price” means €14,500,000 in cash, minus Indebtedness to be paid by the Buyer in accordance with Section 1.11(b)(iv) of the Agreement, minus the amount (if any) by which Closing Working Capital is less than the Target Working Capital, plus the amount (if any) by which Closing Working Capital is greater than the Target Working Capital, minus the Adjustment Escrow Amount, minus the Indemnification Escrow Amount, and minus the Holdback Amount.
“Closing Statement” has the meaning set forth in Section 1.5(b).
“Closing Working Capital” means Working Capital as of 12:01 a.m. Eastern Time on the Closing Date.
“Code” means the Internal Revenue Code of 1986, as amended.
“Consent” means any approval, consent, ratification, permission, waiver or authorization (including any Permit).
“Contract” means any written, oral, implied or other agreement, contract, understanding, arrangement, instrument, note, guaranty, indemnity, representation, warranty, deed, assignment, power of attorney, certificate, purchase order, work order, insurance policy, benefit plan, commitment, covenant, assurance or undertaking of any nature.
“Controlled Persons” has the meaning set forth in Section 6.4(a)(i).
“Covered Person” has the meaning set forth in Section 6.4(a)(i).
“Damages” means any loss, damage, injury, decline in value, Liability, claim, demand, settlement, judgment, award, fine, penalty, Tax, fee (including any legal fee, expert fee, accounting fee or advisory fee), charge, cost (including any cost of investigation) or expense of any nature, other than any punitive damages (except to the extent paid or payable to a third party).
“Disclosure Schedules” has the meaning set forth in Section 2.
“Encumbrance” means any lien, pledge, hypothecation, charge, mortgage, security interest, equitable interest, claim, preference, right of possession, encroachment, covenant, infringement, interference, Order, proxy, option, right of first refusal, preemptive right, community property interest, legend, defect, impediment, exception, reservation, limitation, impairment, imperfection of title or similar restriction.
“Entity” means any corporation (including any non‐profit corporation), general partnership, limited partnership, limited liability partnership, joint venture, estate, trust, cooperative, foundation, society, political party, union, company (including any limited liability company or joint stock company), firm or other enterprise, association, organization or entity.
“Escrow Account” has the meaning set forth in Section 1.11(b)(vi).
“Escrow Agent” means Citibank N.A.
“Estimated Closing Working Capital” has the meaning set forth in Section 1.5(a).
“Estimated Purchase Price” has the meaning set forth in Section 1.5(a).
“Euro,” etc.  The terms “euros” or “€” mean dollars in the lawful currency of the European Union.  All payments made pursuant to this Agreement will be in Euros.  Whenever payments or calculations to be made pursuant to this Agreement require the conversion or comparison of Euros and United States dollar sums, the exchange rate to be applied as between Euro and United States dollar sums will be the Euro foreign-exchange rates published by The Wall Street Journal Eastern Edition on the Business Day immediately preceding the Closing Date.  If no such exchange rate is published by The Wall Street Journal, then the exchange rate published by The Financial Times on the Business Day immediately preceding the Closing Date will be used.
“Excluded Assets” has the meaning set forth in Section 1.2(b).
“Excluded Contracts” has the meaning set forth in Section 1.2(b)(iii).
“Excluded Inventory” has the meaning set forth in Section 1.2(b)(vi).
“Excluded Liabilities” has the meaning set forth in Section 1.2(a).
“Expiration Date” has the meaning set forth in Section 7.1(a).
“Extended Date” has the meaning set forth in Section 7.1(b).
“Financial Statements” has the meaning set forth in Section 2.5.
“Fundamental Representations” has the meaning set forth in Section 7.1(b).
“GDPR” has the meaning set forth in Section 2.18(d).
“Governmental Authority” means any: (a) nation, principality, state, commonwealth, province, territory, county, municipality, district or other jurisdiction of any nature; (b) federal, state, local, municipal, foreign or other government; (c) governmental or quasi‐governmental authority of any nature (including any governmental division, subdivision, department, agency, bureau, branch, office, commission, council, board, instrumentality, officer, official, representative, organization, unit, body or Entity and any court or other tribunal); (d) multi‐national organization or body; or (e) individual, Entity or body exercising, or entitled to exercise, any executive, legislative, judicial, administrative, regulatory, police, military or taxing authority or power of any nature.
“Holdback Amount” means an amount equal to [**].
“IFRS” has the meaning set forth in Section 2.5.
“Indebtedness” means, without duplication, as of any particular time, (a) the amount of indebtedness for borrowed money of the Sellers and their respective subsidiaries (including any unpaid principal, premium, accrued and unpaid interest, related expenses, prepayment penalties, commitment and other fees, reimbursements, indemnities and all other amounts payable in connection therewith), and (b) liabilities of the Sellers and their respective subsidiaries evidenced by bonds, debentures, notes, or other similar instruments or debt securities.
“Indemnification Escrow Account” means that certain account for the deposit of the Indemnification Escrow Amount.
“Indemnification Escrow Amount” means an amount equal to [**].
“Indemnifying Party” has the meaning set forth in Section 7.4(a).
“Indemnitee” has the meaning set forth in Section 7.4(a).
“Insolvent” means if the present fair saleable value of an Entity’s assets do not and will not exceed its debts and other probable Liabilities.
“Insurance Policy” has the meaning set forth in Section 2.19.
“Intellectual Property” means in any jurisdiction worldwide, all intellectual property rights of any kind, including rights in, to and concerning (a) all patents (including utility and design patents), statutory invention registrations and applications for any of the foregoing (including provisional applications), and all related continuations, continuations-in-part, divisionals, reissues, re-examinations, substitutions, and extensions thereof; (b) all trademarks, service marks, names, corporate names, trade names, Internet domain names, URLs and any other addresses for use on the Internet or any other computer network or communication system, websites and website content, and social media, including social media accounts and handles, logos, slogans, trade dress, and other similar designations of source or origin (and all translations, adaptations, derivations and combinations of the foregoing), together with the goodwill symbolized by any of the foregoing (all of the foregoing in (b), collectively “Trademarks”); (c) all copyrights (including copyrights in Software) and copyrightable subject matter, works of authorship, publications, audio-visual works, and rights in fonts and typefaces; (d) all software (including any and all software implementations of algorithms, whether in source code, executable code, or object code), assemblers, applets, compilers, compiled code, binaries, design tools, development tools, user interfaces, operating systems, design documents, website code and specifications, data and databases related to any of the foregoing, user manuals and training materials and other documentation related to the foregoing and any translations thereof, data, databases and compilations of information; (e) all confidential and proprietary information, inventions, formulas, processes, research and developments, technology, research, trade secrets and know-how, concepts, ideas, rights in financial, marketing and business data, pricing and cost information, business and marketing plans, algorithms, inventions, processes, techniques, technical data, designs, drawings, specifications, and customer and supplier lists and information, in each case, whether patentable or not and whether or not reduced to practice (“Trade Secrets”); (f) all design rights, including industrial design rights and community design rights; (g) rights of publicity, rights of privacy and moral rights; and (h) all applications and registrations for any and all of the foregoing, copies and tangible embodiments of any and all of the foregoing; and (i) all rights and remedies against past, present, and future infringement, misappropriation or other violation thereof.
“Intellectual Property Assignments” means one or more assignments of the Seller Owned IP substantially in the form of Exhibit H duly executed by the applicable Sellers.
“Interim Financial Statements” has the meaning set forth in Section 2.5.
“Interim Period” has the meaning set forth in Section 5.1(a).
“Inventory” has the meaning set forth in Section 2.8.
“Knowledge” means the [**] knowledge of [**].
“Law” means any federal, state, local, municipal, foreign or other law, statute, legislation, constitution, principle of common law, resolution, ordinance, code, edict, decree, proclamation, treaty, convention, rule, regulation, ruling, directive, pronouncement, requirement, specification, determination, decision, opinion or interpretation issued, enacted, adopted, passed, approved, promulgated, made, implemented or otherwise put into effect by or under the authority of any Governmental Authority.
“Liability” means any debt, obligation, duty or liability of any nature (including any unknown, undisclosed, unmatured, unaccrued, unasserted, contingent, indirect, conditional, implied, vicarious, derivative, joint, several or secondary liability), regardless of whether such debt, obligation, duty or liability would be required to be disclosed on a balance sheet prepared in accordance with generally accepted accounting principles and regardless of whether such debt, obligation, duty or liability is immediately due and payable.
“Material Customer” has the meaning set forth in Section 2.15(a)(i).
“Material Supplier” has the meaning set forth in Section 2.15(b)(i).
“Net Revenue” means the net revenue of the Business as calculated, without duplication, in accordance with Exhibit I.
“Non-compete Period” has the meaning set forth in Section 6.4(a)(i).
“Notice of Claim” has the meaning set forth in Section 7.4(a).
“Objection Notice” has the meaning set forth in Section 1.5(d).
“Off-the-Shelf License” has the meaning set forth in Section 2.11(c).
“Open Source Code” means any software code that is distributed as “free software” or “open source software” or is otherwise distributed publicly in source code form under terms that permit modification and redistribution of such software.  Open Source Code includes software code that is licensed under the GNU General Public License, GNU Lesser General Public License, Mozilla License, Common Public License, Apache License, BSD License, Artistic License, or Sun Community Source License.
“Order” means any: (a) order, judgment, injunction, edict, decree, ruling, pronouncement, determination, decision, opinion, verdict, sentence, subpoena, writ or award issued, made, entered, rendered or otherwise put into effect by or under the authority of any court, administrative agency or other Governmental Authority or any arbitrator or arbitration panel; or (b) Contract with any Governmental Authority entered into in connection with any Proceeding.
“Ordinary Course of Business” means an action taken by or on behalf of the Sellers that is (a) recurring in nature, is consistent with the past practices of the Sellers and is taken in the ordinary course of the normal day to day operations of the Sellers; (b) taken in accordance with sound and prudent business practices; (c) not required to be authorized by the Stockholders, the board of directors of the Sellers or any committee of the board of directors of the Sellers and does not require any other separate or special authorization of any nature; and (d) similar in nature and magnitude to actions customarily taken, without any separate or special authorization, in the ordinary course of the normal day to day operations of Entities (other than the Sellers) that are engaged in businesses similar to the business of the Sellers as of the Closing.
“Parent” means has the meaning set forth in the Preambles.
“Past Due Receivables” has the meaning set forth in Section 1.1(a)(ii).
“Permit” means any: (a) permit, license, certificate, franchise, concession, approval, consent, ratification, permission, clearance, confirmation, endorsement, waiver, certification, designation, rating, registration, qualification or authorization issued, granted, given or otherwise made available by or under the authority of any Governmental Authority or pursuant to any Law; or (b) right under any Contract with any Governmental Authority.
“Permitted Encumbrance” means any: (a) Liens for Taxes not yet due and payable; (b) statutory Liens to secure obligations to landlords or lessors under leases or rental agreements, the obligations secured by which are not yet due and payable; (c) inchoate statutory Liens in favor of carriers and warehousemen to secure claims for labor, the obligations secured by which are not yet due and payable; and (d) zoning, entitlement, building and other land use regulations imposed by a Governmental Authority having jurisdiction over the Leased Real Property that are not violated by the current use and operation thereof.
“Person” means any individual, Entity or Governmental Authority.
“Personal Information” has the meaning set forth in Section 2.18(a).
“Positioning Guidelines” has the meaning set forth in Section 1.7(d).
“Positioning Period” has the meaning set forth in Section 1.7(d).
“Privacy Policy” has the meaning set forth in Section 2.18(d).
“Proceeding” means any action, suit, litigation, arbitration, proceeding (including any civil, criminal, administrative, investigative or appellate proceeding and any informal proceeding), prosecution, contest, hearing, inquiry, inquest, audit, examination or investigation commenced, brought, conducted or heard by or before, or otherwise involving, any Governmental Authority or any arbitrator or arbitration panel.
“Product Kiosks” has that meaning set forth in Section 1.1(a)(iv).
“Purchase Price” has the meaning set forth in Section 1.3.
“Purchased Assets” has the meaning set forth in Section 1.1.
“Registered IP” means all Seller Owned IP that are registered, filed, or issued under the authority of any Governmental Authority or domain name registrar, including all patents, registered copyrights, registered mask works, and registered Trademarks, registered domain names, and all applications for any of the foregoing.
“Related Party” has the meaning set forth in Section 2.20.
“Related Party Transaction” has the meaning set forth in Section 2.20.
“Related Person” means with respect to a particular individual (a) each other member of such individual’s Family, (b) any Person that is directly or indirectly controlled by any one or more members of such individual’s Family, and (c) any Person with respect to which one or more members of such individual’s Family serves as a director, officer, partner, executor or trustee (or in a similar capacity).  For purposes of this definition, “Family” of an individual includes the individual, the individual’s spouse, any other natural person who is related to the individual or the individual’s spouse within the second degree and any other individual who resides with such individual.
“Representatives” means officers, directors, employees, agents, attorneys, accountants, advisors and representatives.
“Restricted Business” has the meaning set forth in Section 6.4(a)(i).
“Restricted Party” has the meaning set forth in Section 6.4(a).
“Restrictive Covenants” has the meaning set forth in Section 6.4.
“Return Expense” has the meaning set forth in Section 1.6.
“Roccat Subsidiaries” has the meaning set forth in Section 2.1(b).
“Schedule” has the meaning set forth in Section 2.
“Schedule Supplement” has the meaning set forth in Section 5.7.
“Security Incident” has the meaning set forth in Section 2.18.
“Seller Adjustment Amount” has the meaning set forth in Section 1.5(g)(ii).
“Seller Indemnifying Parties” has the meaning set forth in Section 7.2(a).
“Seller Indemnitees” means the following Persons: (a) any Seller or Stockholder; (b) any Seller’s or Stockholder’s current and future Affiliates; (c) the respective Representatives of the Persons referred to in clauses “(a)” and “(b)” above; and (d) the respective successors and assigns of the Persons referred to in clauses “(a),” “(b)” and “(c)” above.
“Seller IP” means (a) the Seller Owned Registered IP, (b) all Intellectual Property of any other Person used or held for use by one or more of the Sellers under the Business IP Agreements set forth on Schedule 2.11(c) and Schedule 2.11(d).
“Seller Owned IP” means all Intellectual Property (i) including all Intellectual Property embodied in or arising out of the Seller Products, owned or purported to be owned by one or more of the Sellers and (ii) Intellectual Property owned by Winspeed and to be transferred to Roccat pursuant to the Winspeed IP Transfer.
“Seller Product” means any product designed, developed, manufactured, marketed, distributed, provided, licensed, or sold at any time by any of the Sellers or under the “Roccat” brand.
“Seller Software” has the meaning set forth in Section 2.11(l).
“Sellers” has the meaning set forth in the introductory paragraph.
“Sellers Knowledge” or any similar expression with regard to the knowledge or awareness of Sellers, means the knowledge after reasonable investigation of the Stockholders and the directors and officers of the Sellers.
“Sellers Representative” has the meaning set forth in Section 11.1.
“Stock Consideration” means €800,000 worth of shares of Parent (with such number of shares calculated using the 10-day volume weighted average price per share of Parent stock immediately prior to the Closing Date).
“Stockholder Indemnifying Parties” has the meaning set forth in Section 7.2(a).
“Stockholders” has the meaning specified in the introductory paragraph to the Agreement.
“Target Working Capital” means an amount calculated in accordance with Exhibit J.
“Tax” means any tax of any kind or nature (including any income tax, alternative or add-on minimum tax, franchise tax, capital gains tax, estimated tax, gross receipts tax, value‐added tax, surtax, excise tax, ad valorem tax, transfer tax, stamp tax, sales tax, use tax, property tax, business tax, occupation tax, inventory tax, occupancy tax, withholding tax, payroll tax, employment tax, excise tax, severance tax, real or personal property tax, or social security contributions (whether computed on a separate or consolidated, unitary or combined basis, or in any other manner)), deficiency, customs, duties and assessments, charges or fees of any similar nature, and for the avoidance of doubt, including, but not limited to, taxes within the meaning of Sec. 3 of the German General Tax Code (Abgabenordnung), and any related charge or amount (including any fine, penalty or interest or addition thereto), that is, has been or may in the future be (a) imposed, assessed or collected by or under the authority of any Governmental Authority, or (b) payable pursuant to any tax‐sharing agreement or similar Contract, as a transferee or successor, by Contract, or otherwise.
“Tax Return” means any return (including any information return), report, statement, declaration, estimate, schedule, notice, notification, form, election, certificate or other document or information that is, has been or may in the future be filed with or submitted to, or required to be filed with or submitted to, any Governmental Authority in connection with the determination, assessment, collection or payment of any Tax or in connection with the administration, implementation or enforcement of or compliance with any Law relating to any Tax.
“Team Roccat” means Team Roccat GmbH, a private limited company organized under the laws of Germany.
“Third-Party Claim” has the meaning set forth in Section 7.4(a).
“Third-Party Defense” has the meaning set forth in Section 7.4(a).
“Transaction Agreements” means: (a) the Agreement; and (b) the Ancillary Documents.
“Transactions” means (a) the execution and delivery of the respective Transaction Agreements, and (b) all of the transactions contemplated by the respective Transaction Agreements, including: (i) the sale of the Purchased Assets to the Buyer in accordance with this Agreement; (ii) the assumption of the Assumed Liabilities by the Buyer pursuant to the Assumption Agreement; and (iii) the performance by the Sellers, the Stockholders and the Buyer of their respective obligations under the Transaction Agreements, and the exercise by the Sellers, the Stockholders and the Buyer of their respective rights under the Transaction Agreements.
“Transfer Documents” has the meaning set forth in Section 1.11(b)(i).
“Transfer Tax” exclusively means the following Taxes: real estate transfer Tax, sales Tax, use Tax, stamp Tax, stamp duties other similar Taxes, charges or fees occasioned solely by the signing of or consummation of the Transaction contemplated by this Agreement, it being understood that such term does not include any income, profit, or capital gain related Tax levied on the Sellers, other Parties to this Agreement or any third party upon the transfer of the title or the beneficial ownership in or the assignment or assumption of the Purchased Assets or Assumed Liabilities or the Business.
“Transferring Employee” has the meaning set forth in Section 5.4(a).
“Union” has the meaning set forth in Section 2.10(b) of the Agreement.
“Valuation Firm” has the meaning set forth in Section 1.5(d).
“VAT” means (i) any Tax imposed in compliance with the Council Directive of 28 November 2006 on the common system of value added tax (Directive 2006/112/EC) and the applicable Laws, regulations and rules in the applicable jurisdiction, and (ii) any other tax of a similar nature, whether imposed in a member state of the European Union in substitution for, or levied in addition to, such Tax referred to in paragraph (i) above, or imposed elsewhere (including, for the avoidance of doubt, Swiss value-added tax and Taiwan business tax); in all cases of (i) or (ii) above, including any additions for late payments (Säumniszuschläge) and interest (Zinsen) as well as secondary liabilities in relation thereto.
“Winspeed” means Winspeed Co., Ltd, doing business as Jiezhi and certain other business names.
“Winspeed IP Transfer” has that meaning set forth in Section 8.1(r).
“Working Capital” means the current assets included in the Purchased Assets less the current liabilities included in the Assumed Liabilities, in each case, determined and calculated in accordance with Exhibit C.

6jpmchasecreditagreementd

                                                                     Exhibit 10.3                                                            EXECUTION VERSION                                   CREDIT AGREEMENT                                        dated as of                                      March 29, 2019                                         among                                    NAUTILUS, INC.,                                         and                                 OCTANE FITNESS, LLC,                                    as the Borrowers,                                The Other Loan Parties Hereto,                                  The Lenders Party Hereto                                          and                             JPMORGAN CHASE BANK, N.A.,                                  as Administrative Agent                               ___________________________                             JPMORGAN CHASE BANK, N.A.,                          as Sole Bookrunner and Sole Lead Arranger    DB1/ 102580159.10  

 

                             TABLE OF CONTENTS                                                                           Page   ARTICLE I    DEFINITIONS ................................................................................................................ 1         SECTION 1.01 Defined Terms ....................................................................................................... 1         SECTION 1.02 Classification of Loans and Borrowings ............................................................. 34         SECTION 1.03 Terms Generally .................................................................................................. 34         SECTION 1.04 Accounting Terms; GAAP. ................................................................................. 34         SECTION 1.05 Interest Rates; LIBOR Notifications ................................................................... 35         SECTION 1.06 Status of Obligations ........................................................................................... 35   ARTICLE II   THE CREDITS ............................................................................................................. 36         SECTION 2.01 Commitments ...................................................................................................... 36         SECTION 2.02 Loans and Borrowings. ....................................................................................... 36         SECTION 2.03 Requests for Borrowings ..................................................................................... 37         SECTION 2.04 Protective Advances. ........................................................................................... 37         SECTION 2.05 Swingline Loans and Overadvances. .................................................................. 38         SECTION 2.06 Letters of Credit. ................................................................................................. 40         SECTION 2.07 Funding of Borrowings. ...................................................................................... 44         SECTION 2.08 Interest Elections. ................................................................................................ 45         SECTION 2.09 Termination and Reduction of Commitments; Increase in Revolving                     Commitments. ..................................................................................................... 46         SECTION 2.10 Repayment of Loans; Evidence of Debt. ............................................................. 48         SECTION 2.11 Prepayment of Loans. .......................................................................................... 48         SECTION 2.12 Fees. ..................................................................................................................... 49         SECTION 2.13 Interest. ................................................................................................................ 50         SECTION 2.14 Alternate Rate of Interest; Illegality. ................................................................... 51         SECTION 2.15 Increased Costs. ................................................................................................... 52         SECTION 2.16 Break Funding Payments ..................................................................................... 54         SECTION 2.17 Withholding of Taxes; Gross-Up. ....................................................................... 54         SECTION 2.18 Payments Generally; Allocation of Proceeds; Sharing of Setoffs. ...................... 57         SECTION 2.19 Mitigation Obligations; Replacement of Lenders. .............................................. 60         SECTION 2.20 Defaulting Lenders .............................................................................................. 61         SECTION 2.21 Returned Payments ............................................................................................. 63         SECTION 2.22 Banking Services and Swap Agreements ............................................................ 63   ARTICLE III  REPRESENTATIONS AND WARRANTIES ............................................................. 63         SECTION 3.01 Organization; Powers .......................................................................................... 63         SECTION 3.02 Authorization; Enforceability .............................................................................. 63         SECTION 3.03 Governmental Approvals; No Conflicts .............................................................. 64         SECTION 3.04 Financial Condition; No Material Adverse Effect. ............................................. 64         SECTION 3.05 Properties. ........................................................................................................... 64         SECTION 3.06 Litigation and Environmental Matters. ............................................................... 64         SECTION 3.07 Compliance with Laws and Agreements; No Default ......................................... 65         SECTION 3.08 Investment Company Status ................................................................................ 65         SECTION 3.09 Taxes ................................................................................................................... 65         SECTION 3.10 ERISA ................................................................................................................. 65         SECTION 3.11 Disclosure. ........................................................................................................... 65         SECTION 3.12 Material Agreements ........................................................................................... 66         SECTION 3.13 Solvency. ............................................................................................................. 66                                         i  DB1/ 102580159.10  

 

                             TABLE OF CONTENTS                                    (continued)                                                                           Page         SECTION 3.14 Insurance ............................................................................................................. 66         SECTION 3.15 Capitalization and Subsidiaries ........................................................................... 66         SECTION 3.16 Security Interest in Collateral .............................................................................. 67         SECTION 3.17 Employment Matters ........................................................................................... 67         SECTION 3.18 Margin Regulations ............................................................................................. 67         SECTION 3.19 Use of Proceeds ................................................................................................... 67         SECTION 3.20 No Burdensome Restrictions ............................................................................... 67         SECTION 3.21 Anti-Corruption Laws and Sanctions .................................................................. 67         SECTION 3.22 [Intentionally Omitted]........................................................................................ 67         SECTION 3.23 Common Enterprise ............................................................................................ 67         SECTION 3.24 EEA Financial Institutions .................................................................................. 68         SECTION 3.25 Plan Assets; Prohibited Transactions .................................................................. 68   ARTICLE IV   CONDITIONS .............................................................................................................. 68         SECTION 4.01 Effective Date ..................................................................................................... 68         SECTION 4.02 Each Credit Event ............................................................................................... 71   ARTICLE V    AFFIRMATIVE COVENANTS ................................................................................... 72         SECTION 5.01 Financial Statements; Borrowing Base and Other Information .......................... 72         SECTION 5.02 Notices of Material Events .................................................................................. 76         SECTION 5.03 Existence; Conduct of Business .......................................................................... 77         SECTION 5.04 Payment of Obligations ....................................................................................... 77         SECTION 5.05 Maintenance of Properties ................................................................................... 77         SECTION 5.06 Books and Records; Inspection Rights ............................................................... 77         SECTION 5.07 Compliance with Laws and Material Contractual Obligations ........................... 78         SECTION 5.08 Use of Proceeds. .................................................................................................. 78         SECTION 5.09 Accuracy of Information ..................................................................................... 78         SECTION 5.10 Insurance ............................................................................................................. 78         SECTION 5.11 Casualty and Condemnation ............................................................................... 79         SECTION 5.12 Appraisals ............................................................................................................ 79         SECTION 5.13 Depository Banks ................................................................................................ 79         SECTION 5.14 Additional Collateral; Further Assurances. ......................................................... 79         SECTION 5.15 Good Standing ..................................................................................................... 80         SECTION 5.16 Post-Closing Matters. .......................................................................................... 80   ARTICLE VI   NEGATIVE COVENANTS ......................................................................................... 80         SECTION 6.01 Indebtedness ........................................................................................................ 80         SECTION 6.02 Liens .................................................................................................................... 82         SECTION 6.03 Fundamental Changes. ........................................................................................ 82         SECTION 6.04 Investments, Loans, Advances, Guarantees and Acquisitions ............................ 83         SECTION 6.05 Asset Sales .......................................................................................................... 84         SECTION 6.06 Sale and Leaseback Transactions ........................................................................ 85         SECTION 6.07 Swap Agreements ............................................................................................... 85         SECTION 6.08 Restricted Payments; Certain Payments of Indebtedness.................................... 85         SECTION 6.09 Transactions with Affiliates ................................................................................ 86         SECTION 6.10 Restrictive Agreements ....................................................................................... 87         SECTION 6.11 Amendment of Material Documents ................................................................... 87   DB1/ 102580159.10                      ii  

 

                             TABLE OF CONTENTS                                    (continued)                                                                           Page        SECTION 6.12 Fixed Charge Coverage Ratio ............................................................................. 87  ARTICLE VII   EVENTS OF DEFAULT .............................................................................................. 87  ARTICLE VIII  THE ADMINISTRATIVE AGENT ............................................................................. 90        SECTION 8.01 Authorization and Action. ................................................................................... 90        SECTION 8.02 Administrative Agent’s Reliance, Indemnification, Etc. .................................... 92        SECTION 8.03 Posting of Communications. ............................................................................... 93        SECTION 8.04 Reliance ............................................................................................................... 94        SECTION 8.05 Successor Administrative Agent. ........................................................................ 94        SECTION 8.06 Acknowledgements of Lenders and Issuing Bank. ............................................. 95        SECTION 8.07 Collateral Matters. ............................................................................................... 96        SECTION 8.08 Credit Bidding ..................................................................................................... 97        SECTION 8.09 Certain ERISA Matters. ...................................................................................... 98        SECTION 8.10 Flood Laws ........................................................................................................ 100  ARTICLE IX    MISCELLANEOUS.................................................................................................... 100        SECTION 9.01 Notices. ............................................................................................................. 100        SECTION 9.02 Waivers; Amendments. ..................................................................................... 101        SECTION 9.03 Expenses; Indemnity; Damage Waiver. ............................................................ 104        SECTION 9.04 Successors and Assigns. .................................................................................... 106        SECTION 9.05 Survival ............................................................................................................. 109        SECTION 9.06 Counterparts; Integration; Effectiveness; Electronic Execution. ...................... 109        SECTION 9.07 Severability ....................................................................................................... 110        SECTION 9.08 Right of Setoff. .................................................................................................. 110        SECTION 9.09 Governing Law; Jurisdiction; Consent to Service of Process. .......................... 111        SECTION 9.10 WAIVER OF JURY TRIAL.. ........................................................................... 112        SECTION 9.11 Headings............................................................................................................ 112        SECTION 9.12 Confidentiality .................................................................................................. 112        SECTION 9.13 Several Obligations; Nonreliance; Violation of Law ........................................ 113        SECTION 9.14 USA PATRIOT Act .......................................................................................... 113        SECTION 9.15 Disclosure .......................................................................................................... 113        SECTION 9.16 Appointment for Perfection............................................................................... 113        SECTION 9.17 Interest Rate Limitation..................................................................................... 114        SECTION 9.18 Marketing Consent ............................................................................................ 114        SECTION 9.19 Acknowledgement and Consent to Bail-In of EEA Financial Institutions ....... 114        SECTION 9.20 No Fiduciary Duty, etc ...................................................................................... 114  ARTICLE X     LOAN GUARANTY .................................................................................................. 115        SECTION 10.01 Guaranty .......................................................................................................... 115        SECTION 10.02 Guaranty of Payment....................................................................................... 115        SECTION 10.03 No Discharge or Diminishment of Loan Guaranty. ........................................ 116        SECTION 10.04 Defenses Waived ............................................................................................. 116        SECTION 10.05 Rights of Subrogation ..................................................................................... 117        SECTION 10.06 Reinstatement; Stay of Acceleration ............................................................... 117        SECTION 10.07 Information ...................................................................................................... 117        SECTION 10.08 Termination ..................................................................................................... 117        SECTION 10.09 Taxes ................................................................................................................ 117   DB1/ 102580159.10                      iii  

 

                             TABLE OF CONTENTS                                    (continued)                                                                           Page         SECTION 10.10 Maximum Liability .......................................................................................... 117         SECTION 10.11 Contribution. .................................................................................................... 118         SECTION 10.12 Liability Cumulative ....................................................................................... 118         SECTION 10.13 Keepwell .......................................................................................................... 118   ARTICLE XI   THE BORROWER REPRESENTATIVE .................................................................. 119         SECTION 11.01 Appointment; Nature of Relationship ............................................................. 119         SECTION 11.02 Powers ............................................................................................................. 119         SECTION 11.03 Employment of Agents ................................................................................... 119         SECTION 11.04 Notices ............................................................................................................ 119         SECTION 11.05 Successor Borrower Representative ................................................................ 119         SECTION 11.06 Execution of Loan Documents; Borrowing Base Certificate .......................... 119         SECTION 11.07 Reporting ......................................................................................................... 120    DB1/ 102580159.10                      iv  

 

                                  SCHEDULES    Commitment Schedule   Schedule 3.05(a)  Properties   Schedule 3.05(b)  Intellectual Property   Schedule 3.06  Disclosed Matters   Schedule 3.12   Material Agreements   Schedule 3.14  Insurance   Schedule 3.15  Capitalization and Subsidiaries   Schedule 5.16  Post-Closing Matters   Schedule 6.01  Existing Indebtedness   Schedule 6.02  Existing Liens   Schedule 6.04  Existing Investments   Schedule 6.10  Existing Restrictions                                      EXHIBITS    Exhibit A         Form of Assignment and Assumption   Exhibit B         Form of Borrowing Base Certificate   Exhibit C         Form of Compliance Certificate   Exhibit D         Joinder Agreement                                           v  DB1/ 102580159.10  

 

       CREDIT AGREEMENT dated as of March 29, 2019 (as it may be amended or modified from time   to time, this “Agreement”) by and among NAUTILUS, INC., a Washington corporation, (the “Company”),   OCTANE FITNESS, LLC, a Minnesota limited liability company (“Octane Fitness” and together with   the  Company  and  any  other  Person  (as  defined  below)  that  joins  this  Agreement  as  a  Borrower  in   accordance  with  the  terms  hereof  are  referred  to  hereinafter  each  individually  as  a  “Borrower”,  and   individually and collectively, jointly and severally, as the “Borrowers”), the other Loan Parties from time   to time party hereto, the Lenders from time to time party hereto, and JPMORGAN CHASE BANK, N.A.,   as Administrative Agent.          The parties hereto agree as follows:                                ARTICLE I   Definitions          SECTION 1.01  Defined  Terms.   As  used  in  this  Agreement,  the  following  terms  have  the   meanings specified below:          “Account” has the meaning assigned to such term in the Security Agreement.          “Account Debtor” means any Person obligated on an Account.          “Acquisition” means any transaction, or any series of related transactions, consummated on or after   the Effective Date, by which any Loan Party (a) acquires any going business or all or substantially all of   the  assets  of  any  Person,  whether  through  purchase  of  assets,  merger  or  otherwise  or  (b)  directly  or   indirectly acquires (in one transaction or as the most recent transaction in a series of transactions) at least a   majority (in number of votes) of the Equity Interests of a Person which has ordinary voting power for the   election of directors or other similar management personnel of a Person (other than Equity Interests having   such power only by reason of the happening of a contingency) or a majority of the outstanding Equity   Interests of a Person.          “Adjusted LIBO Rate” means, with respect to any Eurodollar Borrowing for any Interest Period or   for any CBFR Borrowing, an interest rate per annum (rounded upwards, if necessary, to the next 1/16 of   1%) equal to (a) the LIBO Rate for such Interest Period multiplied by (b) the Statutory Reserve Rate.          “Adjusted One Month LIBOR Rate” means, for any day, an interest rate per annum equal to the   sum of (i) 2.50% plus (ii) the Adjusted LIBO Rate for a one month interest period on such day (or if such   day is not a Business Day, the immediately preceding Business Day); provided that, for the avoidance of   doubt, the Adjusted LIBO Rate for any day shall be based on the LIBO Screen Rate at approximately 11:00   a.m. London time on such day; provided further, that, if the LIBO Screen Rate at such time shall be less   than zero, such rate shall be deemed to be zero for purposes of this Agreement.          “Administrative Agent” means JPMorgan Chase Bank, N.A., in its capacity as administrative agent   for the Lenders hereunder.          “Administrative Questionnaire” means an Administrative Questionnaire in a form supplied by the   Administrative Agent.          “Affiliate” means, with respect to a specified Person, another Person that directly, or indirectly   through one or more intermediaries, Controls or is Controlled by or is under common Control with the   specified Person.          “Agent Indemnitee” has the meaning assigned to it in Section 9.03(c).    DB1/ 102580159.10  

 

       “Agreement” has the meaning assigned to such in the preamble to this Agreement.          “Aggregate  Revolving  Commitment”  means,  at  any  time,  the  aggregate  of  the  Revolving   Commitments of all of the Lenders, as increased or reduced from time to time pursuant to the terms and   conditions hereof.  As of the Effective Date, the Aggregate Revolving Commitment is $40,000,000.          “Aggregate Revolving Exposure” means, at any time, the aggregate Revolving Exposure of all the   Lenders at such time.          “Allocable Amount” has the meaning assigned to it in Section 9.03(c).          “ALTA” means the American Land Title Association.          “Anti-Corruption Laws” means all laws, rules, and regulations of any jurisdiction applicable to any   Borrower or any of its Subsidiaries from time to time concerning or relating to bribery or corruption.          “Applicable Parties” has the meaning assigned to it in Section 8.03(c).          “Applicable Percentage” means, with respect to any Lender, (a) with respect to Revolving Loans,   LC Exposure, Overadvances or Swingline Loans, a percentage equal to a fraction the numerator of which   is  such  Lender’s  Revolving  Commitment  and  the  denominator  of  which  is  the  Aggregate  Revolving   Commitment; provided that, if the Revolving Commitments have terminated or expired, the Applicable   Percentages shall be determined based upon such Lender’s share of the Aggregate Revolving Exposure at   that time, and (b) with respect to Protective Advances or with respect to the Aggregate Revolving Exposure,   a percentage based upon its share of the Aggregate Revolving Exposure and the unused Commitments;   provided that, in accordance with Section 2.20, so long as any Lender shall be a Defaulting Lender, such   Defaulting Lender’s Commitment shall be disregarded in the calculations under clauses (a) and (b) above.          “Applicable Rate” means, for any day, with respect to any Loan, or with respect to the commitment   fees payable hereunder, as the case may be, the applicable rate per annum set forth below under the caption   “Revolver  REVLIBOR30  Spread”,  “Revolver  CBFR  Spread”,  “Revolver  Eurodollar  Spread”  or   “Commitment Fee Rate”, as the case may be, based upon the Fixed Charge Coverage Ratio as of the most   recent determination date, provided that the “Applicable Rate” shall be the applicable rates per annum set   forth below in Category 2 during the period from the Effective Date to, and including, the last day of the   fiscal quarter of the Company ending on or about March 29, 2020:    DB1/ 102580159.10                      2  

 

                                                   Revolver                               Revolver    Revolver              Fixed Charge                              CB    Commitment                              Eurodollar              Coverage Ratio             REVLIBOR30   Floating Fee  Rate                               Spread       Spread     Rate                                                      Spread               Category 1       1.75%       1.75%     0.00%     0.10%                >1.5 to 1.0               Category 2       2.00%       2.00%     0.00%     0.20%               ≤1.50 to 1.0 but               >1.25 to 1.0               Category 3       2.25%       2.25%     0.00%     0.30%                ≤1.25 to 1.0          For purposes of the foregoing,(a) the Applicable Rate shall be determined as of the end of each   fiscal  quarter  of  the  Company  based  upon  the  Company’s  annual  or  quarterly  consolidated  financial   statements delivered pursuant to Section 5.01 and (b) each change in the Applicable Rate resulting from a   change  in  the  Fixed  Charge  Coverage  Ratio  shall  be  effective  during  the  period  commencing  on  and   including  the  date  of  delivery  to  the  Administrative  Agent  of  such  consolidated  financial  statements   indicating such change and ending on the date immediately preceding the effective date of the next such   change, provided that the Fixed Charge Coverage Ratio shall be deemed to be in Category 3 (A) at any time   that an Event of Default has occurred and is continuing or (B) at the option of the Administrative Agent or   at the request of the Required Lenders if the Borrowers fail to deliver the annual or quarterly consolidated   financial statements required to be delivered by it pursuant to Section 5.01, during the period from the   expiration of the time for delivery thereof until such consolidated financial statements are delivered.          “Approved Electronic Platform” has the meaning assigned to it in Section 8.03(a).          “Approved Fund” has the meaning assigned to such term in Section 9.04.          “Assignment and Assumption” means an assignment and assumption agreement entered into by a   Lender and an assignee (with the consent of any party whose consent is required by Section 9.04), and   accepted by the Administrative Agent, in the form of Exhibit A or any other form (including electronic   records generated by the use of an electronic platform) approved by the Administrative Agent.          “Availability” means, at any time, an amount equal to (a) the lesser of (i) the Aggregate Revolving   Commitment and (ii) the Borrowing Base minus (b) the Aggregate Revolving Exposure (calculated, with   respect to any Defaulting Lender, as if such Defaulting Lender had funded its Applicable Percentage of all   outstanding Borrowings).          “Availability Period” means the period from and including the Effective Date to but excluding the   earlier of the Maturity Date and the date of termination of the Commitments.          “Available Revolving Commitment” means, at any time, the Aggregate Revolving Commitment   minus the Aggregate Revolving Exposure (calculated, with respect to any Defaulting Lender, as if such   Defaulting Lender had funded its Applicable Percentage of all outstanding Borrowings).    DB1/ 102580159.10                      3  

 

       “Bail-In Action” 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.          “Bail-In Legislation” 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.          “Banking Services” means each and any of the following bank services provided to any Loan Party   or its Subsidiaries by JPMCB or any of its Affiliates: (a) credit cards for commercial customers (including,   without limitation, “commercial credit cards” and purchasing cards), (b) stored value cards, (c) merchant   processing  services,  and  (d)  treasury  management  services  (including,  without  limitation,  controlled   disbursement, automated clearinghouse transactions, return items, any direct debit scheme or arrangement,   overdrafts, cash pooling services,  and interstate depository network services), and (e) Lease Financing.          “Banking  Services  Obligations”  means  any  and  all  obligations  of  the  Loan  Parties  and  their   Subsidiaries, whether absolute or contingent and howsoever and whensoever created, arising, evidenced or   acquired  (including  all  renewals,  extensions  and  modifications  thereof  and  substitutions  therefor)  in   connection with Banking Services; provided, however, Banking Services Obligations in respect of Lease   Financing shall be limited to Lease Deficiency Obligations.          “Banking Services Reserves” means all Reserves which the Administrative Agent from time to   time establishes in its Permitted Discretion for Banking Services then provided or outstanding.          “Bankruptcy Code” means Title 11 of the United States Code entitled “Bankruptcy”, as now and   hereafter in effect, or any successor statute.          “Bankruptcy Event” means, with respect to any Person, when such Person becomes the subject of   a   voluntary or involuntary bankruptcy or insolvency proceeding, or has had a receiver, conservator, trustee,   administrator,  custodian,  assignee  for  the  benefit  of  creditors  or  similar  Person  charged  with  the   reorganization or liquidation of its business, appointed for it, or, in the good faith determination of the   Administrative Agent, has taken any action in furtherance of, or indicating its consent to, approval of, or   acquiescence in, any such proceeding or appointment or has had any order for relief in such proceeding   entered  in  respect  thereof,  provided  that  a  Bankruptcy  Event   shall  not  result  solely  by  virtue  of  any   ownership  interest,  or  the  acquisition  of  any  ownership  interest,  in  such  Person  by  a  Governmental   Authority or instrumentality thereof, unless such  ownership interest results in or provides such Person with   immunity from the jurisdiction of courts within the U.S. or from the enforcement of judgments or writs of   attachment on its assets or permits such Person (or such Governmental Authority or instrumentality), to   reject, repudiate, disavow or disaffirm any contracts or agreements made by such Person.          “Beneficial  Ownership  Certification”  means  a  certification  regarding  beneficial  ownership  as   required by the Beneficial Ownership Regulation.          “Beneficial Ownership Regulation” means 31 C.F.R. § 1010.230.          “Benefit Plan” means any of (a) an “employee benefit plan” (as defined in Section 3(3) of ERISA)   that is subject to Title I of ERISA, (b) a “plan” as defined in Section 4975 of the Code to which Section   4975  of  the  Code  applies,  and  (c)  any  Person  whose  assets  include  (for  purposes  of  the  Plan  Asset   Regulations 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”.    DB1/ 102580159.10                      4  

 

       “Borrower”  or  “Borrowers”  has  the  meaning  assigned  to  such  term  in  the  preamble  to  this   Agreement.          “Borrower Representative” has the meaning assigned to such term in Section 11.01.          “Borrowing” means (a) Revolving Loans of the same Type, made, converted or continued on the   same date and, in the case of Eurodollar Loans, as to which a single Interest Period is in effect, (b) a Loans   of the same Type, made, converted or continued on the same date and, in the case of Eurodollar Loans, as   to which a single Interest Period is in effect, (c) a Swingline Loan, (d) a Protective Advance and (e) an   Overadvance.          “Borrowing Base” means, at any time, the sum of (a) 85% of the Borrowers’ Eligible Accounts at   such time, plus (b) the lesser of (i) 65% of the Borrowers’ Eligible Inventory, at such time, valued at the   lower of cost or market value, determined on a first-in-first-out basis and (ii) the product of 85% multiplied   by the Net Orderly Liquidation Value percentage identified in the most recent inventory appraisal ordered   by the Administrative Agent multiplied by the Borrowers’ Eligible Inventory, valued at the lower of cost or   market value, determined on a first-in-first-out basis, minus (c) Reserves.  The Administrative Agent may,   in its Permitted Discretion, adjust Reserves or reduce one or more of the other elements used in computing   the Borrowing Base, or after the occurrence of a Default, reduce the advance rates set forth above.            “Borrowing Base Certificate” means a certificate, signed and certified as accurate and complete by   a Financial Officer of the Borrower Representative, in substantially the form of Exhibit B or another form   which is acceptable to the Administrative Agent in its sole discretion.          “Borrowing  Request”  means  a  request  by  the  Borrower  Representative  for  a  Borrowing  in   accordance with Section 2.03.          “Burdensome Restrictions” means any consensual encumbrance or restriction of the type described   in clause (a) or (b) of Section 6.10.          “Business Day” means any day that is not a Saturday, Sunday or other day on which commercial   banks in New York City are authorized or required by law to remain closed; provided that, when used in   connection with a Eurodollar Loan or a Loan accruing interest at REVLIBOR30 Rate without giving effect   to the proviso contained in the definition for “REVLIBOR30 Rate, the term “Business Day” shall also   exclude any day on which banks are not open for general business in London.          “Capital  Expenditures”  means,  without duplication, any  expenditure  or  commitment  to  expend   money for any purchase or other acquisition of any asset which would be classified as a fixed or capital   asset on a consolidated balance sheet of the Company and its Subsidiaries prepared in accordance with   GAAP.          “Capital Lease Obligations” of any Person means the obligations of such Person to pay rent or other   amounts under any lease of (or other arrangement conveying the right to use) real or personal property, or   a combination thereof, which obligations are required to be classified and accounted for as capital leases or   financing leases on a balance sheet of such Person under GAAP, and the amount of such obligations shall   be the capitalized amount thereof determined in accordance with GAAP.          “CB Floating Rate” means the Prime Rate; provided that the CB Floating Rate shall never be less   than  the  Adjusted  One  Month  LIBOR  Rate  on  such  day  (or  if  such  day  is  not  a  Business  Day,  the   immediately preceding Business Day).  Any change in the CB Floating Rate due to a change in the Prime    DB1/ 102580159.10                      5  

 

 Rate or the Adjusted One Month LIBOR Rate shall be effective from and including the effective date of   such change in the Prime Rate or the Adjusted One Month LIBOR Rate, respectively.          “CBFR” means when used in reference to: (a) a rate of interest, refers to the REVLIBOR30 Rate   and (b) any Loan or Borrowing, refers to whether such Loan, or the Loans comprising such Borrowing,   bear interest at a rate determined by reference to the REVLIBOR30 Rate          “Change in Control” means (a) the acquisition of ownership, directly or indirectly, beneficially or   of record, by any Person or group (within the meaning of the Securities Exchange Act of 1934 and the rules   of the SEC thereunder as in effect on the date hereof) of Equity Interests representing more than 25% of   the  aggregate  ordinary  voting  power represented  by  the  issued  and  outstanding  Equity  Interests  of  the   Company; (b) occupation at any time of a majority of the seats (other than vacant seats) on the board of   directors  of  the  Company  by  Persons  who  were  not  (i)  directors  of  the  Company  on  the  date  of  this   Agreement, nominated, appointed or approved for consideration by shareholders for election by the board   of directors of the Company (ii) approved by the board of directors of the Company as director candidates   prior  to  their  election,  nor  (iii)  appointed  by  directors  so  nominated,  appointed  or  approved;  (c)  the   acquisition of direct or indirect Control of the Company by any Person or group; or (d) the Company shall   cease to own, free and clear of all Liens or other encumbrances, at least 100% of the outstanding voting   Equity Interests of the other Loan Parties on a fully diluted basis.          “Change in Law” means the occurrence after the date of this Agreement (or, with respect to any   Lender, such later date on which such Lender becomes a party to this Agreement) of any of the following:   (a) the adoption of or taking effect of any law, rule, regulation or treaty; (b) any change in any law, rule,   regulation or treaty or in the administration, interpretation, implementation or application thereof by any   Governmental Authority; or (c) compliance by any Lender or the Issuing Bank (or, for purposes of Section   2.15(b), by any lending office of such Lender or by such Lender’s or the Issuing Bank’s holding company,   if any) with any request, guideline, requirement or directive (whether or not having the force of law) of any   Governmental Authority made or issued after the date of this Agreement; provided that notwithstanding   anything herein to the contrary, (x) the Dodd-Frank Wall Street Reform and Consumer Protection Act and   all requests, rules, guidelines, requirements or directives thereunder or issued in connection therewith or in   the implementation thereof, and (y) all requests, rules, guidelines, requirements or directives promulgated   by the Bank for International Settlements, the Basel Committee on Banking Supervision (or any successor   or similar authority) or the 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, issued   or implemented.          “Charges” has the meaning assigned to such term in Section 9.17.          “Class”, when used in reference to any Loan or Borrowing, refers to whether such Loan, or the   Loans  comprising  such  Borrowing,  are  Revolving  Loans,  Swingline  Loans  or  Protective  Advances  or   Overadvances.          “Code” means the Internal Revenue Code of 1986, as amended from time to time.          “Collateral” means any and all property owned, leased or operated by a Person covered by the   Collateral Documents and any and all other property of any Loan Party, now existing or hereafter acquired,   that may at any time be, become or be intended to be, subject to a security interest or Lien in favor of the   Administrative Agent, on behalf of itself and the Lenders and other Secured Parties, to secure the Secured   Obligations.          “Collateral Access Agreement” has the meaning assigned to such term in the Security Agreement.   DB1/ 102580159.10                      6  

 

       “Collateral Documents” means, collectively, the Security Agreement, and any other agreements,   instruments and documents executed in connection with this Agreement that are intended to create, perfect   or  evidence  Liens  to  secure  the  Secured  Obligations,  including,  without  limitation,  all  other  security   agreements,  pledge  agreements,  mortgages,  deeds  of  trust,  loan  agreements,  notes,  guarantees,   subordination  agreements,  pledges,  powers  of  attorney,  consents,  assignments,  contracts,  fee  letters,   notices, leases, financing  statements  and  all other  written  matter  whether theretofore, now or  hereafter   executed by any Loan Party and delivered to the Administrative Agent.          “Collection Account” has the meaning assigned to such term in the Security Agreement.          “Commercial LC Exposure” means, at any time, the sum of (a) the aggregate undrawn amount of   all outstanding commercial Letters of Credit plus (b) the aggregate amount of all LC Disbursements relating   to commercial Letters of Credit that have not yet been reimbursed by or on behalf of the Borrowers.  The   Commercial LC Exposure of any Revolving Lender at any time shall be its Applicable Percentage of the   aggregate Commercial LC Exposure at such time.          “Commitment”  means,  with  respect  to  each  Lender,  the  sum  of  such  Lender’s  Revolving   Commitment,  together  with  the  commitment  of  such  Lender  to  acquire  participations  in  Protective   Advances hereunder.  The initial amount of each Lender’s Commitment is set forth on the Commitment   Schedule, or in the Assignment and Assumption or other documentation or record (as such term is defined   in Section 9-102(a)(70) of the New York Uniform Commercial Code) as provided in Section 9.04(b)(ii)(C),   pursuant to which such Lender shall have assumed its Commitment, as applicable.          “Commitment Schedule” means the Schedule attached hereto identified as such.          “Commodity  Exchange  Act”  means  the  Commodity  Exchange  Act  (7  U.S.C.  §  1  et  seq.),  as   amended from time to time, and any successor statute.          “Communications” has the meaning assigned to such term in Section 8.03(c).          “Company” has the meaning assigned to such in the preamble to this Agreement.          “Connection Income Taxes” means Other Connection Taxes that are imposed on or measured by   net income (however denominated) or that are franchise Taxes or branch profits Taxes.          “Control” means the possession, directly or indirectly, of the power to direct or cause the direction   of the management or policies of a Person, whether through the ability to exercise voting power, by contract   or otherwise.  “Controlling” and “Controlled” have meanings correlative thereto.          “Controlled  Disbursement  Account”  means,  collectively,  any  accounts  of  the  Borrowers   maintained with the Administrative Agent as a zero balance, cash management account pursuant to and   under any agreement between a Borrower and the Administrative Agent, as modified and amended from   time to time, and through which all disbursements of a Borrower, any other Loan Party and any designated   Subsidiary  of a Borrower are  made  and  settled  on  a daily  basis  with  no  uninvested  balance  remaining   overnight.          “Credit Party” means the Administrative Agent, the Issuing Bank, the Swingline Lender or any   other Lender.          “DDA Access Product” means the bank service provided to any Loan Party by JPMCB in its sole   discretion consisting of direct access to schedule payments from the Funding Account by electronic, internet    DB1/ 102580159.10                      7  

 

 or other access mechanisms that may be agreed upon from time to time by JPMCB and the funding of such   payments under the Loan Borrowing Option in the DDA Access Product Agreement.          “DDA Access Product Agreement” means JPMCB’s Treasury Services End of Day Investment &   Loan Sweep Service Terms, as in effect on the date of this Agreement, as the same may be amended from   time to time.          “Default” means any event or condition which constitutes an Event of Default or which upon notice,   lapse of time or both would, unless cured or waived, become an Event of Default.          “Defaulting Lender” means any Lender that (a) has failed, within two Business Days of the date   required to be funded or paid, to (i) fund any portion of its Loans, (ii) fund any portion of its participations   in Letters of Credit or Swingline Loans or (iii) pay over to any Credit Party any other amount required to   be paid by it hereunder, unless, in the case of clause (i) above, such Lender notifies the Administrative   Agent in writing that such failure is the result of such Lender’s good faith determination that a condition   precedent  to funding (specifically identified and including the particular Default, if any) has not been   satisfied; (b) has notified any Borrower or any Credit Party in writing, or has made a public statement, to   the  effect  that  it  does  not  intend  or  expect  to  comply  with  any  of  its  funding  obligations  under  this   Agreement (unless such writing or public statement indicates that such position is based on such Lender’s   good faith determination that a condition precedent (specifically identified and including the particular   Default,  if  any)  to  funding  a  Loan  under  this  Agreement  cannot  be  satisfied)  or  generally  under  other   agreements in which it commits to extend credit, (c) has failed, within three Business Days after request by   a Credit Party, acting in good faith, to provide a certification in writing from an authorized officer of such   Lender that it will comply with its obligations (and is financially able to meet such obligations) to fund   prospective Loans and participations in then outstanding Letters of Credit and Swingline Loans under this   Agreement, provided that such Lender shall cease to be a Defaulting Lender pursuant to this clause (c) upon   such  Credit  Party’s  receipt  of  such  certification  in  form  and  substance  satisfactory  to  it  and  the   Administrative Agent, or (d) has become the subject of (i) a Bankruptcy Event or (ii) a Bail-In Action.          “Deficiency Funding Date” has the meaning assigned to it in Section 2.05(a).          “Disclosed Matters” means the actions, suits, proceedings and environmental matters disclosed in   Schedule 3.06.          “Document” has the meaning assigned to such term in the Security Agreement.          “dollars” or “$” refers to lawful money of the U.S.          “Domestic Subsidiary” means a Subsidiary organized under the laws of a jurisdiction located in the   U.S.          “EBITDA” means, for any period, Net Income for such period plus (a) without duplication and to   the extent deducted in determining Net Income for such period, the sum of (i) Interest Expense for such   period, (ii) income tax expense for such period net of credits, (iii) all amounts attributable to depreciation   and amortization expense for such period, (iv) any extraordinary non-cash charges for such period and (v)   any other non-cash charges for such period (but excluding any non-cash charge in respect of an item that   was included in Net Income in a prior period), minus (b) without duplication and to the extent included in   Net Income, (i) any cash payments made during such period in respect of non-cash charges described in   clause (a)(v) taken in a prior period and (ii) any extraordinary gains and any non-cash items of income for   such period, all calculated for the Company and its Subsidiaries on a consolidated basis in accordance with   GAAP.    DB1/ 102580159.10                      8  

 

       “ECP” means an “eligible contract participant” as defined in Section 1(a)(18) of the Commodity   Exchange Act or any regulations promulgated thereunder and the applicable rules issued by the Commodity   Futures Trading Commission and/or the SEC.          “EEA Financial Institution” means (a) any institution 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   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.          “EEA  Member  Country”  means  any  of  the  member  states  of  the  European  Union,  Iceland,   Liechtenstein, and Norway.          “EEA Resolution Authority” 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 on which the conditions specified in Section 4.01 are satisfied (or   waived in accordance with Section 9.02).          “Electronic Signature” means an electronic sound, symbol, or process attached to, or associated   with, a contract or other record and adopted by a Person with the intent to sign, authenticate or accept such   contract or record.          “Electronic System” means any electronic system, including e-mail, e-fax, web portal access for   such Borrower and any other Internet or extranet-based site, whether such electronic system is owned,   operated or hosted by the Administrative Agent or any Issuing Bank and any of its respective Related Parties   or any other Person, providing for access to data protected by passcodes or other security system.          “Eligible Accounts” means, at any time, the Accounts of a Borrower which the Administrative   Agent determines in its Permitted Discretion are eligible as the basis for the extension of Revolving Loans   and Swingline Loans and the issuance of Letters of Credit.  Without limiting the Administrative Agent’s   discretion provided herein, Eligible Accounts shall not include any Account of a Borrower:          (a)   which  is  not  subject  to  a  first  priority  perfected  security  interest  in  favor  of  the   Administrative Agent;          (b)   which is subject to any Lien other than (i) a Lien in favor of the Administrative Agent and   (ii) a Permitted Encumbrance which does not have priority over the Lien in favor of the Administrative   Agent;          (c)   (i) which is unpaid more than 120 days after the date of the original invoice therefor or   more than 60 days after the original due date therefor, or (ii) which has been written off the books of such   Borrower or otherwise designated as uncollectible;          (d)   which is owing by an Account Debtor for which more than 50% of the Accounts owing   from such Account Debtor and its Affiliates are ineligible hereunder;          (e)   which is owing by an Account Debtor to the extent the aggregate amount of Accounts   owing from such Account Debtor and its Affiliates to such Borrower exceeds (i) 40% in the case of Dicks   Sporting Goods, Inc. and its Affiliates, or 35% in the case of Amazon.com, Inc. and its Affiliates or (ii)   DB1/ 102580159.10                      9  

 

 25% in the case of any other Account Debtor and its Affiliates, in each case, of the aggregate amount of   Eligible Accounts of such Borrower;          (f)   with respect to which any covenant, representation or warranty contained in this Agreement   or in the Security Agreement has been breached or is not true;          (g)   which (i) does not arise from the sale of goods or performance of services in the ordinary   course  of  business,  (ii)  is  not  evidenced  by  an  invoice  or  other  documentation  satisfactory  to  the   Administrative Agent which has been sent to the Account Debtor, (iii) represents a progress billing, (iv) is   contingent upon such Borrower’s completion of any further performance, (v) represents a sale on a bill-  and-hold, guaranteed sale, sale-and-return, sale on approval, consignment, cash-on-delivery or any other   repurchase or return basis or (vi) relates to payments of interest, finance charges or late charges;          (h)   for which the goods giving rise to such Account have not been shipped to the Account   Debtor or for which the services giving rise to such Account have not been performed by such Borrower or   if such Account was invoiced more than once;          (i)   with  respect  to  which  any  check  or  other  instrument  of  payment  has  been  returned   uncollected for any reason;          (j)   which is owed by an Account Debtor which has (i) applied for, suffered, or consented to   the appointment of any receiver, custodian, trustee, or liquidator of its assets, (ii) had possession of all or a   material part of its property taken by any receiver, custodian, trustee or liquidator, (iii) filed, or had filed   against  it,  any  request  or  petition  for  liquidation,  reorganization,  arrangement,  adjustment  of  debts,   adjudication  as  bankrupt,  winding-up,  or  voluntary  or  involuntary  case  under  any  state  or  federal   bankruptcy  laws  (other  than  post-petition  accounts  payable  of  an  Account  Debtor  that  is  a  debtor-in-  possession  under  the  Bankruptcy  Code  and  reasonably  acceptable  to  the  Administrative  Agent),  (iv)   admitted in writing its inability, or is generally unable to, pay its debts as they become due, (v) become   insolvent, or (vi) ceased operation of its business;          (k)   which is owed by any Account Debtor which has sold all or substantially all of its assets;          (l)   which is owed by an Account Debtor which (i) does not maintain its chief executive office   in the U.S. or Canada or (ii) is not organized under applicable law of the U.S., any state of the U.S., or the   District of Columbia, Canada, or any province of Canada unless, in any such case, such Account is backed   by a Letter of Credit acceptable to the Administrative Agent which is in the possession of, and is directly   drawable by, the Administrative Agent;          (m)   which is owed in any currency other than U.S. dollars;          (n)   which is owed by (i) any government (or any department, agency, public corporation, or   instrumentality thereof) of any country other than the U.S. unless such Account is backed by a Letter of   Credit acceptable to the Administrative Agent which is in the possession of, and is directly drawable by,   the  Administrative  Agent,  or  (ii)  any  government  of  the  U.S.,  or  any  department,  agency,  public   corporation, or instrumentality thereof, unless the Federal Assignment of Claims Act of 1940, as amended   (31 U.S.C. § 3727 et seq. and 41 U.S.C. § 15 et seq.), and any other steps necessary to perfect the Lien of   the  Administrative  Agent  in  such  Account  have  been  complied  with  to  the  Administrative  Agent’s   satisfaction;          (o)   which is owed by any Affiliate of any Loan Party or any employee, officer, director, agent   or stockholder of any Loan Party or any of its Affiliates;   DB1/ 102580159.10                      10  

 

       (p)   which, for any Account Debtor, exceeds a credit limit determined by the Administrative   Agent, to the extent of such excess;          (q)   which is owed by an Account Debtor or any Affiliate of such Account Debtor to which any   Loan Party is indebted, but only to the extent of such indebtedness, or is subject to any security, deposit,   progress payment, retainage or other similar advance made by or for the benefit of an Account Debtor, in   each case to the extent thereof;          (r)   which is subject to any counterclaim, deduction, defense, setoff or dispute but only to the   extent of any such counterclaim, deduction, defense, setoff or dispute;          (s)   which is evidenced by any promissory note, chattel paper or instrument;          (t)   which is owed by an Account Debtor (i) located in any jurisdiction which requires filing   of a “Notice of Business Activities Report” or other similar report in order to permit such Borrower to seek   judicial enforcement in such jurisdiction of payment of such Account, unless such Borrower has filed such   report or qualified to do business in such jurisdiction or (ii) which is a Sanctioned Person;          (u)   with respect to which such Borrower has made any agreement with the Account Debtor for   any reduction thereof, other than discounts and adjustments given in the ordinary course of business but   only to the extent of any such reduction, or any Account which was partially paid and such Borrower created   a new receivable for the unpaid portion of such Account;          (v)   which does not comply in all material respects with the requirements of all applicable laws   and regulations, whether Federal, state or local, including without limitation the Federal Consumer Credit   Protection Act, the Federal Truth in Lending Act and Regulation Z of the Board;          (w)   which is for goods that have been sold under a purchase order or pursuant to the terms of   a contract or other agreement or understanding (written or oral) that indicates or purports that any Person   other than such Borrower has or has had an ownership interest in such goods, or which indicates any party   other than such Borrower as payee or remittance party;          (x)   which was created on cash on delivery terms;          (y)   unless  otherwise  waived  by  the  Administrative  Agent  in  its  sole  discretion,  Accounts   owned or generated by a target or business acquired in connection with an Acquisition until the completion   of  an  appraisal  and  field  examination  with  respect  to  such  target  or  business,  in  each  case  reasonably   satisfactory to the Administrative Agent; or           (z)   which the Administrative Agent determines may not be paid by reason of the Account   Debtor’s inability to pay or which the Administrative Agent otherwise determines is unacceptable for any   reason whatsoever.          In the event that an Account of a Borrower which was previously an Eligible Account ceases to be   an  Eligible  Account  hereunder,  such  Borrower  or  the  Borrower  Representative  shall  notify  the   Administrative Agent thereof on and at the time of submission to the Administrative Agent of the next   Borrowing Base Certificate.  In determining the amount of an Eligible Account of a Borrower, the face   amount of an Account may, in the Administrative Agent’s Permitted Discretion, be reduced by, without   duplication,  to  the  extent  not  reflected  in  such  face  amount,  (i)  the  amount  of  all  accrued  and  actual   discounts, claims, credits or credits pending, promotional program allowances, price adjustments, finance    DB1/ 102580159.10                      11  

 

 charges or other allowances (including any amount that such Borrower may be obligated to rebate to an   Account Debtor pursuant to the terms of any agreement or understanding (written or oral)) and (ii) the   aggregate amount of all cash received in respect of such Account but not yet applied by such Borrower to   reduce the amount of such Account.          “Eligible Inventory” means, at any time, the Inventory of a Borrower which the Administrative   Agent determines in its Permitted Discretion is eligible as the basis for the extension of Revolving Loans   and Swingline Loans and the issuance of Letters of Credit.  Without limiting the Administrative Agent’s   discretion provided herein, Eligible Inventory of a Borrower shall not include any Inventory:                (a)   which is not subject to a first priority perfected Lien in favor of the Administrative         Agent;                (b)   which is subject to any Lien other than (i) a Lien in favor of the Administrative         Agent and (ii) a Permitted Encumbrance which does not have priority over the Lien in favor of the         Administrative Agent;                (c)   which  is,  in  the  Administrative  Agent’s  opinion,  slow  moving,  obsolete,         unmerchantable, defective, used, unfit for sale, not salable at prices approximating at least the cost         of such Inventory in the ordinary course of business or unacceptable due to age, type, category         and/or quantity;                (d)   with respect to which any covenant, representation or warranty contained in this         Agreement  or  in  the Security  Agreement has been  breached  or  is  not  true  and which  does not         conform to all standards imposed by any Governmental Authority;                (e)   in which any Person other than such Borrower shall (i) have any direct or indirect         ownership, interest or title or (ii) be indicated on any purchase order or invoice with respect to such         Inventory as having or purporting to have an interest therein;                (f)   which is not finished goods or which constitutes work-in-process, raw materials,         spare  or  replacement  parts,  subassemblies,  packaging  and  shipping  material,  manufacturing         supplies, samples, prototypes, displays or display items, bill-and-hold or ship-in-place goods, goods         that are returned or marked for return, repossessed goods, defective or damaged goods, goods held         on consignment, or goods which are not of a type held for sale in the ordinary course of business;                (g)   which is not located in the U.S. or is in transit with a common carrier from vendors         and suppliers; provided that, up to $8,000,000 of Inventory in transit from vendors and suppliers         may  be  included  as  Eligible  Inventory  in  the  aggregate  in  the  calculation  of  clause  (b)  of  the         definition of Borrowing Base despite the foregoing provision of this clause (g) so long as                      (i)   the Administrative Agent shall have received (1) a true and correct copy               of the bill of lading and other shipping documents for such Inventory and (2) evidence of               satisfactory casualty insurance naming the Administrative Agent as lender loss payee and               otherwise covering such risks as the Administrative Agent may reasonably request,                      (ii)  if the bill of lading is non-negotiable, (A) the inventory must be in transit               within the U.S., and the Administrative Agent shall have received, if requested, a duly               executed  Collateral  Access  Agreement,  in  form  and  substance  satisfactory  to  the               Administrative Agent, from the applicable customs broker, freight forwarder or carrier for               such Inventory, and (B) the Administrative Agent shall have received (1) evidence (in form    DB1/ 102580159.10                      12  

 

             and substance reasonably satisfactory to the Administrative Agent) that the Borrowers have               prepaid all freight forwarder fees and expenses or (2) an estimate from the Borrowers of               the freight forwarder fees and expenses associated with the Inventory in order to establish               an appropriate Reserve;                      (iii)  if the bill of lading is negotiable, the inventory must be in transit from               outside the U.S., and the Administrative Agent shall have received (1) confirmation that               the  bill  is  issued  in  the  name  of  such  Borrower  and  consigned  to  the  order  of  the               Administrative  Agent,  and  an  acceptable  agreement  has  been  executed  with  such               Borrower’s customs broker, in which the customs broker agrees that it holds the negotiable               bill as agent for the Administrative Agent and has granted the Administrative Agent access               to the Inventory, (2) confirmation that such Borrower has paid for the goods, and (3) an               estimate from such Borrower of the customs duties and customs fees associated with the               Inventory in order to establish an appropriate Reserve;                      (iv)  the common carrier is not an Affiliate of the applicable vendor or supplier;                      (v)   the customs broker is not an Affiliate of any Borrower; and                      (vi)  such Inventory has been in transit for fifty (50) days or less from the date               of shipment of such Inventory;                (h)   which is located in any location leased by such Borrower unless (i) (A) the lessor         has delivered to the Administrative Agent a Collateral Access Agreement or (B) a Reserve for rent,         charges and other amounts due or to become due with respect to such facility has been established         by the Administrative Agent in its Permitted Discretion, and (ii) at least $100,000 of Inventory of         the Borrowers is located such location;                (i)   (i) which is located in any third party warehouse or is in the possession of a bailee         (other than a third party processor) and is not evidenced by a Document (other than bills of lading         to the extent permitted pursuant to clause (g) above), unless (A) such warehouseman or bailee has         delivered  to  the  Administrative  Agent  a  Collateral  Access  Agreement  and  such  other         documentation as the Administrative Agent may require or (B) an appropriate Reserve has been         established by the Administrative Agent in its Permitted Discretion, and (ii) at least $100,000 of         Inventory of the Borrowers is located at such third party warehouse or in possession of such bailee;                (j)   which is being processed offsite at a third party location or outside processor, or is         in-transit to or from such third party location or outside processor;                (k)   which is a discontinued product or component thereof;                (l)   which is the subject of a consignment by such Borrower as consignor;                (m)  which is perishable;                (n)   which contains or bears any intellectual property rights licensed to such Borrower         unless the Administrative Agent is satisfied that it may sell or otherwise dispose of such Inventory         without (i) infringing the rights of such licensor, (ii) violating any contract with such licensor, or         (iii)  incurring  any  liability  with  respect  to  payment  of  royalties  other  than  royalties  incurred         pursuant to sale of such Inventory under the current licensing agreement;    DB1/ 102580159.10                      13  

 

             (o)   which is not reflected in a current perpetual inventory report of such Borrower         (unless such Inventory is reflected in a report to the Administrative Agent as “in transit” Inventory);                (p)   for which reclamation rights have been asserted by the seller;                (q)   which has been acquired from a Sanctioned Person;                (r)   unless  otherwise  waived  by  the  Administrative  Agent  in  its  sole  discretion,         Inventory  owned  or  generated by  a  target or business  acquired  in  connection with  a Permitted         Acquisition until the completion of an appraisal and field examination with respect to such target         or business, in each case reasonably satisfactory to the Administrative Agent; or                (s)   which  the  Administrative  Agent  otherwise  determines  is  unacceptable  for  any         reason whatsoever.          In the event that Inventory of a Borrower which was previously Eligible Inventory ceases to be   Eligible Inventory hereunder, such Borrower or the Borrower Representative shall notify the Administrative   Agent thereof on and at the time of submission to the Administrative Agent of the next Borrowing Base   Certificate.          “Environmental  Laws”  means  all  laws,  rules,  regulations,  codes,  ordinances,  orders,  decrees,   judgments,  injunctions,  notices  or  binding  agreements  issued,  promulgated  or  entered  into  by  any   Governmental Authority, relating in any way to (i) the environment, (ii) preservation or reclamation of   natural resources, (iii) the management, Release or threatened Release of any Hazardous Material or (iv)   health and safety matters.          “Environmental Liability” means any liability, contingent or otherwise (including any liability for   damages,  costs  of  environmental  remediation,  fines,  penalties  or  indemnities),  of  any  Loan  Party  or   Subsidiary directly or indirectly resulting from or based upon (a) any violation of any Environmental Law,   (b) the generation, use, handling, transportation, storage, treatment or disposal of any Hazardous Materials,   (c) any  exposure  to  any  Hazardous  Materials,  (d) the  Release  or  threatened  Release  of  any  Hazardous   Materials into the environment or (e) any contract, agreement or other consensual arrangement pursuant to   which liability is assumed or imposed with respect to any of the foregoing.          “Equipment” has the meaning assigned to such term in the Security Agreement.          “Equity Interests” means shares of capital stock, partnership interests, membership interests in a   limited liability company, beneficial interests in a trust or other equity ownership interests in a Person, and   any warrants, options or other rights entitling the holder thereof to purchase or acquire any of the foregoing,   but excluding any debt securities convertible into any of the foregoing.          “ERISA” means the Employee Retirement Income Security Act of 1974, as amended from time to   time, and the rules and regulations promulgated thereunder.          “ERISA Affiliate” means any trade or business (whether or not incorporated) that, together with a   Loan Party, is treated as a single employer under Section 414(b) or (c) of the Code or Section 4001(14) of   ERISA or, solely for purposes of Section 302 of ERISA and Section 412 of the Code, is treated as a single   employer under Section 414 of the Code.          “ERISA Event” means (a) any “reportable event”, as defined in Section 4043 of ERISA or the   regulations issued thereunder, with respect to a Plan (other than an event for which the 30-day notice period    DB1/ 102580159.10                      14  

 

 is waived); (b) the failure to satisfy the “minimum funding standard” (as defined in Section 412 of the Code   or Section 302 of ERISA), whether or not waived; (c) the filing pursuant to Section 412(c) of the Code or   Section 302(c) of ERISA of an application for a waiver of the minimum funding standard with respect to   any Plan; (d) the incurrence by any Loan Party or any ERISA Affiliate of any liability under Title IV of   ERISA with respect to the termination of any Plan; (e) the receipt by any Loan Party or any ERISA Affiliate   from the PBGC or a plan administrator of any notice relating to an intention to terminate any Plan or Plans   or to appoint a trustee to administer any Plan; (f) the incurrence by any Loan Party or any ERISA Affiliate   of  any  liability  with respect  to  the  withdrawal or  partial withdrawal  of  any  Loan  Party or  any  ERISA   Affiliate from any Plan or Multiemployer Plan; or (g) the receipt by any Loan Party or any ERISA Affiliate   of any notice, or the receipt by any Multiemployer Plan from any Loan Party or any ERISA Affiliate of any   notice, concerning the imposition upon any Loan Party or any ERISA Affiliate of Withdrawal Liability or   a  determination  that  a  Multiemployer  Plan  is,  or  is  expected  to  be,  insolvent,  in  critical  status  or  in   reorganization, within the meaning of Title IV of ERISA.          “EU Bail-In Legislation Schedule” 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”, when used in reference to any Loan or Borrowing, refers to whether such Loan, or   the Loans comprising such Borrowing, bears interest at a rate determined by reference to the Adjusted   LIBO Rate.          “Event of Default” has the meaning assigned to such term in Article VII.          “Excess Availability” shall mean Availability minus the aggregate amount of all outstanding trade   payables of the Loan Parties which have been unpaid for more than 30 days after the due date therefor   (other than trade payables being contested or disputed by the Loan Parties in good faith), as determined by   the Administrative Agent in its Permitted Discretion.          “Excluded Swap Obligation” means, with respect to any Loan Guarantor, any Swap Obligation if,   and to the extent that, all or a portion of the Guarantee of such Loan Guarantor of, or the grant by such Loan   Guarantor of a security interest to secure, such Swap Obligation (or any Guarantee thereof) is or becomes   illegal under the Commodity Exchange Act or any rule, regulation or order of the Commodity Futures   Trading Commission (or the application or official interpretation of any thereof) by virtue of such Loan   Guarantor’s failure for any reason to constitute an ECP at the time the Guarantee of such Loan Guarantor   or  the  grant  of  such  security  interest  becomes  or  would  become  effective  with  respect  to  such  Swap   Obligation.  If a Swap Obligation arises under a master agreement governing more than one swap, such   exclusion shall apply only to the portion of such Swap Obligation that is attributable to swaps for which   such Guarantee or security interest is or becomes illegal.          “Excluded Taxes” means any of the following Taxes imposed on or with respect to a Recipient or   required to be withheld or deducted from a payment to a Recipient: (a) Taxes imposed on or measured by   net income (however denominated), franchise Taxes, and branch profits Taxes, in each case, (i) imposed as   a result of such Recipient being organized under the laws of, or having its principal office or, in the case of   any Lender, its applicable lending office located in, the jurisdiction imposing such Tax (or any political   subdivision  thereof)  or  (ii)  that are  Other Connection  Taxes; (b)  in  the case  of a  Lender, U.S. Federal   withholding Taxes imposed on amounts payable to or for the account of such Lender with respect to an   applicable interest in a Loan, Letter of Credit or Commitment pursuant to a law in effect on the date on   which  (i) such  Lender  acquires  such  interest in  the Loan, Letter of  Credit  or Commitment  (other  than   pursuant to an assignment request by the Borrowers under Section 2.19(b)) or (ii) such Lender changes its   lending office, except in each case to the extent that, pursuant to Section 2.17, amounts with respect to such   Taxes  were  payable  either  to  such  Lender’s  assignor  immediately  before  such  Lender  acquired  the   DB1/ 102580159.10                      15  

 

 applicable interest in a Loan, Letter of Credit or Commitment or to such Lender immediately before it   changed its lending office; (c) Taxes attributable to such Recipient’s failure to comply with Section 2.17(f);   and (d) any withholding Taxes imposed under FATCA.          “Extenuating  Circumstance”  means  any  period  during  which  the  Administrative  Agent  has   determined  in  its  sole  discretion  (i)  that  due  to  unforeseen  and/or  nonrecurring  circumstances,  it  is   impractical and/or not feasible to submit or receive a Borrowing Request or Interest Election Request by   email or fax or through Electronic System, and (ii) to accept a Borrowing Request or Interest Election   Request telephonically.          “FATCA” means Sections 1471 through 1474 of the Code, as of the date of this Agreement (or any   amended or successor version that is substantively comparable and not materially more onerous to comply   with), any current or future regulations or official interpretations thereof and any agreement entered into   pursuant  to  Section  1471(b)(1)  of  the  Code  and  any  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.          “Federal Funds Effective Rate” means, for any day, the rate calculated by the NYFRB based on   such  day’s  federal  funds  transactions  by  depositary  institutions  (as  determined  in  such  manner  as  the   NYFRB  shall  set forth  on  its public website from  time  to  time)  and  published on  the  next  succeeding   Business Day by the NYFRB as the effective federal funds rate, provided that, if the Federal Funds Effective   Rate as so determined would be less than zero, such rate shall be deemed to be zero for the purposes of this   Agreement.          “Federal Reserve Board” means the Board of Governors of the Federal Reserve System of the   United States of America.          “Financial Covenant Testing Trigger Period” means, from and after the Closing Date and until the   receipt by Agent of the Borrowers’ audited financial statements for the fiscal year ending December 31,   2019 (the “2019 Audited Financial Statements”) as required pursuant to Section 5.01(a), each period (a)   commencing on any day that Excess Availability is less than an amount equal to 12.5% of the Aggregate   Revolving Commitment and (b) continuing until Excess Availability has been greater than or equal to an   amount equal to 12.5% of the Aggregate Revolving Commitment at all times for thirty (30) consecutive   Business Days.          “Financial  Officer”  means  the  chief  financial  officer,  principal  accounting  officer,  treasurer  or   controller of a Borrower.          “Financial Statements” has the meaning assigned to it in Section 5.01(t).          “Fixed Charge Coverage Ratio” means, at any date, the ratio of (a) EBITDA minus Unfinanced   Capital Expenditures to (b) Fixed Charges, all calculated for the period of four consecutive fiscal quarters   ended on such date (or, if such date is not the last day of a fiscal quarter, ended on the last day of the fiscal   quarter most recently ended prior to such date).          “Fixed  Charges”  means,  for  any  period,  without  duplication,  cash  Interest  Expense, plus  prepayments and scheduled principal payments on Indebtedness actually made, plus expenses for taxes paid  in cash (net receipt of tax refunds paid in cash), plus Restricted Payments paid in cash, plus Capital Lease   Obligation  payments,  all  calculated  for  the  Company  and  its  Subsidiaries  on  a  consolidated  basis  in   accordance with GAAP.    DB1/ 102580159.10                      16  

 

       “Fixtures” has the meaning assigned to such term in the Security Agreement.          “Flood Laws” has the meaning assigned to such term in Section 8.10.          “Foreign Lender” means (a) if a Borrower is a U.S. Person, a Lender, with respect to such Borrower,   that is not a U.S. Person, and (b) if a Borrower is not a U.S. Person, a Lender, with respect to such Borrower,   that is resident or organized under the laws of a jurisdiction other than that in which such Borrower is   resident for tax purposes.          “Foreign Subsidiary” means any Subsidiary which is not a Domestic Subsidiary.          “Funding Account” has the meaning assigned to such term in Section 4.01(h).          “GAAP” means generally accepted accounting principles in the U.S.          “Governmental Authority” means the government of the U.S., any other nation or any political   subdivision thereof, whether state or local, and any agency, authority, instrumentality, regulatory body,   court,  central  bank  or  other  entity  exercising  executive,  legislative,  judicial,  taxing,  regulatory  or   administrative powers or functions of or pertaining to government.          “Guarantee” of or by any Person (the “guarantor”) means any obligation, contingent or otherwise,   of the guarantor guaranteeing or having the economic effect of guaranteeing any Indebtedness or other   obligation of any other Person (the “primary obligor”) in any manner, whether directly or indirectly, and   including any obligation of the guarantor, direct or indirect, (a) to purchase or pay (or advance or supply   funds for the purchase or payment of) such Indebtedness or other obligation or to purchase (or to advance   or supply funds for the purchase of) any security for the payment thereof, (b) to purchase or lease property,   securities or services for the purpose of assuring the owner of such Indebtedness or other obligation of the   payment thereof, (c) to maintain working capital, equity capital or any other financial statement condition   or liquidity of the primary obligor so as to enable the primary obligor to pay such Indebtedness or other   obligation or (d) as an account party in respect of any letter of credit or letter of guaranty issued to support   such  Indebtedness  or  obligation; provided,  that  the  term  Guarantee  shall  not  include  endorsements  for   collection or deposit in the ordinary course of business.          “Guaranteed Obligations” has the meaning assigned to such term in Section 10.01.          “Guarantor Payment” has the meaning assigned to it in Section 10.11.          “Hazardous Materials” means:  (a) any substance, material, or waste that is included within the   definitions  of  “hazardous  substances,”  “hazardous  materials,”  “hazardous  waste,”  “toxic  substances,”   “toxic materials,” “toxic waste,” or words of similar import in any Environmental Law; (b) those substances   listed as hazardous substances by the United States Department of Transportation (or any successor agency)   (49 C.F.R. 172.101 and amendments thereto) or by the Environmental Protection Agency (or any successor   agency) (40 C.F.R. Part 302 and amendments thereto); and (c) any substance, material, or waste that is   petroleum,  petroleum-related,  or  a  petroleum  by-product,  asbestos  or  asbestos-containing  material,   polychlorinated biphenyls, flammable, explosive, radioactive, freon gas, radon, or a pesticide, herbicide, or   any other agricultural chemical.          “IBA” has the meaning assigned to such term in Section 1.05.          “Impacted Interest Period” has the meaning assigned to such term in the definition of “LIBO Rate”.    DB1/ 102580159.10                      17  

 

       “Indebtedness” of any Person means, without duplication, (a) all obligations of such Person for   borrowed money or with respect to deposits or advances of any kind, (b) all obligations of such Person   evidenced by bonds, debentures, notes or similar instruments, (c) all obligations of such Person upon which   interest charges are customarily paid, (d) all obligations of such Person under conditional sale or other title   retention agreements relating to property acquired by such Person, (e) all obligations of such Person in   respect of the deferred purchase price of property or services (excluding current accounts payable incurred   in the ordinary course of business), (f) all Indebtedness of others secured by (or for which the holder of   such Indebtedness has an existing right, contingent or otherwise, to be secured by) any Lien on property   owned or acquired by such Person, whether or not the Indebtedness secured thereby has been assumed,   (g) all  Guarantees  by  such  Person  of  Indebtedness  of  others,  (h) all  Capital  Lease  Obligations  of  such   Person, (i) all obligations, contingent or otherwise, of such Person as an account party in respect of letters   of credit and letters of guaranty, (j) all obligations, contingent or otherwise, of such Person in respect of   bankers’ acceptances, (k) obligations under any earn-out (which for all purposes of this Agreement shall be   valued at the maximum potential amount payable with respect to such earn-out) (l) any other Off-Balance   Sheet  Liability,  and  (m)  obligations,  whether  absolute  or  contingent  and  howsoever  and  whensoever   created, arising, evidenced or acquired (including all renewals, extensions and modifications thereof and   substitutions therefor), under (i) any and all Swap Agreements, and (ii) any and all cancellations, buy backs,   reversals, terminations or assignments of any Swap Agreement transaction.  The Indebtedness of any Person   shall include the Indebtedness of any other entity (including any partnership in which such Person is a   general partner) to the extent such Person is liable therefor as a result of such Person’s ownership interest   in or other relationship with such entity, except to the extent the terms of such Indebtedness provide that   such Person is not liable therefor.          “Indemnified Taxes” means (a) Taxes, other than Excluded Taxes, imposed on or with respect to   any payment made by, or on account of any obligation of any Loan Party under any Loan Document and   (b) to the extent not otherwise described in the foregoing clause (a) hereof, Other Taxes.          “Indemnitee” has the meaning assigned to such term in Section 9.03(b).          “Ineligible Institution” has the meaning assigned to such term in Section 9.04(b).          “Information” has the meaning assigned to such term in Section 9.12.          “Interest Election Request” means a request by the Borrower Representative to convert or continue   a Borrowing in accordance with Section 2.08.          “Interest  Expense”  means,  for  any  period,  total  interest  expense  (including  that  attributable  to   Capital  Lease  Obligations)  of  the  Company  and  its  Subsidiaries  for  such  period  with  respect  to  all   outstanding Indebtedness of the Company and its Subsidiaries (including all commissions, discounts and   other fees and charges owed with respect to letters of credit and bankers’ acceptances and net costs under   Swap Agreements in respect of interest rates to the extent such net costs are allocable to such period in   accordance with GAAP), calculated on a consolidated basis for the Company and its Subsidiaries for such   period in accordance with GAAP.          “Interest Payment Date” means (a) with respect to any CBFR Loan (other than a Swingline Loan),   the first Business Day of each calendar month and the Maturity Date, (b) with respect to any Eurodollar   Loan, the last day of each Interest Period applicable to the Borrowing of which such Loan is a part (and, in   the case of a Eurodollar Borrowing with an Interest Period of more than three months’ duration, each day   prior to the last day of such Interest Period that occurs at intervals of three months’ duration after the first   day of such Interest Period) and the Maturity Date, and (c) with respect to any Swingline Loan, the day that   such Swingline Loan is required to be repaid and the Maturity Date.   DB1/ 102580159.10                      18  

 

       “Interest Period” means, with respect to any Eurodollar Borrowing, the period commencing on the   date of such Eurodollar Borrowing and ending on the numerically corresponding day in the calendar month   that is one, two, three or six months thereafter, as the Borrower Representative may elect; provided, that (i)   if any Interest Period would end on a day other than a Business Day, such Interest Period shall be extended   to the next succeeding Business Day unless, such next succeeding Business Day would fall in the next   calendar month, in which case such Interest Period shall end on the next preceding Business Day and (ii)   any Interest Period that commences on the last Business Day of a calendar month (or on a day for which   there is no numerically corresponding day in the last calendar month of such Interest Period) shall end on   the last Business Day of the last calendar month of such Interest Period.  For purposes hereof, the date of a   Borrowing initially shall be the date on which such Borrowing is made and, in the case of a Revolving   Borrowing, thereafter shall be the effective date of the most recent conversion or continuation of such   Borrowing.          “Interpolated Rate” means, at any time, for any Interest Period, the rate per annum (rounded to the   same number of decimal places as the LIBO Screen Rate) determined by the Administrative Agent (which   determination shall be conclusive and binding absent manifest error) to be equal to the rate that results from   interpolating on a linear basis between: (a) the LIBO Screen Rate for the longest period (for which the   LIBO Screen Rate is available) that is shorter than the Impacted Interest Period and (b) the LIBO Screen   Rate for the shortest period (for which the LIBO Screen Rate is available) that exceeds the Impacted Interest   Period, in each case, at such time; provided, that if any Interpolated rate shall be less than zero, such rate   shall be deemed to be zero for purposes of this Agreement.          “Inventory” has the meaning assigned to such term in the Security Agreement.          “IRS” means the United States Internal Revenue Service.          “Issuing Bank” means, individually and collectively, each of JPMCB, in its capacity as the issuer   of  Letters  of  Credit  hereunder,  and  any  other  Revolving  Lender  from  time  to  time  designated  by  the   Borrower  Representative  as  an  Issuing  Bank,  with  the  consent  of  such  Revolving  Lender  and  the   Administrative Agent, and their respective successors in such capacity as provided in Section 2.06(i).  Any   Issuing Bank may, in its discretion, arrange for one or more Letters of Credit to be issued by its Affiliates,   in which case the term “Issuing Bank” shall include any such Affiliate with respect to Letters of Credit   issued by such Affiliate (it being agreed that such Issuing Bank shall, or shall cause such Affiliate to, comply   with the requirements of Section 2.06 with respect to such Letters of Credit).  At any time there is more   than one Issuing Bank, all singular references to the Issuing Bank shall mean any Issuing Bank, either   Issuing Bank, each Issuing Bank, the Issuing Bank that has issued the applicable Letter of Credit, or both   (or all) Issuing Banks, as the context may require.          “Issuing Bank Sublimit” means, as of the Effective Date, (i) $2,000,000, in the case of JPMCB and   (ii) such amount as shall be designated to the Administrative Agent and the Borrower Representative in   writing by an Issuing Bank; provided that any Issuing Bank shall be permitted at any time to increase or   reduce  its  Issuing  Bank  Sublimit  upon  providing  five  (5)  days’  prior  written  notice  thereof  to  the   Administrative Agent and the Borrower Representative.          “Joinder Agreement” means a Joinder Agreement in substantially the form of Exhibit D.          “JPMCB” means JPMorgan Chase Bank, N.A., a national banking association, in its individual   capacity, and its successors.          “JPMCB Parties” has the meaning assigned to it in Section 9.19.    DB1/ 102580159.10                      19  

 

       “LC Collateral Account” has the meaning assigned to such term in Section 2.06(j).          “LC Disbursement” means any payment made by an Issuing Bank pursuant to a Letter of Credit.          “LC Exposure” means, at any time, the sum of the Commercial LC Exposure and the Standby LC   Exposure at such time.  The LC Exposure of any Revolving Lender at any time shall be its Applicable   Percentage of the aggregate LC Exposure at such time.          “Lease Financing” means (i) a lease of specific Equipment as defined in Article 2-A of the UCC,   and (ii) a secured financing transaction secured by specific Equipment, whether that transaction is called a   lease or a loan, entered into by any Loan Party or its Subsidiaries with any Lender or any of its Affiliates   (in this context, the “Lessor”).          “Lease Deficiency Obligation” means after default, repossession and disposition of the Equipment   which is the subject of or which secures a Lease Financing, the amount, if any, by which (i) any and all   obligations of the Loan Parties or their Subsidiaries to a Lessor, arising, evidenced or acquired (including   all renewals, extensions and modifications thereof and substitutions therefor) in connection with a specific   Lease Financing, exceeds (ii) the Net Proceeds realized by the Lessor upon the disposition of the Equipment   which is the subject of or which secures the specific Lease Financing.          “Lenders” means the Persons listed on the Commitment Schedule and any other Person that shall   have become a Lender hereunder pursuant to Section 2.09 or an Assignment and Assumption or otherwise,   other than any such Person that ceases to be a Lender hereunder pursuant to an Assignment and Assumption   or otherwise.  Unless the context otherwise requires, the term “Lenders” includes the Swingline Lender and   the Issuing Bank.          “Letters of Credit” means the letters of credit issued pursuant to this Agreement, and the term   “Letter of Credit” means any one of them or each of them singularly, as the context may require.          “Letter of Credit Agreement” has the meaning assigned to it in Section 2.06(b).          “LIBO Rate” means, with respect to any Eurodollar Borrowing for any applicable Interest Period   or  for  any  CBFR  Borrowing,  LIBO  Screen  Rate  at  approximately  11:00  a.m.,  London  time,  two   (2) Business Days prior to the commencement of such Interest Period; provided that, if the LIBO Screen   Rate shall not be available at such time for such Interest Period (an “Impacted Interest Period”), then the   LIBO Rate shall be the Interpolated Rate, subject to Section 2.14 in the event that the Administrative Agent   shall conclude that it shall not be possible to determine such Interpolated Rate (which conclusion shall be   conclusive and binding absent manifest error).  Notwithstanding the above, to the extent that “LIBO Rate”   or “Adjusted LIBO Rate” is used in connection with an CBFR Borrowing, such rate shall be determined as   modified by the definition of Adjusted One Month LIBOR Rate.          “LIBO Screen Rate” means, for any day and time, with respect to any Eurodollar Borrowing for   any Interest Period or for any CBFR Borrowing, the London interbank offered rate as administered by ICE   Benchmark Administration (or any other Person that takes over the administration of such rate for Dollars)   for a period equal in length to such Interest Period as displayed on such day and time on pages LIBOR01   or LIBOR02 of the Reuters screen that displays such rate (or, in the event such rate does not appear on a   Reuters page or screen, on any successor or substitute page on such screen that displays such rate, or on the   appropriate page of such other information service that publishes such rate from time to time as selected by   the  Administrative  Agent  in  its  reasonable  discretion);  provided  that  if  the  LIBO  Screen  Rate  as  so   determined would be less than zero, such rate shall be deemed to zero for the purposes of this Agreement.    DB1/ 102580159.10                      20  

 

       “Lien”  means,  with  respect  to  any  asset,  (a) any  mortgage,  deed  of  trust,  lien,  pledge,   hypothecation, encumbrance, charge or security interest in, on or of such asset, (b) the interest of a vendor   or a lessor under any conditional sale agreement, capital lease or title retention agreement (or any financing   lease having substantially the same economic effect as any of the foregoing) relating to such asset and (c) in   the  case  of  securities,  any  purchase  option,  call  or  similar  right  of  a  third  party  with  respect  to  such   securities.          “Loan Borrowing Option” has the meaning assigned to such term in the DDA Access Product   Agreement.          “Loan Documents” means, collectively, this Agreement, any promissory notes issued pursuant to   this Agreement, any Letter of Credit Agreement, the Collateral Documents, the Loan Guaranty, the Pacific   Direct Collateral Assignment, and all other agreements, instruments, documents and certificates identified   in Section 4.01 executed and delivered to, or in favor of, the Administrative Agent or any Lender and   including all other pledges, powers of attorney, consents, assignments, contracts, notices, letter of credit   agreements, letter of credit applications and any agreements between the Borrower Representative and the   Issuing Bank regarding the Issuing Bank’s Issuing Bank Sublimit or the respective rights and obligations   between the Borrower and the Issuing Bank in connection with the issuance by the Issuing Bank of Letters   of Credit, and all other written matter whether heretofore, now or hereafter executed by or on behalf of any   Loan Party, or any employee of any Loan Party, and delivered to the Administrative Agent or any Lender   in  connection  with  this  Agreement  or  the  transactions  contemplated  hereby.   Any  reference  in  this   Agreement or any other Loan Document to a Loan Document shall include all appendices, exhibits or   schedules thereto, and all amendments, restatements, supplements or other modifications thereto, and shall   refer to this Agreement or such Loan Document as the same may be in effect at any and all times such   reference becomes operative.          “Loan Guarantor” means each Loan Party.          “Loan Guaranty” means Article X of this Agreement.          “Loan Parties” means, collectively, the Borrowers, the Borrowers’ Domestic Subsidiaries and any   other Person who becomes a party to this Agreement pursuant to a Joinder Agreement and their respective   successors and assigns, and the term “Loan Party” shall mean any one of them or all of them individually,   as the context may require.          “Loans” means the loans and advances made by the Lenders pursuant to this Agreement, including   Swingline Loans, Overadvances and Protective Advances.          “Margin Stock” means margin stock within the meaning of Regulations T, U and X, as applicable.          “Material Adverse Effect” means a material adverse effect on (a) the business, assets, operations,   prospects or condition, financial or otherwise, of the Company and its Subsidiaries, or the Loan Parties and   their Subsidiaries, in each case taken as a whole, (b) the ability of any Loan Party to perform any of its   obligations  under  the  Loan  Documents  to  which  it  is  a  party,  (c)  the  Collateral,  or  the  Administrative   Agent’s Liens (on behalf of itself and other Secured Parties) on the Collateral or the priority of such Liens,   or (d) the rights of or benefits available to the Administrative Agent, the Issuing Bank or the Lenders under   any of the Loan Documents.          “Material Contracts” means, collectively, (a) the Pacific Direct License Agreement, and (b) any   other contract or agreement, the loss of which could reasonably be expected to result in a Material Adverse   Effect.    DB1/ 102580159.10                      21  

 

       “Material  Indebtedness”  means  Indebtedness  (other  than  the  Loans  and  Letters  of  Credit),  or   obligations  in  respect  of  one  or  more  Swap  Agreements,  of  any  one  or  more  of  the  Company  and  its   Subsidiaries in an aggregate principal amount exceeding $1,000,000.  For purposes of determining Material   Indebtedness, the “principal amount” of the obligations of the Company or any Subsidiary in respect of any   Swap  Agreement  at  any  time  shall  be  the  maximum  aggregate  amount  (giving  effect  to  any  netting   agreements) that the Company or such Subsidiary would be required to pay if such Swap Agreement were   terminated at such time.          “Maturity Date” means March 29, 2022 or any earlier date on which the Commitments are reduced   to zero or otherwise terminated pursuant to the terms hereof.          “Maximum Rate” has the meaning assigned to such term in Section 9.17.          “Moody’s” means Moody’s Investors Service, Inc.          “Mortgage” means any mortgage, deed of trust or other agreement which conveys or evidences a   Lien in favor of the Administrative Agent, for the benefit of the Administrative Agent and the other Secured   Parties,  on  real  property  of  a  Loan  Party,  including  any  amendment,  restatement,  modification  or   supplement thereto.          “Multiemployer Plan” means a multiemployer plan as defined in Section 4001(a)(3) of ERISA.          “Net Income” means, for any period, the consolidated net income (or loss) of the Company and its   Subsidiaries, determined on a consolidated basis in accordance with GAAP; provided that there shall be   excluded (a) the income (or deficit) of any Person accrued prior to the date it becomes a Subsidiary or is   merged into or consolidated with the Company or any of its Subsidiaries, (b) the income (or deficit) of any   Person (other than a Subsidiary) in which the Company or any of its Subsidiaries has an ownership interest,   except to the extent that any such income is actually received by the Company or such Subsidiary in the   form of dividends or similar distributions and (c) the undistributed earnings of any Subsidiary to the extent   that the declaration or payment of dividends or similar distributions by such Subsidiary is not at the time   permitted by the terms of any contractual obligation (other than under any Loan Document) or Requirement   of Law applicable to such Subsidiary.          “Net  Orderly  Liquidation  Value”  means,  with  respect  to  Inventory  of  any  Person,  the  orderly   liquidation value thereof as determined in a manner acceptable to the Administrative Agent by an appraiser   acceptable to the Administrative Agent, net of all costs of liquidation thereof.          “Net Proceeds” means, with respect to any event, (a) the cash proceeds received in respect of such   event including (i) any cash received in respect of any non-cash proceeds (including any cash payments   received by way of deferred payment of principal pursuant to a note or installment receivable or purchase   price  adjustment  receivable  or  otherwise,  but  excluding  any  interest  payments),  but  only  as  and  when   received, (ii) in the case of a casualty, insurance proceeds and (iii) in the case of a condemnation or similar   event, condemnation awards and similar payments, minus (b) the sum of (i) all reasonable fees and out-of-  pocket expenses paid to third parties (other than Affiliates) in connection with such event, (ii) in the case   of a sale, transfer or other disposition of an asset (including pursuant to a sale and leaseback transaction or   a casualty or a condemnation or similar proceeding), the amount of all payments required to be made as a   result of such event to repay Indebtedness (other than Loans) secured by such asset or otherwise subject to   mandatory  prepayment  as  a  result  of  such  event  and  (iii) the  amount  of  all  taxes  paid  (or  reasonably   estimated to be payable) and the amount of any reserves established to fund contingent liabilities reasonably   estimated to be payable, in each case during the year that such event occurred or the next succeeding year    DB1/ 102580159.10                      22  

 

 and that are directly attributable to such event (as determined reasonably and in good faith by a Financial   Officer of the Borrower Representative).          “Non-Consenting Lender” has the meaning assigned to such term in Section 9.02(d).          “NYFRB” means the Federal Reserve Bank of New York.          “NYFRB Rate” means, for any day, the greater of (a) the Federal Funds Effective Rate in effect on   such day and (b) the Overnight Bank Funding Rate in effect on such day(or for any day that is not a Business   Day, for the immediately preceding Business Day); provided that if none of such rates are published for   any day that is a Business Day, the term “NYFRB Rate” means the rate for a federal funds transaction   quoted at 11:00 a.m. on such day received by the Administrative Agent from a federal funds broker of   recognized standing selected by it; provided, further, that if any of the aforesaid rates as so determined   would be less than zero, such rate shall be deemed to be zero for purposes of this Agreement.          “Obligated Party” has the meaning assigned to such term in Section 10.02.          “Obligations” means all unpaid principal of and accrued and unpaid interest on the Loans, all LC   Exposure, all accrued and unpaid fees and all expenses, reimbursements, indemnities and other obligations   and indebtedness (including interest and fees accruing during the pendency of any bankruptcy, insolvency,   receivership or other similar proceeding, regardless of whether allowed or allowable in such proceeding),   obligations and liabilities of any of the Loan Parties to any of the Lenders, the Administrative Agent, the   Issuing Bank or any indemnified party, individually or collectively, existing on the Effective Date or arising   thereafter, direct or indirect, joint or several, absolute or contingent, matured or unmatured, liquidated or   unliquidated, secured or unsecured, arising by contract, operation of law or otherwise, arising or incurred   under  this  Agreement or any  of  the other  Loan  Documents  or  in respect  of  any  of  the  Loans  made  or   reimbursement or other obligations incurred or any of the Letters of Credit or other instruments at any time   evidencing any thereof.          “OFAC”  means  the  Office  of  Foreign  Assets  Control  of  the  United  States  Department  of  the   Treasury.          “Off-Balance Sheet Liability” of a Person means (a) any repurchase obligation or liability of such   Person with respect to accounts or notes receivable sold by such Person, (b) any indebtedness, liability or   obligation  under  any  so-called  “synthetic  lease”  transaction  entered  into  by  such  Person,  or  (c)  any   indebtedness, liability or obligation arising with respect to any other transaction which is the functional   equivalent of or takes the place of borrowing but which does not constitute a liability on the balance sheet   of such Person (other than operating leases).          “Original Indebtedness” has the meaning assigned to it in Section 6.01(f).          “Other Connection Taxes” means, with respect to any Recipient, Taxes imposed as a result of a   present or former connection between such Recipient and the jurisdiction imposing such Taxes (other than   a connection arising from such Recipient having executed, delivered, become a party to, performed its   obligations under, received payments under, received or perfected a security interest under, engaged in any   other transaction pursuant to, or enforced, any Loan Document, or sold or assigned an interest in any Loan,   Letter of Credit or any Loan Document).          “Other Taxes” means all present or future stamp, court or documentary, intangible, recording, filing   or  similar Taxes  that  arise  from  any  payment  made  under, from  the  execution,  delivery,  performance,   enforcement or registration of, from the receipt or perfection of a security interest under, or otherwise with    DB1/ 102580159.10                      23  

 

 respect to, any Loan Document, except any such Taxes that are Other Connection Taxes imposed with   respect to an assignment (other than an assignment made pursuant to Section 2.19).          “Overadvance” has the meaning assigned to such term in Section 2.05(b).          “Overnight Bank Funding Rate” means, for any day, the rate comprised of both overnight federal   funds and overnight Eurodollar borrowings by U.S.-managed banking offices of depository institutions (as   such composite rate shall be determined by the NYFRB as set forth on its public website from time to time)   and published on the next succeeding Business Day by the NYFRB as an overnight bank funding rate.          “Pacific Direct” means Pacific Direct, LLC, a Delaware limited liability company.          “Pacific Direct Collateral Assignment” means that certain Collateral Assignment (including any   and all supplements thereto), dated as of the date hereof, by and among the Company, Pacific Direct and   the Administrative Agent, as the same may be amended, restated, supplemented or otherwise modified from   time to time.          “Pacific Direct License Agreement” means that certain Trademark License Agreement, dated as of   September 20, 2001, by and among the Company, Pacific Direct and Schwinn Acquisition LLC, as the   same  may  be  amended,  restated,  supplemented  or  otherwise  modified  from  time  to  time  as  permitted   pursuant to the terms of the Pacific Direct Collateral Assignment.          “Paid  in  Full”  or  “Payment  in  Full”  means,  (i)  the  indefeasible  payment  in  full  in  cash  of  all   outstanding  Loans  and  LC  Disbursements,  together  with  accrued  and  unpaid  interest  thereon,  (ii)  the   termination, expiration, or cancellation and return of all outstanding Letters of Credit (or alternatively, with   respect to each such Letter of Credit, the furnishing to the Administrative Agent of a cash deposit, or at the   discretion of the Administrative Agent a backup standby letter of credit satisfactory to the Administrative   Agent  and  the  Issuing  Bank,  in  an  amount  equal  to  103%  of  the  LC  Exposure  as  of  the  date  of such   payment), (iii) the indefeasible payment in full in cash of the accrued and unpaid fees, (iv) the indefeasible   payment in full in cash of all reimbursable expenses and other Secured Obligations (other than Unliquidated   Obligations  for  which  no  claim  has  been  made  and  other  obligations  expressly  stated  to  survive  such   payment and termination of this Agreement), together with accrued and unpaid interest thereon, (v) the   termination  of  all  Commitments,  and  (vi)  the  termination  of  the  Swap  Agreement  Obligations and  the   Banking  Services  Obligations  or  entering  into  other  arrangements  satisfactory  to  the  Secured  Parties   counterparties thereto.          “Payment Condition” shall be deemed to be satisfied in connection with a Restricted Payment,   Investment, or Permitted Acquisition if:                (a)   no Default has occurred and is continuing or would result immediately after giving         effect to such Restricted Payment, Investment, or Permitted Acquisition;                (b)   immediately  after  giving  effect  to  and  at  all  times  during  the  30-day  period         immediately prior to such Restricted Payment, Investment, Permitted Acquisition, the Borrowers         shall  have  (i)  Excess  Availability  calculated  on  a  pro  forma  basis  after  giving  effect  to  such         Restricted Payment, Investment, or Permitted Acquisition of not less than the greater of (A) 15.0%         of the Aggregate Revolving Commitment or (B) $7,500,000, and (ii) a Fixed Charge Coverage         Ratio for the trailing four fiscal quarters calculated on a pro forma basis after giving effect to such         Restricted Payment, Investment, or Permitted Acquisition of not less than 1.20 to 1.00; and    DB1/ 102580159.10                      24  

 

             (c)   the Borrower Representative shall have delivered to the Administrative Agent a         certificate in form and substance reasonably satisfactory to the Administrative Agent certifying as         to the items described in (a) and (b) above and attaching calculations for clause (b).          “Parent” means, with respect to any Lender, any Person as to which such Lender is, directly or   indirectly, a subsidiary.          “Participant” has the meaning assigned to such term in Section 9.04(c).          “Participant Register” has the meaning assigned to such term in Section 9.04(c).          “PBGC” means the Pension Benefit Guaranty Corporation referred to and defined in ERISA and   any successor entity performing similar functions.          “Permitted Acquisition” means any Acquisition by any Loan Party in a transaction that satisfies   each of the following requirements:                (a)   such Acquisition is not a hostile or contested acquisition;                (b)   the business acquired in connection with such Acquisition is (i) located in the U.S.,         (ii) organized under applicable U.S. and state laws, and (iii) not engaged, directly or indirectly, in         any line of business other than the businesses in which the Loan Parties are engaged on the Effective         Date and any business activities that are substantially similar, related, or incidental thereto;                (c)   both  before  and  after  giving  effect  to  such  Acquisition  and  the  Loans  (if  any)         requested to be made in connection therewith, each of the representations and warranties in the         Loan Documents is true and correct (except any such representation or warranty which relates to a         specified prior date) and no Default exists, will exist, or would result therefrom;                (d)   as soon as available, but not less than thirty (30) days prior to such Acquisition,         the Borrower Representative has provided the Administrative Agent (i) notice of such Acquisition         and (ii) a copy of all business and financial information reasonably requested by the Administrative         Agent  including  pro  forma  financial  statements,  statements  of  cash  flow,  and  Availability         projections;                (e)   if the Accounts and Inventory acquired in connection with such Acquisition are         proposed to be included in the determination of the Borrowing Base, the Administrative Agent shall         have conducted an audit and field examination of such Accounts and Inventory, the results of which         shall be satisfactory to the Administrative Agent;                (f)   the  total  consideration  (including  the  maximum  potential  total  amount  of  all         deferred payment obligations (including earn-outs) and Indebtedness assumed or incurred) paid (i)         in connection with any single Acquisition shall not exceed $1,000,000 and (ii) for all Acquisitions         made during the term of this Agreement shall not exceed $5,000,000;                (g)   if  such  Acquisition  is  an  acquisition  of  the  Equity  Interests  of  a  Person,  such         Acquisition is structured so that the acquired Person shall become a wholly-owned Subsidiary of a         Borrower and a Loan Party pursuant to the terms of this Agreement;                (h)   if such Acquisition is an acquisition of assets, such Acquisition is structured so that         a Borrower shall acquire such assets;    DB1/ 102580159.10                      25  

 

             (i)   if such Acquisition is an acquisition of Equity Interests, such Acquisition will not         result in any violation of Regulation U;                (j)   if such Acquisition involves a merger or a consolidation involving a Borrower or         any other Loan Party, such Borrower or such Loan Party, as applicable, shall be the surviving entity;                (k)   no Loan Party shall, as a result of or in connection with any such Acquisition,         assume  or  incur  any  direct  or  contingent  liabilities  (whether  relating  to  environmental,  tax,         litigation, or other matters) that could have a Material Adverse Effect;                (l)   in connection with an Acquisition of the Equity Interests of any Person, all Liens         on property of such Person shall be terminated unless the Administrative Agent and the Lenders in         their sole discretion consent otherwise, and in connection with an Acquisition of the assets of any         Person, all Liens on such assets shall be terminated (except for Liens permitted under Section 6.02);                (m)  the Payment Conditions are satisfied with respect to such Acquisition;                (n)   all  actions  required  to  be  taken  with  respect  to  any  newly  acquired  or  formed         wholly-owned Subsidiary of a Borrower or a Loan Party, as applicable, required under Section 5.14         shall have been taken; and                (o)   the Borrower Representative shall have delivered to the Administrative Agent (i)         the substantially final form documentation relating to such Acquisition within five (5) days prior         to the consummation thereof, and (ii) the final executed material documentation relating to such         Acquisition within ten (10) days following the consummation thereof.          “Permitted Discretion” means a determination made in good faith and in the exercise of reasonable   (from the perspective of a secured asset-based lender) business judgment.         “Permitted Encumbrances” means:               (a)   Liens imposed by law for Taxes that are not yet due or are being contested in         compliance with Section 5.04;                (b)   carriers’, warehousemen’s, mechanics’, materialmen’s, repairmen’s and other like         Liens imposed by law, arising in the ordinary course of business and securing obligations that are         not overdue by more than forty-five (45) days or are being contested in compliance with Section         5.04;                (c)   pledges and deposits made in the ordinary course of business in compliance with         workers’ compensation, unemployment insurance and other social security laws or regulations;                (d)   deposits  to  secure  the  performance  of  bids,  trade  contracts,  leases,  statutory         obligations, surety and appeal bonds, performance bonds and other obligations of a like nature, in         each case in the ordinary course of business;                (e)   judgment Liens in respect of judgments that do not constitute an Event of Default         under clause (k) of Article VII; and                (f)   easements,  zoning  restrictions,  rights-of-way  and  similar encumbrances  on real         property  imposed  by  law  or  arising  in  the  ordinary  course  of  business  that  do  not  secure  any    DB1/ 102580159.10                      26  

 

       monetary  obligations  and  do  not  materially  detract  from  the  value  of  the  affected  property  or         interfere with the ordinary conduct of business of any Loan Party or any Subsidiary;          provided that the term “Permitted Encumbrances” shall not include any Lien securing Indebtedness,   except with respect to clause (e) above.          “Permitted Investments” means:                (a)   direct  obligations  of,  or  obligations  the  principal  of  and  interest  on  which  are         unconditionally guaranteed by, the U.S. (or by any agency thereof to the extent such obligations         are backed by the full faith and credit of the U.S.), in each case maturing within one year from the         date of acquisition thereof;                (b)   investments  in  commercial  paper  maturing  within  270  days  from  the  date  of         acquisition thereof and having, at such date of acquisition, the highest credit rating obtainable from         S&P or from Moody’s;                (c)   investments  in  certificates  of  deposit,  bankers’  acceptances  and  time  deposits         maturing within 180 days from the date of acquisition thereof issued or guaranteed by or placed         with,  and  money  market  deposit  accounts  issued  or  offered  by,  any  domestic  office  of  any         commercial bank organized under the laws of the U.S. or any State thereof which has a combined         capital and surplus and undivided profits of not less than $500,000,000;                (d)   fully collateralized repurchase agreements with a term of not more than 30 days         for securities described in clause (a) above and entered into with a financial institution satisfying         the criteria described in clause (c) above;                (e)   money market funds that (i) comply with the criteria set forth in Securities and         Exchange Commission Rule 2a-7 under the Investment Company Act of 1940, (ii) are rated AAA         by S&P and Aaa by Moody’s and (iii) have portfolio assets of at least $5,000,000,000; and                (f)   other investments permitted in accordance with the Company’s investment policy         delivered to the Administrative Agent prior to the Effective Date and adopted by the Company’s         board of directors as in effect as of the Effective Date and otherwise reasonably satisfactory to the         Administrative Agent.          “Person”  means any  natural  person, corporation, limited liability  company,  trust, joint  venture,   association, company, partnership, Governmental Authority or other entity.          “Plan” means any employee pension benefit plan (other than a Multiemployer Plan) subject to the   provisions of Title IV of ERISA or Section 412 of the Code or Section 302 of ERISA, and in respect of   which any Loan Party or any ERISA Affiliate is (or, if such plan were terminated, would under Section 4069   of ERISA be deemed to be) an “employer” as defined in Section 3(5) of ERISA.          “Plan Asset Regulations” means 29 CFR § 2510.3-101 et seq., as modified by Section 3(42) of   ERISA, as amended from time to time.          “Prepayment Event” means:    DB1/ 102580159.10                      27  

 

             (a)   any sale, transfer or other disposition (including pursuant to a sale and leaseback         transaction) of any property or asset of any Loan Party or any Subsidiary, other than dispositions         described in Section 6.05(a) or (b); or                (b)   any casualty or other insured damage to, or any taking under power of eminent         domain or by condemnation or similar proceeding of, any property or asset of any Loan Party or         any Subsidiary; or                (c)   the  issuance  by  the  Company  of  any  Equity  Interests,  or  the  receipt  by  the         Company of any capital contribution; or                (d)   the incurrence by any Loan Party or any Subsidiary of any Indebtedness, other than         Indebtedness permitted under Section 6.01.          “Prime Rate” means the rate of interest last quoted by The Wall Street Journal as the “Prime Rate”   in the U.S. or, if The Wall Street Journal ceases to quote such rate, the highest per annum interest rate   published by the Federal Reserve Board in Federal Reserve Statistical Release H.15 (519) (Selected Interest   Rates) as the “bank prime loan” rate or, if such rate is no longer quoted therein, any similar rate quoted   therein (as determined by the Administrative Agent) or any similar release by the Federal Reserve Board   (as determined by the Administrative Agent).  Each change in the Prime Rate shall be effective from and   including the date such change is publicly announced or quoted as being effective.          “Projections” has the meaning assigned to such term in Section 5.01(f).          “Protective Advance” has the meaning assigned to such term in Section 2.04.          “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.          “Public-Sider” means a Lender whose representatives may trade in securities of the Company or   its Controlling Person or any of its Subsidiaries while in possession of the financial statements provided by   the Company under the terms of this Agreement.          “Qualified ECP Guarantor” means, in respect of any Swap Obligation, each Loan Party that has   total assets exceeding $10,000,000 at the time the relevant Loan Guaranty or grant of the relevant security   interest becomes or would become effective with respect to such Swap Obligation or such other person as   constitutes  an  “eligible  contract  participant”  under  the  Commodity  Exchange  Act  or  any  regulations   promulgated thereunder and can cause another person to qualify as an “eligible contract participant” at such   time by entering into a keepwell under Section 1a(18)(A)(v)(II) of the Commodity Exchange Act.          “Recipient” means, as applicable, (a) the Administrative Agent, (b) any Lender and (c) any Issuing   Bank, or any combination thereof (as the context requires).          “Refinance Indebtedness” has the meaning assigned to such term in Section 6.01(f).          “Register” has the meaning assigned to such term in Section 9.04(b).          “Regulation D” means Regulation D of the Federal Reserve Board, as in effect from time to time   and all official rulings and interpretations thereunder or thereof.    DB1/ 102580159.10                      28  

 

       “Regulation T” means Regulation T of the Federal Reserve Board, as in effect from time to time   and all official rulings and interpretations thereunder or thereof.          “Regulation U” means Regulation U of the Federal Reserve Board, as in effect from time to time   and all official rulings and interpretations thereunder or thereof.          “Regulation X” means Regulation X of the Federal Reserve Board, as in effect from time to time   and all official rulings and interpretations thereunder or thereof.          “Related Parties” means, with respect to any specified Person, such Person’s Affiliates and the   respective directors, officers, partners, members, trustees, employees, agents, administrators, managers,   representatives and advisors of such Person and such Person’s Affiliates.          “Release”  means  any  releasing,  spilling,  leaking,  pumping,  pouring,  emitting,  emptying,   discharging,  injecting,  escaping,  leaching,  migrating,  disposing  or  dumping  of  any  substance  into  the   environment.          “Relevant Entities” has the meaning assigned to it in Section 5.01(t).          “Report”  means  reports  prepared  by  the  Administrative  Agent  or  another  Person  showing  the   results  of  appraisals,  field  examinations  or  audits  pertaining  to  the  assets  of  the  Loan  Parties  from   information furnished by or on behalf of the Borrowers, after the Administrative Agent has exercised its   rights of inspection pursuant to this Agreement, which Reports may be distributed to the Lenders by the   Administrative Agent.          “Reporting Trigger Period” means each period (a) commencing on any day that Excess Availability   is less than an amount equal to 12.5% of the Aggregate Revolving Commitment and (b) continuing until   Excess Availability has been greater than or equal to an amount equal to 12.5% of the Aggregate Revolving   Commitment at all times for thirty (30) consecutive calendar days.          “Required  Lenders”  means,  subject  to  Section  2.20,  at  any  time,  Lenders  having  Revolving   Exposure and unused Commitments representing more than 50% of the sum of the Aggregate Revolving   Exposure and unused Commitments at such time; provided that, as long as there are only two Lenders,   Required Lenders shall mean both Lenders.          “Requirement of Law” means, with respect to any Person, (a) the charter, articles or certificate of   organization or incorporation and bylaws or operating,  management or partnership agreement, or other   organizational or governing documents of such Person and (b) any statute, law (including common law),   treaty, rule, regulation, code, ordinance, order, decree, writ, judgment, injunction or determination of any   arbitrator  or  court  or  other  Governmental  Authority  (including  Environmental  Laws),  in  each  case   applicable to or binding upon such Person or any of its property or to which such Person or any of its   property is subject.          “Reserves” means any and all reserves which the Administrative Agent deems necessary, in its   Permitted Discretion, to maintain (including, without limitation, an availability reserve, reserves for accrued   and unpaid interest on the Secured Obligations, Banking Services Reserves, volatility reserves, reserves for   rent  at  locations leased  by  any  Loan  Party and  for  consignee’s, warehousemen’s and  bailee’s  charges,   reserves  for  dilution  of  Accounts,  reserves  for  Inventory  shrinkage,  reserves  for  customs  charges  and   shipping charges related to any Inventory in transit, reserves for Swap Agreement Obligations, reserves for   contingent  liabilities  of  any  Loan  Party,  reserves  for  uninsured  losses  of  any  Loan  Party,  reserves  for   uninsured, underinsured, un-indemnified or under-indemnified liabilities or potential liabilities with respect    DB1/ 102580159.10                      29  

 

 to any litigation and reserves for taxes, fees, assessments, and other governmental charges) with respect to   the Collateral or any Loan Party.          “Responsible  Officer”  means  the  president,  Financial  Officer  or  other  executive  officer  of  the   Borrower Representative.          “Restricted Payment” means any dividend or other distribution (whether in cash, securities or other   property) with respect to any Equity Interests in the Company or any Subsidiary, or any payment (whether   in  cash,  securities  or  other  property), including  any  sinking  fund  or  similar  deposit,  on  account  of  the   purchase, redemption, retirement, acquisition, cancellation or termination of any such Equity Interests or   any option, warrant or other right to acquire any such Equity Interests.          “REVLIBOR30 Rate” means the London interbank offered rate administered by ICE Benchmark   Administration (or any other Person that takes over the administration of such rate for Dollars) for a one   (1) month period as displayed on pages LIBOR01 or LIBOR02 of the Reuters screen that displays such rate   (or, in the event such rate does not appear on a Reuters page or screen, on any successor or substitute page   on such screen that displays such rate, or on the appropriate page of such other information service that   publishes such rate from time to time as shall be selected by the Administrative Agent in its reasonable   discretion; in each case the “REVLIBOR30 Screen Rate”) at approximately 11:00 a.m., London time, two   (2) Business Days prior to the first (1st) Business Day of each month, adjusted monthly on the first (1st)   Business Day of each month; provided that, (x) if the REVLIBOR30 Screen Rate shall be less than zero,   such rate shall be deemed to be zero for purposes of this Agreement and (y) if the REVLIBOR30 Screen   Rate shall not be available at such time for such a period, then the REVLIBOR30 Rate shall be equal to the   CB Floating Rate.          “REVLIBOR30 Screen Rate” has the meaning assigned to it in the definition of “REVLIBOR30   Rate”.          “Revolving Commitment” means, with respect to each Lender, the commitment, if any, of such   Lender  to  make  Revolving  Loans and to acquire  participations  in Letters of  Credit,  Overadvances  and   Swingline  Loans  hereunder,  expressed  as  an  amount  representing  the  maximum  aggregate  permitted   amount of such Lender’s Revolving Exposure hereunder, as such commitment may be reduced or increased   from time to time pursuant to (a) Section 2.09 and (b) assignments by or to such Lender pursuant to Section   9.04.   The  initial  amount  of  each  Lender’s  Revolving  Commitment  is  set  forth  on  the  Commitment   Schedule, or in the Assignment and Assumption pursuant to which such Lender shall have assumed its   Revolving  Commitment,  as  applicable.   The  initial  aggregate  amount  of  the  Lenders’  Revolving   Commitment is $40,000,000.          “Revolving Exposure” means, with respect to any Lender at any time, the sum of (a) the outstanding   principal amount of such Lender’s Revolving Loans, its LC Exposure and its Swingline Exposure at such   time, plus (b) an amount equal to its Applicable Percentage of the aggregate principal amount of Protective   Advances outstanding at such time, plus (c) an amount equal to its Applicable Percentage of the aggregate   principal amount of Overadvances outstanding at such time.          “Revolving  Lender”  means,  as  of  any  date  of  determination,  a  Lender  with  a  Revolving   Commitment  or,  if  the  Revolving  Commitments  have  terminated  or  expired,  a  Lender  with  Revolving   Exposure.          “Revolving Loan” means a Loan made pursuant to Section 2.01.    DB1/ 102580159.10                      30  

 

       “S&P” means Standard & Poor’s Ratings Services, a Standard & Poor’s Financial Services LLC   business.          “Sale and Leaseback Transaction” has the meaning assigned to such term in Section 6.06.          “Sanctioned Country” means, at any time, a country, region or territory which is itself the subject   or target of any Sanctions (at the time of this Agreement, Crimea, Cuba, Iran, North Korea and Syria).          “Sanctioned  Person”  means,  at  any  time,  (a)  any  Person  listed  in  any  Sanctions-related  list  of   designated  Persons  maintained  by  the Office  of  Foreign  Assets Control  of  the U.S. Department  of the   Treasury, the U.S. Department of State, the United Nations Security Council, the European Union or any   European Union member state, Her Majesty’s Treasury of the United Kingdom or other relevant sanctions   authority, (b) any Person operating, organized or resident in a Sanctioned Country, (c) any Person owned   or controlled by any such Person or Persons described in the foregoing clauses, (a) or (b), or (d) any Person   otherwise the subject of any Sanctions.          “Sanctions” means all economic or financial sanctions or trade embargoes imposed, administered   or enforced from time to time by (a) the U.S. government, including those administered by the Office of   Foreign Assets Control of the U.S. Department of the Treasury or the U.S. Department of State, or (b) the   United Nations Security Council, the European Union, any European Union member state, Her Majesty’s   Treasury of the United Kingdom or other relevant sanctions authority.          “SEC” means the Securities and Exchange Commission of the U.S.          “Secured Obligations” means all Obligations, together with all (i) Banking Services Obligations   and (ii) Swap Agreement Obligations owing to one or more Lenders or their respective Affiliates; provided,   however, that the definition of “Secured Obligations” shall not create any guarantee by any Loan Guarantor   of  (or  grant  of  security  interest  by  any  Loan  Guarantor  to  support,  as  applicable)  any  Excluded  Swap   Obligations of such Loan Guarantor for purposes of determining any obligations of any Guarantor.          “Secured Parties” means (a) the Administrative Agent, (b) the Lenders, (c) each Issuing Bank, (d)   each  provider  of  Banking  Services,  to  the  extent  the  Banking  Services  Obligations  in  respect  thereof   constitute Secured Obligations, (e) each counterparty to any Swap Agreement, to the extent the obligations   thereunder  constitute  Secured  Obligations,  (f)  the  beneficiaries  of  each  indemnification  obligation   undertaken by any Loan Party under any Loan Document, and (g) the successors and assigns of each of the   foregoing.          “Security Agreement” means that certain Pledge and Security Agreement (including any and all   supplements thereto), dated as of the date hereof, among the Loan Parties and the Administrative Agent,   for the benefit of the Administrative Agent and the other Secured Parties, and any other pledge or security   agreement  entered  into, after  the  date  of  this  Agreement  by  any  other  Loan  Party  (as  required  by  this   Agreement or any other Loan Document) or any other Person for the benefit of the Administrative Agent   and the other Secured Parties, as the same may be amended, restated, supplemented or otherwise modified   from time to time.          “Settlement” has the meaning assigned to such term in Section 2.05(d).          “Settlement Date” has the meaning assigned to such term in Section 2.05(d).          “Standby LC Exposure” means, at any time, the sum of (a) the aggregate undrawn amount of all   standby Letters of Credit outstanding at such time plus (b) the aggregate amount of all LC Disbursements    DB1/ 102580159.10                      31  

 

 relating to standby Letters of Credit that have not yet been reimbursed by or on behalf of the Borrowers at   such  time.   The  Standby  LC  Exposure  of  any  Revolving  Lender  at  any  time  shall  be  its  Applicable   Percentage of the aggregate Standby LC Exposure at such time.          “Statements” has the meaning assigned to such term in Section 2.18(f).          “Statutory Reserve Rate” means a fraction (expressed as a decimal), the numerator of which is the   number one and the denominator of which is the number one minus the aggregate of the maximum reserve   percentage  (including  any  marginal,  special,  emergency  or  supplemental  reserves)  established  by  the   Federal Reserve Board to which the Administrative Agent is subject with respect to the Adjusted LIBO   Rate, for eurocurrency funding (currently referred to as “Eurocurrency liabilities” in Regulation D).  Such   reserve percentages shall include those imposed pursuant to Regulation D of the Board.  Eurodollar Loans   shall be deemed to constitute eurocurrency funding and to be subject to such reserve requirements without   benefit of or credit for proration, exemptions or offsets that may be available from time to time to any   Lender under Regulation D of the Board or any comparable regulation.  The Statutory Reserve Rate shall   be adjusted automatically on and as of the effective date of any change in any reserve percentage.          “Subordinated Indebtedness” of a Person means any Indebtedness of such Person the payment of   which  is  subordinated  to  payment  of  the  Secured  Obligations  to  the  written  satisfaction  of  the   Administrative Agent.          “subsidiary” means, with respect to any Person (the “parent”) at any date, any corporation, limited   liability company, partnership, association or other entity the accounts of which would be consolidated with   those  of  the  parent  in  the  parent’s  consolidated  financial  statements  if  such  financial  statements  were   prepared in  accordance  with  GAAP  as  of  such  date,  as  well  as  any  other  corporation, limited liability   company,  partnership,  association  or  other  entity  (a)  of  which  securities  or  other  ownership  interests   representing more than 50% of the equity or more than 50% of the ordinary voting power or, in the case of   a partnership, more than 50% of the general partnership interests are, as of such date, owned, controlled or   held, or (b) that is, as of such date, otherwise Controlled, by the parent and/or one or more subsidiaries of   the parent.          “Subsidiary” means any direct or indirect subsidiary of the Company or a Loan Party, as applicable.          “Swap Agreement” means any agreement with respect to any swap, forward, spot, future, credit   default or derivative transaction or option or similar agreement involving, or settled by reference to, one or   more rates, currencies, commodities, equity or debt instruments or securities, or economic, financial or   pricing indices or measures of economic, financial or pricing risk or value or any similar transaction or any   combination of these transactions; provided that no phantom stock or similar plan providing for payments   only on account of services provided by current or former directors, officers, employees or consultants of   the Borrowers or the Subsidiaries shall be a Swap Agreement.          “Swap  Agreement  Obligations”  means  any  and  all  obligations  of  the  Loan  Parties  and  their   Subsidiaries, whether absolute or contingent and howsoever and whensoever created, arising, evidenced or   acquired (including all renewals, extensions and modifications thereof and substitutions therefor), under (a)   any and all Swap Agreements permitted hereunder with a Lender or an Affiliate of a Lender, and (b) any   and all cancellations, buy backs, reversals, terminations or assignments of any Swap Agreement transaction   permitted hereunder with a Lender or an Affiliate of a Lender.          “Swap Obligation” means, with respect to any Loan Guarantor, any obligation to pay or perform   under any agreement, contract or transaction that constitutes a “swap” within the meaning of section 1a(47)   of the Commodity Exchange Act or any rules or regulations promulgated thereunder.   DB1/ 102580159.10                      32  

 

       “Swingline Exposure” means, at any time, the aggregate principal amount of all Swingline Loans   outstanding  at  such  time.   The  Swingline  Exposure  of  any  Revolving  Lender  at  any  time  shall  be  its   Applicable Percentage of the total Swingline Exposure at such time.          “Swingline Lender” means JPMCB, in its capacity as lender of Swingline Loans hereunder.  Any   consent required of the Administrative Agent or the Issuing Bank shall be deemed to be required of the   Swingline Lender and any consent given by JPMCB in its capacity as Administrative Agent or Issuing   Bank shall be deemed given by JPMCB in its capacity as Swingline Lender.          “Swingline Loan” has the meaning assigned to such term in Section 2.05(a).          “Target Balance” has the meaning assigned to such term in the DDA Access Product Agreement.          “Taxes” means any and all present or future taxes, levies, imposts, duties, deductions, withholdings,   (including backup withholding), value added taxes, or any other goods and services, use or sales taxes,   assessments,  fees  or  other  charges  imposed  by  any  Governmental  Authority,  including  any  interest,   additions to tax or penalties applicable thereto.          “Transactions” means the execution, delivery and performance by the Borrowers of this Agreement   and the other Loan Documents, the borrowing of Loans and other credit extensions, the use of the proceeds   thereof and the issuance of Letters of Credit hereunder.          “Type”, when used in reference to any Loan or Borrowing, refers to whether the rate of interest on   such Loan, or on the Loans comprising such Borrowing, is determined by reference to the Adjusted LIBO   Rate or the CBFR.          “UCC” means the Uniform Commercial Code as in effect from time to time in the State of New   York or in any other state the laws of which are required to be applied in connection with the issue of   perfection of security interests.          “Unfinanced Capital Expenditures” means, for any period, Capital Expenditures made during such   period which are not financed from the proceeds of any Indebtedness (other than the Revolving Loans; it   being understood  and agreed  that,  to the extent any  Capital  Expenditures are financed  with  Revolving   Loans, such Capital Expenditures shall be deemed Unfinanced Capital Expenditures).          “Unliquidated Obligations” means, at any time, any Secured Obligations (or portion thereof) that   are  contingent  in  nature  or  unliquidated  at  such  time,  including  any  Secured  Obligation  that  is:  (i)  an   obligation to reimburse a bank for drawings not yet made under a letter of credit issued by it; (ii) any other   obligation (including any guarantee) that is contingent in nature at such time; or (iii) an obligation to provide   collateral to secure any of the foregoing types of obligations.          “U.S.” means the United States of America.          “U.S. Person” means a “United States person” within the meaning of Section 7701(a)(30) of the   Code.          “U.S. Tax  Compliance  Certificate”  has  the  meaning  assigned  to  such  term  in   Section 2.17(f)(ii)(B)(3).          “USA PATRIOT Act” means the Uniting and Strengthening America by Providing Appropriate   Tools Required to Intercept and Obstruct Terrorism Act of 2001.    DB1/ 102580159.10                      33  

 

       “Withdrawal Liability” means liability to a Multiemployer Plan as a result of a complete or partial   withdrawal from such Multiemployer Plan, as such terms are defined in Part I of Subtitle E of Title IV of   ERISA.          “Write-Down and Conversion Powers” 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  Classification of Loans and Borrowings.  For purposes of this Agreement, Loans   may be classified and referred to by Class (e.g., a “Revolving Loan”) or by Type (e.g., a “Eurodollar Loan”)   or by Class and Type (e.g., a “Eurodollar Revolving Loan”).  Borrowings also may be classified and referred   to by Class (e.g., a “Revolving Borrowing”) or by Type (e.g., a “Eurodollar Borrowing”) or by Class and   Type (e.g., a “Eurodollar Revolving Borrowing”).          SECTION 1.03  Terms  Generally.   The  definitions  of  terms  herein  shall  apply  equally  to  the   singular and plural forms of the terms defined.  Whenever the context may require, any pronoun shall   include the corresponding masculine, feminine and neuter forms.  The words “include”, “includes” and   “including” shall be deemed to be followed by the phrase “without limitation”.  The word “law” shall be   construed as referring to all statutes, rules, regulations, codes and other laws (including official rulings and   interpretations thereunder having the force of law or with which affected Persons customarily comply) and   all judgments, orders and decrees of all Governmental Authorities.  The word “will” shall be construed to   have  the  same  meaning  and  effect  as  the  word  “shall”.   Unless the  context requires  otherwise (a)  any   definition of or reference to any agreement, instrument or other document herein shall be construed as   referring  to  such  agreement,  instrument  or  other  document  as  from  time  to  time  amended,  restated,   supplemented  or  otherwise  modified  (subject  to  any  restrictions  on  such  amendments,  restatements,   supplements or modifications set forth herein), (b) any definition of or reference to any statute, rule or   regulation shall be construed as referring thereto as from time to time amended, supplemented or otherwise   modified (including by succession of comparable successor laws), (c) any reference herein to any Person   shall  be  construed  to  include  such  Person’s  successors  and  assigns  (subject  to  any  restrictions  on   assignments set forth herein) and, in the case of any Governmental Authority, any other Governmental   Authority that shall have succeeded to any or all functions thereof, (d) the words “herein”, “hereof” and   “hereunder”, and words of similar import, shall be construed to refer to this Agreement in its entirety and   not to any particular provision hereof, (e) all references herein to Articles, Sections, Exhibits and Schedules   shall be construed to refer to Articles and Sections of, and Exhibits and Schedules to, this Agreement, (f)   any reference in any definition to the phrase “at any time” or “for any period” shall refer to the same time   or  period  for  all  calculations  or  determinations  within  such  definition,  and  (g)  the  words  “asset”  and   “property” shall be construed to have the same meaning and effect and to refer to any and all tangible and   intangible assets and properties, including cash, securities, accounts and contract rights.          SECTION 1.04  Accounting Terms; GAAP.          (a)   Except  as  otherwise  expressly  provided  herein,  all  terms  of  an  accounting  or  financial   nature shall be construed in accordance with GAAP, as in effect from time to time; provided that, if after   the date hereof there occurs any change in GAAP or in the application thereof on the operation of any   provision hereof and the Borrower Representative notifies the Administrative Agent that the Borrowers   request an amendment to any provision hereof to eliminate the effect of such change in GAAP or in the   application thereof  (or if the Administrative Agent notifies the Borrower Representative that the Required   Lenders request an amendment to any provision hereof for such purpose), regardless of whether any such   notice is given before or after such change in GAAP or in the application thereof, then such provision shall   be interpreted on the basis of GAAP as in effect and applied immediately before such change shall have   DB1/ 102580159.10                      34  

 

 become effective until such notice shall have been withdrawn or such provision amended in accordance   herewith.  Notwithstanding any other provision contained herein, all terms of an accounting or financial   nature used herein shall be construed, and all computations of amounts and ratios referred to herein shall   be made (i) without giving effect to any election under Financial Accounting Standards Board Accounting   Standards  Codification  825-10-25  (or  any  other  Accounting  Standards  Codification  or  Financial   Accounting Standard having a similar result or effect) to value any Indebtedness or other liabilities of the   Company or any Subsidiary at “fair value”, as defined therein and (ii) without giving effect to any treatment   of Indebtedness in respect of convertible debt instruments under Financial Accounting Standards Board   Accounting Standards Codification 470-20 (or any other Accounting Standards Codification or Financial   Accounting  Standard having a  similar  result or effect) to  value any  such Indebtedness  in  a reduced  or   bifurcated manner as described therein, and such Indebtedness shall at all times be valued at the full stated   principal amount thereof.          (b)   Notwithstanding anything to the contrary contained in Section 1.04(a) or in the definition   of “Capital Lease Obligations,” in the event of an accounting change requiring all leases to be capitalized,   only those leases (assuming for purposes hereof that such leases were in existence on the date hereof) that   would constitute capital leases in conformity with GAAP on the date hereof shall be considered capital   leases, and all calculations and deliverables under this Agreement or any other Loan Document shall be   made or delivered, as applicable, in accordance therewith.          SECTION 1.05  Interest Rates; LIBOR Notifications.  The interest rate on Eurodollar Loans is   determined by reference to the LIBO Rate, which is derived from the London interbank offered rate.  The   London interbank offered rate is intended to represent the rate at which contributing banks may obtain   short-term borrowings from each other in the London interbank market.  In July 2017, the U.K. Financial   Conduct  Authority  announced  that,  after  the  end  of  2021,  it  would  no  longer  persuade  or  compel   contributing  banks to  make rate  submissions to  the ICE  Benchmark  Administration  (together with  any   successor to the ICE Benchmark Administrator, the “IBA”) for purposes of the IBA setting the London   interbank offered rate.  As a result, it is possible that commencing in 2022, the London interbank offered   rate may no longer be available or may no longer be deemed an appropriate reference rate upon which to   determine  the  interest  rate  on  Eurodollar Loans.   In  light  of  this  eventuality, public  and  private sector   industry initiatives are currently underway to identify new or alternative reference rates to be used in place   of the London interbank offered rate.  In the event that the London interbank offered rate is no longer   available or in certain other circumstances as set forth in Section 2.14(c) of this Agreement, such Section   2.14(c) provides a mechanism for determining an alternative rate of interest.  The Administrative Agent   will notify the Borrower, pursuant to Section 2.14, in advance of any change to the reference rate upon   which the interest rate on Eurodollar Loans is based.  However, the Administrative Agent does not warrant   or  accept  any  responsibility  for,  and  shall  not  have  any  liability  with  respect  to,  the  administration,   submission or any other matter related to the London interbank offered rate or other rates in the definition   of “LIBO Rate” or with respect to any alternative or successor rate thereto, or replacement rate thereof,   including without limitation, whether the composition or characteristics of any such alternative, successor   or replacement reference rate, as it may or may not be adjusted pursuant to Section 2.14(c), will be similar   to, or produce the same value or economic equivalence of, the LIBO Rate or have the same volume or   liquidity as did the London interbank offered rate prior to its discontinuance or unavailability.          SECTION 1.06  Status of Obligations.  In the event that any Borrower or any other Loan Party   shall at any time issue or have outstanding any Subordinated Indebtedness, such Borrower shall take or   cause such other Loan Party to take all such actions as shall be necessary to cause the Secured Obligations   to constitute senior indebtedness (however denominated) in respect of such Subordinated Indebtedness and   to enable the Administrative Agent and the Lenders to have and exercise any payment blockage or other   remedies  available  or  potentially  available  to  holders  of  senior  indebtedness  under  the  terms  of  such   Subordinated Indebtedness.  Without limiting the foregoing, the Secured Obligations are hereby designated   DB1/ 102580159.10                      35  

 

 as “senior indebtedness” and as “designated senior indebtedness” and words of similar import under and in   respect of any indenture or other agreement or instrument under which such Subordinated Indebtedness is   outstanding and are further given all such other designations as shall be required under the terms of any   such Subordinated Indebtedness in order that the Lenders may have and exercise any payment blockage or   other remedies available or potentially available to holders of senior indebtedness under the terms of such   Subordinated Indebtedness.                                ARTICLE II  The Credits          SECTION 2.01  Commitments.  Subject to the terms and conditions set forth herein, each Lender   severally (and not jointly) agrees to make Revolving Loans in dollars to the Borrowers from time to time   during the Availability Period in an aggregate principal amount that will not result in (i) such Lender’s   Revolving  Exposure  exceeding  such  Lender’s  Revolving  Commitment or  (ii) the  Aggregate  Revolving   Exposure exceeding the lesser of (x) the Aggregate Revolving Commitment and (y) the Borrowing Base,   subject to the Administrative Agent’s authority, in its sole discretion, to make Protective Advances and   Overadvances pursuant to the terms of Sections 2.04 and 2.05.  Within the foregoing limits and subject to   the  terms  and  conditions  set  forth  herein, the Borrowers  may  borrow, prepay  and  reborrow  Revolving   Loans.          SECTION 2.02  Loans and Borrowings.                (a)   Each Loan (other than a Swingline Loan) shall be made as part of a Borrowing         consisting of Loans of the same Class and Type made by the Lenders ratably in accordance with         their respective Commitments of the applicable Class.  The failure of any Lender to make any Loan         required to be made by it shall not relieve any other Lender of its obligations hereunder; provided         that the Commitments of the Lenders are several and no Lender shall be responsible for any other         Lender’s failure to make Loans as required.  Any Protective Advance, any Overadvance and any         Swingline Loan shall be made in accordance with the procedures set forth in Sections 2.04 and         2.05.                (b)   Subject to Section 2.14, each Revolving Borrowing shall be comprised entirely of         CBFR  Loans  or  Eurodollar  Loans  as  the  Borrower  Representative  may  request  in  accordance         herewith;  provided  that  all  Borrowings  made  on  the  Effective  Date  must  be  made  as  CBFR         Borrowings but may be converted into Eurodollar Borrowings in accordance with Section 2.08.          Each Swingline Loan shall be an CBFR Loan.  Each Lender at its option may make any Eurodollar         Loan by causing any domestic or foreign branch or Affiliate of such Lender to make such Loan         (and in the case of an Affiliate, the provisions of Sections 2.14, 2.15, 2.16 and 2.17 shall apply to         such Affiliate to the same extent as to such Lender); provided that any exercise of such option shall         not affect the obligation of the Borrowers to repay such Loan in accordance with the terms of this         Agreement.                (c)   At the commencement of each Interest Period for any Eurodollar Borrowing, such         Borrowing shall be in an aggregate amount that is an integral multiple of $500,000 and not less         than $1,000,000.  CBFR Borrowings may be in any amount.  Borrowings of more than one Type         and Class may be outstanding at the same time; provided that there shall not at any time be more         than a total of six (6) Eurodollar Borrowings outstanding.                (d)   Notwithstanding  any  other  provision  of  this  Agreement,  the  Borrower         Representative shall not be entitled to request, or to elect to convert or continue, any Borrowing if         the Interest Period requested with respect thereto would end after the Maturity Date.    DB1/ 102580159.10                      36  

 

       SECTION 2.03  Requests for Borrowings.  To request a Borrowing, the Borrower Representative   shall  notify  the  Administrative  Agent  of  such  request  either  in  writing  (delivered  by  hand  or  fax)  by   delivering a Borrowing Request signed by a Responsible Officer of the Borrower Representative or through   Electronic System if arrangements for doing so have been approved by the Administrative Agent (or if an   Extenuating Circumstance shall exist, by telephone) not later than (a) in the case of a Eurodollar Borrowing,   10:00 a.m., Chicago time, three (3) Business Days before the date of the proposed Borrowing or (b) in the   case of an CBFR Borrowing, noon, Chicago time, on the date of the proposed Borrowing; provided that   any  such  notice  of  an  CBFR  Borrowing  to  finance  the  reimbursement  of  an  LC  Disbursement  as   contemplated by Section 2.06(e) may be given not later than 9:00 a.m., Chicago time, on the date of such   proposed  Borrowing.   Each  such  Borrowing  Request  shall  be  irrevocable  and  each  such  telephonic   Borrowing Request, if permitted, shall be confirmed immediately upon the cessation of the Extenuating   Circumstance  by  hand  delivery,  facsimile  or  a  communication  through  Electronic  System  to  the   Administrative Agent of a written Borrowing Request in a form approved by the Administrative Agent and   signed  by  a  Responsible  Officer  of  the  Borrower  Representative.   Each  such  written  (or  if  permitted,   telephonic) Borrowing Request shall specify the following information in compliance with Section 2.02:                (i)   the name of the applicable Borrower(s);                (ii)  the aggregate amount of the requested Borrowing and a breakdown of the separate         wires comprising such Borrowing;                (iii) the date of such Borrowing, which shall be a Business Day;                (iv)  whether such Borrowing is to be an CBFR Borrowing or a Eurodollar Borrowing;         and                (v)   in the case of a Eurodollar Borrowing, the initial Interest Period to be applicable         thereto, which shall be a period contemplated by the definition of the term “Interest Period.”          If no election as to the Type of Borrowing is specified, then the requested Borrowing shall be a   CBFR Borrowing.  If no Interest Period is specified with respect to any requested Eurodollar Borrowing,   then the applicable Borrower(s) shall be deemed to have selected an Interest Period of one month’s duration.    Promptly following receipt of a Borrowing Request in accordance with this Section, the Administrative   Agent shall advise each Lender of the details thereof and of the amount of such Lender’s Loan to be made   as part of the requested Borrowing.          SECTION 2.04  Protective Advances.          (a)   Subject to the limitations set forth below, the Administrative Agent is authorized by the   Borrowers and the Lenders, from time to time in the Administrative Agent’s sole discretion (but shall have   absolutely  no  obligation  to),  to  make  Loans  to  the  Borrowers,  on  behalf  of  all  Lenders,  which  the   Administrative Agent, in its Permitted Discretion, deems necessary or desirable (i) to preserve or protect   the  Collateral,  or  any  portion  thereof,  (ii)  to  enhance  the  likelihood  of,  or  maximize  the  amount  of,   repayment of the Loans and other Obligations, or (iii) to pay any other amount chargeable to or required to   be paid by the Borrowers pursuant to the terms of this Agreement, including payments of reimbursable   expenses (including costs, fees, and expenses as described in Section 9.03) and other sums payable under   the Loan Documents (any of such Loans are herein referred to as “Protective Advances”); provided that,   the aggregate amount of Protective Advances outstanding at any time shall not at any time exceed the   greater of (x) 10% of the Aggregate Revolving Commitment and (y) $5,000,000; provided further that, the   Aggregate Revolving Exposure after giving effect to the Protective Advances being made shall not exceed   the Aggregate Revolving Commitment.  Protective Advances may be made even if the conditions precedent   DB1/ 102580159.10                      37  

 

 set forth in Section 4.02 have not been satisfied.  The Protective Advances shall be secured by the Liens in   favor of the Administrative Agent in and to the Collateral and shall constitute Obligations hereunder.  All   Protective Advances shall be CBFR Borrowings.  The making of a Protective Advance on any one occasion   shall not obligate the Administrative Agent to make any Protective Advance on any other occasion.  The   Administrative Agent’s authorization to make Protective Advances may be revoked at any time by the   Required Lenders.  Any such revocation must be in writing and shall become effective prospectively upon   the  Administrative  Agent’s  receipt  thereof.   At  any  time  that  there  is  sufficient  Availability  and  the   conditions precedent set forth in Section 4.02 have been satisfied, the Administrative Agent may request   the Revolving Lenders to make a Revolving Loan to repay a Protective Advance.  At any other time, the   Administrative Agent may require the Lenders to fund their risk participations described in Section 2.04(b).          (b)   Upon the making of a Protective Advance by the Administrative Agent (whether before or   after the occurrence of a Default), each Lender shall be deemed, without further action by any party hereto,   to have unconditionally and irrevocably purchased from the Administrative Agent, without recourse or   warranty, an undivided interest and participation in such Protective Advance in proportion to its Applicable   Percentage.  From and after the date, if any, on which any Lender is required to fund its participation in any   Protective  Advance  purchased  hereunder,  the  Administrative  Agent  shall  promptly  distribute  to  such   Lender, such Lender’s Applicable Percentage of all payments of principal and interest and all proceeds of   Collateral received by the Administrative Agent in respect of such Protective Advance.          SECTION 2.05  Swingline Loans and Overadvances.          (a)   The Administrative Agent, the Swingline Lender and the Revolving Lenders agree that in   order to facilitate the administration of this Agreement and the other Loan Documents, promptly after the   Borrower Representative requests an CBFR Borrowing, the Swingline Lender may elect to have the terms   of this Section 2.05(a) apply to such Borrowing Request by advancing, on behalf of the Revolving Lenders   and in the amount requested, same day funds to the Borrowers, on the date of the applicable Borrowing to   the Funding Account(s) (each such Loan made solely by the Swingline Lender pursuant to this Section   2.05(a) is referred to in this Agreement as a “Swingline Loan”), with settlement among them as to the   Swingline Loans to take place on a periodic basis as set forth in Section 2.05(d).  Each Swingline Loan   shall be subject to all the terms and conditions applicable to other CBFR Loans funded by the Revolving   Lenders,  except that  all  payments  thereon  shall  be  payable  to  the  Swingline Lender  solely  for  its own   account.  In addition, the Borrowers hereby authorize the Swingline Lender to, and the Swingline Lender   may, subject to the terms and conditions set forth herein (but without any further written notice required),   not later than 1:00 p.m., Chicago time, on each Business Day, make available to the Borrowers by means   of a credit to the Funding Account(s), the proceeds of a Swingline Loan to the extent necessary to pay items   to be drawn on any Controlled Disbursement Account that Business Day; provided that, if on any Business   Day  there  is  insufficient  borrowing  capacity  to  permit  the  Swingline  Lender  to  make  available  to  the   Borrowers a Swingline Loan in the amount necessary to pay all items to be so drawn on any such Controlled   Disbursement Account on such Business Day, then the Borrowers shall be deemed to have requested a   CBFR Borrowing pursuant to Section 2.03 in the amount of such deficiency to be made on such Business   Day.  In addition, the Borrowers hereby authorize the Swingline Lender to, and the Swingline Lender shall,   subject to the terms and conditions set forth herein (but without any further written notice required), to the   extent that from time to time on any Business Day funds are required under the DDA Access Product to   reach the Target Balance (a “Deficiency Funding Date”), make available to the applicable Borrower the   proceeds of a Swingline Loan in the amount of such deficiency up to the Target Balance, by means of a   credit to the applicable Funding Account on or before the start of business on the next succeeding Business   Day, and such Swingline Loan shall be deemed made on such Deficiency Funding Date.  The aggregate   amount of Swingline Loans outstanding at any time shall not exceed the greater of (i) 10% of the Aggregate   Revolving Commitment and (ii) $5,000,000.  The Swingline Lender shall not make any Swingline Loan    DB1/ 102580159.10                      38  

 

 if the requested Swingline Loan exceeds Availability (before or after giving effect to such Swingline Loan).    All Swingline Loans shall be CBFR Borrowings.          (b)   Any provision of this Agreement to the contrary notwithstanding, at the request of the   Borrower  Representative,  the  Administrative  Agent  may  in  its  sole  discretion  (but  with  absolutely  no   obligation), on behalf of the Revolving Lenders, (x) make Revolving Loans to the Borrowers in amounts   that  exceed  Availability  (any  such  excess  Revolving  Loans  are  herein  referred  to  collectively  as   “Overadvances”) or (y) deem the amount of Revolving Loans outstanding to the Borrowers that are in   excess of Availability to be Overadvances; provided that, no Overadvance shall result in a Default due to   Borrowers’ failure to comply with Section 2.01 for so long as such Overadvance remains outstanding in   accordance with the terms of this paragraph, but solely with respect to the amount of such Overadvance.    In addition, Overadvances may be made even if the condition precedent set forth in Section 4.02(c) has not   been satisfied.  All Overadvances shall constitute CBFR Borrowings.  The making of an Overadvance on   any  one  occasion  shall  not  obligate the  Administrative  Agent  to  make  any  Overadvance  on  any  other   occasion.  The authority of the Administrative Agent to make Overadvances is limited to an aggregate   amount not to exceed the greater of (i) 10% of the Aggregate Revolving Commitment and (ii) $5,000,000   at any time, no Overadvance may remain outstanding for more than thirty days and no Overadvance shall   cause any Revolving Lender’s Revolving Exposure to exceed its Revolving Commitment; provided that,   the  Required  Lenders  may  at  any  time  revoke  the  Administrative  Agent’s  authorization  to  make   Overadvances.  Any such revocation must be in writing and shall become effective prospectively upon the   Administrative Agent’s receipt thereof.          (c)   Upon the making of a Swingline Loan or an Overadvance (whether before or after the   occurrence of a Default and regardless of whether a Settlement has been requested with respect to such   Swingline Loan or Overadvance), each Revolving Lender shall be deemed, without further action by any   party  hereto,  to  have  unconditionally  and  irrevocably  purchased  from  the  Swingline  Lender  or  the   Administrative  Agent,  as  the  case  may  be,  without  recourse  or  warranty,  an  undivided  interest  and   participation in such Swingline Loan or Overadvance in proportion to its Applicable Percentage of the   Revolving Commitment.  The Swingline Lender or the Administrative Agent may, at any time, require the   Revolving Lenders to fund their participations.  From and after the date, if any, on which any Revolving   Lender is required to fund its participation in any Swingline Loan or Overadvance purchased hereunder,   the Administrative Agent shall promptly distribute to such Lender, such Lender’s Applicable Percentage   of all payments of principal and interest and all proceeds of Collateral received by the Administrative Agent   in respect of such Swingline Loan or Overadvance.          (d)   The Administrative Agent, on behalf of the Swingline Lender, shall request settlement (a   “Settlement”) with the Revolving Lenders on at least a weekly basis or on any date that the Administrative   Agent elects, by notifying the Revolving Lenders of such requested Settlement by facsimile, telephone, or   e-mail no later than 12:00 noon Chicago time on the date of such requested Settlement (the “Settlement   Date”).  Each Revolving Lender (other than the Swingline Lender, in the case of the Swingline Loans) shall   transfer the amount of such Revolving Lender’s Applicable Percentage of the outstanding principal amount   of the applicable Loan with respect to which Settlement is requested to the Administrative Agent, to such   account of the Administrative Agent as the Administrative Agent may designate, not later than 2:00 p.m.,   Chicago  time,  on  such  Settlement  Date.   Settlements  may  occur during  the  existence  of  a  Default  and   whether or not the applicable conditions precedent set forth in Section 4.02 have then been satisfied.  Such   amounts transferred to the Administrative Agent shall be applied against the amounts of the Swingline   Lender’s Swingline Loans and, together with Swingline Lender’s Applicable Percentage of such Swingline   Loan, shall constitute Revolving Loans of such Revolving Lenders, respectively.  If any such amount is not   transferred to the Administrative Agent by any Revolving Lender on such Settlement Date, the Swingline   Lender shall be entitled to recover from such Lender on demand such amount, together with interest thereon,   as specified in Section 2.07.   DB1/ 102580159.10                      39  

 

       SECTION 2.06  Letters of Credit.          (a)   General.  Subject to the terms and conditions set forth herein, the Borrower Representative   may request the issuance of Letters of Credit for its own account or for the account of another Borrower   denominated in dollars as the applicant thereof for the support of its or its Subsidiaries’ obligations, in a   form reasonably acceptable to the Administrative Agent and the Issuing Bank, at any time and from time   to time during the Availability Period.  In the event of any inconsistency between the terms and conditions   of this Agreement and the terms and conditions of any Letter of Credit Agreement, the terms and conditions   of this Agreement shall control.  Notwithstanding anything herein to the contrary, the Issuing Bank shall   have no obligation hereunder to issue, and shall not issue, any Letter of Credit (i) the proceeds of which   would be made available to any Person (A) to fund any activity or business of or with any Sanctioned   Person, or in any country or territory that, at the time of such funding, is the subject of any Sanctions or (B)   in any manner that would result in a violation of any Sanctions by any party to this Agreement, (ii) if any   order, judgment or decree of any Governmental Authority or arbitrator shall by its terms purport to enjoin   or restrain the Issuing Bank from issuing such Letter of Credit, or any Requirement of Law relating to the   Issuing Bank or any request or directive (whether or not having the force of law) from any Governmental   Authority with jurisdiction over the Issuing Bank shall prohibit, or request that the Issuing Bank refrain   from, the issuance of letters of credit generally or such Letter of Credit in particular or shall impose upon   the Issuing Bank with respect to such Letter of Credit any restriction, reserve or capital requirement (for   which the Issuing Bank is not otherwise compensated hereunder) not in effect on the Effective Date, or   shall impose upon the Issuing Bank any unreimbursed loss, cost or expense which was not applicable on   the Effective Date and which the Issuing Bank in good faith deems material to it, or (iii) if the issuance of   such Letter of Credit would violate one or more policies of the Issuing Bank applicable to letters of credit   generally; provided that, notwithstanding anything herein to the contrary, (x) the Dodd-Frank Wall Street   Reform  and  Consumer  Protection  Act  and  all  requests,  rules,  guidelines,  requirements  or  directives   thereunder or issued in connection therewith or in the implementation thereof, and (y) all requests, rules,   guidelines, requirements or directives promulgated by the Bank for International Settlements, the Basel   Committee on Banking Supervision (or any successor or similar authority) or the United States or foreign   regulatory authorities, in each case pursuant to Basel III, shall in each case be deemed not to be in effect on   the  Effective  Date for  purposes  of  clause (ii)  above,  regardless  of the  date enacted,  adopted, issued or   implemented.          (b)   Notice of Issuance, Amendment, Renewal, Extension; Certain Conditions.  To request the   issuance of a Letter of Credit (or the amendment, renewal or extension of an outstanding Letter of Credit),   the Borrower Representative shall deliver by hand or facsimile (or transmit through Electronic System, if   arrangements  for  doing  so  have  been  approved  by  the  Issuing  Bank)  to  the  Issuing  Bank  and  the   Administrative Agent (reasonably in advance of, but in any event no less than three (3) Business Days prior   to the requested date of issuance, amendment, renewal or extension) a notice requesting the issuance of a   Letter of Credit, or identifying the Letter of Credit to be amended, renewed or extended, and specifying the   date of issuance, amendment, renewal or extension (which shall be a Business Day), the date on which such   Letter of Credit is to expire (which shall comply with clause (c) of this Section), the amount of such Letter   of Credit, the name and address of the beneficiary thereof and such other information as shall be necessary   to prepare, amend, renew or extend such Letter of Credit.  In addition, as a condition to any such Letter of   Credit issuance, the applicable Borrower shall have entered into a continuing agreement (or other letter of   credit agreement) for the issuance of letters of credit and/or shall submit a letter of credit application in each   case,  as  required  by  the  Issuing  Bank  and  using  such  bank’s  standard  form  (each,  a  “Letter  of  Credit   Agreement”).  A Letter of Credit shall be issued, amended, renewed or extended only if (and upon issuance,   amendment, renewal or extension of each Letter of Credit the Borrowers shall be deemed to represent and   warrant that), after giving effect to such issuance, amendment, renewal or extension (i) the aggregate LC   Exposure shall not exceed $2,000,000, (ii) no Revolving Lender’s Revolving Exposure shall exceed its   Revolving  Commitment  and  (iii)  the  Aggregate Revolving  Exposure shall not exceed the lesser  of the   DB1/ 102580159.10                      40  

 

 Aggregate Revolving Commitment and the Borrowing Base.  Notwithstanding the foregoing or anything   to the contrary contained herein, no Issuing Bank shall be obligated to issue or modify any Letter of Credit   if, immediately after giving effect thereto, the outstanding LC Exposure in respect of all Letters of Credit   issued by such Person and its Affiliates would exceed such Issuing Bank’s Issuing Bank Sublimit.  Without   limiting the foregoing and without affecting the limitations contained herein, it is understood and agreed   that the Borrower Representative may from time to time request that an Issuing Bank issue Letters of Credit   in excess of its individual Issuing Bank Sublimit in effect at the time of such request, and each Issuing Bank   agrees to consider any such request in good faith.  Any Letter of Credit so issued by an Issuing Bank in   excess of its individual Issuing Bank Sublimit then in effect shall nonetheless constitute a Letter of Credit   for all purposes of the Credit Agreement, and shall not affect the Issuing Bank Sublimit of any other Issuing   Bank, subject to the limitations on the aggregate LC Exposure set forth in clause (i) of this Section 2.06(b).          (c)   Expiration Date.  Each Letter of Credit shall expire (or be subject to termination or non-  renewal by notice from the Issuing Bank to the beneficiary thereof) at or prior to the close of business on   the earlier of (i) the date one year after the date of the issuance of such Letter of Credit (or, in the case of   any renewal or extension thereof, including, without limitation, any automatic renewal provision, one year   after such renewal or extension) and (ii) the date that is five Business Days prior to the Maturity Date.          (d)   Participations.  By the issuance of a Letter of Credit (or an amendment to a Letter of Credit   increasing  the  amount  thereof)  and  without  any  further  action  on  the  part  of  the  Issuing  Bank  or  the   Revolving Lenders, the Issuing Bank hereby grants to each Revolving Lender, and each Revolving Lender   hereby acquires from the Issuing Bank, a participation in such Letter of Credit equal to such Lender’s   Applicable  Percentage  of  the  aggregate  amount  available to  be drawn under such  Letter  of Credit.   In   consideration  and  in  furtherance  of  the  foregoing,  each  Revolving  Lender  hereby  absolutely  and   unconditionally  agrees  to  pay  to  the  Administrative  Agent,  for  the  account  of  the  Issuing  Bank,  such   Lender’s Applicable Percentage of each LC Disbursement made by the Issuing Bank and not reimbursed   by the Borrowers on the date due as provided in paragraph (e) of this Section, or of any reimbursement   payment required to be refunded to the Borrowers for any reason.  Each Revolving Lender acknowledges   and agrees that its obligation to acquire participations pursuant to this paragraph in respect of Letters of   Credit is absolute and unconditional and shall not be affected by any circumstance whatsoever, including   any amendment, renewal or extension of any Letter of Credit or the occurrence and continuance of a Default   or reduction or termination of the Commitments, and that each such payment shall be made without any   offset, abatement, withholding or reduction whatsoever.          (e)   Reimbursement.  If the Issuing Bank shall make any LC Disbursement in respect of a Letter   of Credit, the Borrowers shall reimburse such LC Disbursement by paying to the Administrative Agent an   amount equal to such LC Disbursement not later than 11:00 a.m., Chicago time, on (a) (i) the Business Day   that the Borrower Representative receives notice of such LC Disbursement, if such notice is received prior   to 9:00 a.m., Chicago time, on the day of receipt, or (ii) the Business Day immediately following the day   that the Borrower Representative receives such notice, if such notice is received after 9:00 a.m. Chicago   time on the day of receipt; provided that, the Borrowers may, subject to the conditions to borrowing set   forth herein, request in accordance with Section 2.03 or 2.05 that such payment be financed with a CBFR   Revolving  Borrowing  or  Swingline  Loan  in  an  equivalent  amount  and,  to  the  extent  so  financed,  the   Borrowers’  obligation  to  make  such  payment  shall  be  discharged  and  replaced  by  the  resulting  CBFR   Revolving  Borrowing  or  Swingline  Loan.   If  the  Borrowers  fail to  make  such  payment  when  due, the   Administrative Agent shall notify each Revolving Lender of the applicable LC Disbursement, the payment   then due from the Borrowers in respect thereof and such Lender’s Applicable Percentage thereof.  Promptly   following  receipt  of  such  notice,  each  Revolving  Lender  shall  pay  to  the  Administrative  Agent  its   Applicable Percentage of the payment then due from the Borrowers, in the same manner as provided in   Section 2.07 with respect to Loans made by such Lender (and Section 2.07 shall apply, mutatis mutandis,   to the payment obligations of the Revolving Lenders), and the Administrative Agent shall promptly pay to   DB1/ 102580159.10                      41  

 

 the Issuing Bank the amounts so received by it from the Revolving Lenders.  Promptly following receipt   by  the  Administrative  Agent  of  any  payment  from  the  Borrowers  pursuant  to  this  paragraph,  the   Administrative Agent shall distribute such payment to the Issuing Bank or, to the extent that Revolving   Lenders  have  made  payments  pursuant  to  this  paragraph  to  reimburse  the  Issuing  Bank,  then  to  such   Lenders and the Issuing Bank as their interests may appear.  Any payment made by a Revolving Lender   pursuant to this paragraph to reimburse the Issuing Bank for any LC Disbursement (other than the funding   of CBFR Revolving Loans or a Swingline Loan as contemplated above) shall not constitute a Loan and   shall not relieve the Borrowers of their obligation to reimburse such LC Disbursement.          (f)   Obligations  Absolute.   The  Borrowers’  joint  and  several  obligation  to  reimburse  LC   Disbursements as provided in paragraph (e) of this Section shall be absolute, unconditional and irrevocable,   and  shall  be  performed  strictly  in  accordance  with  the  terms  of  this  Agreement  under  any  and  all   circumstances whatsoever and irrespective of (i) any lack of validity or enforceability of any Letter of   Credit, any Letter of Credit Agreement or this Agreement, or any term or provision therein or herein, (ii)   any draft or other document presented under a Letter of Credit proving to be forged, fraudulent or invalid   in any respect or any statement therein being untrue or inaccurate in any respect, (iii) any payment by the   Issuing Bank under a Letter of Credit against presentation of a draft or other document that does not comply   with the terms of such Letter of Credit, or (iv) any other event or circumstance whatsoever, whether or not   similar  to any  of  the foregoing, that might, but for the  provisions of this  Section,  constitute  a legal  or   equitable discharge of, or provide a right of setoff against, the Borrowers’ obligations hereunder.  None of   the Administrative Agent, the Revolving Lenders, the Issuing Bank or any of their Related Parties, shall   have any liability or responsibility by reason of or in connection with the issuance or transfer of any Letter   of  Credit  or  any  payment  or  failure  to  make  any  payment  thereunder  (irrespective  of  any  of  the   circumstances referred to in the preceding sentence), or any error, omission, interruption, loss or delay in   transmission or delivery of any draft, notice or other communication under or relating to any Letter of Credit   (including any document required to make a drawing thereunder), any error in interpretation of technical   terms or any consequence arising from causes beyond the control of the Issuing Bank; provided that the   foregoing shall not be construed to excuse the Issuing Bank from liability to the Borrowers to the extent of   any direct damages (as opposed to special, indirect, consequential or punitive damages, claims in respect   of which are hereby waived by the Borrowers to the extent permitted by applicable law) suffered by any   Borrower that are caused by the Issuing Bank’s failure to exercise care when determining whether drafts   and other documents presented under a Letter of Credit comply with the terms thereof.  The parties hereto   expressly agree that, in the absence of gross negligence or willful misconduct on the part of the Issuing   Bank (as finally determined by a court of competent jurisdiction), the Issuing Bank shall be deemed to have   exercised  care  in  each  such  determination.   In  furtherance  of  the  foregoing  and  without  limiting  the   generality thereof, the parties agree that, with respect to documents presented which appear on their face to   be in substantial compliance with the terms of a Letter of Credit, the Issuing Bank may, in its sole discretion,   either  accept  and  make  payment  upon  such  documents  without  responsibility  for  further  investigation,   regardless of any notice or information to the contrary, or refuse to accept and make payment upon such   documents if such documents are not in strict compliance with the terms of such Letter of Credit.          (g)   Disbursement Procedures.  The Issuing Bank shall, promptly following its receipt thereof,   examine all documents purporting to represent a demand for payment under a Letter of Credit.  The Issuing   Bank shall promptly notify the Administrative Agent and the applicable Borrower by telephone (confirmed   by fax or through Electronic Systems) of such demand for payment and whether the Issuing Bank has made   or will make an LC Disbursement thereunder; provided that any failure to give or delay in giving such   notice shall not relieve the Borrowers of their obligation to reimburse the Issuing Bank and the Revolving   Lenders with respect to any such LC Disbursement.          (h)   Interim Interest.  If the Issuing Bank shall make any LC Disbursement, then, unless the   Borrowers shall reimburse such LC Disbursement in full on the date such LC Disbursement is made, the   DB1/ 102580159.10                      42  

 

 unpaid amount thereof shall bear interest, for each day from and including the date such LC Disbursement   is made to but excluding the date that the Borrowers reimburse such LC Disbursement, at the rate per annum   then  applicable  to  CBFR  Revolving  Loans  and  such  interest  shall  be  payable  on  the  date  when  such   reimbursement is due; provided that, if the Borrowers fail to reimburse such LC Disbursement when due   pursuant to clause (e) of this Section, then Section 2.13(d) shall apply.  Interest accrued pursuant to this   paragraph shall be for the account of the Issuing Bank, except that interest accrued on and after the date of   payment by any Revolving Lender pursuant to paragraph (e) of this Section to reimburse the Issuing Bank   shall be for the account of such Lender to the extent of such payment.          (i)   Replacement of the Issuing Bank.                (i)   The Issuing Bank may be replaced at any time by written agreement among the         Borrower Representative, the Administrative Agent, the replaced Issuing Bank and the successor         Issuing  Bank.   The  Administrative  Agent  shall  notify  the  Revolving  Lenders  of  any  such         replacement of the Issuing Bank.  At the time any such replacement shall become effective, the         Borrowers shall pay all unpaid fees accrued for the account of the replaced Issuing Bank pursuant         to Section 2.12(b).  From and after the effective date of any such replacement, (x) the successor         Issuing Bank shall have all the rights and obligations of the Issuing Bank under this Agreement         with respect to Letters of Credit to be issued thereafter and (y) references herein to the term “Issuing         Bank”  shall be deemed  to  refer to  such  successor  or  to  any previous  Issuing Bank,  or  to such         successor and all previous Issuing Banks, as the context shall require.  After the replacement of an         Issuing Bank hereunder, the replaced Issuing Bank shall remain a party hereto and shall continue         to have all the rights and obligations of an Issuing Bank under this Agreement with respect to         Letters  of  Credit  then  outstanding  and  issued  by  it  prior  to  such  replacement,  but  shall  not  be         required to issue additional Letters of Credit.                (ii)  Subject to the appointment and acceptance of a successor Issuing Bank, the Issuing         Bank  may  resign  as  an  Issuing  Bank  at  any  time  upon  thirty  days’  prior  written  notice  to  the         Administrative Agent, the Borrower Representative and the Lenders, in which case, such Issuing         Bank shall be replaced in accordance with Section 2.06(i) above.          (j)   Cash Collateralization.  If any Default shall occur and be continuing, on the Business Day   that the Borrower Representative receives notice from the Administrative Agent or the Required  Lenders   demanding  the  deposit  of  cash  collateral  pursuant  to  this  paragraph,  the  Borrowers  shall  deposit in  an   account with the Administrative Agent, in the name of the Administrative Agent and for the benefit of the   Revolving Lenders (the “LC Collateral Account”), an amount in cash equal to 103% of the amount of the   LC  Exposure as  of  such  date plus  accrued and  unpaid  interest  thereon;  provided  that the  obligation to   deposit  such  cash  collateral  shall  become  effective  immediately,  and  such  deposit  shall  become   immediately due and payable, without demand or other notice of any kind, upon the occurrence of any   Event of Default with respect to any Borrower described in clause (h) or (i) of Article VII.  Such Borrower   also shall deposit cash collateral in accordance with this paragraph as and to the extent required by Sections   2.10(b), 2.11(b) or 2.20.  Each such deposit shall be held by the Administrative Agent as collateral for the   payment and performance of the Secured Obligations.  The Administrative Agent shall have exclusive   dominion and control, including the exclusive right of withdrawal, over the LC Collateral Account and the   Borrowers hereby grant the Administrative Agent a security interest in the LC Collateral Account and all   money  or  other  assets  on  deposit  therein  or  credited  thereto.   Other  than  any  interest  earned  on  the   investment  of  such  deposits,  which  investments  shall  be  made  at  the  option  and  sole  discretion  of  the   Administrative Agent and at the Borrowers’ risk and expense, such deposits shall not bear interest.  Interest   or profits, if any, on such investments shall accumulate in the LC Collateral Account.  Moneys in the LC   Collateral Account shall be applied by the Administrative Agent to reimburse the Issuing Bank for LC   Disbursements for which it has not been reimbursed and, to the extent not so applied, shall be held for the   DB1/ 102580159.10                      43  

 

 satisfaction of the reimbursement obligations of the Borrowers for the LC Exposure at such time or, if the   maturity  of  the  Loans  has  been  accelerated,  be  applied  to  satisfy  other  Secured  Obligations.   If  the   Borrowers are required to provide an amount of cash collateral hereunder as a result of the occurrence of a   Default, such amount (to the extent not applied as aforesaid) shall be returned to the Borrowers within three   (3)  Business  Days  after  all  such  Defaults  have  been  cured  or  waived  as  confirmed  in  writing  by  the   Administrative Agent.          (k)   Issuing  Bank  Reports  to  the  Administrative  Agent.   Unless  otherwise  agreed  by  the   Administrative  Agent,  each  Issuing  Bank  (other  than  JPMCB)  shall,  in  addition  to  its  notification   obligations set forth elsewhere in this Section, report in writing to the Administrative Agent (i) periodic   activity (for such period or recurrent periods as shall be requested by the Administrative Agent) in respect   of Letters of Credit issued by such  Issuing Bank, including all issuances, extensions, amendments and   renewals, all expirations and cancelations and all disbursements and reimbursements, (ii) reasonably prior   to the time that such Issuing Bank issues, amends, renews or extends any Letter of Credit, the date of such   issuance, amendment, renewal or extension, and the stated amount of the Letters of Credit issued, amended,   renewed or extended by it and outstanding after giving effect to such issuance, amendment, renewal or   extension (and whether the amounts thereof shall have changed), (iii) on each Business Day on which such   Issuing Bank makes any LC Disbursement, the date and amount of such LC Disbursement, (iv) on any   Business Day on which any Borrower fails to reimburse an LC Disbursement required to be reimbursed to   such Issuing Bank on such day, the date of such failure and the amount of such LC Disbursement, and (v)   on any other Business Day, such other information as the Administrative Agent shall reasonably request as   to the Letters of Credit issued by such Issuing Bank.          (l)   LC Exposure Determination.  For all purposes of this Agreement, the amount of a Letter   of Credit that, by its terms or the terms of any document related thereto, provides for one or more automatic   increases in the stated amount thereof shall be deemed to be the maximum stated amount of such Letter of   Credit after giving effect to all such increases, whether or not such maximum stated amount is in effect at   the time of determination.          (m)   Letters of  Credit  Issued  for  Account  of Subsidiaries.   Notwithstanding  that  a Letter  of   Credit issued or outstanding hereunder supports any obligations of, or is for the account of, a Subsidiary,   or states that a Subsidiary is the “account party,” “applicant,” “customer,” “instructing party,” or the like   of or for such Letter of Credit, and without derogating from any rights of the Issuing Bank (whether arising   by contract, at law, in equity or otherwise) against such Subsidiary in respect of such Letter of Credit, the   Borrowers (i) shall reimburse, indemnify and compensate the Issuing Bank hereunder for such Letter of   Credit (including to reimburse any and all drawings thereunder) as if such Letter of Credit had been issued   solely for the account of a Borrower and (ii) irrevocably waives any and all defenses that might otherwise   be available to it as a guarantor or surety of any or all of the obligations of such Subsidiary in respect of   such Letter of Credit.  Each Borrower hereby acknowledges that the issuance of such Letters of Credit for   its Subsidiaries inures to the benefit of the Borrowers, and that each Borrower’s business derives substantial   benefits from the businesses of such Subsidiaries.          SECTION 2.07  Funding of Borrowings.          (a)   Each Lender shall make each Loan to be made by such Lender hereunder on the proposed   date thereof solely by wire transfer of immediately available funds by 2:00 p.m., Chicago time, to the   account  of  the  Administrative  Agent  most  recently  designated  by  it  for  such  purpose  by  notice  to  the   Lenders in an amount equal to such Lender’s Applicable Percentage; provided that, Swingline Loans shall   be made as provided in Section 2.05.  The Administrative Agent will make such Loans available to the   Borrower  Representative  by  promptly  crediting  the  funds  so  received  in  the  aforesaid  account  of  the   Administrative Agent to the Funding Account; provided that CBFR Revolving Loans made to finance the   DB1/ 102580159.10                      44  

 

 reimbursement  of  (i)  an  LC  Disbursement  as  provided  in  Section  2.06(e)  shall  be  remitted  by  the   Administrative Agent to the Issuing Bank and (ii) a Protective Advance or an Overadvance shall be retained   by the Administrative Agent.          (b)   Unless the Administrative Agent shall have received notice from a Lender prior to the   proposed date of any Borrowing that such Lender will not make available to the Administrative Agent such   Lender’s share of such Borrowing, the Administrative Agent may assume that such Lender has made such   share available on such date in accordance with clause (a) of this Section and may, in reliance upon such   assumption, make available to the applicable Borrower 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 the Borrowers each severally agree to pay to the Administrative Agent forthwith on   demand such corresponding amount with interest thereon, for each day from and including the date such   amount  is  made  available  to  the  applicable  Borrower  to  but  excluding  the  date  of  payment  to  the   Administrative Agent, at (i) in the case of such Lender, the greater of the NYFRB Rate and a rate determined   by the Administrative Agent in accordance with banking industry rules on interbank compensation and (ii)   in the case of the Borrowers, the interest rate applicable to CBFR Loans.  If such Lender pays such amount   to  the  Administrative  Agent,  then  such  amount  shall  constitute  such  Lender’s  Loan  included  in  such   Borrowing, provided, that any interest received from a Borrower by the Administrative Agent during the   period beginning when Administrative Agent funded the Borrowing until such Lender pays such amount   shall be solely for the account of the Administrative Agent.          SECTION 2.08  Interest Elections.          (a)   Each  Borrowing  initially  shall  be  of  the  Type  specified  in  the  applicable  Borrowing   Request and, in the case of a Eurodollar Borrowing, shall have an initial Interest Period as specified in such   Borrowing Request.  Thereafter, the Borrower Representative may elect to convert such Borrowing to a   different Type or to continue such Borrowing and, in the case of a Eurodollar Borrowing, may elect Interest   Periods therefor, all as provided in this Section.  The Borrower Representative may elect different options   with  respect  to  different  portions  of  the  affected  Borrowing,  in  which  case  each  such  portion  shall  be   allocated  ratably  among  the  Lenders  holding  the  Loans  comprising  such  Borrowing,  and  the  Loans   comprising each such portion shall be considered a separate Borrowing.  This Section shall not apply to   Swingline Borrowings, Overadvances or Protective Advances, which may not be converted or continued.          (b)   To make an election pursuant to this Section, the Borrower Representative shall notify the   Administrative Agent of such election either in writing (delivered by hand or fax) by delivering an Interest   Election Request signed by a Responsible Officer of the Borrower Representative or through Electronic   System if arrangements for doing so have been approved by the Administrative Agent (or if an Extenuating   Circumstance shall exist, by telephone) by the time that a Borrowing Request would be required under   Section 2.03 if the Borrowers were requesting a Borrowing of the Type resulting from such election to be   made on the effective date of such election.  Each such Interest Election Request shall be irrevocable and   each  such  telephonic  Interest  Election  Request, if  permitted,  shall  be  confirmed  immediately  upon  the   cessation  of  the  Extenuating  Circumstance  by  hand  delivery,  Electronic  System  or  facsimile  to  the   Administrative Agent of a written Interest Election Request in a form approved by the Administrative Agent   and signed by a Responsible Officer of the Borrower Representative.          (c)   Each  written  (or  if  permitted,  telephonic)  Interest  Election  Request  (including  requests   submitted through Electronic System) shall specify the following information in compliance with Section   2.02:                (i)   the name of the applicable Borrower and the Borrowing to which such Interest         Election Request applies and, if different options are being elected with respect to different portions   DB1/ 102580159.10                      45  

 

       thereof,  the  portions  thereof  to  be  allocated  to  each  resulting  Borrowing  (in  which  case  the         information  to  be  specified  pursuant  to  clauses  (iii)  and  (iv)  below  shall  be  specified  for  each         resulting Borrowing);                (ii)  the effective date of the election made pursuant to such Interest Election Request,         which shall be a Business Day;                (iii) whether  the  resulting  Borrowing  is  to  be  a  CBFR  Borrowing  or  a  Eurodollar         Borrowing; and                (iv)  if the  resulting  Borrowing  is a  Eurodollar  Borrowing, the  Interest Period to  be         applicable thereto after giving effect to such election, which shall be a period contemplated by the         definition of the term “Interest Period”.                If any such Interest Election Request requests a Eurodollar Borrowing but does not specify         an Interest Period, then the Borrowers shall be deemed to have selected an Interest Period of one         month’s duration.          (d)   Promptly following receipt of an Interest Election Request, the Administrative Agent shall   advise each Lender of the details thereof and of such Lender’s portion of each resulting Borrowing.          (e)   If  the  Borrower  Representative  fails  to  deliver  a  timely  Interest  Election  Request  with   respect to a Eurodollar Borrowing prior to the end of the Interest Period applicable thereto, then, unless   such Borrowing is repaid as provided herein, at the end of such Interest Period such Borrowing shall be   converted to an CBFR Borrowing.  Notwithstanding any contrary provision hereof, if a Default has occurred   and is continuing and the Administrative Agent, at the request of the Required Lenders, so notifies the   Borrower Representative, then, so long as a Default is continuing (i) no outstanding Borrowing may be   converted to or continued as a Eurodollar Borrowing and (ii) unless repaid, each Eurodollar Borrowing   shall be converted to an CBFR Borrowing at the end of the Interest Period applicable thereto.          SECTION 2.09  Termination  and  Reduction  of  Commitments;  Increase  in  Revolving   Commitments.          (a)   Unless previously terminated, the Revolving Commitments shall terminate on the Maturity   Date.          (b)   The Borrowers may at any time terminate the Revolving Commitments upon the Payment   in Full of the Secured Obligations.          (c)   The Borrowers may from time to time reduce the Revolving Commitments; provided that   (i) each reduction of the Revolving Commitments shall be in an amount that is an integral multiple of   $1,000,000 and not less than $5,000,000, (ii) the Borrowers shall not terminate or reduce the Revolving   Commitments if, after giving effect to any concurrent prepayment of the Revolving Loans in accordance   with Section 2.11, the Aggregate Revolving Exposure would exceed the lesser of the Aggregate Revolving   Commitment and the Borrowing Base, and (iii) in no event shall the Revolving Commitments be reduced   to an amount less than $10,000,000.          (d)   The  Borrower  Representative  shall  notify  the  Administrative  Agent  of  any  election  to   terminate or reduce the Commitments under clause (b) or (c) of this Section at least three (3) Business Days   prior to the effective date of such termination or reduction, specifying such election and the effective date   thereof.  Promptly following receipt of any notice, the Administrative Agent shall advise the Lenders of the   DB1/ 102580159.10                      46  

 

 contents thereof.  Each notice delivered by the Borrower Representative pursuant to this Section shall be   irrevocable;  provided  that  a  notice  of  termination  of  the  Commitments  delivered  by  the  Borrower   Representative may state that such notice is conditioned upon the effectiveness of other credit facilities, in   which case such notice may be revoked by the Borrower Representative (by notice to the Administrative   Agent on or prior to the specified effective date) if such condition is not satisfied.  Any termination or   reduction of the Commitments shall be permanent.  Each reduction of the Commitments shall be made   ratably among the Lenders in accordance with their respective Commitments.          (e)   The Borrowers shall have the right to increase the Revolving Commitments by obtaining   additional Revolving Commitments, either from one or more of the Lenders or another lending institution   provided that (i) any such request for an increase shall be in a minimum amount of $5,000,000, (ii) the   Borrower Representative, on behalf of the Borrowers, may make a maximum of five (5) such requests, (iii)   after giving effect thereto, the sum of the total of the additional Commitments does not exceed $25,000,000,   (iv) the Administrative Agent and the Issuing Bank have approved the identity of any such new Lender,   such approvals not to be unreasonably withheld, (v) any such new Lender assumes all of the rights and   obligations of a “Lender” hereunder, and (vi) the procedure described in Section 2.09(f) have been satisfied.    Nothing contained in this Section 2.09 shall constitute, or otherwise be deemed to be, a commitment on the   part of any Lender to increase its Commitment hereunder at any time.          (f)   Any amendment hereto for such an increase or addition shall be in form and substance   satisfactory to the Administrative Agent and shall only require the written signatures of the Administrative   Agent, the  Borrowers  and each  Lender  being added or increasing  its  Commitment, subject  only  to the   approval of all Lenders if any such increase or addition would cause the Revolving Commitments to exceed   $75,000,000.  As a condition precedent to such an increase or addition, the Borrowers shall deliver to the   Administrative Agent (i) a certificate of each Loan Party signed by an authorized officer of such Loan Party   (A) certifying and attaching the resolutions adopted by such Loan Party approving or consenting to such   increase, and (B) in the case of the Borrowers, certifying that, before and after giving effect to such increase   or addition, (1) the representations and warranties contained in Article III and the other Loan Documents   are true and correct, except to the extent that such representations and warranties specifically refer to an   earlier date, in which case they are true and correct as of such earlier date, (2) no Default exists and (3) the   Borrowers are in compliance (on a pro forma basis) with the covenant contained in Section 6.12, and (ii)   legal opinions and documents consistent with those delivered on the Effective Date, to the extent requested   by the Administrative Agent.          (g)   On the effective date of any such increase or addition, (i) any Lender increasing (or, in the   case  of  any  newly  added  Lender,  extending)  its  Revolving  Commitment  shall  make  available  to  the   Administrative  Agent  such  amounts  in  immediately  available  funds  as  the  Administrative  Agent  shall   determine, for the benefit of the other Lenders, as being required in order to cause, after giving effect to   such  increase  or  addition and  the  use  of such  amounts  to  make  payments to  such other  Lenders,  each   Lender’s portion of the outstanding Revolving Loans of all the Lenders to equal its revised Applicable   Percentage  of such outstanding  Revolving  Loans,  and  the  Administrative Agent  shall  make  such  other   adjustments  among the  Lenders with  respect to  the Revolving Loans  then outstanding  and  amounts  of   principal, interest, commitment fees and other amounts paid or payable with respect thereto as shall be   necessary, in the opinion of the Administrative Agent, in order to effect such reallocation and (ii)  the   Borrowers shall be deemed to have repaid and reborrowed all outstanding Revolving Loans as of the date   of any increase (or addition) in the Revolving Commitments (with such reborrowing to consist of the Types   of  Revolving  Loans,  with  related  Interest  Periods  if  applicable,  specified  in  a  notice  delivered  by  the   Borrower Representative, in accordance with the requirements of Section 2.03).  The deemed payments   made pursuant to clause (ii) of the immediately preceding sentence shall be accompanied by payment of all   accrued  interest  on  the  amount  prepaid  and,  in  respect  of  each  Eurodollar  Loan,  shall  be  subject  to   indemnification by the Borrowers pursuant to the provisions of Section 2.16 if the deemed payment occurs   DB1/ 102580159.10                      47  

 

 other than on the last day of the related Interest Periods.  Within a reasonable time after the effective date   of any increase or addition, the Administrative Agent shall, and is hereby authorized and directed to, revise   the Commitment Schedule to reflect such increase or addition and shall distribute such revised Commitment   Schedule to each of the Lenders and the Borrower Representative, whereupon such revised Commitment   Schedule shall replace the old Commitment Schedule and become part of this Agreement.          SECTION 2.10  Repayment of Loans; Evidence of Debt.          (a)   The Borrowers hereby unconditionally promise to pay (i) to the Administrative Agent for   the account of each Revolving Lender the then unpaid principal amount of each Revolving Loan on the   Maturity Date, (ii) to the Administrative Agent the then unpaid amount of each Protective Advance on the   earlier of the Maturity Date and demand by the Administrative Agent, and (iii) to the Administrative Agent   the then unpaid principal amount of each Overadvance on the earlier of the Maturity Date and demand by   the Administrative Agent.          (b)   At all times that full cash dominion is in effect pursuant to Section 7.3 of the Security   Agreement, on each Business Day, the Administrative Agent shall apply all funds credited to the Collection   Account  on  such  Business  Day  or  the  immediately  preceding  Business  Day  (at  the  discretion  of  the   Administrative Agent, whether or not immediately available), first to prepay any Protective Advances and   Overadvances that may be outstanding, pro rata, and second to prepay the Revolving Loans (including   Swingline Loans) and to cash collateralize outstanding LC Exposure.  Notwithstanding the foregoing, to   the extent any funds credited to the Collection Account constitute Net Proceeds, the application of such Net   Proceeds shall be subject to Section 2.11(c).          (c)   Each Lender shall maintain in accordance with its usual practice an account or accounts   evidencing  the  Indebtedness  of the  Borrowers  to  such  Lender resulting from  each  Loan made by  such   Lender, including the amounts of principal and interest payable and paid to such Lender from time to time   hereunder.          (d)   The Administrative Agent shall maintain accounts in which it shall record (i) the amount   of each Loan made hereunder, the Class and Type thereof and the Interest Period applicable thereto, (ii) the   amount of any principal or interest due and payable or to become due and payable from the Borrowers to   each Lender hereunder and (iii) the amount of any sum received by the Administrative Agent hereunder for   the account of the Lenders and each Lender’s share thereof.          (e)   The entries made in the accounts maintained pursuant to clause (c) or (d) of this Section   shall be prima facie evidence of the existence and amounts of the obligations recorded therein; provided   that the failure of any Lender or the Administrative Agent to maintain such accounts or any error therein   shall not in any manner affect the obligation of the Borrowers to repay the Loans in accordance with the   terms of this Agreement.          (f)   Any Lender may request that Loans made by it be evidenced by a promissory note.  In such   event, the Borrowers shall prepare, execute and deliver to such Lender a promissory note payable to such   Lender (or, if requested by such Lender, to such Lender and its registered assigns) and in a form approved   by the Administrative Agent.  Thereafter, the Loans evidenced by such promissory note and interest thereon   shall  at all  times  (including  after  assignment  pursuant  to  Section  9.04)  be  represented by one  or  more   promissory notes in such form.          SECTION 2.11  Prepayment of Loans.    DB1/ 102580159.10                      48  

 

       (a)   The  Borrowers  shall  have  the  right  at  any  time  and  from  time  to  time  to  prepay  any   Borrowing in whole or in part, subject to prior notice in accordance with clause (f) of this Section and, if   applicable, payment of any break funding expenses under Section 2.16.          (b)   Except for Overadvances permitted under Section 2.05, in the event and on such occasion   that the Aggregate Revolving Exposure exceeds the lesser of (A) the Aggregate Revolving Commitment   and  (B)  the  Borrowing  Base,  the  Borrowers  shall  prepay  the  Revolving  Loans,  LC  Exposure  and/or   Swingline Loans or cash collateralize LC Exposure in an account with the Administrative Agent pursuant   to Section 2.06(j), as applicable, in an aggregate amount equal to such excess.          (c)   In the event and on each occasion that any Net Proceeds are received by or on behalf of   any Loan Party or any Subsidiary in respect of any Prepayment Event, the Borrowers shall, immediately   after such Net Proceeds are received by such Loan Party or such Subsidiary, prepay the Obligations and   cash collateralize the LC Exposure as set forth in Section 2.11(d) below in an aggregate amount equal to   100% of such Net Proceeds.          (d)   All such amounts pursuant to Section 2.11(c) shall be applied, first to prepay any Protective   Advances and Overadvances that may be outstanding, pro rata, and second to prepay the Revolving Loans   (including Swingline Loans) without a corresponding reduction in the Revolving Commitments and to cash   collateralize  outstanding  LC  Exposure.   If  the  precise  amount  of  insurance  or  condemnation  proceeds   allocable to Inventory as compared to Equipment, Fixtures and real property is not otherwise determined,   the allocation and application of those proceeds shall be determined by the Administrative Agent, in its   Permitted Discretion.          (e)   The Borrower Representative shall notify the Administrative  Agent (and, in the case of   prepayment  of  a  Swingline  Loan,  the  Swingline  Lender)  by  telephone  (confirmed  by  fax)  or  through   Electronic System, if arrangements for doing so have been approved by the Administrative Agent, of any   prepayment hereunder not later than 10:00 a.m., Chicago time, (i) in the case of prepayment of a Eurodollar   Revolving  Borrowing,  three  (3)  Business  Days  before  the  date  of  prepayment,  or  (B)  in  the  case  of   prepayment of a CBFR Revolving Borrowing, one (1) Business Day before the date of prepayment.  Each   such notice shall be irrevocable and shall specify the prepayment date and the principal amount of each   Borrowing or portion thereof to be prepaid; provided that, if a notice of prepayment is given in connection   with a conditional notice of termination of the Revolving Commitments as contemplated by Section 2.09,   then such notice of prepayment may be revoked if such notice of termination is revoked in accordance with   Section 2.09.   Promptly  following  receipt  of  any  such  notice  relating  to  a  Revolving  Borrowing,  the   Administrative Agent shall advise the Lenders of the contents thereof.  Each partial prepayment of any   Revolving  Borrowing  shall  be  in  an  amount  that  would  be  permitted  in  the  case  of  an  advance  of  a   Revolving Borrowing of the same Type as provided in Section 2.02.  Each prepayment of a Revolving   Borrowing shall be applied ratably to the Revolving Loans included in the prepaid Borrowing.  Prepayments   shall be accompanied by (x) accrued interest to the extent required by Section 2.13 and (y) break funding   payments pursuant to Section 2.16.          SECTION 2.12  Fees.          (a)   The Borrowers agree to pay to the Administrative Agent for the account of each Lender a   commitment fee, which shall accrue at the Applicable Rate on the average daily amount of the Available   Revolving Commitment of such Lender during the period from and including the Effective Date to but   excluding the date on which the Revolving Commitments terminate.  Accrued commitment fees shall be   payable in arrears on the first Business Day of each calendar month and on the date on which the Revolving   Commitments terminate, commencing on the first such date to occur after the date hereof.  All commitment    DB1/ 102580159.10                      49  

 

 fees shall be computed on the basis of a year of 360 days and shall be payable for the actual number of days   elapsed, (including the first day but excluding the last day).          (b)   Borrowers agree to pay (i) to the Administrative Agent for the account of each Revolving   Lender a participation fee with respect to its participations in Letters of Credit, which shall accrue at the   same Applicable Rate used to determine the interest rate applicable to Eurodollar Revolving Loans on the   average  daily  amount  of  such  Lender’s  LC  Exposure  (excluding  any  portion  thereof  attributable  to   unreimbursed LC Disbursements) during the period from and including the Effective Date to but excluding   the later of the date on which such Lender’s Revolving Commitment terminates and the date on which such   Lender ceases to have any LC Exposure, and (ii) to the Issuing Bank a fronting fee, which shall accrue at   the rate of 0.125% per annum on the average daily amount of the LC Exposure (excluding any portion   thereof  attributable  to  unreimbursed  LC  Disbursements)  attributable  to  Letters  of  Credit  issued  by  the   Issuing Bank during the period from and including the Effective Date to but excluding the later of the date   of termination of the Revolving Commitments and the date on which there ceases to be any LC Exposure,   as  well  as  the  Issuing  Bank’s  standard  fees  and  charges  with  respect  to  the  issuance,  amendment,   cancellation, negotiation, transfer, presentment, renewal or extension of any Letter of Credit or processing   of drawings thereunder.  Participation fees and fronting fees accrued through and including the last day of   each calendar month shall be payable on the first Business Day of each calendar month following such last   day, commencing on the first such date to occur after the Effective Date; provided that all such fees shall   be payable on the date on which the Revolving Commitments terminate and any such fees accruing after   the date on which the Revolving Commitments terminate shall be payable on demand.  Any other fees   payable to the Issuing Bank pursuant to this paragraph shall be payable within ten (10) days after demand.    All participation fees and fronting fees shall be computed on the basis of a year of 360 days and shall be   payable for the actual number of days elapsed (including the first day but excluding the last day).          (c)   The Borrowers agree to pay to the Administrative Agent, for its own account, fees payable   in  the  amounts  and  at  the  times  separately  agreed  upon  in  writing  between  the  Borrowers  and  the   Administrative Agent.          (d)   All fees payable hereunder shall be paid on the dates due, in immediately available funds,   to the Administrative Agent (or to the Issuing Bank, in the case of fees payable to it) for distribution, in the   case of commitment fees and participation fees, to the Lenders.  Fees paid shall not be refundable under   any circumstances.          SECTION 2.13  Interest.          (a)   The Loans comprising CBFR Borrowings (including Swingline Loans) shall bear interest   at the CBFR plus the Applicable Rate.          (b)   The Loans comprising each Eurodollar Borrowing shall bear interest at the Adjusted LIBO   Rate for the Interest Period in effect for such Borrowing plus the Applicable Rate.          (c)   Each Protective Advance and each Overadvance shall bear interest at the CBFR plus the   Applicable Rate for Revolving Loans plus 2%.          (d)   Notwithstanding  the  foregoing,  during  the  occurrence  and  continuance  of  an  Event  of   Default under clause (a), (b), (h) or (i) of Article VII, the Administrative Agent or the Required Lenders   may, at their option, by notice to the Borrower Representative (which notice may be revoked at the option   of  the  Required  Lenders notwithstanding  any  provision  of  Section 9.02  requiring  the  consent  of  “each   Lender affected thereby” for reductions in interest rates), declare that (i) all Loans shall bear interest at 2%   plus the rate otherwise applicable to such Loans as provided in the preceding paragraphs of this Section or   DB1/ 102580159.10                      50  

 

 (ii) in the case of any other amount outstanding hereunder, such amount shall accrue at 2% plus the rate   applicable to such fee or other obligation as provided hereunder..          (e)   Accrued interest on each Loan (for CBFR Loans, accrued through the last day of the prior   calendar  month)  shall  be  payable  in  arrears  on  each  Interest  Payment  Date  for  such  Loan  and  upon   termination of the Commitments; provided that (i) interest accrued pursuant to clause (d) of this Section   shall be payable on demand, (ii) in the event of any repayment or prepayment of any Loan (other than a   prepayment of a CBFR Revolving Loan prior to the end of the Availability Period), accrued interest on the   principal amount repaid or prepaid shall be payable on the date of such repayment or prepayment and (iii)   in the event of any conversion of any Eurodollar Loan prior to the end of the current Interest Period therefor,   accrued interest on such Loan shall be payable on the effective date of such conversion.          (f)   All interest hereunder shall be computed on the basis of a year of 360 days, except that   interest computed by reference to the CB Floating Rate shall be computed on the basis of a year of 365   days (or 366 days in a leap year), and in each case shall be payable for the actual number of days elapsed   (including the first day but excluding the last day).  The applicable CB Floating Rate, Adjusted LIBO Rate,   REVLIBOR30  Rate,  or  LIBO  Rate  shall  be  determined  by  the  Administrative  Agent,  and  such   determination shall be conclusive absent manifest error.          SECTION 2.14  Alternate Rate of Interest; Illegality.          (a)   If prior to the commencement of any Interest Period for a Eurodollar Borrowing:                (i)   the Administrative Agent determines (which determination shall be conclusive and         binding absent manifest error) that adequate and reasonable means do not exist for ascertaining the         Adjusted LIBO Rate or the LIBO Rate, as applicable (including, without limitation, by means of         an Interpolated Rate or because the LIBO Screen Rate is not available or published on a current         basis) for such Interest Period; or                (ii)  the Administrative Agent is advised by the Required Lenders that the Adjusted         LIBO Rate or the LIBO Rate, as applicable, for such Interest Period will not adequately and fairly         reflect the cost to such Lenders (or Lender) of making or maintaining their Loans (or its Loan)         included in such Borrowing for such Interest Period;          then the Administrative Agent shall give notice thereof to the Borrower Representative and the   Lenders through Electronic System as provided in Section 9.01 as promptly as practicable thereafter and,   until the Administrative Agent notifies the Borrower Representative and the Lenders that the circumstances   giving rise to such notice no longer exist, (A) any Interest Election Request that requests the conversion of   any Borrowing to, or continuation of any Borrowing as, a Eurodollar Borrowing shall be ineffective and   any such Eurodollar Borrowing shall be repaid or converted into a CBFR Borrowing on the last day of the   then current Interest Period applicable thereto, and (B) if any Borrowing Request requests a Eurodollar   Borrowing, such Borrowing shall be made as a CBFR Borrowing.          (b)   If any Lender determines that any Requirement of Law has made it unlawful, or if any   Governmental Authority has asserted that it is unlawful, for any Lender or its applicable lending office to   make, maintain, fund or continue any Eurodollar Borrowing, or any Governmental Authority has imposed   material restrictions on the authority of such Lender to purchase or sell, or to take deposits of, dollars in the   London interbank market, then, on notice thereof by such Lender to the Borrower Representative through   the Administrative Agent, any obligations of such Lender to make, maintain, fund or continue Eurodollar   Loans or  to  convert  CBFR  Borrowings to  Eurodollar  Borrowings  will  be  suspended  until such Lender   notifies the Administrative Agent and the Borrower Representative that the circumstances giving rise to   DB1/ 102580159.10                      51  

 

 such determination no longer exist.  Upon receipt of such notice, the Borrowers will upon demand from   such Lender (with a copy to the Administrative Agent), either convert or prepay all Eurodollar Borrowings   of such Lender to CBFR Borrowings, either on the last day of the Interest Period therefor, if such Lender   may lawfully continue to maintain such Eurodollar Borrowings to such day, or immediately, if such Lender   may  not  lawfully  continue  to  maintain  such  Loans.   Upon  any  such  conversion  or  prepayment,  the   Borrowers will also pay accrued interest on the amount so converted or prepaid.          (c)   If  at  any  time  the  Administrative  Agent  determines  (which  determination  shall  be   conclusive absent manifest error) that (i) the circumstances set forth in clause (a)(i) have arisen and such   circumstances are unlikely to be temporary or (ii) the circumstances set forth in clause (a)(i) have not arisen   but either (w) the supervisor for the administrator of the LIBO Screen Rate has made a public statement   that the administrator of the LIBO Screen Rate is insolvent (and there is no successor administrator that   will continue publication of the LIBO Screen Rate), (x) the administrator of the LIBO Screen Rate has   made a public statement identifying a specific date after which the LIBO Screen Rate will permanently or   indefinitely cease to be published by it (and there is no successor administrator that will continue publication   of the LIBO Screen Rate), (y) the supervisor for the administrator of the LIBO Screen Rate has made a   public  statement  identifying  a  specific  date  after  which  the  LIBO  Screen  Rate  will  permanently  or   indefinitely cease to be published or (z) the supervisor for the administrator of the LIBO Screen Rate or a   Governmental Authority having jurisdiction over the Administrative Agent has made a public statement   identifying a specific date after which the LIBO Screen Rate may no longer be used for determining interest   rates for loans, then the Administrative Agent and the Borrower Representative shall endeavor to establish   an alternate rate of interest to the LIBO Rate that gives due consideration to the then prevailing market   convention for determining a rate of interest for syndicated loans in the United States at such time, and shall   enter into an amendment to this Agreement to reflect such alternate rate of interest and such other related   changes to this Agreement as may be applicable (but for the avoidance of doubt, such related changes shall   not include a reduction of the Applicable Rate).  Notwithstanding anything to the contrary in Section 9.02,   such amendment shall become effective without any further action or consent of any other party to this   Agreement so long as the Administrative Agent shall not have received, within five Business Days of the   date notice of such alternate rate of interest is provided to the Lenders, a written notice from the Required   Lenders stating that such Required Lenders object to such amendment.  Until an alternate rate of interest   shall be determined in accordance with this clause (c) (but, in the case of the circumstances described in   clause (ii) of the first sentence of this Section 2.14(c), only to the extent the LIBO Screen Rate for such   Interest  Period  is not  available  or  published  at  such time  on  a  current  basis),  (x)  any  Interest Election   Request that requests the conversion of any Borrowing to, or continuation of any Borrowing as, a Eurodollar   Borrowing shall be ineffective and any such Eurodollar Borrowing shall be repaid or converted into a CBFR   Borrowing on the last day of the then current Interest Period applicable thereto, and (y) if any Borrowing   Request requests a Eurodollar Borrowing, such Borrowing shall be made as a CBFR Borrowing; provided   that, if such alternate rate of interest shall be less than zero, such rate shall be deemed to be zero for the   purposes of this Agreement.          SECTION 2.15  Increased Costs.          (a)   If any Change in Law shall:                (i)   impose, modify or deem applicable any reserve, special deposit, liquidity or similar         requirement (including any compulsory loan requirement, insurance charge or other assessment)         against assets of, deposits with or for the account of, or credit extended by, any Lender (except any         such reserve requirement reflected in the Adjusted LIBO Rate) or the Issuing Bank;    DB1/ 102580159.10                      52  

 

             (ii)  impose on any Lender or the Issuing Bank or the London interbank market any         other condition, cost or expense (other than Taxes) affecting this Agreement or Loans made by         such Lender or any Letter of Credit or participation therein; or                (iii) subject any Recipient to any Taxes (other than (A) Indemnified Taxes, (B) Taxes         described in clauses (b) through (d) of the definition of Excluded Taxes and (C) Connection Income         Taxes)  on  its  loans,  loan  principal,  letters  of  credit,  commitments,  or  other  obligations,  or  its         deposits, reserves, other liabilities or capital attributable thereto;          and the result of any of the foregoing shall be to increase the cost to such Lender or such other   Recipient of making, continuing, converting into or maintaining any Loan (or of maintaining its obligation   to make any such Loan) or to increase the cost to such Lender, the Issuing Bank or such other Recipient of   participating in, issuing or maintaining any Letter of Credit or to reduce the amount of any sum received or   receivable  by  such  Lender,  the  Issuing  Bank  or  such  other  Recipient  hereunder  (whether  of  principal,   interest or otherwise), then, upon the written notice by such Lender to the Borrower Representative with a   reasonably detailed explanation thereof, the Borrowers will pay to such Lender, the Issuing Bank or such   other Recipient, as the case may be, such additional amount or amounts as will compensate such Lender,   the Issuing Bank or such other Recipient, as the case may be, for such additional costs actually incurred or   reduction actually suffered.          (b)   If any Lender or the Issuing Bank determines that any Change in Law regarding capital or   liquidity requirements has or would have the effect of reducing the rate of return on such Lender’s or the   Issuing Bank’s capital or on the capital of such Lender’s or the Issuing Bank’s holding company, if any, as   a consequence of this Agreement, the Commitments of, or the Loans made by, or participations in Letters   of Credit or Swingline Loans held by, such Lender, or the Letters of Credit issued by the Issuing Bank, to   a level below that which such Lender or the Issuing Bank or such Lender’s or the Issuing Bank’s holding   company could have achieved but for such Change in Law (taking into consideration such Lender’s or the   Issuing Bank’s policies and the policies of such Lender’s or the Issuing Bank’s holding company with   respect to capital adequacy and liquidity), then, upon the written notice by such Lender to the Borrower   Representative with a reasonably detailed explanation thereof, from time to time the Borrowers will pay to   such Lender or the Issuing Bank, as the case may be, such additional amount or amounts as will compensate   such Lender or the Issuing Bank or such Lender’s or the Issuing Bank’s holding company for any such   reduction actually suffered.          (c)   A certificate of a Lender or the Issuing Bank setting forth the amount or amounts necessary   to compensate such Lender or the Issuing Bank or its holding company, as the case may be, as specified in   clause (a) or (b) of this Section, together with reasonably detailed explanations as required in such clauses,   shall  be  delivered  to  the  Borrower  Representative  and  shall  be  conclusive  absent  manifest  error.  The   Borrowers shall pay such Lender or the Issuing Bank, as the case may be, the amount shown as due on any   such certificate within ten (10) Business Days after receipt thereof.          (d)   Failure or delay on the part of any Lender or the Issuing Bank to demand compensation   pursuant to this Section shall not constitute a waiver of such Lender’s or the Issuing Bank’s right to demand   such compensation; provided that the Borrowers shall not be required to compensate a Lender or the Issuing   Bank pursuant to this Section for any increased costs or reductions incurred more than 270 days prior to the   date that such Lender or the Issuing Bank, as the case may be, notifies the Borrower Representative of the   Change in Law giving rise to such increased costs or reductions and of such Lender’s or the Issuing Bank’s   intention to claim compensation therefor; provided further that, if the Change in Law giving rise to such   increased costs or reductions is retroactive, then the 270-day period referred to above shall be extended to   include the period of retroactive effect thereof.    DB1/ 102580159.10                      53  

 

       SECTION 2.16  Break Funding Payments.  In the event of (a) the payment of any principal of any   Eurodollar Loan other than on the last day of an Interest Period applicable thereto (including as a result of   an Event of Default or as a result of any prepayment pursuant to Section 2.11), (b) the conversion of any   Eurodollar Loan other than on the last day of the Interest Period applicable thereto, (c) the failure to borrow,   convert, continue or prepay any Eurodollar Loan on the date specified in any notice delivered pursuant   hereto  (regardless  of  whether  such  notice  may  be  revoked  under  Section  2.09(d)  and  is  revoked  in   accordance therewith), or (d) the assignment of any Eurodollar Loan other than on the last day of the Interest   Period applicable thereto as a result of a request by the Borrower Representative pursuant to Section 2.19   or 9.02(d), then, in any such event, the Borrowers shall compensate each Lender for the loss, cost and   expense attributable to such event.  In the case of a Eurodollar Loan, such loss, cost or expense to any   Lender shall be deemed to include an amount determined by such Lender to be the excess, if any, of (i) the   amount of interest which would have accrued on the principal amount of such Eurodollar Loan had such   event not occurred, at the Adjusted LIBO Rate that would have been applicable to such Eurodollar Loan,   for the period from the date of such event to the last day of the then current Interest Period therefor (or, in   the case of a failure to borrow, convert or continue, for the period that would have been the Interest Period   for such Eurodollar Loan), over (ii) the amount of interest which would accrue on such principal amount   for such period at the interest rate which such Lender would bid were it to bid, at the commencement of   such period, for dollar deposits of a comparable amount and period from other banks in the eurodollar   market.  A certificate of any Lender setting forth any amount or amounts (together with reasonably detailed   explanations supporting such amount or amounts) that such Lender is entitled to receive pursuant to this   Section shall be delivered to the Borrower Representative and shall be conclusive absent manifest error.    The Borrowers shall pay such Lender the amount shown as due on any such certificate within ten (10)   Business Days after receipt thereof.          SECTION 2.17  Withholding of Taxes; Gross-Up.          (a)   Payments Free of Taxes.  Any and all payments by or on account of any obligation of any   Loan Party under any Loan Document shall be made without deduction or withholding for any Taxes,   except as required by applicable law.  If any applicable law (as determined in the good faith discretion of   an applicable withholding agent) requires the deduction or withholding of any Tax from any such payment   by a withholding agent, then the applicable withholding agent shall be entitled to make such deduction or   withholding  and  shall  timely  pay  the  full  amount  deducted  or  withheld  to  the  relevant  Governmental   Authority in accordance with applicable law and, if such Tax is an Indemnified Tax, then the sum payable   by the applicable Loan Party shall be increased as necessary so that after such deduction or withholding has   been made (including such deductions and withholdings applicable to additional sums payable under this   Section 2.17) the applicable Recipient receives an amount equal to the sum it would have received had no   such deduction or withholding been made.          (b)   Payment of Other Taxes by the Loan Parties.  The Loan Parties shall timely pay to the   relevant Governmental Authority in accordance with applicable law, or at the option of the Administrative   Agent timely reimburse it for, Other Taxes.          (c)   Evidence of Payment.  As soon as practicable after any payment of Taxes by any Loan   Party  to  a  Governmental  Authority  pursuant  to  this  Section  2.17,  such  Loan  Party  shall  deliver  to  the   Administrative Agent a certified copy of a receipt issued by such Governmental Authority evidencing such   payment,  a  copy  of  the  return  reporting  such  payment  or  other  evidence  of  such  payment  reasonably   satisfactory to the Administrative Agent.          (d)   Indemnification  by  the  Loan  Parties.   The  Loan  Parties  shall  jointly  and  severally   indemnify each Recipient, within ten (10) Business Days after written demand therefor, for the full amount   of any Indemnified Taxes (including Indemnified Taxes imposed or asserted on or attributable to amounts   DB1/ 102580159.10                      54  

 

 payable under this Section) payable or paid by such Recipient or required to be withheld or deducted from   a payment to such Recipient and any reasonable expenses arising therefrom or with respect thereto, whether   or not such Indemnified Taxes were correctly or legally imposed or asserted by the relevant Governmental   Authority.  A certificate as to the amount of such payment or liability delivered to any Loan Party by a   Lender (with a copy to the Administrative Agent), or by the Administrative Agent on its own behalf or on   behalf of a Lender (together with a copy of the statement issued by the relevant Governmental Authority,   if available), shall be conclusive absent manifest error.          (e)   Indemnification by the Lenders.  Each Lender shall severally indemnify the Administrative   Agent,  within  ten  (10)  Business  Days  after  written  demand  therefor,  for  (i)  any  Indemnified  Taxes   attributable to such Lender (but only to the extent that any Loan Party has not already indemnified the   Administrative Agent for such Indemnified Taxes and without limiting the obligation of the Loan Parties   to do so), (ii) any Taxes attributable to such Lender’s failure to comply with the provisions of Section   9.04(c) relating to the maintenance of a Participant Register and (iii) any Excluded Taxes attributable to   such Lender, in each case, that are payable or paid by the Administrative Agent in connection with any   Loan Document, and any reasonable expenses arising therefrom or with respect thereto, whether or not   such  Taxes  were  correctly  or  legally  imposed  or  asserted  by  the  relevant  Governmental  Authority.   A   certificate as to the amount of such payment or liability delivered to any Lender by the Administrative   Agent shall be conclusive absent manifest error.  Each Lender hereby authorizes the Administrative Agent   to set off and apply any and all amounts at any time owing to such Lender under any Loan Document or   otherwise payable by the Administrative Agent to such Lender from any other source against any amount   due to the Administrative Agent under this clause (e).          (f)   Status of Lenders.                (i)   Any Lender that is entitled to an exemption from or reduction of withholding Tax         with  respect  to  payments  made  under  any  Loan  Document  shall  deliver  to  the  Borrower         Representative and the Administrative Agent, at the time or times reasonably requested by the         Borrower  Representative  or  the  Administrative  Agent,  such  properly  completed  and  executed         documentation reasonably requested by the Borrower Representative or the Administrative Agent         as will permit such payments to be made without withholding or at a reduced rate of withholding.          In  addition,  any  Lender,  if  reasonably  requested  by  the  Borrower  Representative  or  the         Administrative  Agent,  shall  deliver  such  other  documentation  prescribed  by  applicable  law  or         reasonably requested by the Borrower Representative or the Administrative Agent as will enable         the Borrowers or the Administrative Agent to determine whether or not such Lender is subject to         backup  withholding  or  information  reporting  requirements.   Notwithstanding  anything  to  the         contrary  in  the  preceding  two  sentences,  the  completion,  execution  and  submission  of  such         documentation (other than such documentation set forth in Section 2.17(f)(ii)(A), (ii)(B) and (ii)(D)         below) shall not be required if in the Lender’s reasonable judgment such completion, execution or         submission would subject such Lender to any material unreimbursed cost or expense or would         materially prejudice the legal or commercial position of such Lender.                (ii)  Without limiting the generality of the foregoing, in the event that any Borrower is         a U.S. Person,                      (A)   any  Lender  that  is  a  U.S.  Person  shall  deliver  to  the  Borrower               Representative and the Administrative Agent on or prior to the date on which such Lender               becomes  a  Lender  under  this  Agreement  (and  from  time  to  time  thereafter  upon  the               reasonable  request  of  the  Borrower  Representative  or  the  Administrative  Agent),  an               executed copy of IRS Form W-9 certifying that such Lender is exempt from U.S. federal               backup withholding tax;   DB1/ 102580159.10                      55  

 

                   (B)   any Foreign Lender shall, to the extent it is legally entitled to do so, deliver               to the Borrower Representative and the Administrative Agent (in such number of copies as               shall be requested by the recipient) on or prior to the date on which such Foreign Lender               becomes  a  Lender  under  this  Agreement  (and  from  time  to  time  thereafter  upon  the               reasonable  request  of  the  Borrower  Representative  or  the  Administrative  Agent),               whichever of the following is applicable:                            (1)   in the case of a Foreign Lender claiming the benefits of an income                     tax treaty to which the United States is a party (x) with respect to payments of                     interest under any Loan Document, an executed copy of IRS Form W-8BEN or                     IRS Form W-8BEN-E, as applicable, establishing an exemption from, or reduction                     of, U.S. federal withholding Tax pursuant to the “interest” article of such tax treaty                     and (y) with respect to any other applicable payments under any Loan Document,                     IRS  Form  W-8BEN  or  IRS  Form  W-8BEN-E,  as  applicable,  establishing  an                     exemption from, or reduction of, U.S. Federal withholding Tax pursuant to the                     “business profits” or “other income” article of such tax treaty;                            (2)   in the case of a Foreign Lender claiming that its extension of credit                     will generate U.S. effectively connected income, an executed copy of IRS Form                     W-8ECI;                            (3)   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                     in form and substance satisfactory to the Administrative Agent to the effect that                     such Foreign Lender is not a “bank” within the meaning of Section 881(c)(3)(A)                     of  the  Code,  a  “10  percent  shareholder”  of  a  Borrower  within  the  meaning  of                     Section 881(c)(3)(B) of the Code, or a “controlled foreign corporation” described                     in Section 881(c)(3)(C) of the Code (a “U.S. Tax Compliance Certificate”) and (y)                     an executed copy of IRS Form W-8BEN or IRS Form W-8BEN-E, as applicable;                     or                            (4)   to  the  extent  a  Foreign  Lender  is  not  the  beneficial  owner,  an                     executed copy of IRS Form W-8IMY, accompanied by IRS Form W-8ECI, IRS                     Form W-8BEN or IRS Form W-8BEN-E, as applicable, a U.S. Tax Compliance                     Certificate in form and substance satisfactory to the Administrative Agent, IRS                     Form W-9, and/or other certification documents from each beneficial owner, as                     applicable; provided that if the Foreign Lender is a partnership and one or more                     direct or indirect partners of such Foreign Lender are claiming the portfolio interest                     exemption, such Foreign Lender may provide a U.S. Tax Compliance Certificate                     in form and substance satisfactory to the Administrative Agent on behalf of each                     such direct and indirect partner;                      (C)   any Foreign Lender shall, to the extent it is legally entitled to do so, deliver               to the Borrower Representative and the Administrative Agent (in such number of copies as               shall be requested by the recipient) on or prior to the date on which such Foreign Lender               becomes  a  Lender  under  this  Agreement  (and  from  time  to  time  thereafter  upon  the               reasonable request of the Borrower Representative or the Administrative Agent), executed               copies of any other form prescribed by applicable law as a basis for claiming exemption               from or a reduction in U.S. federal withholding Tax, duly completed, together with such               supplementary  documentation  as  may  be  prescribed  by  applicable  law  to  permit  the    DB1/ 102580159.10                      56  

 

             Borrowers or the Administrative Agent to determine the withholding or deduction required               to be made; and                      (D)   if a payment made to a Lender under any Loan Document would be subject               to U.S. Federal withholding Tax imposed by FATCA if such Lender were to fail to comply               with  the  applicable  reporting  requirements  of  FATCA  (including  those  contained  in               Section 1471(b) or 1472(b) of the Code, as applicable), such Lender shall deliver to the               Borrower Representative and the Administrative Agent at the time or times prescribed by               law and at such time or times reasonably requested by the Borrower Representative or the               Administrative  Agent  such  documentation  prescribed  by  applicable  law  (including  as               prescribed by Section 1471(b)(3)(C)(i) of the Code) and such additional documentation               reasonably requested by the Borrower Representative or the Administrative Agent as may               be  necessary  for  the  Borrowers  and  the  Administrative  Agent  to  comply  with  their               obligations  under  FATCA  and  to  determine  that  such  Lender  has  complied  with  such               Lender’s obligations under FATCA or to determine the amount to deduct and withhold               from such payment.  Solely for purposes of this clause (D), “FATCA” shall include any               amendments made to FATCA after the date of this Agreement.          Each Lender agrees that if any form or certification it previously delivered expires or becomes   obsolete  or  inaccurate  in  any  respect,  it  shall  update  such  form  or  certification  or  promptly  notify  the   Borrower Representative and the Administrative Agent in writing of its legal inability to do so.          (g)   Treatment of Certain Refunds.  If any party determines, in its sole discretion exercised in   good faith, that it has received a refund of any Taxes as to which it has been indemnified pursuant to this   Section  (including  by  the  payment  of  additional  amounts  pursuant  to  this  Section),  it  shall  pay  to  the   indemnifying party an amount equal to such refund (but only to the extent of indemnity payments made   under this Section with respect to the Taxes giving rise to such refund), net of all reasonable out-of-pocket   expenses (including Taxes) of such indemnified party and without interest (other than any interest paid by   the relevant Governmental Authority with respect to such refund).  Such indemnifying party, upon the   request of such indemnified party, shall repay to such indemnified party the amount paid over pursuant to   this  clause  (g)  (plus  any  penalties,  interest  or  other  charges  imposed  by  the  relevant  Governmental   Authority) in the event that such indemnified party is required to repay such refund to such Governmental   Authority.  Notwithstanding anything to the contrary in this clause (g), in no event will the indemnified   party be required to pay any amount to an indemnifying party pursuant to this clause (g) the payment of   which would place the indemnified party in a less favorable net after-Tax position than the indemnified   party would have been in if the Tax subject to indemnification and giving rise to such refund had not been   deducted, withheld or otherwise imposed and the indemnification payments or additional amounts giving   rise to such refund had never been paid.  This clause (g) shall not be construed to require any indemnified   party  to  make  available  its  Tax  returns  (or  any  other  information  relating  to  its  Taxes  that  it  deems   confidential) to the indemnifying party or any other Person.          (h)   Survival.   Each  party’s  obligations  under  this  Section  shall  survive  the  resignation  or   replacement of the Administrative Agent or any assignment of rights by, or the replacement of, a Lender,   the termination of the Commitments and the repayment, satisfaction or discharge of all obligations under   any Loan Document (including the Payment in Full of the Secured Obligations).          (i)   Defined Terms.  For purposes of this Section 2.17, the term “Lender” includes any Issuing   Bank and the term “applicable law” includes FATCA.          SECTION 2.18  Payments Generally; Allocation of Proceeds; Sharing of Setoffs.    DB1/ 102580159.10                      57  

 

       (a)   The Borrowers shall make each payment required to be made by them hereunder (whether   of principal, interest, fees or reimbursement of LC Disbursements, or of amounts payable under Section   2.15, 2.16 or 2.17, or otherwise) prior to 2:00 p.m., Chicago time, on the date when due, in immediately   available funds, without setoff, recoupment or counterclaim.  Any amounts received after such time on any   date may, in the discretion of the Administrative Agent, be deemed to have been received on the next   succeeding Business Day for purposes of calculating interest thereon.  All such payments shall be made to   the Administrative Agent at its offices at 10 South Dearborn Street, Floor L2, Chicago, Illinois, except   payments to be made directly to the Issuing Bank or Swingline Lender as expressly provided herein and   except that payments pursuant to Sections 2.15, 2.16, 2.17 and 9.03 shall be made directly to the Persons   entitled thereto.  The Administrative Agent shall distribute any such payments received by it for the account   of  any  other  Person  to  the  appropriate  recipient  promptly  following  receipt  thereof.   Unless  otherwise   provided for herein, if any payment hereunder shall be due on a day that is not a Business Day, the date for   payment shall be extended to the next succeeding Business Day, and, in the case of any payment accruing   interest, interest thereon shall be payable for the period of such extension.  All payments hereunder shall be   made in dollars.          (b)   Any proceeds of Collateral received by the Administrative Agent (i) not constituting either   (A) a specific payment of principal, interest, fees or other sum payable under the Loan Documents (which   shall be applied as specified by the Borrowers), (B) a mandatory prepayment (which shall be applied in   accordance with Section 2.11) or (C) amounts to be applied from the Collection Account when full cash   dominion is in effect (which shall be applied in accordance with Section 2.10(b)) or (ii) after an Event of   Default has occurred and is continuing and the Administrative Agent so elects or the Required Lenders so   direct, shall be applied ratably first, to pay any fees, indemnities, or expense reimbursements then due to   the Administrative Agent and the Issuing Bank from the Borrowers (other than in connection with Banking   Services Obligations or Swap Agreement Obligations), second, to pay any fees, indemnities, or expense   reimbursements  then  due  to  the  Lenders  from  the  Borrowers  (other  than  in  connection  with  Banking   Services  Obligations  or  Swap  Agreement  Obligations),  third,  to  pay  interest  due  in  respect  of  the   Overadvances and Protective Advances, fourth, to pay the principal of the Overadvances and Protective   Advances,  fifth,  to  pay  interest  then  due  and  payable  on  the  Loans  (other  than  the  Overadvances  and   Protective Advances) ratably, sixth, to prepay principal on the Loans (other than the Overadvances and   Protective Advances) and unreimbursed LC Disbursements and to pay any amounts owing in respect of   Swap Agreement Obligations up to and including the amount most recently provided to the Administrative   Agent  pursuant to  Section  2.22, for  which  Reserves have  been established, ratably, seventh, to  pay  an   amount  to  the  Administrative  Agent  equal  to  one  hundred  three  percent  (103%)  of  the  aggregate  LC   Exposure, to be held as cash collateral for such Obligations, eighth, to payment of any amounts owing in   respect of Banking Services Obligations and Swap Agreement Obligations up to and including the amount   most recently provided to the Administrative Agent pursuant to Section 2.22 and to the extent not paid   pursuant  to  clause  sixth  above,  and  ninth,  to  the  payment  of  any  other  Secured  Obligation  due  to  the   Administrative Agent or any Lender by the Borrowers.  Notwithstanding the foregoing amounts received   from  any  Loan  Party  shall  not  be  applied  to  any  Excluded  Swap  Obligation  of  such  Loan  Party.    Notwithstanding anything to the contrary contained in this Agreement, unless so directed by the Borrower   Representative, or unless a Default is in existence, neither the Administrative Agent nor any Lender shall   apply any payment which it receives to any Eurodollar Loan of a Class, except (x) on the expiration date   of  the  Interest  Period  applicable  thereto  or  (y)  in  the  event,  and  only  to  the  extent,  that  there  are  no   outstanding CBFR Loans of the same Class and, in any such event, the Borrowers shall pay the break   funding payment required in accordance with Section 2.16.  The Administrative Agent and the Lenders   shall have the continuing and exclusive right to apply and reverse and reapply any and all such proceeds   and payments to any portion of the Secured Obligations.          (c)   At  the  election  of  the  Administrative  Agent,  all  payments  of  principal,  interest,  LC   Disbursements, fees, premiums, reimbursable expenses (including, without limitation, all reimbursement   DB1/ 102580159.10                      58  

 

 for fees, costs and expenses pursuant to Section 9.03), and other sums payable under the Loan Documents,   may be paid from the proceeds of Borrowings made hereunder whether made following a request by the   Borrower Representative pursuant to Section 2.03 or a deemed request as provided in this Section or may   be deducted from any deposit account of any Borrower maintained with the Administrative Agent.  The   Borrowers hereby irrevocably authorize (i) the Administrative Agent to make a Borrowing for the purpose   of paying each payment of principal, interest and fees as it becomes due hereunder or any other amount due   under the Loan Documents and agrees that all such amounts charged shall constitute Loans (including   Swingline Loans and Overadvances, but such a Borrowing may only constitute a Protective Advance if it   is to reimburse costs, fees and expenses as described in Section 9.03) and that all such Borrowings shall be   deemed  to  have  been  requested  pursuant  to  Section  2.03,  2.04  or  2.05,  as  applicable,  and  (ii)  the   Administrative Agent to charge any deposit account of any Borrower maintained with the Administrative   Agent for each payment of principal, interest and fees as it becomes due hereunder or any other amount due   under the Loan Documents.          (d)   If, except as otherwise expressly provided herein, any Lender shall, by exercising any right   of setoff or counterclaim or otherwise, obtain payment in respect of any principal of or interest on any of   its Loans or participations in LC Disbursements resulting in such Lender receiving payment of a greater   proportion of the aggregate amount of its Loans and participations in LC Disbursements and Swingline   Loans and accrued interest thereon than the proportion received by any other similarly situated Lender, then   the Lender receiving such greater proportion shall purchase (for cash at face value) participations in the   Loans and participations in LC Disbursements and Swingline Loans of other Lenders to the extent necessary   so that the benefit of all such payments shall be shared by all such Lenders ratably in accordance with the   aggregate amount of principal of and accrued interest on their respective Loans and participations in LC   Disbursements and Swingline Loans; provided that (i) if any such participations are purchased and all or   any portion of the payment giving rise thereto is recovered,  such participations shall be rescinded and the   purchase  price  restored  to  the  extent  of  such  recovery,  without  interest,  and  (ii)  the  provisions  of  this   paragraph  shall  not  be  construed  to  apply  to  any  payment  made  by  the  Borrowers  pursuant  to  and  in   accordance with the express terms of this Agreement or any payment obtained by a Lender as consideration   for the assignment of or sale of a participation in any of its Loans or participations in LC Disbursements or   Swingline Loans to any assignee or participant, other than to the Borrowers or any Subsidiary or Affiliate   thereof (as to which the provisions of this paragraph shall apply).  Each Borrower consents to the foregoing   and  agrees,  to  the  extent  it  may  effectively  do  so  under  applicable  law,  that  any  Lender  acquiring  a   participation pursuant to the foregoing arrangements may exercise against such Borrower rights of setoff   and counterclaim with respect to such participation as fully as if such Lender were a direct creditor of such   Borrower in the amount of such participation.          (e)   Unless  the  Administrative  Agent  shall  have  received  notice  from  the  Borrower   Representative prior to the date on which any payment is due to the Administrative Agent for the account   of  the  Lenders  or  the  Issuing  Bank  hereunder  that  the  Borrowers  will  not  make  such  payment,  the   Administrative Agent may assume that the Borrowers have made such payment on such date in accordance   herewith and may, in reliance upon such assumption, distribute to the Lenders or the Issuing Bank, as the   case may be, the amount due.  In such event, if the Borrowers have not in fact made such payment, then   each of the Lenders or the Issuing Bank, as the case may be, severally agrees to repay to the Administrative   Agent forthwith on demand the amount so distributed to such Lender or Issuing Bank with interest thereon,   for each day from and including the date such amount is distributed to it to but excluding the date of payment   to the Administrative Agent, at the greater of the NYFRB Rate and a rate determined by the Administrative   Agent in accordance with banking industry rules on interbank compensation.          (f)   The  Administrative  Agent  may from time  to  time  provide  the  Borrowers  with  account   statements  or  invoices  with  respect  to  any  of  the  Secured  Obligations  (the  “Statements”).   The   Administrative Agent is under no duty or obligation to provide Statements, which, if provided, will be   DB1/ 102580159.10                      59  

 

 solely for the Borrowers’ convenience.  Statements may contain estimates of the amounts owed during the   relevant billing period, whether of principal, interest, fees or other Secured Obligations.  If the Borrowers   pay the full amount indicated on a Statement on or before the due date indicated on such Statement, the   Borrowers shall not be in default of payment with respect to the billing period indicated on such Statement;   provided, that acceptance by the Administrative Agent, on behalf of the Lenders, of any payment that is   less than the total amount actually due at that time (including but not limited to any past due amounts) shall   not constitute a waiver of the Administrative Agent’s or the Lenders’ right to receive payment in full at   another time.          SECTION 2.19  Mitigation Obligations; Replacement of Lenders.          (a)   If any Lender requests compensation under Section 2.15, or if the Borrowers are required   to pay any Indemnified Taxes or additional amounts to any Lender or any Governmental Authority for the   account of any Lender pursuant to Section 2.17, then such Lender shall use reasonable efforts to designate   a different lending office for funding or booking its Loans hereunder or to assign its rights and obligations   hereunder  to  another  of  its  offices,  branches  or  affiliates,  if,  in  the  judgment  of  such  Lender,  such   designation or assignment (i) would eliminate or reduce amounts payable pursuant to Section 2.15 or 2.17,   as the case may be, in the future and (ii) would not subject such Lender to any unreimbursed cost or expense   and  would  not  otherwise  be  disadvantageous  to  such  Lender.   The  Borrowers  hereby  agree  to  pay  all   reasonable  costs  and  expenses  incurred  by  any  Lender  in  connection  with  any  such  designation  or   assignment.          (b)   If any Lender requests compensation under Section 2.15, or if the Borrowers are required   to pay any Indemnified Taxes or additional amounts to any Lender or any Governmental Authority for the   account of any Lender pursuant to Section 2.17, or if any Lender becomes a Defaulting Lender, then the   Borrowers may, at their 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 Section 9.04), all its interests, rights (other than its existing rights to payments   pursuant to Section 2.15 or 2.17) and obligations under this Agreement and other Loan Documents to an   assignee that shall assume such obligations (which assignee may be another Lender, if a Lender accepts   such  assignment);  provided  that  (i)  the  Borrowers  shall  have  received  the  prior  written  consent  of  the   Administrative Agent (and in circumstances where its consent would be required under Section 9.04, the   Issuing Bank and the Swingline Lender), which consent shall not unreasonably be withheld, (ii) such Lender   shall  have  received  payment  of  an  amount  equal  to  the  outstanding  principal  of  its  Loans  and  funded   participations in LC Disbursements and Swingline Loans, accrued interest thereon, accrued fees and all   other amounts payable to it hereunder, from the assignee (to the extent of such outstanding principal and   accrued interest and fees) or the Borrowers (in the case of all other amounts) and (iii) in the case of any   such assignment resulting from a claim for compensation under Section 2.15 or payments required to be   made  pursuant  to  Section  2.17,  such  assignment  will  result  in  a  reduction  in  such  compensation  or   payments.  A Lender shall not be required to make any such assignment and 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 party hereto agrees that an assignment required pursuant   to  this  clause  may  be  effected  pursuant  to  an  Assignment  and  Assumption  executed  by  the  Borrower   Representative,  the  Administrative  Agent  and  the  assignee  (or,  to  the  extent  applicable,  an  agreement   incorporating an Assignment and Assumption by reference pursuant to an Approved Electronic Platform   as to which the Administrative Agent and such parties are participants), and the Lender required to make   such assignment need not be a party thereto in order for such assignment to be effective and shall be deemed   to have consented to an be bound by the terms thereof; provided that, following the effectiveness of any   such  assignment,  the  other  parties  to  such  assignment  agree  to  execute  and  deliver  such  documents   necessary to evidence such assignment as reasonably requested by the applicable Lender, provided that any   such documents shall be without recourse to or warranty by the parties thereto.   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       SECTION 2.20  Defaulting Lenders.  Notwithstanding any provision of this Agreement to the   contrary, if any Lender becomes a Defaulting Lender, then the following provisions shall apply for so long   as such Lender is a Defaulting Lender:          (a)   fees shall cease to accrue on the unfunded portion of the Revolving Commitment of such   Defaulting Lender pursuant to Section 2.12(a);          (b)   any payment of principal, interest, fees or other amounts received by the Administrative   Agent for the account of such Defaulting Lender (whether voluntary or mandatory, at maturity, pursuant to   Section 2.18(b) or otherwise) or received by the Administrative Agent from a Defaulting Lender pursuant   to Section 9.08 shall be applied at such time or times as may be determined by the Administrative Agent as   follows: first, to the payment of any amounts owing by such Defaulting Lender to the Administrative Agent   hereunder; second, to the payment on a pro rata basis of any amounts owing by such Defaulting Lender to  any  Issuing  Bank  or  Swingline  Lender  hereunder; third,  to  cash  collateralize  the  Issuing  Bank’s  LC   Exposure with respect to such Defaulting Lender in accordance with this Section; fourth, as the Borrower   Representative may request (so long as no Default or Event of Default exists), to the funding of any Loan   in  respect  of  which  such  Defaulting  Lender  has  failed  to  fund  its  portion  thereof  as  required  by  this   Agreement, as determined by the Administrative Agent; fifth, if so determined by the Administrative Agent   and the Borrower Representative, to be held in a deposit account and released pro rata in order to (x) satisfy   such Defaulting Lender’s potential future funding obligations with respect to Loans under this Agreement   and (y) cash collateralize the Issuing Bank’s future LC Exposure with respect to such Defaulting Lender   with respect to future Letters of Credit issued under this Agreement, in accordance with this Section; sixth,   to the payment of any amounts owing to the Lenders, the Issuing Bank or Swingline Lender as a result of   any judgment of a court of competent jurisdiction obtained by any Lender, the Issuing Bank or Swingline   Lender against such Defaulting Lender as a result of such Defaulting Lender’s breach of its obligations   under this Agreement or under any other Loan Document; seventh, so long as no Default or Event of Default   exists, to the payment of any amounts owing to the Borrowers as a result of any judgment of a court of   competent  jurisdiction  obtained  by  any  Borrower  against  such  Defaulting  Lender  as  a  result  of  such   Defaulting Lender’s breach of its obligations under this Agreement or under any other Loan Document;   and eighth,  to  such  Defaulting  Lender  or  as  otherwise  directed  by  a  court  of  competent  jurisdiction;   provided that if (x) such payment is a payment of the principal amount of any Loans or LC Disbursements   in respect of which such Defaulting Lender has not fully funded its appropriate share, and (y) such Loans   were made or the related Letters of Credit were issued at a time when the conditions set forth in Section   4.02  were  satisfied  or  waived,  such  payment  shall  be  applied  solely  to  pay  the  Loans  of,  and  LC   Disbursements owed to, all non-Defaulting Lenders on a pro rata basis prior to being applied to the payment   of any Loans of, or LC Disbursements owed to, such Defaulting Lender until such time as all Loans and   funded  and  unfunded  participations  in  the  Borrowers’  obligations  corresponding  to  such  Defaulting   Lender’s  LC  Exposure  and  Swingline  Loans  are  held  by  the  Lenders  pro  rata  in  accordance  with  the   Commitments without giving effect to clause (d) below.  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 Section shall be deemed paid to and redirected by such   Defaulting Lender, and each Lender irrevocably consents hereto;          (c)   such Defaulting Lender shall not have the right to vote on any issue on which voting is   required  (other  than  to  the  extent  expressly  provided  in  Section  9.02(b))  and  the  Commitment  and   Revolving Exposure of such Defaulting Lender shall not be included in determining whether the Required   Lenders have taken or may take any action hereunder (including any consent to any amendment, waiver or   other modification pursuant to Section 9.02) or under any other Loan Document; provided, that, except as   otherwise provided in Section 9.02, this clause (c) shall not apply to the vote of a Defaulting Lender in the   case of an amendment, waiver or other modification requiring the consent of such Lender or each Lender   directly affected thereby;   DB1/ 102580159.10                      61  

 

       (d)   if  any  Swingline  Exposure  or  LC  Exposure  exists  at  the  time  a  Lender  becomes  a   Defaulting Lender then:                (i)   all or any part of the Swingline Exposure and LC Exposure of such Defaulting         Lender shall be reallocated among the non-Defaulting Lenders in accordance with their respective         Applicable  Percentages  but  only  to  the  extent  that  such  reallocation  does  not,  as  to  any  non-        Defaulting  Lender,  cause  such  non-Defaulting  Lender’s  Revolving  Exposure  to  exceed  its         Revolving Commitment;                (ii)  if the reallocation described in clause (i) above cannot, or can only partially, be         effected, the Borrowers shall within one (1) Business Day following notice by the Administrative         Agent (x) first, prepay such Swingline Exposure and (y) second, cash collateralize, for the benefit         of the Issuing Bank, the Borrowers’ obligations corresponding to such Defaulting Lender’s LC         Exposure (after giving effect to any partial reallocation pursuant to clause (i) above) in accordance         with the procedures set forth in Section 2.06(j) for so long as such LC Exposure is outstanding;                (iii) if the Borrowers cash collateralize any portion of such Defaulting Lender’s LC         Exposure pursuant to clause (ii) above, the Borrowers shall not be required to pay any fees to such         Defaulting  Lender  pursuant  to  Section  2.12(b)  with  respect  to  such  Defaulting  Lender’s  LC         Exposure during the period such Defaulting Lender’s LC Exposure is cash collateralized;                (iv)  if the LC Exposure of the non-Defaulting Lenders is reallocated pursuant to clause         (i) above, then the fees payable to the Lenders pursuant to Sections 2.12(a) and 2.12(b) shall be         adjusted in accordance with such non-Defaulting Lenders’ Applicable Percentages; and                (v)   if all or any portion of such Defaulting Lender’s LC Exposure is neither reallocated         nor cash collateralized pursuant to clause (i) or (ii) above, then, without prejudice to any rights or         remedies of the Issuing Bank or any other Lender hereunder, all letter of credit fees payable under         Section  2.12(b)  with respect to  such  Defaulting  Lender’s  LC Exposure  shall  be  payable  to the         Issuing Bank until and to the extent that such LC Exposure is reallocated and/or cash collateralized;         and          (e)   so long as such Lender is a Defaulting Lender, the Issuing Bank shall not be required to   issue, amend, renew, extend or increase any Letter of Credit, unless it is satisfied that such Defaulting   Lender’s then outstanding LC Exposure will be 100% covered by the Commitments of the non-Defaulting   Lenders and/or cash collateral will be provided by the Borrowers in accordance with Section 2.20(d), and   LC  Exposure  related  to  any  newly  issued  or  increased  Letter  of  Credit  shall  be  allocated  among  non-  Defaulting Lenders in a manner consistent with Section 2.20(d)(i) (and such Defaulting Lender shall not   participate therein).          (f)   If (i) a Bankruptcy Event or a Bail-In Action with respect to the Parent of any Lender shall   occur following the date hereof and for so long as such event shall continue or (ii) the Swingline Lender or   the Issuing Bank has a good faith belief that any Lender has defaulted in fulfilling its obligations under one   or more other agreements in which such Lender commits to extend credit, the Swingline Lender shall not   be required to fund any Swingline Loan and the Issuing Bank shall not be required to issue, amend or   increase any Letter of Credit, unless the Swingline Lender or the Issuing Bank, as the case may be, shall   have entered into arrangements with the Borrowers or such Lender, satisfactory to the Swingline Lender or   the Issuing Bank, as the case may be, to defease any risk  to it in respect of such Lender hereunder          In the event that each of the Administrative Agent, the Borrowers, the Swingline Lender and the   Issuing Bank agrees that a Defaulting Lender has adequately remedied all matters that caused such Lender   DB1/ 102580159.10                      62  

 

 to be a Defaulting Lender, then the Swingline Exposure and LC Exposure of the Lenders shall be readjusted   to reflect the inclusion of such Lender’s Revolving Commitment and on the date of such readjustment such   Lender shall purchase at par such of the Loans of the other Lenders (other than Swingline Loans) as the   Administrative Agent shall determine may be necessary in order for such Lender to hold such Loans in   accordance with its Applicable Percentage          SECTION 2.21  Returned  Payments.   If  after  receipt  of  any  payment  which  is  applied  to  the   payment of all or any part of the Obligations (including a payment effected through exercise of a right of   setoff), the Administrative Agent or any Lender is for any reason compelled to surrender such payment or   proceeds to any Person because such payment or application of proceeds is invalidated, declared fraudulent,   set aside, determined to be void or voidable as a preference, impermissible setoff, or a diversion of trust   funds, or for any other reason (including pursuant to any settlement entered into by the Administrative   Agent or such Lender in its discretion), then the Obligations or part thereof intended to be satisfied shall be   revived and continued and this Agreement shall continue in full force as if such payment or proceeds had   not been received by the Administrative Agent or such Lender.  The provisions of this Section 2.21 shall   be  and  remain  effective  notwithstanding  any  contrary  action  which  may  have  been  taken  by  the   Administrative  Agent  or  any  Lender  in  reliance  upon  such  payment  or  application  of  proceeds.   The   provisions of this Section 2.21 shall survive the termination of this Agreement.          SECTION 2.22  Banking  Services  and  Swap  Agreements.   Each  Lender  or  Affiliate  thereof   providing Banking Services (excluding Lease Financing) for, or having Swap Agreements with, any Loan   Party or any Subsidiary or Affiliate of a Loan Party shall deliver to the Administrative Agent, promptly   after entering into such Banking Services or Swap Agreements, written notice setting forth the aggregate   amount  of  all  Banking  Services  Obligations  and  Swap  Agreement  Obligations  of  such  Loan  Party  or   Subsidiary or Affiliate thereof to such Lender or Affiliate (whether matured or unmatured, absolute or   contingent).  In addition, each such Lender or Affiliate thereof shall deliver to the Administrative Agent,   from time to time after a significant change therein or upon a request therefor, a summary of the amounts   due or to become due in respect of such Banking Services Obligations and Swap Agreement Obligations.    The most recent information provided to the Administrative Agent shall be used in determining the amounts   to be applied in respect of such Banking Services Obligations and/or Swap Agreement Obligations pursuant   to Section 2.18(b) and which tier of the waterfall, contained in Section 2.18(b), such Banking Services   Obligations and/or Swap Agreement Obligations will be placed.                         ARTICLE III Representations and Warranties          Each Loan Party represents and warrants to the Lenders that:          SECTION 3.01  Organization; Powers.  Each Loan Party and each Subsidiary is duly organized   or formed, validly existing and in good standing under the laws of the jurisdiction of its organization, has   all requisite power and authority to carry on its business as now conducted and, except where the failure to   do so, individually or in the aggregate, could not reasonably be expected to result in a Material Adverse   Effect, is qualified to do business, and is in good standing, in every jurisdiction where such qualification is   required.          SECTION 3.02  Authorization; Enforceability.  The Transactions are within each Loan Party’s   corporate or other organizational powers and have been duly authorized by all necessary corporate or other   organizational actions and, if required, actions by equity holders.  Each Loan Document to which each Loan   Party is a party has been duly executed and delivered by such Loan Party and constitutes a legal, valid and   binding  obligation  of  such  Loan  Party,  enforceable  in  accordance  with  its  terms,  subject  to applicable   bankruptcy, insolvency, reorganization, moratorium or other laws affecting creditors’ rights generally and   subject to general principles of equity, regardless of whether considered in a proceeding in equity or at law.   DB1/ 102580159.10                      63  

 

       SECTION 3.03  Governmental Approvals; No Conflicts.  The Transactions (a) do not require any   consent or approval of, registration or filing with, or any other action by, any Governmental Authority,   except such as have been obtained or made and are in full force and effect and except for filings necessary   to perfect Liens created pursuant to the Loan Documents, (b) will not violate any Requirement of Law   applicable to any Loan Party or any Subsidiary, (c) will not violate or result in a default under any indenture,   agreement or other instrument binding upon any Loan Party or any Subsidiary or the assets of any Loan   Party or any Subsidiary, or give rise to a right thereunder to require any payment to be made by any Loan   Party or any Subsidiary, and (d) will not result in the creation or imposition of, or the requirement to create,   any Lien on any asset of any Loan Party or any Subsidiary, except Liens created pursuant to the Loan   Documents.          SECTION 3.04  Financial Condition; No Material Adverse Effect.          (a)   The Company has heretofore furnished to the Lenders its consolidated balance sheet and   statements of income, stockholders equity and cash flows (i) as of and for the fiscal year ended December   31, 2018, reported on by KPMG LLP, independent public accountants, and (ii) as of and for the fiscal month   and the portion of the fiscal year ended January 31, 2019, certified by its Financial Officer.  Such financial   statements present fairly, in all material respects, the financial position and results of operations and cash   flows of the Company and its consolidated Subsidiaries as of such dates and for such periods in accordance   with GAAP, subject to normal year-end audit adjustments and the absence of footnotes in the case of the   statements referred to in clause (ii) above.          (b)   No event, change or condition has occurred that has had, or could reasonably be expected   to have, a Material Adverse Effect, since December 31, 2018.          SECTION 3.05  Properties.          (a)   As of the date of this Agreement, Schedule 3.05(a) sets forth the address of each parcel of   real property that is owned or leased by any Loan Party.  Each of such leases and subleases is valid and   enforceable in accordance with its terms and is in full force and effect, and no default by any party to any   such lease or sublease exists.  Each of the Loan Parties and each of its Subsidiaries has good and indefeasible   title to, or valid leasehold interests in, all of its real and personal property, free of all Liens other than those   permitted by Section 6.02.          (b)   Each  Loan  Party  and  each  Subsidiary  owns,  or  is  licensed  to  use,  all  trademarks,   tradenames,  copyrights,  patents  and  other  intellectual  property  necessary  to  its  business  as  currently   conducted, the use thereof by each Loan Party, each Subsidiary does not infringe in any material respect   upon the rights of any other Person, and each Loan Party’s and each Subsidiary’s rights thereto are not   subject to any licensing agreement or similar arrangement, and a correct and complete list (other than any   intellectual  property  licensed  by  any  Loan  Party  or  its  Subsidiaries)  of  all  trademarks,  tradenames,   copyrights, patents and other owned intellectual property, as of the date of this Agreement, is set forth on   Schedule 3.05(b).          SECTION 3.06  Litigation and Environmental Matters.          (a)   There are no actions, suits or proceedings by or before any arbitrator or Governmental   Authority pending against or, to the knowledge of any Loan Party, threatened against or affecting any Loan   Party or any Subsidiary (i) as to which there is a reasonable possibility of an adverse determination and   that, if adversely determined, could reasonably be expected, individually or in the aggregate, to result in a    DB1/ 102580159.10                      64  

 

 Material Adverse Effect (other than the Disclosed Matters) or (ii) that involve any Loan Document or the   Transactions.          (b)   Except for the Disclosed Matters (i) no Loan Party or any Subsidiary has received notice   of any claim with respect to any Environmental Liability or knows of any basis for any Environmental   Liability and (ii) and except with respect to any other matters that, individually or in the aggregate, could   not reasonably be expected to result in a Material Adverse Effect, no Loan Party or any Subsidiary (A) has   failed to comply with any Environmental Law or to obtain, maintain or comply with any permit, license or   other  approval  required  under  any  Environmental  Law,  (B) has  become  subject  to  any  Environmental   Liability, (C) has received notice of any claim with respect to any Environmental Liability or (D) knows of   any basis for any Environmental Liability.          (c)   Since the date of this Agreement, there has been no change in the status of the Disclosed   Matters that, individually or in the aggregate, has resulted in, or materially increased the likelihood of, a   Material Adverse Effect.          SECTION 3.07  Compliance with Laws and Agreements; No Default.  Except where the failure   to do so, individually or in the aggregate, could not reasonably be expected to result in a Material Adverse   Effect, each Loan Party and each Subsidiary is in compliance with (i) all Requirement of Law applicable   to it or its property and (ii) all indentures, agreements and other instruments binding upon it or its property.    No Default has occurred and is continuing.          SECTION 3.08  Investment Company Status.  No Loan Party or any Subsidiary is an “investment   company” as defined in, or subject to regulation under, the Investment Company Act of 1940.          SECTION 3.09  Taxes.  Each Loan Party and each Subsidiary has timely filed or caused to be   filed all Tax returns and reports required to have been filed and has paid or caused to be paid all Taxes   required  to  have  been  paid  by  it,  except  Taxes  that  are  being  contested  in  good  faith  by  appropriate   proceedings and for which such Loan Party or such Subsidiary, as applicable, has set aside on its books   adequate reserves.  No tax liens have been filed and no claims are being asserted with respect to any such   taxes.          SECTION 3.10  ERISA.  No ERISA Event has occurred or is reasonably expected to occur that,   when taken together with all other such ERISA Events for which liability is reasonably expected to occur,   could reasonably be expected to result in a Material Adverse Effect.  The present value of all accumulated   benefit obligations under each Plan (based on the assumptions used for purposes of Statement of Financial   Accounting Standards No. 87) did not, as of the date of the most recent financial statements reflecting such   amounts, exceed the fair market value of the assets of such Plan.          SECTION 3.11  Disclosure.          (a)   The Loan Parties have disclosed to the Lenders all agreements, instruments and corporate   or other restrictions to which any Loan Party or any Subsidiary is subject, and all other matters known to   it, that, individually or in the aggregate, could reasonably be expected to result in a Material Adverse Effect.    None of the reports, financial statements, certificates or other information furnished by or on behalf of any   Loan Party or any Subsidiary to the Administrative Agent or any Lender in connection with the negotiation   of this Agreement or any other Loan Document (as modified or supplemented by other information so   furnished) contains any material misstatement of fact or omits to state any material fact necessary to make   the  statements  therein,  in the  light  of the  circumstances under  which they  were  made,  not  misleading;   provided that, with respect to projected financial information, the Loan Parties represent only that such   information  was  prepared  in  good  faith  based  upon  assumptions  believed  to  be  reasonable  at  the  time   DB1/ 102580159.10                      65  

 

 delivered and, if such projected financial information was delivered prior to the Effective Date, as of the   Effective Date.          (b)   As of the Effective Date, to the best knowledge of any Borrower, the information included   in  the  Beneficial  Ownership  Certification  provided  on  or  prior  to  the  Effective  Date  to  any  Lender  in   connection with this Agreement is true and correct in all respects.          SECTION 3.12  Material Agreements.  All material agreements and contracts (including, without   limitation, any Material Contract) to which any Loan Party or any Subsidiary is a party or is bound as of   the date of this Agreement are listed on Schedule 3.12.  No Loan Party or any Subsidiary is in default in   the performance, observance or fulfillment of any of the obligations, covenants or conditions contained in   (i) any material agreement to which it is a party or (ii) any agreement or instrument evidencing or governing   Indebtedness.          SECTION 3.13  Solvency.          (a)   Immediately after the consummation of the Transactions to occur on the Effective Date, (i)   the fair value of the assets of each Loan Party, at a fair valuation, will exceed its debts and liabilities,   subordinated, contingent or otherwise; (ii) the present fair saleable value of the property of each Loan Party   will be greater than the amount that will be required to pay the probable liability of its debts and other   liabilities, subordinated, contingent or otherwise, as such debts and other liabilities become absolute and   matured;  (iii) each  Loan  Party  will  be  able to  pay  its  debts  and  liabilities, subordinated,  contingent  or   otherwise, as such debts and liabilities become absolute and matured; and (iv) no Loan Party will have   unreasonably small capital with which to conduct the business in which it is engaged as such business is   now conducted and is proposed to be conducted after the Effective Date.          (b)   No Loan Party intends to, nor will permit any Subsidiary to, and no Loan Party believes   that it or any Subsidiary will, incur debts beyond its ability to pay such debts as they mature, taking into   account the timing of and amounts of cash to be received by it or any such Subsidiary and the timing of the   amounts  of  cash  to  be  payable  on  or  in  respect  of  its  Indebtedness  or  the  Indebtedness  of  any  such   Subsidiary.          SECTION 3.14  Insurance.  Schedule 3.14 sets forth a description of all insurance maintained by   or on behalf of the Loan Parties and their Subsidiaries as of the Effective Date.  As of the Effective Date,   all premiums in respect of such insurance have been paid.  Each Loan Party maintains, and has caused each   Subsidiary to maintain, with financially sound and reputable insurance companies, insurance on all their   real and personal property in such amounts, subject to such deductibles and self-insurance retentions and   covering such properties and risks as are adequate and customarily maintained by companies engaged in   the same or similar businesses operating in the same or similar locations.          SECTION 3.15  Capitalization  and  Subsidiaries.   Schedule  3.15  sets  forth  (a)  a  correct  and   complete list of the name and relationship to the Company and the other Loan Parties of each and all of the   Company’s Subsidiaries and the Loan Parties, (b) a true and complete listing of each class of each Loan   Party’s (other than the Company’s) authorized Equity Interests, all of which issued Equity Interests are   validly issued, outstanding, fully paid and non-assessable, and owned beneficially and of record by the   Persons identified on Schedule 3.15, and (c) the type of entity of the Company, each of its Subsidiaries, and   each other Loan Party.  All of the issued and outstanding Equity Interests owned by any Loan Party have   been (to the extent such concepts are relevant with respect to such ownership interests) duly authorized and   issued and are fully paid and non-assessable.  There are no outstanding commitments or other obligations   of any Loan Party to issue, and no options, warrants or other rights of any Person to acquire, any shares of   any class of capital stock or other equity interests of any Loan Party.   DB1/ 102580159.10                      66  

 

       SECTION 3.16  Security Interest in Collateral.  The provisions of this Agreement and the other   Loan Documents create legal and valid Liens on all of the Collateral in favor of the Administrative Agent,   for the benefit of the Secured Parties, and such Liens constitute perfected and continuing Liens on the   Collateral, securing the Secured Obligations, enforceable against the applicable Loan Party and all third   parties,  and  having  priority  over  all  other  Liens  on  the  Collateral  except  in  the  case  of  (a)  Permitted   Encumbrances, to the extent any such Permitted Encumbrances would have priority over the Liens in favor   of the Administrative Agent pursuant to any applicable law or agreement permitted hereunder and (b) Liens   perfected  only  by  possession  (including  possession  of  any  certificate  of  title)  to  the  extent  the   Administrative Agent has not obtained or does not maintain possession of such Collateral.          SECTION 3.17  Employment Matters.  As of the Effective Date, there are no strikes, lockouts or   slowdowns against any Loan Party or any Subsidiary pending or, to the knowledge of any Loan Party,   threatened.   The  hours  worked  by  and  payments  made  to  employees  of  the  Loan  Parties  and  their   Subsidiaries have not been in violation of the Fair Labor Standards Act or any other applicable Federal,   state,  local  or  foreign  law  dealing  with  such  matters.   All  payments  due  from  any  Loan  Party  or  any   Subsidiary, or for which any claim may be made against any Loan Party or any Subsidiary, on account of   wages and employee health and welfare insurance and other benefits, have been paid or accrued as a liability   on the books of such Loan Party or such Subsidiary.          SECTION 3.18  Margin Regulations.  No Loan Party is engaged and will not engage, principally   or as one of its important activities, in the business of purchasing or carrying Margin Stock, or extending   credit for the purpose of purchasing or carrying Margin Stock, and no part of the proceeds of any Borrowing   or Letter of Credit hereunder will be used to buy or carry any Margin Stock.  Following the application of   the proceeds of each Borrowing or drawing under each Letter of Credit, not more than 25% of the value of   the assets (either of any Loan Party only or of the Loan Parties and their Subsidiaries on a consolidated   basis) will be Margin Stock.          SECTION 3.19  Use of Proceeds.  The proceeds of the Loans have been used and will be used,   whether directly or indirectly as set forth in Section 5.08.          SECTION 3.20  No  Burdensome  Restrictions.   No  Loan  Party  is  subject  to  any  Burdensome   Restrictions except Burdensome Restrictions permitted under Section 6.10.          SECTION 3.21  Anti-Corruption Laws and Sanctions.  Each Loan Party has implemented and   maintains  in  effect  policies  and  procedures  designed  to  ensure  compliance  by  such  Loan  Party,  its   Subsidiaries and their respective directors, officers, employees and agents with Anti-Corruption Laws and   applicable Sanctions, and such Loan Party, its Subsidiaries and their respective officers and directors and,   to the knowledge of such Loan Party, its employees and agents, are in compliance with Anti-Corruption   Laws and applicable Sanctions in all material respects.  None of (a) any Loan Party, any Subsidiary or any   of their respective directors, officers or, to the actual knowledge of any such Loan Party or Subsidiary,   employees, or (b) to the actual knowledge of any such Loan Party or Subsidiary, any agent of such Loan   Party or any Subsidiary that will act in any capacity in connection with or benefit from the credit facility   established hereby, is a Sanctioned Person.  No Borrowing or Letter of Credit, use of proceeds, Transaction   or  other  transaction  contemplated  by  this  Agreement  or  the  other  Loan  Documents  will  violate  Anti-  Corruption Laws or applicable Sanctions.          SECTION 3.22  [Intentionally Omitted].          SECTION 3.23  Common Enterprise.  The successful operation and condition of each of the Loan   Parties is dependent on the continued successful performance of the functions of the group of the Loan    DB1/ 102580159.10                      67  

 

 Parties as a whole and the successful operation of each of the Loan Parties is dependent on the successful   performance and operation of each other Loan Party.  Each Loan Party expects to derive benefit (and its   board of directors or other governing body has determined that it may reasonably be expected to derive   benefit), directly and indirectly, from (i) successful operations of each of the other Loan Parties and (ii) the   credit extended by the Lenders to the Borrowers hereunder, both in their separate capacities and as members   of the group of companies.  Each Loan Party has determined that execution, delivery, and performance of   this Agreement and any other Loan Documents to be executed by such Loan Party is within its purpose, in   furtherance of its direct and/or indirect business interests, will be of direct and/or indirect benefit to such   Loan Party, and is in its best interest.          SECTION 3.24  EEA Financial Institutions.  No Loan Party is an EEA Financial Institution.          SECTION 3.25  Plan Assets; Prohibited Transactions.  No Loan Party or any of its Subsidiaries   is an entity deemed to hold “plan assets” (within the meaning of the Plan Asset Regulations), and neither   the execution, delivery or performance of the transactions contemplated under this Agreement, including   the making of any Loan and the issuance of any Letter of Credit hereunder, will give rise to a non-exempt   prohibited transaction under Section 406 of ERISA or Section 4975 of the Code.                                ARTICLE IV  Conditions          SECTION 4.01  Effective Date.  The obligations of the Lenders to make Loans and of the Issuing   Bank to issue Letters of Credit hereunder shall not become effective until the date on which each of the   following conditions is satisfied (or waived in accordance with Section 9.02):          (a)   Credit Agreement and Other Loan Documents.  The Administrative Agent (or its counsel)   shall have received (i) from each party hereto either (A) a counterpart of this Agreement signed on behalf   of such party or (B) written evidence satisfactory to the Administrative Agent (which may include facsimile   or other electronic transmission of a signed signature page of this Agreement) that such party has signed a   counterpart of this Agreement, (ii) either (A) a counterpart of each other Loan Document signed on behalf   of each party thereto or (B) written evidence satisfactory to the Administrative Agent (which may include   facsimile or other electronic transmission of a signed signature page thereof) that each such party has signed   a  counterpart  of  such  Loan  Document  and  (iii)  such  other  certificates,  documents,  instruments  and   agreements  as  the  Administrative  Agent  shall  reasonably  request  in  connection  with  the  transactions   contemplated by this Agreement and the other Loan Documents, including any promissory notes requested   by a Lender pursuant to Section 2.10 payable to the order of each such requesting Lender and written   opinions of the Loan Parties’ counsel, addressed to the Administrative Agent, the Issuing Bank and the   Lenders and the other Secured Parties, all in form and substance satisfactory to the Administrative Agent   and its counsel.          (b)   Financial  Statements  and  Projections.   The  Lenders  shall  have  received  (i)  audited   consolidated  financial  statements  of  the  Company  for  the  2018  fiscal  year,  (ii)  unaudited  interim   consolidated financial statements of the Company for each fiscal month and quarter ended after the date of   the latest applicable financial statements delivered pursuant to clause (i) of this paragraph as to which such   financial statements are available, and such financial statements shall not, in the reasonable judgment of   the Administrative Agent, reflect any material adverse change in the consolidated financial condition of the   Company and its Subsidiaries, as reflected in the audited, consolidated financial statements described in   clause (i) above and (iii) satisfactory projections from 2019 and through and including 2021 (prepared on   a monthly basis for the first eighteen (18) months and quarterly thereafter).          (c)   Closing  Certificates;  Certified  Certificate  of  Incorporation; Good  Standing  Certificates.    The Administrative Agent shall have received (i) a certificate of each Loan Party, dated the Effective Date   DB1/ 102580159.10                      68  

 

 and executed by its Secretary or Assistant Secretary, which shall (A) certify the resolutions of its Board of   Directors,  members  or  other  body  authorizing  the  execution,  delivery  and  performance  of  the  Loan   Documents to which it is a party, (B) identify by name and title and bear the signatures of the officers of   such  Loan  Party  authorized  to  sign  the  Loan Documents to  which  it is  a  party  and, in the case  of the   Borrower,  its  Financial  Officers,  and  (C)  contain  appropriate  attachments,  including  the  certificate  or   articles  of  incorporation  or  organization  of  each  Loan  Party  certified  by  the  relevant  authority  of  the   jurisdiction of organization of such Loan Party and a true and correct copy of its by-laws or operating,   management or partnership agreement, or other organizational or governing documents, and (ii) a good   standing certificate for each Loan Party from its jurisdiction of organization or the substantive equivalent   available in the jurisdiction of organization for each Loan Party from the appropriate governmental officer   in such jurisdiction.          (d)   No Default Certificate.  The Administrative Agent shall have received a certificate, signed   by a Financial Officer of each Borrower and each other Loan Party, dated as of the Effective Date (i) stating   that no Default has occurred and is continuing, (ii) stating that the representations and warranties contained   in the Loan Documents are true and correct as of such date, and (iii) certifying as to any other factual matters   as may be reasonably requested by the Administrative Agent.          (e)   Fees.  The Lenders and the Administrative Agent shall have received all fees required to   be  paid,  and  all  expenses  for  which  invoices  have  been  presented  (including  the  reasonable  fees  and   expenses of legal counsel), on or before the Effective Date.  All such amounts will be paid with proceeds   of Loans made on the Effective Date and will be reflected in the funding instructions given by the Borrower   Representative to the Administrative Agent on or before the Effective Date.          (f)   Lien Searches.  The Administrative Agent shall have received the results of a recent lien   search in each jurisdiction where the Loan Parties are organized and where the assets of the Loan Parties   are located, and such search shall reveal no Liens on any of the assets of the Loan Parties except for Liens   permitted by Section 6.02 or discharged on or prior to the Effective Date pursuant to a pay-off letter or   other documentation satisfactory to the Administrative Agent.          (g)   Pay-Off Letter.  The Administrative Agent shall have received satisfactory pay-off letters   for all existing Indebtedness to be repaid from the proceeds of the initial Borrowing, confirming that all   Liens upon any of the property of the Loan Parties constituting Collateral will be terminated concurrently   with such payment and all letters of credit issued or guaranteed as part of such Indebtedness shall have been   cash collateralized or supported by a Letter of Credit.          (h)   Funding Account.  The Administrative Agent shall have received a notice setting forth the   deposit  account(s)  of  the  Borrowers  (the  “Funding  Account”)  to  which  the  Administrative  Agent  is   authorized by the Borrowers to transfer the proceeds of any Borrowings requested or authorized pursuant   to this Agreement.          (i)   Customer  List.   The  Administrative  Agent  shall  have  received  a  true  and  complete   customer list for each Borrower and its Subsidiaries, which list shall state the customer’s name, mailing   address and phone number and shall be certified as true and correct by a Financial Officer of the Borrower   Representative.          (j)   Collateral Access and Control Agreements.  The Administrative Agent shall have received   (i) each Collateral Access Agreement required to be provided pursuant to Section 4.13 of the Security   Agreement and (ii) each Deposit Account Control Agreement and Securities Account Control Agreement   (each such term as defined in the Security Agreement) required to be provided pursuant to Section 4.14 of   the Security Agreement.   DB1/ 102580159.10                      69  

 

       (k)   Solvency.  The Administrative Agent shall have received a solvency certificate signed by   a Financial Officer of each of the Borrowers dated the Effective Date          (l)   Borrowing Base Certificate.  The Administrative Agent shall have received a Borrowing   Base  Certificate  (together  with  supporting  documentation  and  supplemental  reporting  required  by  the   Administrative Agent) which calculates the Borrowing Base as of a date specified by the Administrative   Agent.          (m)   Closing  Excess  Availability.   After  giving  effect  to  all  Borrowings  to  be  made  on  the   Effective Date, the issuance of any Letters of Credit on the Effective Date and the payment of all fees and   expenses due hereunder, and with all of the Loan Parties’ indebtedness, liabilities, and obligations current,   Excess Availability shall not be less than $10,000,000.          (n)   Pledged Equity Interests; Stock Powers; Pledged Notes.  The Administrative Agent shall   have  received  (i)  the  certificates  representing  the  Equity  Interests  pledged  pursuant  to  the  Security   Agreement, together with an undated stock power for each such certificate executed in blank by a duly   authorized officer of the pledgor thereof and (ii) each promissory note (if any) pledged to the Administrative   Agent pursuant to the Security Agreement endorsed (without recourse) in blank (or accompanied by an   executed transfer form in blank) by the pledgor thereof.          (o)   Filings,  Registrations  and  Recordings.   Each  document  (including  any  Uniform   Commercial Code financing statement) required by the Collateral Documents or under law or reasonably   requested by the Administrative Agent to be filed, registered or recorded in order to create in favor of the   Administrative Agent, for the benefit of itself, the Lenders and the other Secured Parties, a perfected Lien   on the Collateral described therein, prior and superior in right to any other Person (other than with respect   to Liens expressly permitted by Section 6.02), shall be in proper form for filing, registration or recordation.          (p)   [Reserved.]          (q)   [Reserved.]          (r)   Insurance.  The Administrative Agent shall have received evidence of insurance coverage   in  form,  scope,  and  substance  reasonably  satisfactory  to  the  Administrative  Agent  and  otherwise  in   compliance with the terms of Section 5.10 hereof and Section 4.12 of the Security Agreement.          (s)   Letter of Credit Application.  If a Letter of Credit is requested to be issued on the Effective   Date,  the  Administrative  Agent  shall  have  received  a  properly  completed  letter  of  credit  application   (whether standalone or pursuant to a master agreement, as applicable).          (t)   Tax Withholding.  The Administrative Agent shall have received a properly completed and   signed IRS Form W-8 or W-9, as applicable, for each Loan Party.          (u)   Corporate  Structure.   The  corporate  structure,  capital  structure  and  other  material  debt   instruments, material accounts and governing documents of the Borrowers and their Affiliates shall be   acceptable to the Administrative Agent in its sole discretion.          (v)   Field Examination.  The Administrative Agent or its designee shall have conducted a field   examination of the Loan Parties’ Accounts, Inventory and related working capital matters and of the Loan   Parties’  related  data  processing  and  other  systems,  the  results  of  which  shall  be  satisfactory  to  the   Administrative Agent in its sole discretion.    DB1/ 102580159.10                      70  

 

       (w)   Legal Due Diligence.  The Administrative Agent and its counsel shall have completed all   legal due diligence, the results of which shall be satisfactory to Administrative Agent in its sole discretion.    All legal (including tax implications) and regulatory matters shall be satisfactory to the Administrative   Agent  and  the  Lenders,  including  but  not  limited  to  compliance  with  all  applicable  requirements  of   Regulation U, T and X of the Federal Reserve Board and any other relevant Governmental Authority.          (x)   Appraisal(s).  The Administrative Agent shall have received an appraisal of the Borrowers’   Inventory  from  one  or  more  firms  satisfactory  to  the  Administrative  Agent,  which  appraisal  shall  be   satisfactory to the Administrative Agent in its sole discretion.          (y)   USA PATRIOT Act, Etc.  (i) The Administrative Agent shall have received, at least five   (5) days prior to the Effective Date, all documentation and other information regarding the Loan Parties   requested  in  connection  with  applicable  “know  your  customer”  and  anti-money  laundering  rules  and   regulations, including the USA PATRIOT Act, to the extent requested in writing of the Loan Parties at least   ten (10) days prior to the Effective Date, and (ii) to the extent any Borrower qualifies as a “legal entity   customer” under the Beneficial Ownership Regulation, at least five (5) days prior to the Effective Date, any   Lender that has requested, in a written notice to the Borrowers at least ten (10) days prior to the Effective   Date, a Beneficial Ownership Certification in relation to each Borrower shall have received such Beneficial   Ownership Certification (provided that, upon the execution and delivery by such Lender of its signature   page to this Agreement, the condition set forth in this clause (ii) shall be deemed to be satisfied).          (z)   Approvals.  All government and third party approvals necessary in connection with the   transactions contemplated hereby and the continuing operations of the Loan Parties and their Subsidiaries   (including  shareholder  approvals,  if  any)  shall  have  been  obtained  on  terms  satisfactory  to  the   Administrative Agent and shall be in full force and effect.          (aa)  Other Documents.  The Administrative Agent shall have received such other documents as   the Administrative Agent, the Issuing Bank, any Lender or their respective counsel may have reasonably   requested.          The Administrative Agent shall notify the Borrowers, the Lenders and the Issuing Bank of the   Effective Date, and such notice shall be conclusive and binding.          SECTION 4.02  Each  Credit  Event.   The  obligation  of  each  Lender  to  make  a  Loan  on  the   occasion of any Borrowing, and of the Issuing Bank to issue, amend, renew or extend any Letter of Credit,   is subject to the satisfaction of the following conditions:          (a)   The representations and warranties of the Loan Parties set forth in the Loan Documents   shall be true and correct in all material respects with the same effect as though made on and as of the date   of such Borrowing or the date of issuance, amendment, renewal or extension of such Letter of Credit, as   applicable (it being understood and agreed that any representation or warranty which by its terms is made   as of a specified date shall be required to be true and correct in all material respects only as of such specified   date, and that any representation or warranty which is subject to any materiality qualifier shall be required   to be true and correct in all respects).          (b)   At  the  time  of  and  immediately  after  giving  effect  to  such  Borrowing  or  the  issuance,   amendment, renewal or extension of such Letter of Credit, as applicable, (i) no Default shall have occurred   and be continuing and (ii) no Protective Advance shall be outstanding.          (c)   After giving effect to any Borrowing or the issuance, amendment, renewal or extension of   any Letter of Credit, Availability shall not be less than zero.   DB1/ 102580159.10                      71  

 

       Each Borrowing and each issuance, amendment, renewal or extension of a Letter of Credit shall be   deemed to constitute a representation and warranty by the Borrowers on the date thereof as to the matters   specified in clauses (a), (b), and (c) of this Section.                            ARTICLE V   Affirmative Covenants          Until  all  of  the  Secured  Obligations  have  been  Paid  in  Full,  each  Loan  Party  executing  this   Agreement covenants and agrees, jointly and severally with all of the other Loan Parties, with the Lenders   that:          SECTION 5.01  Financial Statements; Borrowing Base and Other Information.  The Borrowers   will furnish to the Administrative Agent and each Lender:          (a)   within  ninety  (90) days  after  the  end  of  each  fiscal  year  of  the  Company,  its  audited   consolidated balance sheet and related statements of operations, stockholders’ equity and cash flows as of   the end of and for such year, setting forth in each case in comparative form the figures for the previous   fiscal  year,  all  reported  on  by  independent  public  accountants  acceptable  to  the  Administrative  Agent   (without a “going concern” or like qualification, commentary or exception and without any qualification or   exception as to the scope of such audit) to the effect that such consolidated financial statements present   fairly  in  all  material  respects  the  financial  condition and  results  of  operations  of  the  Company  and  its   consolidated  Subsidiaries  on  a  consolidated  basis  in  accordance  with  GAAP  consistently  applied,   accompanied by any management letter prepared by said accountants;          (b)   within forty-five (45) days after the end of each of the first three fiscal quarters of each   fiscal  year  of  the  Company,  its  consolidated  balance  sheet  and  related  statements  of  operations,   stockholders’ equity and cash flows as of the end of and for such fiscal quarter and the then elapsed portion   of such fiscal year, setting forth in each case in comparative form the figures for the corresponding period   or periods of (or, in the case of the balance sheet, as of the end of) the previous fiscal year, all certified by   a Financial Officer of the Borrower Representative as presenting fairly in all material respects the financial   condition and results of operations of the Company and its consolidated Subsidiaries on a consolidated   basis in accordance with GAAP consistently applied, subject to normal year-end audit adjustments and the   absence of footnotes;          (c)   within twenty (20) days after the end of each fiscal month of the Company, its consolidated   balance sheet and related statements of operations, stockholders’ equity and cash flows as of the end of and   for such fiscal month and the then elapsed portion of the fiscal year, setting forth in each case in comparative   form the figures for the corresponding period or periods of (or, in the case of the balance sheet, as of the   end  of) the previous fiscal  year, all  certified  by  a  Financial  Officer  of  the  Borrower Representative  as   presenting fairly in all material respects the financial condition and results of operations of the Company   and its consolidated Subsidiaries on a consolidated basis in accordance with GAAP consistently applied,   subject to normal year-end audit adjustments and the absence of footnotes;          (d)   concurrently with any delivery of financial statements under clause (a), (b) or (c) above, a   certificate of a Financial Officer of the Borrower Representative in substantially the form of Exhibit C (i)   certifying, in the case of the financial statements delivered under clause (b) or (c), as presenting fairly in all   material respects the financial condition and results of operations of the Company and its consolidated   Subsidiaries on a consolidated basis in accordance with GAAP consistently applied, subject to normal year-  end audit adjustments and the absence of footnotes, (ii) certifying as to whether a Default has occurred and,   if a Default has occurred, specifying the details thereof and any action taken or proposed to be taken with   respect thereto, (iii) setting forth reasonably detailed calculations demonstrating compliance with Section   6.12 and (iv) stating whether any change in GAAP or in the application thereof has occurred since the date   DB1/ 102580159.10                      72  

 

 of  the  audited  financial  statements  referred  to  in  Section 3.04  and,  if  any  such  change  has  occurred,   specifying the effect of such change on the financial statements accompanying such certificate;          (e)   concurrently with any delivery of financial statements under clause (a) above, a certificate   of the accounting firm that reported on such financial statements stating whether they obtained knowledge   during the course of their examination of such financial statements of any Default (which certificate may   be limited to the extent required by accounting rules or guidelines);          (f)   as soon as available but in any event no later than thirty (30) days after the end of each   fiscal  year  of  the  Company,  a  copy  of  the  plan  and  forecast  (including  a  projected  consolidated  and   consolidating balance sheet, income statement and cash flow statement) of the Company for each month of   the upcoming fiscal year (the “Projections”) in form reasonably satisfactory to the Administrative Agent;          (g)   as soon as available but in any event within twenty (20) days of the end of each calendar   month (and within three (3) Business Days of the end of each calendar week which ends during a Reporting   Trigger Period or at any time that an Event of Default has occurred and is continuing), and at such other   times as may be requested by the Administrative Agent, as of the period then ended, a Borrowing Base   Certificate, and supporting information in connection therewith, together with any additional reports with   respect to the Borrowing Base as the Administrative Agent may reasonably request;          (h)   as soon as available but in any event within twenty (20) days of the end of each calendar   month (and within three (3) Business Days of the end of each calendar week which ends during a Reporting   Trigger Period or at any time that an Event of Default has occurred and is continuing) and at such other   times  as  may  be  requested  by  the  Administrative  Agent,  as  of  the  period  then  ended,  all  delivered   electronically in a text formatted file acceptable to the Administrative Agent;                (i)   a detailed aging of the Borrowers’ Accounts, including all invoices aged by invoice         date and due date (with an explanation of the terms offered), prepared in a manner reasonably         acceptable to the Administrative Agent, together with a summary specifying the name, address,         and balance due for each Account Debtor;                (ii)  a  schedule  detailing  the  Borrowers’  Inventory,  in  form  satisfactory  to  the         Administrative Agent, (1) by location (showing Inventory in transit, any Inventory located with a         third party under any consignment, bailee arrangement, or warehouse agreement), by class (raw         material, work-in-process and finished goods), by product type, and by volume on hand, which         Inventory shall be valued at the lower of cost (determined on a first-in, first-out basis) or market         and adjusted for Reserves as the Administrative Agent has previously indicated to the Borrower         Representative  are deemed  by  the Administrative  Agent  to  be  appropriate, and (2) including  a         report of any variances or other results of Inventory counts performed by the Borrowers since the         last  Inventory  schedule  (including  information  regarding  sales  or  other  reductions,  additions,         returns, credits issued by Borrowers and complaints and claims made against the Borrowers);                (iii) a  worksheet  of  calculations  prepared  by  the  Borrowers  to  determine  Eligible         Accounts and Eligible Inventory, such worksheets detailing the Accounts and Inventory excluded         from Eligible Accounts and Eligible Inventory and the reason for such exclusion;                (iv)  a  reconciliation  of  the  Borrowers’  Accounts  and  Inventory  between  (A)  the         amounts shown in the Borrowers’ general ledger and financial statements and the reports delivered         pursuant to clauses (i) and (ii) above and (B) the amounts and dates shown in the reports delivered         pursuant to clauses (i) and (ii) above and the Borrowing Base Certificate delivered pursuant to         clause (g) above as of such date; and   DB1/ 102580159.10                      73  

 

             (v)   a reconciliation of the loan balance per the Borrowers’ general ledger to the loan         balance under this Agreement;          (i)   as soon as available but in any event within twenty (20) days of the end of each calendar   month and at such other times as may be requested by the Administrative Agent upon no less than five (5)   days’ prior written notice, as of the month then ended, a schedule and aging of the Borrowers’ accounts   payable, delivered electronically in a text formatted file acceptable to the Administrative Agent;          (j)   [reserved];          (k)   promptly upon the Administrative Agent’s written request:                (i)   copies of invoices issued by the Borrowers in connection with any Accounts, credit         memos, shipping and delivery documents, and other information related thereto;                (ii)  copies  of  purchase  orders,  invoices,  and  shipping  and  delivery  documents  in         connection with any Inventory or Equipment purchased by any Loan Party;                (iii) a schedule detailing the balance of all intercompany accounts of the Loan Parties;                (iv)  an updated customer list for each Borrower and its Subsidiaries, which list shall         state the customer’s name, mailing address and phone number, delivered electronically in a text         formatted file acceptable to the Administrative Agent and certified as true and correct by a Financial         Officer of the Borrower Representative; and                (v)   as of the period then ended, the Borrowers’ sales journal, cash receipts journal         (identifying trade and non-trade cash receipts) and debit memo/credit memo journal;          (l)   [reserved];          (m)   as soon as possible and in any event within twenty (20) days of filing thereof, copies of all   tax returns filed by any Loan Party with the U.S. Internal Revenue Service;          (n)   within twenty (20) days after the end of each fiscal year of the Company, a certificate of   good  standing  or  the  substantive  equivalent  available  in  the  jurisdiction  of  incorporation,  formation  or   organization for each Loan Party from the appropriate governmental officer in such jurisdiction;          (o)   as soon as possible and in any event within twenty (20) days after the end of each calendar   month, a detailed listing of all advances of proceeds of Loans requested by the Borrower Representative   for  each  Borrower  during  the  immediately  preceding  calendar  month  and  a  detailed  listing  of  all   intercompany loans made by the Borrowers during such calendar month;          (p)   promptly after the same become publicly available, copies of all periodic and other reports,   proxy  statements and  other  materials  filed  by  any  Loan  Party  or  any  Subsidiary  with  the SEC,  or any   Governmental Authority succeeding to any or all of the functions of the SEC, or with any national securities   exchange, or distributed by any Borrower to its shareholders generally, as the case may be;          (q)   promptly after any written request therefor by the Administrative Agent or any Lender,   copies of (i) any documents described in Section 101(k)(1) of ERISA that any Loan Party or any ERISA   Affiliate may request with respect to any Multiemployer Plan and (ii) any notices described in Section    DB1/ 102580159.10                      74  

 

 101(l)(1)  of  ERISA  that  any  Loan  Party  or  any  ERISA  Affiliate  may  request  with  respect  to  any   Multiemployer Plan; provided that if a Loan Party or any ERISA Affiliate has not requested such documents   or notices from the administrator or sponsor of the applicable Multiemployer Plan, the applicable Loan   Party or the applicable ERISA Affiliate shall promptly make a request for such documents and notices from   such administrator or sponsor and shall provide copies of such documents and notices promptly after receipt   thereof;          (r)   promptly following any written request therefor, (x) such other information regarding the   operations, changes in ownership of Equity Interests, business affairs and financial condition of any Loan   Party or any Subsidiary, or compliance with the terms of this Agreement, as the Administrative Agent or   any Lender may reasonably request, and (y) information and documentation reasonably requested by the   Administrative Agent or any Lender for purposes of compliance with applicable “know your customer”   and anti-money laundering rules and regulations, including the USA PATRIOT Act and the Beneficial   Ownership Regulation;          (s)   promptly after receipt thereof by any Loan Party or any Subsidiary, copies of each notice   or  other  correspondence  received  from  the  SEC  (or  comparable  agency  in  any  applicable  non-U.S.   jurisdiction) concerning any investigation or possible investigation or other inquiry by the SEC or such   other agency regarding financial or other operational results of any Loan Party or any Subsidiary thereof;          (t)   promptly following any request therefor, copies of any detailed audit reports, management   letters or recommendations submitted to the board of directors (or the audit committee of the board of   directors) of any Borrower by independent accountants in connection with the accounts or books of the   Borrower or any Subsidiary, or any audit of any of them as the Administrative Agent or any Lender (through   the Administrative Agent) may reasonably request; and          (u)   the Loan Parties acknowledge that the Administrative Agent may order once per annum,   at the Borrowers’ expense, certificates of good standing or the substantive equivalent in the jurisdiction of   incorporation, formation or organization for each Loan Party from the appropriate government office or   officer in such jurisdiction;          Documents required to be delivered pursuant to Section 5.01(a), (b) or (o) (to the extent any such   documents are included in materials 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 materials are publicly   available as posted on the Electronic Data Gathering, Analysis and Retrieval system (EDGAR); or (ii) on   which such documents are posted on a Borrower’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  made  available  by  the  Administrative  Agent);  provided  that:  (A)  upon  written  request  by  the   Administrative Agent (or any Lender through the Administrative Agent) to the Borrower Representative,   the Borrower Representative shall deliver paper copies of such documents to the Administrative Agent or   such Lender until a written request to cease delivering paper copies is given by the Administrative Agent   or such Lender and (B) the Borrower Representative shall notify the Administrative Agent and each Lender   (by  fax  or  through  Electronic  Systems)  of  the  posting  of  any  such  documents  and  provide  to  the   Administrative Agent through Electronic Systems 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   any Borrower with any such request by a Lender for delivery, and each Lender shall be solely responsible   for timely accessing posted documents or requesting delivery of paper copies of such document to it and   maintaining its copies of such documents.    DB1/ 102580159.10                      75  

 

       The Company represents and warrants that each of it, and its Controlling and Controlled entities,   in  each  case,  if  any  (collectively  with  the  Borrowers,  the  “Relevant  Entities”),  either  (i)  has  no  SEC   registered or unregistered, publicly traded securities outstanding, or (ii) files its financial statements with   the  SEC  and/or  makes  its  financial  statements  available  to  potential  holders  of  its  securities,  and,   accordingly, the Company hereby (i) authorizes the Administrative Agent to make the financial statements   to be provided under Section 5.01(a), (b) and (c) above (collectively or individually, as the context requires,   the “Financial Statements”), along with the Loan Documents, available to Public-Siders and (ii) agree that   at the time such Financial Statements are provided hereunder, they shall already have been made available   to holders of any such securities.  The Company will not request that any other material be posted to Public-  Siders  without  expressly  representing  and  warranting  to  the  Administrative  Agent  in  writing  that  such   materials do not constitute material non-public information within the meaning of the federal securities   laws  or  that  the  Relevant  Entities  have  no  outstanding  SEC  registered  or  unregistered, publicly  traded   securities.  Notwithstanding anything herein to the contrary, in no event shall the Company request that the   Administrative Agent make available to Public-Siders budgets or any certificates, reports or calculations   with  respect  to  the  Borrowers’  compliance  with  the  covenants  contained  herein  or  with  respect  to  the   Borrowing Base.          SECTION 5.02  Notices of Material Events.  The Borrowers will furnish to the Administrative   Agent and each Lender prompt (but in any event within any time period that may be specified below)   written notice of the following:          (a)   the occurrence of any Default;          (b)   receipt of any notice of any investigation by a Governmental Authority or any litigation or   proceeding commenced or threatened against any Loan Party or any Subsidiary that (i) seeks damages in   excess of $500,000, (ii) seeks injunctive relief, (iii) is asserted or instituted against any Plan, its fiduciaries   or its assets, (iv) alleges criminal misconduct by any Loan Party or any Subsidiary, (v) alleges the violation   of, or seeks to impose remedies under, any Environmental Law or related Requirement of Law, or seeks to   impose Environmental Liability, (vi) asserts liability on the part of any Loan Party or any Subsidiary in   excess of $250,000 in respect of any tax, fee, assessment, or other governmental charge, or (vii) involves   any product recall;          (c)   any Lien (other than Permitted Encumbrances) or claim made or asserted against any of   the Collateral;          (d)   any  loss,  damage,  or  destruction  to  the  Collateral  in  the  amount  of  $500,000  or  more,   whether or not covered by insurance;          (e)   within two (2) Business Days of receipt thereof, any and all default notices received under   or with respect to any leased location or public warehouse where Collateral is located;          (f)   all material amendments to any documents, agreements and/or instruments executed and/or   delivered in connection with any Material Indebtedness or Subordinated Indebtedness, together with a copy   of each such amendment;          (g)   within two (2) Business Days after the occurrence thereof, any Loan Party entering into a   Swap Agreement or an amendment thereto, together with copies of all agreements evidencing such Swap   Agreement or amendment;    DB1/ 102580159.10                      76  

 

       (h)   the occurrence of any ERISA Event that, alone or together with any other ERISA Events   that  have  occurred,  could  reasonably  be  expected  to  result  in  liability  of  the  Loan  Parties  and  their   Subsidiaries in an aggregate amount exceeding $500,000;          (i)   any material change in accounting or financial reporting practices by any Loan Party or   any Subsidiary;          (j)   [reserved];          (k)   any other development that results, or could reasonably be expected to result in, a Material   Adverse Effect; and          (l)   any change in the information provided in the Beneficial Ownership Certification delivered   to such Lender that would result in a change to the list of beneficial owners identified in such certification.          Each notice delivered under this Section shall be accompanied by a statement of a Financial Officer   or  other  executive  officer  of  the  Borrower  Representative  setting  forth  the  details  of  the  event  or   development requiring such notice and any action taken or proposed to be taken with respect thereto.          SECTION 5.03  Existence;  Conduct  of  Business.   Each  Loan  Party  will,  and  will  cause  each   Subsidiary to, (a) do or cause to be done all things necessary to preserve, renew and keep in full force and   effect  its  legal  existence  and  the  rights,  qualifications,  licenses,  permits,  franchises,  governmental   authorizations, intellectual property rights, licenses and permits material to the conduct of its business, and   maintain  all  requisite  authority  to  conduct  its  business  in  each  jurisdiction  in  which  its  business  is   conducted,  provided  that  the  foregoing  shall  not  prohibit  any  merger,  consolidation,  liquidation  or   dissolution permitted under Section 6.03, and (b) carry on and conduct its business in substantially the same   manner and in substantially the same fields of enterprise as it is presently conducted.          SECTION 5.04  Payment of Obligations.  Each Loan Party will, and will cause each Subsidiary   to, pay or discharge all Material Indebtedness and all other material liabilities and obligations, including   Taxes, before the same shall become delinquent or in default, except where (a) the validity or amount   thereof is being contested in good faith by appropriate proceedings, (b) such Loan Party or Subsidiary has   set  aside  on  its  books  adequate  reserves  with  respect  thereto  in  accordance  with  GAAP  and  (c)  such   liabilities would not result in aggregate liabilities in excess of $250,000 and none of the Collateral would   become subject to forfeiture or loss as a result of the contest; provided, however, that each Loan Party will,   and  will  cause  each  Subsidiary  to,  remit  withholding  taxes  and  other  payroll  taxes  to  appropriate   Governmental Authorities as and when claimed to be due, notwithstanding the foregoing exceptions.          SECTION 5.05  Maintenance of Properties.  Each Loan Party will, and will cause each Subsidiary   to,  keep  and  maintain  all  property  material  to  the  conduct  of  its  business  in  good  working  order  and   condition, ordinary wear and tear excepted.          SECTION 5.06  Books and Records; Inspection Rights.  Each Loan Party will, and will cause   each Subsidiary to, (a) keep proper books of record and account in which full, true and correct entries are   made  of  all  dealings  and  transactions  in  relation  to  its  business  and  activities  and  (b)  permit  any   representatives  designated  by  the  Administrative  Agent  or  any  Lender  (including  employees  of  the   Administrative Agent, any Lender or any consultants, accountants, lawyers, agents and appraisers retained   by the Administrative Agent), upon reasonable prior notice, to visit and inspect its properties, to conduct at   such Loan Party’s premises field examinations of such Loan Party’s assets, liabilities, books and records,   including examining and making extracts from its books and records, environmental assessment reports   and  Phase  I or  Phase  II studies, and  to  discuss its  affairs,  finances  and  condition  with its officers  and   DB1/ 102580159.10                      77  

 

 independent accountants, all at such reasonable times and as often as reasonably requested.  Each Loan   Party acknowledges that the Administrative Agent, after exercising its rights of inspection, may prepare   and distribute to the Lenders certain Reports pertaining to such Loan Party’s assets for internal use by the   Administrative Agent and the Lenders.  The Loan Parties shall be responsible for the costs of expenses of   one (1) field examination during any 12-month period and one (1) additional field examination (for the total   of  two  (2)  such  field  examinations  during  any  12-month  period)  conducted  at  any  time  after  Excess   Availability falls below 12.5% of the Aggregate Revolving Commitment at any time in such 12-month   period;  provided  that  the  Loan  Parties  shall  be  responsible  for  the  costs  and  expenses  of  all  field   examinations conducted while an Event of Default has occurred and is continuing.          SECTION 5.07  Compliance with Laws and Material Contractual Obligations.  Each Loan Party   will, and will cause each Subsidiary to, (i) comply with each Requirement of Law applicable to it or its   property (including without limitation Environmental Laws) and (ii) perform in all material respects its   obligations under material agreements (including, without limitation, any Material Contract) to which it is   a party.  Each Loan Party will maintain in effect and enforce policies and procedures designed to ensure   compliance by such Loan Party, its Subsidiaries and their respective directors, officers, employees and   agents with Anti-Corruption Laws and applicable Sanctions.          SECTION 5.08  Use of Proceeds.          (a)   The proceeds of the Loans and the Letters of Credit will be used only for financing the   working capital needs of the Loan Parties in the ordinary course of business, to refinance certain existing   Indebtedness, and for other general corporate purposes of the Loan Parties permitted hereunder.  No part   of the proceeds of any Loan and no Letter of Credit will be used, whether directly or indirectly, for any   purpose  that  entails  a  violation  of  any  of  the  regulations  of  the  Federal  Reserve  Board,  including   Regulations T, U and X.          (b)   No Borrower will request any Borrowing or Letter of Credit, and no Borrower shall use,   and  each  Borrower  shall  procure  that  its  Subsidiaries  and  its  and  their  respective  directors,  officers,   employees and agents shall not use, the proceeds of any Borrowing or Letter of Credit (a) in furtherance of   an offer, payment, promise to pay, or authorization of the payment or giving of money, or anything else of   value, to any Person in violation of any Anti-Corruption Laws, (b) for the purpose of funding, financing or   facilitating any activities, business or transaction of or with any Sanctioned Person, or in any Sanctioned   Country, except to the extent permitted for a Person required to comply with Sanctions, or (c) in any manner   that would result in the violation of any Sanctions applicable to any party hereto.          SECTION 5.09  Accuracy of Information.  The Loan Parties will ensure that any information,   including financial statements or other documents, furnished to the Administrative Agent or the Lenders in   connection with this Agreement or any other Loan Document or any amendment or modification hereof or   thereof or waiver hereunder or thereunder contains no material misstatement of fact or omits to state any   material fact necessary to make the statements therein, in the light of the circumstances under which they   were made, not misleading, and the furnishing of such information shall be deemed to be a representation   and warranty by the Borrowers on the date thereof as to the matters specified in this Section; provided that,   with respect to projected financial information, the Loan Parties will only ensure that such information was   prepared in good faith based upon assumptions believed to be reasonable at the time.          SECTION 5.10  Insurance.  Each Loan Party will, and will cause each Subsidiary to, maintain   with financially sound and reputable carriers having a financial strength rating of at least A- by A.M. Best   Company (a) insurance in such amounts (with no greater risk retention) and against such risks (including,   without  limitation:  loss  or  damage  by  fire  and  loss  in  transit;  theft,  burglary,  pilferage,  larceny,   embezzlement, and other criminal activities; business interruption; and general liability) and such other   DB1/ 102580159.10                      78  

 

 hazards, as is customarily maintained by companies of established repute engaged in the same or similar   businesses operating in the same or similar locations and (b) all insurance required pursuant to the Collateral   Documents.  The Borrowers will furnish to the Lenders, upon request of the Administrative Agent, but no   less frequently than annually, information in reasonable detail as to the insurance so maintained.          SECTION 5.11  Casualty  and  Condemnation.   The  Borrowers  will  (a)  furnish  to  the   Administrative Agent and the Lenders prompt written notice of any casualty or other insured damage to   any material portion of the Collateral or the commencement of any action or proceeding for the taking of   any material portion of the Collateral or interest therein under power of eminent domain or by condemnation   or  similar proceeding  and  (b) ensure  that  the  Net  Proceeds  of  any  such  event  (whether  in  the  form  of   insurance proceeds, condemnation awards or otherwise) are collected and applied in accordance with the   applicable provisions of this Agreement and the Collateral Documents.          SECTION 5.12  Appraisals.  At any time that the Administrative Agent requests, each Loan Party   will provide the Administrative Agent with appraisals or updates thereof of its Inventory from an appraiser   selected  and  engaged  by  the  Administrative  Agent,  and  prepared  on  a  basis  satisfactory  to  the   Administrative Agent, such appraisals and updates to include, without limitation, information required by   any applicable Requirement of Law.  The Loan Parties shall be responsible for the costs of expenses of one   (1) Inventory appraisal during any 12-month period and one (1) additional field examination (for the total   of  two  (2) such  Inventory  appraisals  during  any  12-month  period)  conducted  at  any  time  after  Excess   Availability falls below 12.5% of the Aggregate Revolving Commitment at any time in such 12-month   period.  Additionally, there shall be no limitation on the number or frequency of Inventory appraisals if an   Event of Default has occurred and is continuing, and the Loan Parties shall be responsible for the costs and   expenses of any such appraisals conducted while an Event of Default has occurred and is continuing.          SECTION 5.13  Depository Banks.  Within ninety (90) days after the Effective Date (or such   longer period as the Administrative Agent may agree to in its sole discretion), each Borrower and each   Subsidiary  will  maintain  the  Administrative  Agent  as  its  principal  depository  bank,  including  for  the   maintenance of operating, administrative, cash management (including, without limitation, changes to Loan   Parties’ cash management systems in accordance with standard asset-based lending account practices in a   manner reasonably acceptable to Agent), collection activity and other deposit accounts for the conduct of   its business.          SECTION 5.14  Additional Collateral; Further Assurances.          (a)   Subject  to  applicable  Requirement of  Law,  each  Loan  Party  will cause each  Domestic   Subsidiary formed or acquired after the date of this Agreement to become a Loan Party by executing a   Joinder Agreement.  Upon execution and delivery thereof, each such Person (i) shall automatically become   a Loan Guarantor hereunder and thereupon shall have all of the rights, benefits, duties and obligations in   such capacity under the Loan Documents and (ii) will grant Liens to the Administrative Agent, for the   benefit of the Administrative Agent and the other Secured Parties, in any property of such Loan Party which   constitutes Collateral, including any parcel of real property located in the U.S. owned by any Loan Party.          (b)   Each Loan Party will cause (i) 100% of the issued and outstanding Equity Interests of each   of its Domestic Subsidiaries and (ii) 65% (or such greater percentage that could not reasonably be expected   to cause any material adverse tax consequences) of the issued and outstanding Equity Interests entitled to   vote (within the meaning of Treas. Reg. Section 1.956-2(c)(2)) and 100% of the issued and outstanding   Equity  Interests  not  entitled  to  vote  (within  the  meaning  of  Treas.  Reg.  Section  1.956-2(c)(2)  in  each   Foreign Subsidiary directly owned by such Borrower or any Domestic Subsidiary to be subject at all times   to a first priority, perfected Lien in favor of the Administrative Agent, for the benefit of the Administrative    DB1/ 102580159.10                      79  

 

 Agent and the other Secured Parties, pursuant to the terms and conditions of the Loan Documents or other   security documents as the Administrative Agent shall reasonably request.          (c)   Without limiting the foregoing, each Loan Party will, and will cause each Subsidiary to,   execute and deliver, or cause to be executed and delivered, to the Administrative Agent such documents,   agreements and instruments, and will take or cause to be taken such further actions (including the filing and   recording of financing statements, fixture filings, mortgages, deeds of trust and other documents and such   other actions or deliveries of the type required by Section 4.01, as applicable), which may be required by   any Requirement of Law or which the Administrative Agent may, from time to time, reasonably request to   carry out the terms and conditions of this Agreement and the other Loan Documents and to ensure perfection   and priority of the Liens created or intended to be created by the Collateral Documents, all in form and   substance reasonably satisfactory to the Administrative Agent and all at the expense of the Loan Parties.    Notwithstanding the foregoing, at any time after an Event of Default, each Loan Party will, upon the request   of the Administrative Agent, cause each Foreign Subsidiary to become a Loan Party and a Loan Guarantor   and to grant Liens to the Administrative Agent on its assets and have the balance of its Equity Interests   pledged to the Administrative Agent.          (d)   If any assets (including any real property or improvements thereto or any interest therein)   are acquired by any Loan Party after the Effective Date (other than assets constituting Collateral under the   Security  Agreement  that  become  subject  to  the  Lien  under  the  Security  Agreement  upon  acquisition   thereof), the Borrower Representative will (i) notify the Administrative Agent and the Lenders thereof and,   if requested by the Administrative Agent or the Required Lenders, cause such assets to be subjected to a   Lien securing the Secured Obligations and (ii) take, and cause each applicable Loan Party to take, such   actions as shall be necessary or reasonably requested by the Administrative Agent to grant and perfect such   Liens, including actions described in paragraph (c) of this Section, all at the expense of the Loan Parties.          SECTION 5.15  Good Standing.  Each Loan Party shall remain in good standing under the laws   of the jurisdiction of its organization.          SECTION 5.16  Post-Closing Matters.  Each Loan Party, as applicable, shall execute and deliver   and  complete  the  tasks  set  forth  on  Schedule  5.16  attached  hereto  (unless  otherwise  waived  by  the   Administrative Agent in its sole discretion), in each case within time limits specified on such schedule (or   such later times as the Administrative Agent may agree to in its sole discretion).                             ARTICLE VI  Negative Covenants          Until  all  of  the  Secured  Obligations  have  been  Paid  in  Full,  each  Loan  Party  executing  this   Agreement covenants and agrees, jointly and severally with all of the other Loan Parties, with the Lenders   that:          SECTION 6.01  Indebtedness.  No Loan Party will, nor will it permit any Subsidiary to, create,   incur, assume or suffer to exist any Indebtedness, except:          (a)   the Secured Obligations;          (b)   Indebtedness existing on the date hereof and set forth in Schedule 6.01 and any extensions,   renewals, refinancings and replacements of any such Indebtedness in accordance with clause (f) hereof;          (c)   Indebtedness of any Loan Party to any Subsidiary or any other Loan Party and of any   Subsidiary to any Loan Party or any other Subsidiary, provided that (i) Indebtedness of any Subsidiary that   is not a Loan Party to any Loan Party shall be subject to Section 6.04 and (ii) Indebtedness of any Loan   DB1/ 102580159.10                      80  

 

 Party to any Subsidiary that is not a Loan Party shall be subordinated to the Secured Obligations on terms   reasonably satisfactory to the Administrative Agent;          (d)   Guarantees by any Loan Party of Indebtedness of any Subsidiary or another Loan Party   and by any Subsidiary of Indebtedness of any Loan Party or any other Subsidiary; provided that (i) the   Indebtedness  so  Guaranteed  is  permitted  by  this  Section  6.01,  (ii)  Guarantees  by  any  Loan  Party  of   Indebtedness of any Subsidiary that is not a Loan Party shall, in each case, be subject to the limitations set   forth in Section 6.04 and (iii) Guarantees permitted under this clause (d) shall be subordinated to the Secured   Obligations  on  the  same  terms  as  the  Indebtedness  so  Guaranteed  is  subordinated  to  the  Secured   Obligations;          (e)   Indebtedness  of  any  Borrower  or  any  Subsidiary  incurred  to  finance  the  acquisition,   construction or improvement of any fixed or capital assets (whether or not constituting purchase money   Indebtedness), including Capital Lease Obligations and any Indebtedness assumed in connection with the   acquisition of any such assets or secured by a Lien on any such assets prior to the acquisition thereof, and   extensions,  renewals  and  replacements  of  any  such  Indebtedness  in  accordance  with  clause  (f)  below;   provided that (i) such Indebtedness is incurred prior to or within ninety (90) days after such acquisition or   the completion of such construction or improvement and (ii) the aggregate principal amount of Indebtedness   permitted by this clause (e) together with any Refinance Indebtedness in respect thereof permitted by clause   (f) below, shall not exceed $1,000,000 at any time outstanding;          (f)   Indebtedness  which  represents  extensions,  renewals,  refinancing  or  replacements  (such   Indebtedness being so extended, renewed, refinanced or replaced being referred to herein as the “Refinance   Indebtedness”) of any of the Indebtedness described in clauses (b), (e), and (i) hereof (such Indebtedness   being referred to herein as the “Original Indebtedness”); provided that (i) such Refinance Indebtedness does   not increase the principal amount or interest rate of the Original Indebtedness, (ii) any Liens securing such   Refinance Indebtedness are not extended to any additional property of any Loan Party or any Subsidiary,   (iii) no Loan Party or any Subsidiary that is not originally obligated with respect to repayment of such   Original Indebtedness is required to become obligated with respect to such Refinance Indebtedness, (iv)   such  Refinance  Indebtedness  does  not  result  in  a shortening  of  the  average weighted  maturity of  such   Original Indebtedness, (v) the terms of such Refinance Indebtedness other than fees and interest are not less   favorable to the obligor thereunder than the original terms of such Original Indebtedness and (vi) if such   Original Indebtedness was subordinated in right of payment to the Secured Obligations, then the terms and   conditions of such Refinance Indebtedness must include subordination terms and conditions that are at least   as favorable to the Administrative Agent and the Lenders as those that were applicable to such Original   Indebtedness;          (g)   Indebtedness owed to any Person providing workers’ compensation, health, disability or   other  employee  benefits  or  property,  casualty  or  liability  insurance,  pursuant  to  reimbursement  or   indemnification obligations to such Person, in each case incurred in the ordinary course of business;          (h)   Indebtedness of any Loan Party in respect of performance bonds, bid bonds, appeal bonds,   surety bonds and similar obligations, in each case provided in the ordinary course of business;          (i)   Indebtedness of any Person that becomes a Subsidiary after the date hereof; provided that   (i)  such  Indebtedness  exists  at  the  time  such  Person  becomes  a  Subsidiary  and  is  not  created  in   contemplation of or in connection with such Person becoming a Subsidiary and (ii) the aggregate principal   amount of Indebtedness permitted by this clause (i), together with any Refinance Indebtedness in respect   thereof permitted by clause (f) above, shall not exceed $500,000 at any time outstanding;          (j)   [reserved]; and   DB1/ 102580159.10                      81  

 

       (k)   other unsecured Indebtedness in an aggregate principal amount not exceeding $5,000,000   at any time outstanding.          SECTION 6.02  Liens.  No Loan Party will, nor will it permit any Subsidiary to, create, incur,   assume or permit to exist any Lien on any property or asset now owned or hereafter acquired by it, or assign   or sell any income or revenues (including Accounts) or rights in respect of any thereof, except:          (a)   Liens created pursuant to any Loan Document;          (b)   Permitted Encumbrances;          (c)   any Lien on any property or asset of any Borrower or any Subsidiary existing on the date   hereof and set forth in Schedule 6.02; provided that (i) such Lien shall not apply to any other property or   asset of such Borrower or Subsidiary or any other Borrower or Subsidiary and (ii) such Lien shall secure   only  those obligations which  it  secures on  the  date  hereof,  and  extensions, renewals  and  replacements   thereof that do not increase the outstanding principal amount thereof;          (d)   Liens on fixed or capital assets acquired, constructed or improved by any Borrower or any   Subsidiary;  provided  that  (i) such  Liens  secure  Indebtedness  permitted  by  clause  (e)  of  Section 6.01,   (ii) such Liens and the Indebtedness secured thereby are incurred prior to or within ninety (90) days after   such acquisition or the completion of such construction or improvement, (iii) the Indebtedness secured   thereby does not exceed 100% of the cost of acquiring, constructing or improving such fixed or capital   assets and (iv) such Liens shall not apply to any other property or assets of such Borrower or Subsidiary or   any other Borrower or Subsidiary;          (e)   any Lien existing on any property or asset (other than Accounts and Inventory) prior to the   acquisition thereof by any Borrower or any Subsidiary or existing on any property or asset (other than   Accounts and Inventory) of any Person that becomes a Loan Party after the date hereof prior to the time   such Person becomes a Loan Party; provided that (i) such Lien is not created in contemplation of or in   connection with such acquisition or such Person becoming a Loan Party, as the case may be, (ii) such Lien   shall not apply to any other property or assets of the Loan Party and (iii) such Lien shall secure only those   obligations which it secures on the date of such acquisition or the date such Person becomes a Loan Party,   as the case may be;          (f)   Liens of a collecting bank arising in the ordinary course of business under Section 4-208   of the UCC in effect in the relevant jurisdiction covering only the items being collected upon;          (g)   Liens arising out of Sale and Leaseback Transactions permitted by Section 6.06; and          (h)   Liens granted by a Subsidiary that is not a Loan Party in favor of any Borrower or another   Loan Party in respect of Indebtedness owed by such Subsidiary.          Notwithstanding the foregoing, none of the Liens permitted pursuant to this Section 6.02 may at   any  time  attach  to  any  Loan  Party’s  (1)  Accounts,  other  than  those  permitted  under  clause  (a)  of  the   definition of Permitted Encumbrances and clause (a) above and (2) Inventory, other than those permitted   under clauses (a) and (b) of the definition of Permitted Encumbrances and clause (a) above          SECTION 6.03  Fundamental Changes.    DB1/ 102580159.10                      82  

 

       (a)   No Loan Party will, nor will it permit any Subsidiary to, merge into or consolidate with   any other Person, or permit any other Person to merge into or consolidate with it, or liquidate or dissolve,   except that, if at the time thereof and immediately after giving effect thereto no Event of Default shall have   occurred and be continuing (i) any Subsidiary of any Borrower may merge into a Borrower in a transaction   in which such Borrower (or the Company if multiple Borrowers are involved) is the surviving entity, (ii) any   Loan Party (other than a Borrower) may merge into any other Loan Party in a transaction in which the   surviving entity is a Loan Party and (iii) any  Subsidiary that is not a Loan Party may liquidate or dissolve   if the Loan Party which owns such Subsidiary determines in good faith that such liquidation or dissolution   is in the best interests of such Loan Party and is not materially disadvantageous to the Lenders; provided   that any such merger involving a Person that is not a wholly owned Subsidiary immediately prior to such   merger shall not be permitted unless also permitted by Section 6.04.          (b)   No Loan Party will, nor will it permit any Subsidiary to, engage to any material extent in   any business other than businesses of the type conducted by the Borrowers and their Subsidiaries on the   date hereof and businesses reasonably related thereto.          (c)   No Loan Party will, nor will it permit any Subsidiary to, change its fiscal year from the   basis in effect on the Effective Date.          (d)   No Loan Party will change the accounting basis upon which its financial statements are   prepared.          (e)   No Loan Party will change the tax filing elections it has made under the Code.          SECTION 6.04  Investments,  Loans,  Advances,  Guarantees and Acquisitions.   No  Loan  Party   will, nor will it permit any Subsidiary to, form any subsidiary after the Effective Date, or purchase, hold or   acquire (including pursuant to any merger with any Person that was not a Loan Party and a wholly owned   Subsidiary prior to such merger) any  evidences of Indebtedness or Equity Interests or other securities   (including any option, warrant or other right to acquire any of the foregoing) of, make or permit to exist   any loans or advances to, Guarantee any obligations of, or make or permit to exist any investment or any   other  interest  in,  any  other  Person,  or  purchase  or  otherwise  acquire (in  one  transaction  or a  series  of   transactions) any assets of any other Person constituting a business unit (whether through purchase of assets,   merger or otherwise), except:          (a)   Permitted Investments, subject to control agreements in favor of the Administrative Agent   for the benefit of the Secured Parties or otherwise subject to a perfected security interest in favor of the   Administrative Agent for the benefit of the Secured Parties;          (b)   investments in existence on the date hereof and described in Schedule 6.04;          (c)   investments by the Loan Parties and their Subsidiaries in Equity Interests in their respective   Subsidiaries, provided that, in each case (i) any such Equity Interests held by a Loan Party shall be pledged   pursuant to the Security Agreement (subject to the limitations applicable to Equity Interests of a Foreign   Subsidiary  referred  to  in  Section  5.14)  (ii)  the  aggregate  amount  of  investments  by  Loan  Parties  in   Subsidiaries  that  are  not  Loan  Parties  (together,  in  each  case,  with  outstanding  intercompany  loans   permitted under clause (B) to the proviso to Section 6.04(d) and outstanding Guarantees permitted under   the proviso to Section 6.04(e)) shall not exceed $500,000 at any time outstanding (in each case determined   without regard to any write-downs or write-offs), and (iii) no such investments into a Subsidiary that is not   a Loan Party may be made while a Default is continuing or would result therefrom;    DB1/ 102580159.10                      83  

 

       (d)   loans or advances made by any Loan Party to any Subsidiary and made by any Subsidiary   to a Loan Party or any other Subsidiary; provided that (A) any such loans and advances made by a Loan   Party shall be evidenced by a promissory note pledged pursuant to the Security Agreement; (B) the amount   of such loans and advances made by Loan Parties to Subsidiaries that are not Loan Parties (together, in each   case  with  outstanding  investments  permitted  under  clause  (ii)  to  the  proviso  to  Section  6.04(c)  and   outstanding Guarantees permitted under the proviso to Section 6.04(e)) shall not exceed $500,000 at any   time outstanding (in each case determined without regard to any write-downs or write-offs); and (C) no   such loans or advances may be made to a Subsidiary that is not a Loan Party while any Default is continuing   or would result therefrom;          (e)   Guarantees  constituting  Indebtedness  permitted  by  Section 6.01,  provided  that  the   aggregate principal amount of Indebtedness of Subsidiaries that are not Loan Parties that is Guaranteed by   any  Loan  Party  (together,  in  each  case  with  outstanding  investments  permitted  under  clause (ii)  to  the   proviso to Section 6.04(c) and outstanding intercompany loans permitted under clause (B) to the proviso to   Section 6.04(d)) shall not exceed $500,000 at any time outstanding (in each case determined without regard   to any write-downs or write-offs);          (f)   loans or advances made by a Loan Party to its employees on an arms-length basis in the   ordinary course of business consistent with past practices for travel and entertainment expenses, relocation   costs and similar purposes up to a maximum of $250,000 in the aggregate at any one time outstanding;          (g)   notes  payable,  or  stock  or  other  securities  issued  by  Account  Debtors  to a  Loan  Party   pursuant to negotiated agreements with respect to settlement of such Account Debtor’s Accounts in the   ordinary course of business, consistent with past practices;          (h)   investments in the form of Swap Agreements permitted by Section 6.07;          (i)   investments of any  Person existing at  the time  such Person  becomes  a  Subsidiary  of a   Borrower or consolidates or merges with a Borrower or any of the Subsidiaries (including in connection   with a Permitted Acquisition) so long as such investments were not made in contemplation of such Person   becoming a Subsidiary or of such merger;          (j)   investments  received  in  connection  with  the  disposition  of  assets  permitted  by   Section 6.05;          (k)   Permitted Acquisitions;          (l)   investments constituting deposits described in clauses (c) and (d) of the definition of the   term “Permitted Encumbrances”; and          (m)   in  addition  to  investments  otherwise  expressly  permitted  by  this  Section  6.04,  other   investments by Loan Parties or Subsidiaries in an aggregate amount not to exceed (i) $1,500,000 per Fiscal   Year and (ii) $3,000,000 in the aggregate during the term of this Agreement; provided that, in each case the   Payment Conditions are satisfied with respect to such investment.           SECTION 6.05  Asset  Sales.   No  Loan  Party  will,  nor  will  it  permit  any  Subsidiary  to,  sell,   transfer, lease or otherwise dispose of any asset, including any Equity Interest owned by it, nor will any   Borrower permit any Subsidiary to issue any additional Equity Interest in such Subsidiary (other than to   another Borrower or another Subsidiary in compliance with Section 6.04), except:    DB1/ 102580159.10                      84  

 

       (a)   sales, transfers and dispositions of (i) Inventory in the ordinary course of business and (ii)   used, obsolete, worn out or surplus equipment or property in the ordinary course of business;          (b)   sales, transfers and dispositions of assets that are solely among: (i) Borrowers, (ii) Loan   Parties (other than Borrowers), or (iii) Subsidiaries that are not Loan Parties; provided that any such sales,   transfers or dispositions shall be made in compliance with Section 6.09;          (c)   sales, transfers and dispositions of Accounts in connection with the compromise, settlement   or collection thereof (including, without limitation, sales, transfers and dispositions of Accounts not in   excess of $500,000, in the aggregate, in connection with supply chain financing, open account services and   similar trade finance services);          (d)   sales, transfers and dispositions of Permitted Investments;          (e)   Sale and Leaseback Transactions permitted by Section 6.06;          (f)   dispositions resulting from any casualty or other insured damage to, or any taking under   power  of  eminent  domain  or  by  condemnation  or  similar  proceeding  of,  any  property  or  asset  of  any   Borrower or any Subsidiary; and          (g)   sales, transfers and other dispositions of assets (other than Equity Interests in a Subsidiary,   Accounts, Inventory or intellectual property) that are not permitted by any other clause of this Section,   provided that the aggregate fair market value of all assets sold, transferred or otherwise disposed of in   reliance upon this paragraph (g) shall not exceed $500,000 during any fiscal year of the Company;          provided that all sales, transfers, leases and other dispositions permitted hereby (other than those   permitted by clauses (b) and (f) above) shall be made for fair value and for at least 75% cash consideration.          SECTION 6.06  Sale and Leaseback Transactions.  No Loan Party will, nor will it permit any   Subsidiary  to,  enter  into  any  arrangement,  directly  or  indirectly,  whereby  it  shall  sell  or  transfer  any   property, real or personal, used or useful in its business, whether now owned or hereafter acquired, and   thereafter rent or lease such property or other property that it intends to use for substantially the same   purpose or purposes as the property sold or transferred (a “Sale and Leaseback Transaction”), except for   any  such  sale  of  any  fixed  or  capital  assets  by  any  Borrower  or  any  Subsidiary  that  is  made  for  cash   consideration in an amount not less than the fair value of such fixed or capital asset and is consummated   within ninety (90) days after such Borrower or such Subsidiary acquires or completes the construction of   such fixed or capital asset.          SECTION 6.07  Swap Agreements.  No Loan Party will, nor will it permit any  Subsidiary to,   enter into any Swap Agreement, except (a) Swap Agreements entered into to hedge or mitigate risks to   which any Borrower or any Subsidiary has actual exposure (other than those in respect of Equity Interests   of any Borrower or any of its Subsidiaries), and (b) Swap Agreements entered into in order to effectively   cap, collar or exchange interest rates (from floating to fixed rates, from one floating rate to another floating   rate  or  otherwise)  with  respect  to  any  interest-bearing  liability  or  investment  of  any  Borrower  or  any   Subsidiary.          SECTION 6.08  Restricted Payments; Certain Payments of Indebtedness.    DB1/ 102580159.10                      85  

 

       (a)   No Loan Party will, nor will it permit any Subsidiary to, declare or make, or agree to declare   or make, directly or indirectly, any Restricted Payment, or incur any obligation (contingent or otherwise)   to do so, except:                (i)   each of the Borrowers may declare and pay dividends with respect to its common         stock payable solely in additional shares of its common stock, and, with respect to its preferred         stock, payable solely in additional shares of such preferred stock or in shares of its common stock,                 (ii)  any Subsidiary may make a Restricted Payment to a Borrower and any Subsidiary         which is not a Loan Party may make a Restricted Payment to another Subsidiary,                 (iii) the Borrowers may make Restricted Payments, not exceeding $250,000 during any         fiscal year of the Company, pursuant to and in accordance with stock option plans or other benefit         plans for management or employees of the Borrowers and their Subsidiaries and                 (iv)  the Borrowers may make other Restricted Payments subject to the satisfaction of         the Payment Conditions so long as such Restricted Payments are permitted by applicable law.          (b)   No Loan Party will, nor will it permit any Subsidiary to, make or agree to pay or make,   directly or indirectly, any payment or other distribution (whether in cash, securities or other property) of or   in respect of principal of or interest on any Indebtedness, or any payment or other distribution (whether in   cash, securities or other property), including any sinking fund or similar deposit, on account of the purchase,   redemption, retirement, acquisition, cancellation or termination of any Indebtedness, except:                (i)   payment of Indebtedness created under the Loan Documents;                (ii)  payment of regularly scheduled interest and principal payments as and when due         in respect of any Indebtedness permitted under Section 6.01, other than payments in respect of the         Subordinated Indebtedness prohibited by the subordination provisions thereof;                (iii) refinancings of Indebtedness to the extent permitted by Section 6.01; and                (iv)  payment of secured Indebtedness that becomes due as a result of the voluntary sale         or transfer of the property or assets securing such Indebtedness to the extent such sale or transfer is         permitted by the terms of Section 6.05.          SECTION 6.09  Transactions  with  Affiliates.   No  Loan  Party  will,  nor  will  it  permit  any   Subsidiary to, sell, lease or otherwise transfer any property or assets to, or purchase, lease or otherwise   acquire any property or assets from, or otherwise engage in any other transactions with, any of its Affiliates,   except (a) transactions that (i) are in the ordinary course of business and (ii) are at prices and on terms and   conditions not less favorable to such Loan Party or such Subsidiary than could be obtained on an arm’s-  length basis from unrelated third parties, (b) transactions between or among (i) any Borrowers not involving   any other Affiliate or (ii) Loan Parties (other than any Borrower) not involving any other Affiliate, (c) any   investment permitted by Section 6.04(c) or 6.04(d), (d) any Indebtedness permitted under Section 6.01(c),   (e) any Restricted Payment permitted by Section 6.08, (f) loans or advances to employees permitted under   Section 6.04, (g) the payment of reasonable fees to directors of any Borrower or any Subsidiary who are   not employees of such Borrower or Subsidiary, and compensation and employee benefit arrangements paid   to, and indemnities provided for the benefit of, directors, officers or employees of the Borrowers or their   Subsidiaries in the ordinary course of business and (h) any issuances of securities or other payments, awards   or grants in cash, securities or otherwise pursuant to, or the funding of, employment agreements, stock   options and stock ownership plans approved by a Borrower’s board of directors.   DB1/ 102580159.10                      86  

 

       SECTION 6.10  Restrictive Agreements.  No Loan Party will, nor will it permit any Subsidiary   to,  directly  or  indirectly,  enter  into,  incur  or  permit  to  exist  any  agreement  or  other  arrangement  that   prohibits, restricts or imposes any condition upon (a) the ability of such Loan Party or any Subsidiary to   create, incur or permit to exist any Lien upon any of its property or assets, or (b) the ability of any Subsidiary   to pay dividends or other distributions with respect to any of its Equity Interests or to make or repay loans   or advances to any Borrower or any other Subsidiary or to Guarantee Indebtedness of any Borrower or any   other Subsidiary; provided that (i) the foregoing shall not apply to restrictions and conditions imposed by   any Requirement of Law or by any Loan Document, (ii) the foregoing shall not apply to restrictions and   conditions existing on the date hereof identified on Schedule 6.10 (but shall apply to any extension or   renewal of, or any amendment or modification expanding the scope of, any such restriction or condition),   (iii) the foregoing shall not apply to customary restrictions and conditions contained in agreements relating   to the sale of a Subsidiary pending such sale, provided that such restrictions and conditions apply only to   the Subsidiary that is to be sold and such sale is permitted hereunder, (iv) clause (a) of the foregoing shall   not apply to restrictions or conditions imposed by any agreement relating to secured Indebtedness permitted   by this Agreement if such restrictions or conditions apply only to the property or assets securing such   Indebtedness and (v) clause (a) of the foregoing shall not apply to customary provisions in leases and other   contracts restricting the assignment thereof.          SECTION 6.11  Amendment of Material Documents.  No Loan Party will, nor will it permit any   Subsidiary  to,  amend,  modify  or  waive  any  of  its  rights  under  (a)  any  agreement  relating  to  any   Subordinated Indebtedness, (b) its charter, articles or certificate of incorporation or organization, by-laws,   operating, management or partnership agreement or other organizational or governing documents, (c) any   Material Contract (other than the Pacific Direct License Agreement), to the extent any such amendment,   modification or waiver would be adverse to the Lenders, and (d) the Pacific Direct License Agreement   unless such amendment, modification or waiver is permitted pursuant to the terms of the Pacific Direct   Collateral Assignment.          SECTION 6.12  Fixed  Charge  Coverage  Ratio.   Upon  the  occurrence  of  and  during  the   continuation of the Financial Covenant Testing Trigger Period, the Loan Parties will not permit the Fixed   Charge Coverage Ratio to be less than 1.10 to 1.00 at all times when measured on any trailing four quarter   basis. At all times after the Administrative Agent’s receipt of the 2019 Audited Financial Statements, the   Loan Parties will not permit the Fixed Charge Coverage Ratio, as of the last day of any fiscal quarter of the   Company, to be less than 1.10 to 1.00 when measured on any trailing four quarter basis.                             ARTICLE VII Events of Default          If any of the following events (“Events of Default”) shall occur:          (a)   the Borrowers shall fail to pay any principal of any Loan or any reimbursement obligation   in respect of any LC Disbursement when and as the same shall become due and payable, whether at the due   date thereof or at a date fixed for prepayment thereof or otherwise;          (b)   the Borrowers shall fail to pay any interest on any Loan or any fee or any other amount   (other than an amount referred to in clause (a) of this Article) payable under this Agreement or any other   Loan Document, when and as the same shall become due and payable;          (c)   any representation or warranty made or deemed made by or on behalf of any Loan Party or   any Subsidiary in, or in connection with, this Agreement or any other Loan Document or any amendment   or modification hereof or thereof or waiver hereunder or thereunder, or in any report, certificate, financial   statement or other document furnished pursuant to or in connection with this Agreement or any other Loan    DB1/ 102580159.10                      87  

 

 Document or any amendment or modification hereof or thereof or waiver hereunder or thereunder, shall   prove to have been materially incorrect when made or deemed made;          (d)   any  Loan  Party  shall  fail  to  observe  or  perform  any  covenant,  condition  or  agreement   contained in Section 5.02(a), 5.03 (with respect to a Loan Party’s existence) or 5.08 or in Article VI;          (e)   any  Loan  Party  shall  fail  to  observe  or  perform  any  covenant,  condition  or  agreement   contained in this  Agreement (other than those  which constitute a  default  under  another  Section  of this   Article), and such failure shall continue unremedied for a period of (i) five (5) days after the earlier of any   Loan Party’s knowledge of such breach or notice thereof from the Administrative Agent (which notice will   be given at the request of any Lender) if such breach relates to terms or provisions of Section 5.01, 5.02   (other than Section 5.02(a)), 5.03 through 5.07, 5.10, 5.11 or 5.13 of this Agreement or (ii) fifteen (15) days   after the earlier of any Loan Party’s knowledge of such breach or notice thereof from the Administrative   Agent (which notice will be given at the request of any Lender) if such breach relates to terms or provisions   of any other Section of this Agreement;          (f)   any  Loan  Party  or  Subsidiary  shall fail  to  make  any  payment  (whether  of  principal  or   interest and regardless of amount) in respect of any Material Indebtedness, when and as the same shall   become due and payable;          (g)   any event or condition occurs that results in any Material Indebtedness becoming due prior   to its scheduled maturity or that enables or permits (with or without the giving of notice, the lapse of time   or both) the holder or holders of any Material Indebtedness or any trustee or agent on its or their behalf to   cause any Material Indebtedness to become due, or to require the prepayment, repurchase, redemption or   defeasance thereof, prior to its scheduled maturity; provided that this clause (g) shall not apply to secured   Indebtedness that becomes due as a result of the voluntary sale or transfer of the property or assets securing   such Indebtedness to the extent such sale or transfer is permitted by Section 6.05;          (h)   an involuntary proceeding shall be commenced or an involuntary petition shall be filed   seeking (i) liquidation, reorganization or other relief in respect of a Loan Party or Subsidiary or its debts,   or of a substantial part of its assets, under any federal, state or foreign bankruptcy, insolvency, receivership   or  similar  law  now  or  hereafter  in  effect  or  (ii) the  appointment  of  a  receiver,  trustee,  custodian,   sequestrator, conservator or similar official for any Loan Party or Subsidiary or for a substantial part of its   assets, and, in any such case, such proceeding or petition shall continue undismissed for sixty (60) days or   an order or decree approving or ordering any of the foregoing shall be entered;          (i)   any Loan Party or Subsidiary shall (i) voluntarily commence any proceeding or file any   petition seeking liquidation, reorganization or other relief under any Federal, state or foreign bankruptcy,   insolvency, receivership or similar law now or hereafter in effect, (ii) consent to the institution of, or fail to   contest in a timely and appropriate manner, any proceeding or petition described in clause (h) of this Article,   (iii) apply for or consent to the appointment of a receiver, trustee, custodian, sequestrator, conservator or   similar official for such Loan Party or Subsidiary or for a substantial part of its assets, (iv) file an answer   admitting the material allegations of a petition filed against it in any such proceeding, (v) make a general   assignment  for  the  benefit  of  creditors  or  (vi) take  any  action  for  the  purpose  of  effecting  any  of  the   foregoing;          (j)   any Loan Party or Subsidiary shall become unable, admit in writing its inability, or publicly   declare its intention not to, or fail generally to pay its debts as they become due;          (k)   (i) one or more judgments for the payment of money in an aggregate amount in excess of   $500,000 shall be rendered against any Loan Party, any Subsidiary or any combination thereof and the same   DB1/ 102580159.10                      88  

 

 shall remain undischarged for a period of thirty (30) consecutive days during which execution shall not be   effectively stayed, or any action shall be legally taken by a judgment creditor to attach or levy upon any   assets of any Loan Party or Subsidiary to enforce any such judgment; or (ii) any Loan Party or Subsidiary    shall  fail  within  thirty  (30)  days  to  discharge  one  or  more  non-monetary  judgments  or  orders  which,   individually or in the aggregate, could reasonably be expected to have a Material Adverse Effect, which   judgments or orders, in any such case, are not stayed on appeal or otherwise being appropriately contested   in good faith by proper proceedings diligently pursued;          (l)   an ERISA Event shall have occurred that, in the opinion of the Required Lenders, when   taken together with all other ERISA Events that have occurred, could reasonably be expected to result in   liability of the Loan Parties and their Subsidiaries in an aggregate amount exceeding (i) $500,000 in any   year or (ii) $1,500,000 for all periods;          (m)   a Change in Control shall occur;          (n)   the  occurrence  of  any  “default”,  as  defined  in  any  Loan  Document  (other  than  this   Agreement)  or  the  breach  of  any  of  the  terms  or  provisions  of  any  Loan  Document  (other  than  this   Agreement), which default or breach continues beyond any period of grace therein provided;          (o)   the Loan Guaranty shall fail to remain in full force or effect or any action shall be taken to   discontinue or to assert the invalidity or unenforceability of the Loan Guaranty, or any Loan Guarantor   shall fail to comply with any of the terms or provisions of the Loan Guaranty to which it is a party, or any   Loan Guarantor shall deny that it has any further liability under the Loan Guaranty to which it is a party, or   shall give notice to such effect, including, but not limited to notice of termination delivered pursuant to   Section 10.08;          (p)   except as permitted by the terms of any Collateral Document, (i) any Collateral Document   shall for any reason fail to create a valid security interest in any Collateral purported to be covered thereby,   or (ii) any Lien securing any Secured Obligation shall cease to be a perfected, first priority Lien;          (q)   any Collateral Document shall fail to remain in full force or effect or any action shall be   taken to discontinue or to assert the invalidity or unenforceability of any Collateral Document;          (r)   any material provision of any Loan Document for any reason ceases to be valid, binding   and enforceable in accordance with its terms (or any Loan Party shall challenge the enforceability of any   Loan Document or shall assert in writing, or engage in any action or inaction that evidences its assertion,   that any provision of any of the Loan Documents has ceased to be or otherwise is not valid, binding and   enforceable in accordance with its terms); or          (s)   any Loan Party is criminally indicted or convicted under any law that may reasonably be   expected to lead to a forfeiture of any property of such Loan Party having a fair market value in excess of   $500,000;          then, and in every such event (other than an event with respect to the Borrowers described in clause   (h) or (i) of this Article), and at any time thereafter during the continuance of such event, the Administrative   Agent may, and at the request of the Required Lenders shall, by notice to the Borrower Representative, take   any  or  all  of  the  following  actions,  at  the  same  or  different  times:  (i) terminate  the  Commitments,   whereupon the Commitments shall terminate immediately, (ii) declare the Loans then outstanding to be due   and payable in whole (or in part, but ratably as among the Classes of Loans and the Loans of each Class at   the time outstanding, in which case any principal not so declared to be due and payable may thereafter be   declared to be due and payable), whereupon the principal of the Loans so declared to be due and payable,   DB1/ 102580159.10                      89  

 

 together with accrued interest thereon and all fees and other obligations of the Borrowers accrued hereunder,   shall become due and payable immediately, in each case without presentment, demand, protest or other   notice of any kind, all of which are hereby waived by the Borrowers, and (iii) require cash collateral for the   LC Exposure in accordance with Section 2.06(j) hereof; and in the case of any event with respect to the   Borrowers described in clause (h) or (i) of this Article, the Commitments shall automatically terminate and   the principal of the Loans then outstanding and the cash collateral for the LC Exposure, together with   accrued  interest  thereon  and  all  fees  and  other  obligations  of  the  Borrowers  accrued  hereunder,  shall   automatically become due and payable, in each case without presentment, demand, protest or other notice   of  any  kind,  all  of  which  are  hereby  waived  by  the  Borrowers.   Upon  the  occurrence  and  during  the   continuance of an Event of Default, the Administrative Agent may, and at the request of the Required   Lenders shall, increase the rate of interest applicable to the Loans and other Obligations as set forth in this   Agreement and exercise any rights and remedies provided to the Administrative Agent under the Loan   Documents or at law or equity, including all remedies provided under the UCC.                        ARTICLE VIII      The Administrative Agent          SECTION 8.01  Authorization and Action.          (a)   Each Lender, on behalf of itself and any of its Affiliates that are Secured Parties and the   Issuing Bank hereby irrevocably appoints the entity named as Administrative Agent in the heading of this   Agreement and its successors and assigns to serve as the administrative agent and collateral agent under the   Loan Documents and each Lender and the Issuing Bank authorizes the Administrative Agent to take such   actions  as  agent  on  its  behalf  and  to  exercise  such  powers  under  this  Agreement  and  the  other  Loan   Documents  as  are  delegated  to  the  Administrative  Agent  under  such  agreements  and  to  exercise  such   powers  as  are reasonably  incidental thereto.   In  addition,  to  the  extent required  under  the laws of  any   jurisdiction other than within the United States, each Lender and the Issuing Bank hereby grants to the   Administrative Agent any required powers of attorney to execute and enforce any Collateral Document   governed by the laws of such jurisdiction on such Lender’s or such Issuing Bank’s behalf.  Without limiting   the foregoing, each Lender and the Issuing Bank hereby authorizes the Administrative Agent to execute   and deliver, and to perform its obligations under, each of the Loan Documents to which the Administrative   Agent is a party, to exercise all rights, powers and remedies that the Administrative Agent may have under   such Loan Documents.          (b)   As  to  any  matters  not  expressly  provided for herein and  in the other  Loan  Documents   (including  enforcement  or  collection),  the  Administrative  Agent  shall  not  be  required  to  exercise  any   discretion  or  take  any  action,  but  shall  be  required to  act  or  to  refrain  from  acting  (and  shall  be  fully   protected in so acting or refraining from acting) upon the written instructions of the Required Lenders (or   such other number or percentage of the Lenders as shall be necessary, pursuant to the terms in the Loan   Documents), and, unless and until revoked in writing, such instructions shall be binding upon each Lender   and the Issuing Bank; provided, however, that the Administrative Agent shall not be required to take any   action  that  (i)  the  Administrative  Agent  in  good  faith  believes  exposes  it  to  liability  unless  the   Administrative Agent receives an indemnification satisfactory to it from the Lenders and the Issuing Bank   with respect to such action or (ii) is contrary to this Agreement or any other Loan Document or applicable   law, including any action that may be in violation of the automatic stay under any requirement of law   relating to bankruptcy, insolvency or reorganization or relief of debtors or that may effect a forfeiture,   modification  or  termination  of property of a  Defaulting  Lender in  violation  of any  requirement of law   relating  to  bankruptcy,  insolvency  or  reorganization  or  relief  of  debtors;  provided,  further,  that  the   Administrative Agent may seek clarification or direction from the Required Lenders prior to the exercise   of any such instructed action and may refrain from acting until such clarification or direction has been   provided.  Except as expressly set forth in the Loan Documents, the Administrative Agent shall not have   any  duty  to  disclose,  and shall  not  be  liable for the failure to  disclose,  any  information relating to the   DB1/ 102580159.10                      90  

 

 Borrower,  any  other  Loan  Party,  any  Subsidiary  or  any  Affiliate  of  any  of  the  foregoing  that  is   communicated to or obtained by the Person serving as Administrative Agent or any of its Affiliates in any   capacity.  Nothing in this Agreement shall require the Administrative Agent to expend or risk its own funds   or otherwise incur any financial liability in the performance of any of its duties hereunder or in the exercise   of any of its rights or powers if it shall have reasonable grounds for believing that repayment of such funds   or adequate indemnity against such risk or liability is not reasonably assured to it.          (c)   In performing its functions and duties hereunder and under the other Loan Documents, the   Administrative Agent is acting solely on behalf of the Lenders and the Issuing Bank (except in limited   circumstances expressly provided for herein relating to the maintenance of the Register), and its duties are   entirely mechanical and administrative in nature.  Without limiting the generality of the foregoing:                (i)   the  Administrative  Agent  does  not  assume  and  shall  not  be  deemed  to  have         assumed any obligation or duty or any other relationship as the agent, fiduciary or trustee of or for         any Lender, Issuing Bank or Secured Party or holder of any other obligation other than as expressly         set forth herein and in the other Loan Documents, regardless of whether a Default or an Event of         Default has occurred and is continuing (and it is understood and agreed that the use of the term         “agent”  (or  any  similar  term)  herein  or  in  any  other  Loan  Document  with  reference  to  the         Administrative Agent is not intended to connote any fiduciary duty or other implied (or express)         obligations arising under agency doctrine of any applicable law, and that such term is used as a         matter of market custom and is intended to create or reflect only an administrative relationship         between  contracting  parties);  additionally,  each  Lender  agrees  that  it  will  not  assert  any  claim         against  the  Administrative  Agent  based  on  an  alleged  breach  of  fiduciary  duty  by  the         Administrative Agent in connection with this Agreement and the transactions contemplated hereby;         and                (ii)  nothing in this Agreement or any Loan Document shall require the Administrative         Agent to account to any Lender for any sum or the profit element of any sum received by the         Administrative Agent for its own account;          (d)   The Administrative Agent may perform any 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  of  their   respective duties and exercise their respective rights and powers through their respective Related Parties.    The exculpatory provisions of this Article 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 pursuant to   this Agreement.  The Administrative Agent shall not be responsible for the negligence or misconduct of   any  sub  agent  except  to  the  extent  that  a  court  of  competent  jurisdiction  determines  in  a  final  and   nonappealable judgment that the Administrative Agent acted with gross negligence or willful misconduct   in the selection of such sub-agent.          (e)   In  case  of  the  pendency  of  any  proceeding  with  respect  to  any  Loan  Party  under  any   Federal, state or foreign bankruptcy, insolvency, receivership or similar law now or hereafter in effect, the   Administrative Agent (irrespective of whether the principal of any Loan or any reimbursement obligation   in respect of any LC Disbursement 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  any   Borrower)  shall  be  entitled  and  empowered  (but  not  obligated)  by  intervention  in  such  proceeding  or   otherwise:                (i)   to file and prove a claim for the whole amount of the principal and interest owing         and unpaid in respect of the Loans, LC Disbursements and all other Obligations that are owing and   DB1/ 102580159.10                      91  

 

       unpaid and to file such other documents as may be necessary or advisable in order to have the         claims of the Lenders, the Issuing Bank and the Administrative Agent (including any claim under         Sections 2.12, 2.13, 2.15, 2.17 and 9.03) allowed in such judicial proceeding; and                (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 proceeding is hereby authorized by each Lender, the Issuing Bank and each other Secured Party   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, the Issuing Bank or the other Secured   Parties, to pay to the Administrative Agent any amount due to it, in its capacity as the Administrative Agent,   under the Loan Documents (including under Section 9.03).  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   or  Issuing  Bank  any  plan  of  reorganization,  arrangement,  adjustment  or  composition  affecting  the   Obligations or the rights of any Lender or Issuing Bank or to authorize the Administrative Agent to vote in   respect of the claim of any Lender or Issuing Bank in any such proceeding.          The provisions of this Article are solely for the benefit of the Administrative Agent, the Lenders   and the Issuing Bank, and, except solely to the extent of the Borrowers’ right to consent pursuant to and   subject to the conditions set forth in this Article, no Borrower nor any Subsidiary, or any of their respective   Affiliates, shall have any rights as a third party beneficiary under any such provisions.  Each Secured Party,   whether or not a party hereto, will be deemed, by its acceptance of the benefits of the Collateral and of the   Guarantees  of  the  Secured  Obligations  provided  under  the  Loan  Documents,  to  have  agreed  to  the   provisions of this Article.          SECTION 8.02  Administrative Agent’s Reliance, Indemnification, Etc.          (a)   Neither the Administrative Agent nor any of its Related Parties shall be (i) liable for any   action taken or omitted to be taken by it under or in connection with this Agreement or the other Loan   Documents (x) with the consent of 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   to be necessary, under the circumstances as provided in the Loan Documents) or (y) in the absence of its   own gross negligence or willful misconduct (such absence to be presumed unless otherwise determined by   a court of competent jurisdiction by a final and nonappealable judgment) or (ii) responsible in any manner   to any of the Lenders for any recitals, statements, representations or warranties made by any Loan Party or   any officer thereof contained in this Agreement or any other Loan Document or in any certificate, report,   statement or other document referred to or provided for in, or received by the Administrative Agent under   or in connection with, this Agreement or any other Loan Document or for the value, validity, effectiveness,   genuineness, enforceability or sufficiency of this Agreement or any other Loan Document or for any failure   of any Loan Party to perform its obligations hereunder or thereunder.           (b)   The Administrative Agent shall be deemed not to have knowledge of any Default unless   and until written notice thereof (stating that it is a “notice of default”) is given to the Administrative Agent   by the Borrower Representative, a Lender or the Issuing Bank, and the Administrative Agent shall not be   responsible for or have any duty to ascertain or inquire into (i) any statement, warranty or representation   made in or in connection with any Loan Document, (ii) the contents of any certificate, report or other   document delivered thereunder or in connection therewith, (iii) the performance or observance of any of   the covenants, agreements or other terms or conditions set forth in any Loan Document or the occurrence   of  any  Default,  (iv)  the  sufficiency,  validity,  enforceability,  effectiveness  or  genuineness  of  any  Loan   Document or any other agreement, instrument or document, (v) the satisfaction of any condition set forth   DB1/ 102580159.10                      92  

 

 in Article IV or elsewhere in any Loan Document, other than to confirm receipt of items expressly required   to be delivered to the Administrative Agent or satisfaction of any condition that expressly refers to the   matters described therein being acceptable or satisfactory to the Administrative Agent, or (vi) the creation,   perfection or priority of Liens on the Collateral.          (c)   Without limiting the foregoing, the Administrative Agent (i) may treat the payee of any   promissory note as its holder until such promissory note has been assigned in accordance with Section 9.04,   (ii) may rely on the Register to the extent set forth in Section 9.04(b), (iii) may consult with legal counsel   (including counsel to the Borrowers), independent public accountants and other experts selected by it, and   shall not be liable for any action taken or omitted to be taken in good faith by it in accordance with the   advice of such counsel, accountants or experts, (iv) makes no warranty or representation to any Lender or   Issuing Bank and shall not be responsible to any Lender or Issuing Bank for any statements, warranties or   representations made by or on behalf of any Loan Party in connection with this Agreement or any other   Loan Document, (v) in determining compliance with any condition hereunder to the making of a Loan, or   the issuance of a Letter of Credit, that by its terms must be fulfilled to the satisfaction of a Lender or an   Issuing Bank, may presume that such condition is satisfactory to such Lender or Issuing Bank unless the   Administrative  Agent  shall  have  received  notice  to  the  contrary  from  such  Lender  or  Issuing  Bank   sufficiently in advance of the making of such Loan or the issuance of such Letter of Credit and (vi) shall be   entitled to rely on, and shall incur no liability under or in respect of this Agreement or any other Loan   Document by acting upon, any notice, consent, certificate or other instrument or writing (which writing   may be a fax, any electronic message, Internet or intranet website posting or other distribution) or any   statement made to it orally or by telephone and believed by it to be genuine and signed or sent or otherwise   authenticated by the proper party or parties (whether or not such Person in fact meets the requirements set   forth in the Loan Documents for being the maker thereof).          SECTION 8.03  Posting of Communications.          (a)   The Borrowers agree that the Administrative Agent may, but shall not be obligated to,   make any Communications available to the Lenders and the Issuing Bank by posting the Communications   on  IntraLinksTM,  DebtDomain,  SyndTrak,  ClearPar  or  any  other  electronic  system  chosen  by  the   Administrative Agent to be its electronic transmission system (the “Approved Electronic Platform”).          (b)   Although the Approved Electronic Platform and its primary web portal are secured with   generally-applicable  security  procedures  and  policies  implemented  or  modified  by  the  Administrative   Agent from time to time (including, as of the Effective Date, a user ID/password authorization system) and   the Approved Electronic Platform is secured through a per-deal authorization method whereby each user   may access the Approved Electronic Platform only on a deal-by-deal basis, each of the Lenders, the Issuing   Bank and each Borrower acknowledges and agrees that the distribution of material through an electronic   medium is not necessarily secure, that the Administrative Agent is not responsible for approving or vetting   the representatives or contacts of any Lender that are added to the Approved Electronic Platform, and that   there are confidentiality and other risks associated with such distribution.  Each of the Lenders, the Issuing   Bank  and  each  Borrower  hereby  approves  distribution  of  the  Communications  through  the  Approved   Electronic Platform and understands and assumes the risks of such distribution.          (c)   THE APPROVED ELECTRONIC PLATFORM AND THE COMMUNICATIONS ARE   PROVIDED “AS IS” AND “AS AVAILABLE”.  THE APPLICABLE PARTIES (AS DEFINED BELOW)   DO NOT WARRANT THE ACCURACY OR COMPLETENESS OF THE COMMUNICATIONS, OR   THE ADEQUACY OF THE APPROVED ELECTRONIC PLATFORM AND EXPRESSLY DISCLAIM   LIABILITY FOR ERRORS OR OMISSIONS IN THE APPROVED ELECTRONIC PLATFORM AND   THE  COMMUNICATIONS.   NO  WARRANTY  OF  ANY  KIND,  EXPRESS,  IMPLIED  OR   STATUTORY,  INCLUDING  ANY  WARRANTY  OF  MERCHANTABILITY,  FITNESS  FOR  A   DB1/ 102580159.10                      93  

 

 PARTICULAR  PURPOSE,  NON-INFRINGEMENT  OF  THIRD  PARTY  RIGHTS  OR  FREEDOM   FROM  VIRUSES  OR  OTHER  CODE  DEFECTS,  IS  MADE  BY  THE  APPLICABLE  PARTIES  IN   CONNECTION WITH THE COMMUNICATIONS OR THE APPROVED ELECTRONIC PLATFORM.    IN NO EVENT SHALL THE ADMINISTRATIVE AGENT, ANY ARRANGER OR ANY OF THEIR   RESPECTIVE  RELATED  PARTIES  (COLLECTIVELY,  “APPLICABLE  PARTIES”)  HAVE  ANY   LIABILITY  TO  ANY  LOAN  PARTY,  ANY  LENDER,  ANY  ISSUING  BANK  OR  ANY  OTHER   PERSON  OR  ENTITY  FOR  DAMAGES  OF  ANY  KIND,  INCLUDING  DIRECT  OR  INDIRECT,   SPECIAL, INCIDENTAL OR CONSEQUENTIAL DAMAGES, LOSSES OR EXPENSES (WHETHER   IN  TORT,  CONTRACT  OR  OTHERWISE)  ARISING  OUT  OF  ANY  LOAN  PARTY’S  OR  THE   ADMINISTRATIVE  AGENT’S  TRANSMISSION  OF  COMMUNICATIONS  THROUGH  THE   INTERNET OR THE APPROVED ELECTRONIC PLATFORM.                “Communications” means, collectively, any notice, demand, communication, information,         document  or  other material  provided  by  or  on  behalf  of  any Loan  Party  pursuant  to any  Loan         Document  or  the  transactions  contemplated  therein  which  is  distributed  by  the  Administrative         Agent,  any  Lender  or  Issuing  Bank  by  means  of  electronic  communications  pursuant  to  this         Section, including through an Approved Electronic Platform.          (d)   Each Lender and Issuing Bank agrees that notice to it (as provided in the next sentence)   specifying that Communications have been posted to the Approved Electronic Platform shall constitute   effective  delivery  of  the  Communications  to  such  Lender  for  purposes  of  the  Loan  Documents.   Each   Lender and Issuing Bank agrees (i) to notify the Administrative Agent in writing (which could be in the   form of electronic communication) from time to time of such Lender’s or Issuing Bank’s (as applicable)   email  address  to  which  the  foregoing  notice  may  be  sent  by  electronic  transmission  and  (ii)  that  the   foregoing notice may be sent to such email address.          (e)   Each of the Lenders, Issuing Bank and each Borrower agrees that the Administrative Agent   may, but (except as may be required by applicable law) shall not be obligated to, store the Communications   on the Approved Electronic Platform in accordance with the Administrative Agent’s generally applicable   document retention procedures and policies.          (f)   Nothing herein shall prejudice the right of the Administrative Agent, any Lender or Issuing   Bank to give any notice or other communication pursuant to any Loan Document in any other manner   specified in such Loan Document.          SECTION 8.04  Reliance.   With  respect  to  its  Commitment,  Loans  and  Letters  of  Credit, the   Person  serving  as  the  Administrative  Agent  shall  have  and  may  exercise  the  same  rights  and  powers   hereunder and is subject to the same obligations and liabilities as and to the extent set forth herein for any   other  Lender  or  Issuing  Bank,  as  the  case  may  be.   The  terms  “Issuing  Bank”,  “Lenders”,  “Required   Lenders”  and  any  similar  terms  shall,  unless  the  context  clearly  otherwise  indicates,  include  the   Administrative Agent in its individual capacity as a Lender, Issuing Bank or as one of the Required Lenders,   as applicable.  The Person serving as the Administrative Agent 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 banking, trust or other business with, any Loan Party, any Subsidiary or   any Affiliate of any of the foregoing as if such Person was not acting as the Administrative Agent and   without any duty to account therefor to the Lenders or the Issuing Bank.          SECTION 8.05  Successor Administrative Agent.          (a)   The Administrative Agent may resign at any time by giving thirty (30) days’ prior written   notice thereof to the Lenders, the Issuing Bank and the Borrower Representative, whether or not a successor   DB1/ 102580159.10                      94  

 

 Administrative Agent has been appointed.  Upon any such resignation, the Required Lenders shall have the   right, to appoint a successor Administrative Agent.  If no successor Administrative Agent shall have been   so appointed by the Required Lenders and shall have accepted such appointment within thirty (30) days   after the retiring Administrative Agent’s giving of notice of resignation, then the retiring Administrative   Agent may, on behalf of the Lenders and the Issuing Bank, appoint a successor Administrative Agent which   shall be a bank with an office in New York, New York or an Affiliate of any such bank.  In either case,   such appointment shall be subject to the prior written approval of the Borrower Representative (which   approval may not be unreasonably withheld and shall not be required while an Event of Default has occurred   and  is  continuing).   Upon  the  acceptance  of  any  appointment  as  Administrative  Agent  by  a  successor   Administrative Agent, such successor Administrative Agent shall succeed to and become vested with, all   the rights, powers, privileges and duties of the retiring Administrative Agent.  Upon the acceptance of   appointment as  Administrative Agent  by  a successor Administrative  Agent, the retiring  Administrative   Agent  shall  be  discharged  from  its  duties  and  obligations  under  this  Agreement  and  the  other  Loan   Documents.  Prior to any retiring Administrative Agent’s resignation hereunder as Administrative Agent,   the retiring Administrative Agent shall take such action as may be reasonably necessary to assign to the   successor Administrative Agent its rights as Administrative Agent under the Loan Documents.          (b)   Notwithstanding clause (a) of this Section, in the event no successor Administrative Agent   shall have been so appointed and shall have accepted such appointment within 30 days after the retiring   Administrative Agent gives notice of its intent to resign, the retiring Administrative Agent may give notice   of the effectiveness of its resignation to the Lenders, the Issuing Bank and the Borrowers, whereupon, on   the date of effectiveness of such resignation stated in such notice, (i) the retiring Administrative Agent shall   be discharged from its duties and obligations hereunder and under the other Loan Documents; provided   that, solely for purposes of maintaining any security interest granted to the Administrative Agent under any   Collateral Document for the benefit of the Secured Parties, the retiring Administrative Agent shall continue   to be vested with such security interest as collateral agent for the benefit of the Secured Parties and continue   to be entitled to the rights set forth in such Collateral Document and Loan Document, and, in the case of   any Collateral in the possession of the Administrative Agent, shall continue to hold such Collateral, in each   case until such time as a successor Administrative Agent is appointed and accepts such appointment in   accordance with this Section (it being understood and agreed that the retiring Administrative Agent shall   have no duty or obligation to take any further action under any Collateral Document, including any action   required to maintain the perfection of any such security interest), and (ii) the Required Lenders shall succeed   to and become vested with all the rights, powers, privileges and duties of the retiring Administrative Agent;   provided that (A) all payments required to be made hereunder or under any other Loan Document to the   Administrative Agent for the account of any Person other than the Administrative Agent shall be made   directly to such Person and (B) all notices and other communications required or contemplated to be given   or made to the Administrative Agent shall directly be given or made to each Lender and Issuing Bank.    Following  the  effectiveness  of  the  Administrative  Agent’s  resignation  from  its  capacity  as  such,  the   provisions of this Article, Section 2.17(d) and Section 9.03, as well as any exculpatory, reimbursement and   indemnification provisions set forth in any other Loan Document, shall continue in effect for the benefit of   such retiring Administrative Agent, its sub-agents and their respective Related Parties in respect of any   actions taken or omitted to be taken by any of them while the retiring Administrative Agent was acting as   Administrative Agent and in respect of the matters referred to in the proviso under clause (a) above.          SECTION 8.06  Acknowledgements of Lenders and Issuing Bank.          (a)   Each Lender represents that it is engaged in making, acquiring or holding commercial loans   in  the  ordinary  course  of  its  business  and  that  it  has,  independently  and  without  reliance  upon  the   Administrative  Agent,  any  arranger  or  any  other  Lender,  or  any  of  the  Related  Parties  of  any  of  the   foregoing, and based on such documents and information as it has deemed appropriate, made its own credit   analysis  and  decision  to  enter  into  this  Agreement  as  a  Lender,  and  to  make,  acquire  or  hold  Loans   DB1/ 102580159.10                      95  

 

 hereunder.   Each  Lender  also  acknowledges  that  it  will,  independently  and  without  reliance  upon  the   Administrative  Agent,  any  arranger  or  any  other  Lender,  or  any  of  the  Related  Parties  of  any  of  the   foregoing,  and  based  on  such  documents  and  information  (which  may  contain  material,  non-public   information within the meaning of the United States securities laws concerning the Borrowers and their   Affiliates) as it shall from time to time deem appropriate, continue to make its own decisions in taking or   not taking action under or based upon this Agreement, any other Loan Document or any related agreement   or any document furnished hereunder or thereunder.          (b)   Each Lender, by delivering its signature page to this Agreement on the Effective Date, or   delivering its signature page to an Assignment and Assumption or any other Loan Document pursuant to   which it shall become a Lender hereunder, shall be deemed to have acknowledged receipt of, and consented   to and approved, each Loan Document and each other document required to be delivered to, or be approved   by or satisfactory to, the Administrative Agent or the Lenders on the Effective Date or the effective date of   any such Assignment and Assumption or any other Loan Document pursuant to which it shall have become   a Lender hereunder.          (c)   Each Lender hereby agrees that (i) it has requested a copy of each Report prepared by or   on  behalf  of  the  Administrative  Agent;  (ii)  the  Administrative  Agent  (A)  makes  no  representation  or   warranty, express or implied, as to the completeness or accuracy of any Report or any of the information   contained therein or any inaccuracy or omission contained in or relating to a Report and (B) shall not be   liable  for  any  information  contained  in  any  Report;  (iii)  the  Reports  are  not  comprehensive  audits  or   examinations, and that any Person performing any field examination will inspect only specific information   regarding the Loan Parties and will rely significantly upon the Loan Parties’ books and records, as well as   on  representations  of  the  Loan  Parties’  personnel  and  that  the  Administrative  Agent  undertakes  no   obligation to update, correct or supplement the Reports; (iv) it will keep all Reports confidential and strictly   for its internal use, not share the Report with any Loan Party or any other Person except as otherwise   permitted pursuant to this Agreement; and (v) without limiting the generality of any other indemnification   provision contained in this Agreement, (A) it will hold the Administrative Agent and any such other Person   preparing  a  Report  harmless  from  any  action  the  indemnifying  Lender  may  take  or  conclusion  the   indemnifying Lender may reach or draw from any Report in connection with any extension of credit that   the  indemnifying  Lender  has  made  or  may  make  to  the  Borrower,  or  the  indemnifying  Lender’s   participation in, or the indemnifying Lender’s purchase of, a Loan or Loans; and (B) it will pay and protect,   and indemnify, defend, and hold the Administrative Agent and any such other Person preparing a Report   harmless from and against, the claims, actions, proceedings, damages, costs, expenses, and other amounts   (including reasonable attorneys’ fees) incurred by the Administrative Agent or any such other Person as the   direct  or  indirect  result  of  any  third  parties  who  might  obtain  all  or  part  of  any  Report  through  the   indemnifying Lender.          SECTION 8.07  Collateral Matters.          (a)   Except with respect to the exercise of setoff rights in accordance with Section 9.08 or with   respect to a Secured Party’s right to file a proof of claim in an insolvency proceeding, no Secured Party   shall have any right individually to realize upon any of the Collateral or to enforce any Guarantee of the   Secured Obligations, it being understood and agreed that all powers, rights and remedies under the Loan   Documents  may  be  exercised  solely  by  the  Administrative  Agent  on  behalf  of  the  Secured  Parties  in   accordance with the terms thereof.  In its capacity, the Administrative Agent is a “representative” of the   Secured Parties within the meaning of the term “secured party” as defined in the UCC.  In the event that   any Collateral is hereafter pledged by any Person as collateral security for the Secured Obligations, the   Administrative Agent is hereby authorized, and hereby granted a power of attorney, to execute and deliver   on behalf of the Secured Parties any Loan Documents necessary or appropriate to grant and perfect a Lien   on such Collateral in favor of the Administrative Agent on behalf of the Secured Parties.   DB1/ 102580159.10                      96  

 

       (b)   In furtherance of the foregoing and not in limitation thereof, no arrangements in respect of   Banking Services the obligations under which constitute Secured Obligations and no Swap Agreement the   obligations under which constitute Secured Obligations, will create (or be deemed to create) in favor of any   Secured  Party  that  is  a  party  thereto  any  rights  in  connection  with  the  management  or  release  of  any   Collateral or of the obligations of any Loan Party under any Loan Document.  By accepting the benefits of   the Collateral, each Secured Party that is a party to any such arrangement in respect of Banking Services or   Swap Agreement, as applicable, shall be deemed to have appointed the Administrative Agent to serve as   administrative agent and collateral agent under the Loan Documents and agreed to be bound by the Loan   Documents as a Secured Party thereunder, subject to the limitations set forth in this paragraph.          (c)   The Secured Parties irrevocably authorize the Administrative Agent, at its option and in its   discretion, to subordinate any Lien on any property granted to or held by the Administrative Agent under   any Loan Document to the holder of any Lien on such property that is permitted by Section 6.02(b).  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 or   any other Secured Party for any failure to monitor or maintain any portion of the Collateral.          SECTION 8.08  Credit  Bidding.   The  Secured  Parties  hereby  irrevocably  authorize  the   Administrative  Agent,  at  the  direction  of  the  Required  Lenders,  to  credit  bid  all  or  any  portion  of  the   Obligations  (including  by  accepting  some  or  all  of  the  Collateral  in  satisfaction  of  some  or  all  of  the   Obligations pursuant to a deed in lieu of foreclosure or otherwise) and in such manner purchase (either   directly or through one or more acquisition vehicles) all or any portion of the Collateral (a) at any sale   thereof conducted under the provisions of the Bankruptcy Code, including under Sections 363, 1123 or   1129 of the Bankruptcy Code, or any similar laws in any other jurisdictions to which a Loan Party is subject,   or (b) at any other sale, foreclosure or acceptance of collateral in lieu of debt conducted by (or with the   consent  or  at  the  direction  of)  the  Administrative  Agent  (whether  by  judicial  action  or  otherwise)  in   accordance with any applicable law.  In connection with any such credit bid and purchase, the Obligations   owed to the Secured Parties shall be entitled to be, and shall be, credit bid by the Administrative Agent at   the direction of the Required Lenders on a ratable basis (with Obligations with respect to contingent or   unliquidated claims receiving contingent interests in the acquired assets on a ratable basis that shall vest   upon the liquidation of such claims in an amount proportional to the liquidated portion of the contingent   claim amount used in allocating the contingent interests) for the asset or assets so purchased (or for the   equity interests or debt instruments of the acquisition vehicle or vehicles that are issued in connection with   such purchase).  In connection with any such bid (i) the Administrative Agent shall be authorized to form   one or more acquisition vehicles and to assign any successful credit bid to such acquisition vehicle or   vehicles (ii) each of the Secured Parties’ ratable interests in the Obligations which were credit bid shall be   deemed without any further action under this Agreement to be assigned to such vehicle or vehicles for the   purpose of closing such sale, (iii) the Administrative shall be authorized to adopt documents providing for   the governance of the acquisition vehicle or vehicles (provided that any actions by the Administrative Agent   with respect to such acquisition vehicle or vehicles, including any disposition of the assets or equity interests   thereof, shall be governed, directly or indirectly, by, and the governing documents shall provide for, control   by the vote of the Required Lenders or their permitted assignees under the terms of this Agreement or the   governing documents of the applicable acquisition vehicle or vehicles, as the case may be, irrespective of   the termination of this Agreement and without giving effect to the limitations on actions by the Required   Lenders contained in Section 9.02 of this Agreement), (iv) the Administrative Agent on behalf of such   acquisition vehicle or vehicles shall be authorized to issue to each of the Secured Parties, ratably on account   of  the  relevant  Obligations  which  were  credit  bid,  interests,  whether  as  equity,  partnership,  limited   partnership interests or membership interests, in any such acquisition vehicle and/or debt instruments issued   by such acquisition vehicle, all without the need for any Secured Party or acquisition vehicle to take any   DB1/ 102580159.10                      97  

 

 further action, and (v) to the extent that Obligations that are assigned to an acquisition vehicle are not used   to acquire Collateral for any reason (as a result of another bid being higher or better, because the amount   of  Obligations  assigned to  the  acquisition vehicle  exceeds  the amount  of  Obligations credit  bid  by the   acquisition vehicle or otherwise), such Obligations shall automatically be reassigned to the Secured Parties   pro rata with their original interest in such Obligations and the equity interests and/or debt instruments   issued by any acquisition vehicle on account of such Obligations shall automatically be cancelled, without   the need for any Secured Party or any acquisition vehicle to take any further action.  Notwithstanding that   the ratable portion of the Obligations of each Secured Party are deemed assigned to the acquisition vehicle   or vehicles as set forth in clause (ii) above, each Secured Party shall execute such documents and provide   such information regarding the Secured Party (and/or any designee of the Secured Party which will receive   interests  in  or  debt  instruments  issued  by  such  acquisition  vehicle)  as  the  Administrative  Agent  may   reasonably  request  in  connection  with  the  formation  of  any  acquisition  vehicle,  the  formulation  or   submission of any credit bid or the consummation of the transactions contemplated by such credit bid.          SECTION 8.09  Certain ERISA Matters.          (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, each arranger and   their respective Affiliates, and not, for the avoidance of doubt, to or for the benefit of any Borrower or any   other Loan Party, that at least one of the following is and will be true:                (i)   such  Lender  is  not  using  “plan  assets”  (within  the  meaning  of  the  Plan  Asset         Regulations) of one or more Benefit Plans in connection with the Loans, the Letters of Credit or         the Commitments,                (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 Commitments and this Agreement, and the conditions for exemptive relief thereunder         are and will continue to be satisfied in connection therewith,                (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 Commitments and this Agreement, (C)         the entrance into, participation in, administration of and performance of the Loans, the Letters of         Credit, the 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         Commitments and this Agreement, or                (iv)  such  other  representation,  warranty  and  covenant  as  may  be  agreed  in  writing         between the Administrative Agent, in its sole discretion, and such Lender.    DB1/ 102580159.10                      98  

 

       (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, any arranger and their respective Affiliates, and not, for the avoidance   of doubt, to or for the benefit of any Borrower or any other Loan Party, that:                (i)   none  of  the  Administrative  Agent,  or  any  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),                (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 Commitments and this Agreement is independent (within the meaning of 29 CFR §         2510.3-21, as amended from time to time) 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),                (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  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),                (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 Commitments and this Agreement is a fiduciary under ERISA or the Code, or both,         with  respect  to  the  Loans,  the  Letters  of  Credit,  the  Commitments  and  this  Agreement  and  is         responsible for exercising independent judgment in evaluating the transactions hereunder, and                (v)   no fee or other compensation is being paid directly to the Administrative Agent,         any  arranger  or  any  of  their  respective  Affiliates  for  investment  advice  (as  opposed  to  other         services) in connection with the Loans, the Letters of Credit, the Commitments or this Agreement.          (c)   The Administrative Agent and each 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 Commitments and this Agreement, (ii) may   recognize a gain if it extended the Loans, the Letters of Credit or the Commitments for an amount less than   the amount being paid for an interest in the Loans, the Letters of Credit or the 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.    DB1/ 102580159.10                      99  

 

       SECTION 8.10  Flood Laws.  JPMCB has adopted internal policies and procedures that address   requirements placed on federally regulated lenders under the National Flood Insurance Reform Act of 1994   and  related  legislation  (the  “Flood  Laws”).   JPMCB,  as  administrative  agent  or  collateral  agent  on  a   syndicated facility, will post on the applicable electronic platform (or otherwise distribute to each Lender   in the syndicate) documents that it receives in connection with the Flood Laws.  However, JPMCB reminds   each Lender and Participant in the facility that, pursuant to the Flood Laws, each federally regulated Lender   (whether acting as a Lender or Participant in the facility) is responsible for assuring its own compliance   with the flood insurance requirements.                               ARTICLE IX  Miscellaneous          SECTION 9.01  Notices.          (a)   Except in the case of notices and other communications expressly permitted to be given by   telephone or Electronic Systems (and subject in each case to paragraph (b) below), all notices and other   communications provided for herein shall be in writing and shall be delivered by hand or overnight courier   service, mailed by certified or registered mail or sent by facsimile, as follows:                (i)   if to any Loan Party, to the Borrower Representative at:                      Nautilus, Inc.                     17750 SE 6th Way                     Vancouver, WA 98683                     Attention: Sidharth Nayar, Chief Financial Officer                     Facsimile No: (360) 859-2515                     E-mail: snayar@nautilus.com                     With a copy to (which shall not constitute notice):                      Garvey Schubert Barer, P.C.                     Second & Seneca Building                     1191 Second Avenue, 18th Floor                     Seattle, WA 98101                     Attention: Chelsea Anderson, Esq.                     Facsimile No: (206) 464-0125                     E-mail: canderson@gsblaw.com               (ii)  if to the Administrative Agent, JPMCB in its capacity as an Issuing Bank or the         Swingline Lender, to JPMorgan Chase Bank, N.A. at:                      3 Park Plaza, Suite 900                     Irvine, CA 92614                     Attention: Account Executive                     Facsimile No: (949) 471-9872                      With a copy to (which shall not constitute notice):                      Morgan, Lewis & Bockius LLP                     300 South Grand Avenue, 22nd Floor                     Los Angeles, CA 90071                     Attention: Marshall Stoddard, Jr., Esq.   DB1/ 102580159.10                     100  

 

                   Facsimile No.: (213) 612-2501                     E-mail: marshall.stoddard@morganlewis.com               (iii) if to any other Lender or Issuing Bank, to it at its address or facsimile number set         forth in its Administrative Questionnaire.          All such notices and other communications (i) sent by hand or overnight courier service, or mailed   by certified or registered mail, shall be deemed to have been given when received, (ii) sent by facsimile   shall be deemed to have been given when sent, provided that if not given during normal business hours of   the recipient, such notice or communication shall be deemed to have been given at the opening of business   on  the  next  Business  Day  of  the  recipient,  or  (iii)  delivered  through  Electronic  Systems  or  Approved   Electronic Platforms, as applicable, to the extent provided in clause (b) below shall be effective as provided   in such paragraph.          (b)   Notices and other communications to the Lenders and the Administrative Agent hereunder   may be delivered or furnished by using Electronic Systems or Approved Electronic Platforms, as applicable,   or pursuant to procedures approved by the Administrative Agent; provided that the foregoing shall not apply   to notices pursuant to Article II or to compliance and no Default certificates delivered pursuant to Section   5.01(d)  unless  otherwise  agreed  by  the  Administrative  Agent  and  the  applicable  Lender.   Each  of  the   Administrative  Agent  and  the  Borrower  Representative  (on  behalf  of  the  Loan  Parties)  may,  in  its   discretion, agree to  accept notices  and  other  communications to it hereunder  by  Electronic Systems  or   Approved  Electronic  Platforms,  as  applicable,  pursuant  to  procedures  approved  by  it;  provided  that   approval  of  such  procedures  may  be  limited  to  particular  notices  or  communications.   Unless  the   Administrative Agent otherwise proscribes, all such notices and other communications (i) sent to an e-mail   address shall  be deemed  received  upon  the  sender’s receipt  of  an  acknowledgement  from the  intended   recipient (such as by the “return receipt requested” function, as available, return e-mail or other written   acknowledgement), provided that if not given during the normal business hours of the recipient, such notice   or communication shall be deemed to have been given at the opening of business on the next Business Day   for the recipient, and (ii) posted to an Internet or intranet website shall be deemed received upon the deemed   receipt by the intended recipient, at its e-mail address as described in the foregoing clause (i), of notification   that such notice or communication is available and identifying the website address therefor; provided that,   for both clauses (i) and (ii) above, if such notice, e-mail or other communication is not sent during the   normal business hours of the recipient, such notice or communication shall be deemed to have been sent at   the opening of business on the next Business Day of the recipient.          (c)   Any party hereto may change its address, facsimile number or e-mail address for notices   and other communications hereunder by notice to the other parties hereto.          SECTION 9.02  Waivers; Amendments.          (a)   No  failure  or  delay  by  the  Administrative  Agent,  the  Issuing  Bank  or  any  Lender  in   exercising  any  right  or  power  hereunder  or  under  any  other  Loan  Document  shall  operate as a  waiver   thereof,  nor  shall  any  single  or  partial  exercise  of  any  such  right  or  power,  or  any  abandonment  or   discontinuance of steps to enforce such a right or power, preclude any other or further exercise thereof or   the exercise of any other right or power.  The rights and remedies of the Administrative Agent, the Issuing   Bank and the Lenders hereunder and under any other Loan Document are cumulative and are not exclusive   of  any  rights  or  remedies  that  they  would  otherwise  have.   No  waiver  of  any  provision  of  any  Loan   Document or consent to any departure by any Loan Party therefrom shall in any event be effective unless   the same shall be permitted by paragraph (b) of this Section, and then such waiver or consent shall be   effective only in the specific instance and for the purpose for which given.  Without limiting the generality   of the foregoing, the making of a Loan or issuance of a Letter of Credit shall not be construed as a waiver   DB1/ 102580159.10                     101  

 

 of any Default, regardless of whether the Administrative Agent, any Lender or the Issuing Bank may have   had notice or knowledge of such Default at the time.          (b)   Except as provided in the first sentence of Section 2.09(f) (with respect to any commitment   increase) and subject to Section 2.14(c) and Section 9.02(e) below, neither this Agreement nor any other   Loan Document nor any provision hereof or thereof may be waived, amended or modified except (x) in the   case of this Agreement, pursuant to an agreement or agreements in writing entered into by the Borrowers   and the Required Lenders or (y) in the case of any other Loan Document, pursuant to an agreement or   agreements in writing entered into by the Administrative Agent and the Loan Party or Loan Parties that are   parties thereto, with the consent of the Required Lenders; provided that no such agreement shall (i) increase   the Commitment of any Lender without the written consent of such Lender (including any such Lender that   is a Defaulting Lender), (ii) reduce or forgive the principal amount of any Loan or LC Disbursement or   reduce the rate of interest thereon, or reduce or forgive any interest or fees payable hereunder, without the   written consent of each Lender (including any such Lender that is a Defaulting Lender) directly affected   thereby (provided that any amendment or modification of the financial covenants in this Agreement (or any   defined term used therein) shall not constitute a reduction in the rate of interest or fees for purposes of this   clause  (ii)),  (iii)  postpone any  scheduled  date  of  payment  of  the  principal  amount  of any  Loan  or  LC   Disbursement, or any date for the payment of any interest, fees or other Obligations payable hereunder, or   reduce the amount of, waive or excuse any such payment, or postpone the scheduled date of expiration of   any  Commitment,  without  the  written  consent  of  each  Lender  (including  any  such  Lender  that  is  a   Defaulting Lender) directly affected thereby, (iv) change Section 2.09(d), Section 2.18(b) or (d) in a manner   that would alter the ratable reduction of Commitments or the manner in which payments are shared, without   the written consent of each Lender (other than any Defaulting Lender), (v) increase the advance rates set   forth  in  the  definition  of Borrowing  Base  or  add new  categories  of eligible  assets,  without  the  written   consent of each Revolving Lender (other than any Defaulting Lender), (vi) change any of the provisions of   this  Section  or  the  definition  of  “Required  Lenders”  or  any  other  provision  of  any  Loan  Document   specifying the number or percentage of Lenders (or Lenders of any Class) required to waive, amend or   modify  any  rights  thereunder  or  make  any  determination  or  grant  any  consent  thereunder,  without the   written consent of each Lender (other than any Defaulting Lender) directly affected thereby, (vii) change   Section 2.20 without the consent of each Lender (other than any Defaulting Lender), (viii) release any Loan   Guarantor from its obligation under its Loan Guaranty (except as otherwise permitted herein or in the other   Loan Documents), without the written consent of each Lender (other than any Defaulting Lender), or (ix)   except as provided in clause (c) of this Section or in any Collateral Document, release all or substantially   all  of  the  Collateral,  without  the  written  consent  of  each  Lender  (other  than  any  Defaulting  Lender);   provided further that no such agreement shall amend, modify or otherwise affect the rights or duties of the   Administrative  Agent,  the  Issuing  Bank  or  the  Swingline  Lender  hereunder  without  the  prior  written   consent of the Administrative Agent, the Issuing Bank or the Swingline Lender, as the case may be (it being   understood that any amendment to Section 2.20 shall require the consent of the Administrative Agent, the   Issuing Bank and the Swingline Lender); provided further that no such agreement shall amend or modify   the provisions of Section 2.07 or any letter of credit application and any bilateral agreement between the   Borrower Representative and the Issuing Bank regarding the Issuing Bank’s Issuing Bank Sublimit or the   respective  rights  and  obligations  between  the  Borrower  and  the  Issuing  Bank  in  connection  with  the   issuance of Letters of Credit without the prior written consent of the Administrative Agent and the Issuing   Bank,  respectively.   The  Administrative  Agent  may  also  amend  the  Commitment  Schedule  to  reflect   assignments entered into pursuant to Section 9.04.  Any amendment, waiver or other modification of this   Agreement or any other Loan Document that by its terms affects the rights or duties under this Agreement   of the Lenders of one or more Classes (but not the Lenders of any other Class), may be effected by an   agreement or agreements in writing entered into by the Borrower and the requisite number or percentage in   interest of each affected Class of Lenders that would be required to consent thereto under this Section if   such Class of Lenders were the only Class of Lenders hereunder at the time.    DB1/ 102580159.10                     102  

 

       (c)   The Lenders and the Issuing Bank hereby irrevocably authorize the Administrative Agent,   at its option and in its sole discretion, to release any Liens granted to the Administrative Agent by the Loan   Parties  on  any  Collateral  (i)  upon  the  Payment  in  Full  of  all  Secured  Obligations,  and  the  cash   collateralization  of  all  Unliquidated  Obligations  in  a  manner  satisfactory  to  each  affected  Lender,   (ii) constituting property being sold or disposed of if the Loan Party disposing of such property certifies to   the Administrative Agent that the sale or disposition is made in compliance with the terms of this Agreement   (and the Administrative Agent may rely conclusively on any such certificate, without further inquiry), (iii)   constituting  property  leased  to  a  Loan  Party  under  a  lease  which  has  expired  or  been  terminated  in  a   transaction permitted under this Agreement, or (iv) as required to effect any sale or other disposition of   such Collateral in connection with any exercise of remedies of the Administrative Agent and the Lenders   pursuant to Article VII.  Except as provided in the preceding sentence, the Administrative Agent will not   release any Liens on Collateral without the prior written authorization of the Required Lenders; provided   that, the Administrative Agent may in its discretion, release its Liens on Collateral valued in the aggregate   not in excess of $5,000,000 during any calendar year without the prior written authorization of the Required   Lenders(it being agreed that the Administrative Agent may rely conclusively on one or more certificates of   the Borrowers as to the value of any Collateral to be so released, without further inquiry).  Any such release   shall not in any manner discharge, affect, or impair the Obligations or any Liens (other than those expressly   being released) upon (or obligations of the Loan Parties in respect of) all interests retained by the Loan   Parties, including the proceeds of any sale, all of which shall continue to constitute part of the Collateral.    Any execution and delivery by the Administrative Agent of documents in connection with any such release   shall be without recourse to or warranty by the Administrative Agent.          (d)   If, in connection with any proposed amendment, waiver or consent requiring the consent   of “each Lender” or “each Lender affected thereby,” the consent of the Required Lenders is obtained, but   the consent of other necessary Lenders is not obtained (any such Lender whose consent is necessary but   has not been obtained being referred to herein as a “Non-Consenting Lender”), then the Borrowers may   elect to replace a Non-Consenting Lender as a Lender party to this Agreement, provided that, concurrently   with such replacement, (i) another bank or other entity which is reasonably satisfactory to the Borrowers,   the Administrative Agent and the Issuing Bank shall agree, as of such date, to purchase for cash the Loans   and other Obligations due to the Non-Consenting Lender pursuant to an Assignment and Assumption and   to  become  a  Lender  for  all  purposes  under  this  Agreement  and  to  assume  all  obligations  of  the  Non-  Consenting Lender to be terminated as of such date and to comply with the requirements of clause (b) of   Section 9.04, and (ii) the Borrowers shall pay to such Non-Consenting Lender in same day funds on the   day of such replacement (1) all interest, fees and other amounts then accrued but unpaid to such Non-  Consenting Lender by the Borrowers hereunder to and including the date of termination, including without   limitation payments due to such Non-Consenting Lender under Sections 2.15 and 2.17, and (2) an amount,   if any, equal to the payment which would have been due to such Lender on the day of such replacement   under Section 2.16 had the Loans of such Non-Consenting Lender been prepaid on such date rather than   sold to the replacement Lender.  Each party hereto agrees that an assignment required pursuant to this   paragraph  may  be  effected  pursuant  to  an  Assignment  and  Assumption  executed  by  the  Borrower   Representative,  the  Administrative  Agent  and  the  assignee  (or,  to  the  extent  applicable,  an  agreement   incorporating an Assignment and Assumption by reference pursuant to an Approved Electronic Platform   as to which the Administrative Agent and such parties are participants), and (b) the Lender required to make   such assignment need not be a party thereto in order for such assignment to be effective and shall be deemed   to have consented to an be bound by the terms thereof; provided that, following the effectiveness of any   such  assignment,  the  other  parties  to  such  assignment  agree  to  execute  and  deliver  such  documents   necessary to evidence such assignment as reasonably requested by the applicable Lender, provided that any   such documents shall be without recourse to or warranty by the parties thereto.    DB1/ 102580159.10                     103  

 

       (e)   Notwithstanding anything to the contrary herein the Administrative Agent may, with the   consent of the Borrower Representative only, amend, modify or supplement this Agreement or any of the   other Loan Documents to cure any ambiguity, omission, mistake, defect or inconsistency.          SECTION 9.03  Expenses; Indemnity; Damage Waiver.          (a)   The Loan Parties shall, jointly and severally, pay all (i) reasonable out-of-pocket expenses   incurred  by  the  Administrative  Agent  and  its  Affiliates,  including  the  reasonable  fees,  charges  and   disbursements of counsel for the Administrative Agent, in connection with the syndication and distribution   (including, without limitation, via the internet or through any Electronic System or Approved Electronic   Platform)  of  the  credit  facilities  provided  for  herein,  the  preparation  and  administration  of  the  Loan   Documents  and  any  amendments,  modifications  or  waivers  of  the  provisions  of  the  Loan  Documents   (whether or not the transactions contemplated hereby or thereby shall be consummated), (ii) reasonable out-  of-pocket expenses incurred by the Issuing Bank in connection with the issuance, amendment, renewal or   extension of any Letter of Credit or any demand for payment thereunder and (iii) out-of-pocket expenses   incurred by the Administrative Agent, the Issuing Bank or any Lender, including the fees, charges and   disbursements of any counsel for the Administrative Agent, the Issuing Bank or any Lender, in connection   with  the  enforcement,  collection  or  protection  of  its  rights  in  connection  with  the  Loan  Documents,   including its rights under this Section, or in connection with the Loans made or Letters of Credit issued   hereunder,  including  all  such  out-of-pocket  expenses  incurred  during  any  workout,  restructuring  or   negotiations in respect of such Loans or Letters of Credit.  Expenses being reimbursed by the Loan Parties   under  this  Section  include,  without  limiting  the  generality  of  the  foregoing,  fees,  costs  and  expenses   incurred in connection with:                      (A)   appraisals and insurance reviews;                      (B)   field  examinations  and  the  preparation  of  Reports  based  on  the  fees               charged by a third party retained by the Administrative Agent or the internally allocated               fees for  each  Person  employed  by  the Administrative  Agent  with  respect  to  each  field               examination (subject to the limitations set forth in Section 5.06);                      (C)   background checks regarding senior management and/or key investors, as               deemed necessary or appropriate in the sole discretion of the Administrative Agent;                      (D)   Taxes,  fees  and  other  charges  for  (1)  lien  and  title  searches  and  title               insurance and (2) recording the Mortgages, filing financing statements and continuations,               and other actions to perfect, protect, and continue the Administrative Agent’s Liens;                      (E)   sums paid or incurred to take any action required of any Loan Party under               the Loan Documents that such Loan Party fails to pay or take; and                      (F)   forwarding loan proceeds, collecting checks and other items of payment,               and establishing and maintaining the accounts and lock boxes, and costs and expenses of               preserving and protecting the Collateral.          All of the foregoing fees, costs and expenses may be charged to the Borrowers as Revolving Loans   or to another deposit account, all as described in Section 2.18(c).          (b)   The Loan  Parties shall, jointly and  severally,  indemnify  the  Administrative  Agent, any   arranger, the Issuing Bank and each Lender, and each Related Party of any of the foregoing Persons (each   such Person being called an “Indemnitee”) against, and hold each Indemnitee harmless from, any and all   DB1/ 102580159.10                     104  

 

 losses, claims, damages, penalties, incremental taxes, liabilities and related expenses, including the fees,   charges  and  disbursements  of  any  counsel  for  any  Indemnitee,  incurred  by  or  asserted  against  any   Indemnitee arising out of, in connection with, or as a result of (i) the execution or delivery of the Loan   Documents or any agreement or instrument contemplated thereby, the performance by the parties hereto of   their respective obligations thereunder or the consummation of the Transactions or any other transactions   contemplated hereby, (ii) any Loan or Letter of Credit or the use of the proceeds therefrom (including any   refusal by the Issuing Bank to honor a demand for payment under a Letter of Credit if the documents   presented in connection with such demand do not strictly comply with the terms of such Letter of Credit),   (iii) any actual or alleged presence or Release of Hazardous Materials on or from any property owned or   operated by a Loan Party or a Subsidiary, or any Environmental Liability related in any way to a Loan Party   or a Subsidiary, (iv) the failure of a Loan Party to deliver to the Administrative Agent the required receipts   or other required documentary evidence with respect to a payment made by a Loan Party for Taxes pursuant   to Section 2.17, or (v) any actual or prospective claim, litigation, investigation, arbitration or proceeding   relating  to  any  of  the  foregoing,  whether  or  not  such  claim,  litigation,  investigation,  arbitration  or   proceeding is brought by any Loan Party or their respective equity holders, Affiliates, creditors or any other   third  Person  and  whether  based  on  contract,  tort  or  any  other  theory  and  regardless  of  whether  any   Indemnitee is a party thereto; provided that such indemnity shall not, as to any Indemnitee, be available to   the extent that such losses, claims, damages, penalties, liabilities or related expenses are determined by a   court  of  competent  jurisdiction  by  final  and  nonappealable  judgment  to  have  resulted  from  the  gross   negligence or willful misconduct of such Indemnitee. This Section 9.03(b) shall not apply with respect to   Taxes other than any Taxes that represent losses or damages arising from any non-Tax claim.          (c)   Each Lender severally agrees to pay any amount required to be paid by any Loan Party   under clause (a) or (b) of this Section 9.03 to the Administrative Agent, each Issuing Bank and the Swingline   Lender, and each Related Party of any of the foregoing Persons (each, an “Agent Indemnitee”) (to the extent   not reimbursed by a Loan Party and without limiting the obligation of any Loan Party to do so), ratably   according to their respective Applicable Percentage in effect on the date on which indemnification is sought   under this Section (or, if indemnification is sought after the date upon which the Commitments shall have   terminated  and  the  Loans  shall  have  been  paid  in  full,  ratably  in  accordance  with  such  Applicable   Percentage immediately prior to such date), from and against any and all losses, claims, damages, liabilities   and related expenses, including the fees, charges and disbursements of any kind whatsoever that may at any   time (whether before or after the payment of the Loans) be imposed on, incurred by or asserted against such   Agent Indemnitee in any way relating to or arising out of the Commitments, this Agreement, any of the   other Loan Documents or any documents contemplated by or referred to herein or therein or the transactions   contemplated  hereby or  thereby  or  any  action  taken  or omitted  by  such Agent  Indemnitee  under  or  in   connection with any of the foregoing; provided that the unreimbursed expense or indemnified loss, claim,   damage, liability or related expense, as the case may be, was incurred by or asserted against such Agent   Indemnitee in its capacity as such; provided, further, that no Lender shall be liable for the payment of any   portion of such liabilities, obligations, losses, damages, penalties, actions, judgments, suits, costs, expenses   or disbursements that are found by a final and nonappealable decision of a court of competent jurisdiction   to have resulted from such Agent Indemnitee’s gross negligence or willful misconduct.  The agreements in   this  Section  shall  survive  the  termination  of  this  Agreement  and  the  Payment  in  Full  of  the  Secured   Obligations.          (d)   To the extent permitted by applicable law, no Loan Party shall assert, and each Loan Party   hereby waives, any claim against any Indemnitee (i) for any damages arising from the use by others of   information  or  other  materials  obtained  through  telecommunications,  electronic  or  other  information   transmission  systems  (including  the  Internet)  or  (ii)  on  any  theory  of  liability,  for  special,  indirect,   consequential or punitive damages (as opposed to direct or actual damages) arising out of, in connection   with,  or  as  a  result  of,  this  Agreement,  any  other  Loan  Document  or  any  agreement  or  instrument   contemplated hereby or thereby, the Transactions, any Loan or Letter of Credit or the use of the proceeds   DB1/ 102580159.10                     105  

 

 thereof; provided that, nothing in this paragraph (d) shall relieve any Loan Party of any obligation it may   have  to  indemnify  an  Indemnitee  against  special,  indirect,  consequential  or  punitive  damages  asserted   against such Indemnitee by a third party.          (e)   All  amounts  due  under  this  Section  shall  be  payable  promptly  after  written  demand   therefor.          SECTION 9.04  Successors and Assigns.          (a)   The provisions of this Agreement shall be binding upon and inure to the benefit of the   parties hereto and their respective successors and assigns permitted hereby (including any Affiliate of the   Issuing Bank that issues any Letter of Credit), except that (i) no Borrower may assign or otherwise transfer   any  of  its  rights  or  obligations  hereunder  without  the  prior  written  consent  of  each  Lender  (and  any   attempted assignment or transfer by any Borrower without such consent shall be null and void) and (ii) no   Lender may assign or otherwise transfer its rights or obligations hereunder except in accordance with this   Section.  Nothing in this Agreement, expressed or implied, shall be construed to confer upon any Person   (other  than  the  parties  hereto,  their  respective  successors  and  assigns  permitted  hereby  (including  any   Affiliate of the Issuing Bank that issues any Letter of Credit), Participants (to the extent provided in clause   (c) of this Section) and, to the extent expressly contemplated hereby, the Related Parties of each of the   Administrative Agent, the Issuing Bank and the Lenders) any legal or equitable right, remedy or claim   under or by reason of this Agreement.          (b)   (i) Subject to the conditions set forth in clause (b)(ii) below, any Lender may assign to one   or more Persons (other than an Ineligible Institution) all or a portion of its rights and obligations under this   Agreement (including all or a portion of its Commitment, participations in Letters of Credit and the Loans   at the time owing to it) with the prior written consent (such consent not to be unreasonably withheld) of:                      (A)   the Borrower Representative, provided that the Borrower Representative               shall  be  deemed  to  have  consented  to  any  such  assignment  of  all  or  a  portion  of  the               Revolving Loans and Commitments unless it shall object thereto by written notice to the               Administrative Agent within ten (10) Business Days after having received notice thereof               and provided further that no consent of the Borrower Representative shall be required for               an assignment to a Lender, an Affiliate of a Lender, an Approved Fund or, if an Event of               Default has occurred and is continuing, any other assignee;                      (B)   the Administrative Agent;                      (C)   the Issuing Bank; and                      (D)   the Swingline Lender.                (ii)  Assignments shall be subject to the following additional conditions:                      (A)   except in the case of an assignment to a Lender or an Affiliate of a Lender               or an Approved Fund or an assignment of the entire remaining amount of the assigning               Lender’s Commitment or Loans of any Class, the amount of the Commitment or Loans of               the  assigning  Lender  subject  to  each  such  assignment  (determined  as  of  the  date  the               Assignment  and  Assumption  with  respect  to  such  assignment  is  delivered  to  the               Administrative  Agent)  shall  not  be  less  than  $5,000,000  unless  each  of  the  Borrower               Representative  and  the  Administrative  Agent  otherwise  consent,  provided  that  no  such    DB1/ 102580159.10                     106  

 

             consent  of  the  Borrower  Representative  shall  be  required  if  an  Event  of  Default  has               occurred and is continuing;                      (B)   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;                      (C)   the  parties  to  each  assignment  shall  execute  and  deliver  to  the               Administrative Agent (x) an Assignment and Assumption or (y) to the extent applicable,               an agreement incorporating an Assignment and Assumption by reference pursuant to an               Approved Electronic Platform as to which the Administrative Agent and the parties to the               Assignment and Assumption are participants, together with a processing and recordation               fee of $3,500; and                      (D)   the assignee, if it shall not be a Lender, shall deliver to the Administrative               Agent an Administrative Questionnaire in which the assignee designates one or more credit               contacts to whom all syndicate-level information (which may contain material non-public               information about the Company, the other Loan Parties and their Related Parties or their               respective securities) will be made available and who may receive such information in               accordance  with  the  assignee’s  compliance  procedures  and  applicable  laws,  including               Federal and state securities laws.                For  the  purposes  of  this  Section  9.04(b),  the  terms  “Approved  Fund”  and  “Ineligible         Institution” have the following meanings:                “Approved  Fund”  means  any  Person  (other  than  a  natural  person)  that  is  engaged  in         making,  purchasing,  holding  or  investing  in  bank  loans  and  similar  extensions  of  credit  in  the         ordinary course of its business and that is administered or managed by (a) a Lender, (b) an Affiliate         of a Lender or (c) an entity or an Affiliate of an entity that administers or manages a Lender.                “Ineligible Institution” means a (a) natural person, (b) a Defaulting Lender or its Parent,         (c) company, investment vehicle or trust for, or owned and operated for the primary benefit of, a         natural  person  or  relative(s)  thereof;  provided  that,  with  respect  to  clause  (c),  such  company,         investment  vehicle  or  trust  shall  not  constitute  an  Ineligible  Institution  if  it  (x)  has  not  been         established for the primary purpose of acquiring any Loans or Commitments, (y) is managed by a         professional  advisor,  who  is  not  such  natural  person  or  a  relative  thereof,  having  significant         experience in the business of making or purchasing commercial loans, and (z) has assets greater         than $25,000,000 and a significant part of its activities consist of making or purchasing commercial         loans and similar extensions of credit in the ordinary course of its business or (d) a Loan Party or a         Subsidiary or other Affiliate of a Loan Party.                (iii) Subject  to  acceptance  and  recording  thereof  pursuant  to  clause  (b)(iv)  of  this         Section,  from  and  after  the  effective  date  specified  in  each  Assignment  and  Assumption,  the         assignee  thereunder  shall  be  a  party  hereto  and,  to  the  extent  of  the  interest  assigned  by  such         Assignment and Assumption, have the rights and obligations of a Lender under this Agreement,         and the assigning Lender thereunder shall, to the extent of the interest assigned by such Assignment         and Assumption, be released from its obligations under this Agreement (and, in the case of an         Assignment and Assumption covering all of the assigning Lender’s rights and obligations under         this Agreement, such Lender shall cease to be a party hereto but shall continue to be entitled to the         benefits of Sections 2.15, 2.16, 2.17 and 9.03).  Any assignment or transfer by a Lender of rights         or obligations under this Agreement that does not comply with this Section shall be treated for    DB1/ 102580159.10                     107  

 

       purposes of this Agreement as a sale by such Lender of a participation in such rights and obligations         in accordance with clause (c) of this Section.                (iv)  The Administrative Agent, acting for this purpose as a non-fiduciary agent of the         Borrowers, shall maintain at one of its offices a copy of each Assignment and Assumption delivered         to  it  and  a  register  for  the  recordation  of  the  names  and  addresses  of  the  Lenders,  and  the         Commitment of, and principal amount of the Loans and LC Disbursements owing to, each Lender         pursuant to the terms hereof from time to time (the “Register”).  The entries in the Register shall         be conclusive, and the Borrowers, the Administrative Agent, the Issuing Bank and the Lenders shall         treat each Person whose name is recorded in the Register pursuant to the terms hereof as a Lender         hereunder for all purposes of this Agreement, notwithstanding notice to the contrary.  The Register         shall  be  available  for  inspection  by  the  Borrowers,  the  Issuing  Bank  and  any  Lender,  at  any         reasonable time and from time to time upon reasonable prior notice.                (v)   Upon its receipt of (x) a duly completed Assignment and Assumption executed by         an assigning Lender and an assignee, or (y) to the extent applicable, an agreement incorporating an         Assignment and Assumption by reference pursuant to an Approved Electronic Platform  as to which         the Administrative Agent and the parties to the Assignment and Assumption are participants, the         assignee’s completed Administrative Questionnaire (unless the assignee shall already be a Lender         hereunder), the processing and recordation fee referred to in paragraph (b) of this Section and any         written consent to such assignment required by paragraph (b) of this Section, the Administrative         Agent shall accept such Assignment and Assumption and record the information contained therein         in the Register; provided that if either the assigning Lender or the assignee shall have failed to make         any payment required to be made by it pursuant to Section 2.05, 2.06(d) or (e), 2.07(b), 2.18(d) or         9.03(c),  the  Administrative  Agent  shall  have  no  obligation  to  accept  such  Assignment  and         Assumption and record the information therein in the Register unless and until such payment shall         have been made in full, together with all accrued interest thereon.  No assignment shall be effective         for  purposes  of  this  Agreement  unless it has  been recorded  in the  Register  as provided in  this         paragraph.          (c)   Any Lender may, without the consent of, or notice to, the Borrowers, the Administrative   Agent, the Issuing Bank or the Swingline Lender, sell participations to one or more banks or other entities   (a “Participant”) other than an Ineligible Institution in all or a portion of such Lender’s rights and obligations   under this Agreement (including all or a portion of its Commitment and/or the Loans owing to it); provided   that (A) such Lender’s obligations under this Agreement shall remain unchanged; (B) such Lender shall   remain solely responsible to the other parties hereto for the performance of such obligations; and (C) the   Borrowers, the Administrative Agent, the Issuing Bank and the other Lenders shall continue to deal solely   and  directly  with  such  Lender  in  connection  with  such  Lender’s  rights  and  obligations  under  this   Agreement.   Any  agreement  or  instrument  pursuant to  which  a  Lender  sells  such  a  participation  shall   provide  that  such  Lender  shall  retain  the  sole  right  to  enforce  this  Agreement  and  to  approve  any   amendment, modification or waiver of any provision of this Agreement; provided that such agreement or   instrument may provide that such Lender will not, without the consent of the Participant, agree to any   amendment,  modification  or  waiver  described  in  the  first  proviso  to  Section 9.02(b)  that  affects  such   Participant.  The Borrowers agree that each Participant shall be entitled to the benefits of Sections 2.15,   2.16  and  2.17  (subject  to  the  requirements  and  limitations  therein,  including  the  requirements  under   Section 2.17(f) and (g) (it being understood that the documentation required under Section 2.17(f) shall be   delivered to the participating Lender and the information and documentation required under Section 2.17(g)   will be delivered to the Borrowers and the Administrative Agent)) to the same extent as if it were a Lender   and had acquired its interest by assignment pursuant to paragraph (b) of this Section; provided that such   Participant (A) agrees to be subject to the provisions of Sections 2.18 and 2.19 as if it were an assignee   under paragraph (b) of this Section; and (B) shall not be entitled to receive any greater payment under   DB1/ 102580159.10                     108  

 

 Section 2.15 or 2.17, with respect to any participation, than its participating Lender would have been entitled   to receive, except to the extent such entitlement to receive a greater payment results from a Change in Law   that occurs after the Participant acquired the applicable participation.          Each  Lender  that  sells  a  participation  agrees,  at  the  Borrowers’  request  and  expense,  to  use   reasonable  efforts  to  cooperate  with  the  Borrowers to  effectuate the provisions  of  Section 2.19(b)  with   respect to any Participant.  To the extent permitted by law, each Participant also shall be entitled to the   benefits  of  Section 9.08  as  though  it  were  a  Lender,  provided  such  Participant  agrees  to  be  subject  to   Section 2.18(c) as though it were a Lender.  Each Lender that sells a participation shall, acting solely for   this purpose as a non-fiduciary agent of the Borrowers, maintain a register on which it enters the name and   address of each Participant and the principal amounts (and stated interest) of each Participant’s interest in   the  Loans  or  other  obligations  under  this  Agreement  or  any  other  Loan  Document  (the  “Participant   Register”); provided that no Lender shall have any obligation to disclose all or any portion of the Participant   Register (including the identity of any Participant or any information relating to a Participant’s interest in   any Commitments, Loans, Letters of Credit or its other obligations under this Agreement or any other Loan   Document)  to  any  Person  except  to  the  extent  that  such  disclosure  is  necessary  to  establish  that  such   Commitment, Loan, Letter of Credit or other obligation is in registered form 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.          (d)   Any Lender may at any time pledge or assign a security interest in all or any portion of its   rights under this Agreement to secure obligations of such Lender, including without limitation any pledge   or assignment to secure obligations to a Federal Reserve Bank, and this Section shall not apply to any such   pledge or assignment of a security interest; provided that no such pledge or assignment of a security interest   shall release a Lender from any of its obligations hereunder or substitute any such pledgee or assignee for   such Lender as a party hereto.          SECTION 9.05  Survival.  All covenants, agreements, representations and warranties made by   the Loan Parties in the Loan Documents and in the certificates or other instruments delivered in connection   with or pursuant to this Agreement or any other Loan Document shall be considered to have been relied   upon by the other parties hereto and shall survive the execution and delivery of the Loan Documents and   the making of any Loans and issuance of any Letters of Credit, regardless of any investigation made by any   such other party or on its behalf and notwithstanding that the Administrative Agent, the Issuing Bank or   any Lender may have had notice or knowledge of any Default or incorrect representation or warranty at the   time any credit is extended hereunder, and shall continue in full force and effect as long as the principal of   or  any  accrued  interest  on any  Loan  or any  fee  or  any  other  amount payable under  this  Agreement  is   outstanding and unpaid or any Letter of Credit is outstanding and so long as the Commitments have not   expired or terminated.  The provisions of Sections 2.15, 2.16, 2.17 and 9.03 and Article VIII shall survive   and remain in full force and effect regardless of the consummation of the transactions contemplated hereby,   the repayment of the Loans, the expiration or termination of the Letters of Credit and the Commitments or   the termination of this Agreement or any other Loan Document or any provision hereof or thereof.          SECTION 9.06  Counterparts; Integration; Effectiveness; Electronic Execution.          (a)   This  Agreement  may  be  executed  in  counterparts  (and  by  different  parties  hereto  on   different counterparts), each of which shall constitute an original, but all of which when taken together shall   constitute a single contract.  This Agreement, the other Loan Documents and any separate letter agreements   with respect to (i) fees payable to the Administrative Agent and (ii) increases or reductions of the Issuing   DB1/ 102580159.10                     109  

 

 Bank Sublimit of the Issuing Bank constitute the entire contract among the parties relating to the subject   matter hereof and supersede any and all previous agreements and understandings, oral or written, relating   to the subject matter hereof.  Except as provided in Section 4.01, this Agreement shall become effective   when it shall have been executed by the Administrative Agent and when the Administrative Agent shall   have received counterparts hereof which, when taken together, bear the signatures of each of the other   parties hereto, and thereafter shall be binding upon and inure to the benefit of the parties hereto and their   respective successors and assigns.          (b)   Delivery of an executed counterpart of a signature page of this Agreement by telecopy,   emailed pdf, or any other electronic means that reproduces an image of the actual executed signature page   shall be effective as delivery of a manually executed counterpart of this Agreement.  The words “execution,”   “signed,” “signature,” “delivery,” and words of like import in or relating to any document to be signed in   connection with this Agreement and the transactions contemplated hereby or thereby shall be deemed to   include Electronic Signatures, deliveries or the keeping of records in electronic form, each of which shall   be of the same legal effect, validity or enforceability as a manually executed signature, physical delivery   thereof or the use of a paper-based recordkeeping system, as the case may be, to the extent and as provided   for in any applicable law, including the Federal Electronic Signatures in Global and National Commerce   Act, the New York State Electronic Signatures and Records Act, or any other similar state laws based on   the Uniform Electronic Transactions Act; provided that nothing herein shall require the Administrative   Agent to accept electronic signatures in any form or format without its prior written consent.          SECTION 9.07  Severability.  Any provision of any Loan Document held to be invalid, illegal or   unenforceable in any jurisdiction shall, as to such jurisdiction, be ineffective to the extent of such invalidity,   illegality or unenforceability without affecting the validity, legality and enforceability of the remaining   provisions thereof; and the invalidity of a particular provision in a particular jurisdiction shall not invalidate   such provision in any other jurisdiction.          SECTION 9.08.  Right of Setoff.  If an Event of Default shall have occurred and be continuing,   each Lender, the Issuing Bank and each of their respective Affiliates is hereby authorized at any time and   from time to time, to the fullest extent permitted by law, to set off and apply any and all deposits (general   or special, time or demand, provisional or final) at any time held, and other obligations at any time owing,   by such Lender, the Issuing Bank or any such Affiliate, to or for the credit or the account of any Loan Party   against any and all of the Secured Obligations held by such Lender, the Issuing Bank or their respective   Affiliates, irrespective of whether or not such Lender, the Issuing Bank or their respective Affiliates shall   have made any demand under the Loan Documents and although such obligations may be contingent or   unmatured or are owed to a branch office or Affiliate of such Lender or the Issuing Bank different from the   branch office or Affiliate 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   Section 2.20 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 Issuing  Bank, and  the   Lenders, and (y) the Defaulting Lender shall provide promptly to the Administrative Agent a statement   describing in reasonable detail the Secured Obligations owing to such Defaulting Lender as to which it   exercised such right of setoff.  The applicable Lender, the Issuing Bank or such Affiliate shall notify the   Borrower Representative and the Administrative Agent of such setoff or application, provided that any   failure to give or any delay in giving such notice shall not affect the validity of any such setoff or application   under this Section.  The rights of each Lender, the Issuing Bank and their respective Affiliates under this   Section are in addition to other rights and remedies (including other rights of setoff) that such Lender, the   Issuing Bank or their respective Affiliates may have.  NOTWITHSTANDING THE FOREGOING, AT   ANY  TIME  THAT  ANY  OF  THE  SECURED  OBLIGATIONS  SHALL  BE  SECURED  BY  REAL   PROPERTY LOCATED IN CALIFORNIA, NO LENDER SHALL EXERCISE A RIGHT OF SETOFF,   DB1/ 102580159.10                     110  

 

 LENDER’S LIEN OR COUNTERCLAIM OR TAKE ANY COURT OR ADMINISTRATIVE ACTION   OR INSTITUTE ANY PROCEEDING TO ENFORCE ANY PROVISION OF THIS AGREEMENT OR   ANY  LOAN  DOCUMENT  UNLESS  IT  IS  TAKEN  WITH  THE  CONSENT  OF  THE  LENDERS   REQUIRED  BY  SECTION 9.02  OF  THIS  AGREEMENT,  IF  SUCH  SETOFF  OR  ACTION  OR   PROCEEDING WOULD OR MIGHT (PURSUANT TO SECTIONS 580a, 580b, 580d AND 726 OF THE   CALIFORNIA  CODE  OF  CIVIL  PROCEDURE  OR  SECTION 2924  OF  THE  CALIFORNIA  CIVIL   CODE, IF APPLICABLE, OR OTHERWISE) AFFECT OR IMPAIR THE VALIDITY, PRIORITY, OR   ENFORCEABILITY OF THE LIENS GRANTED TO ADMINISTRATIVE AGENT PURSUANT TO   THE  COLLATERAL  DOCUMENTS  OR  THE  ENFORCEABILITY  OF  THE  SECURED   OBLIGATIONS HEREUNDER, AND ANY ATTEMPTED EXERCISE BY ANY LENDER OF ANY   SUCH  RIGHT  WITHOUT  OBTAINING  SUCH  CONSENT  OF  THE  PARTIES  AS  REQUIRED   ABOVE,  SHALL  BE  NULL  AND  VOID.   THIS  PARAGRAPH  SHALL  BE  SOLELY  FOR  THE   BENEFIT OF EACH OF THE LENDERS.          SECTION 9.09  Governing Law; Jurisdiction; Consent to Service of Process.          (a)   The  Loan  Documents  (other  than  those  containing  a  contrary  express  choice  of  law   provision) shall be governed by and construed in accordance with the internal laws of the State of New   York, but giving effect to federal laws applicable to national banks.          (b)   Each of the Lenders and the Administrative Agent hereby irrevocably and unconditionally   agrees that, notwithstanding the governing law provisions of any applicable Loan Document, any claims   brought against the Administrative Agent by any Secured Party relating to this Agreement, any other Loan   Document, the Collateral or the consummation or administration of the transactions contemplated hereby   or thereby shall be construed in accordance with and governed by the law of the State of New York.          (c)   Each of the parties hereto hereby irrevocably and unconditionally submits, for itself and its   property, to the exclusive jurisdiction of any U.S. federal or New York state court sitting in New York,   New York, and any appellate court from any thereof, in any action or proceeding arising out of or relating   to any Loan Documents, the transactions relating hereto or thereto, or for recognition or enforcement of   any judgment, and each of the parties hereto hereby irrevocably and unconditionally agrees that all claims   in respect of any such action or proceeding may (and any such claims, cross-claims or third party claims   brought against the Administrative Agent or any of its Related Parties may only) be heard and determined   in such New York State court or, to the extent permitted by law, in such Federal court.  Each of the parties   hereto agrees that a final judgment in any such action or proceeding shall be conclusive and may be enforced   in other jurisdictions by suit on the judgment or in any other manner provided by law.  Nothing in this   Agreement or any other Loan Document shall affect any right that the Administrative Agent, the Issuing   Bank or any Lender may otherwise have to bring any action or proceeding relating to this Agreement or   any other Loan Document against any Loan Party or its properties in the courts of any jurisdiction.          (d)   Each Loan Party hereby irrevocably and unconditionally waives, to the fullest extent it may   legally and effectively do so, any objection which it may now or hereafter have to the laying of venue of   any suit, action or proceeding arising out of or relating to this Agreement or any other Loan Document in   any court referred to in paragraph (c) of this Section.  Each of the parties hereto hereby irrevocably waives,   to the fullest extent permitted by law, the defense of an inconvenient forum to the maintenance of such   action or proceeding in any such court.          (e)   Each party to this Agreement irrevocably consents to service of process in the manner   provided for notices in Section 9.01.  Nothing in this Agreement or any other Loan Document will affect   the right of any party to this Agreement to serve process in any other manner permitted by law.    DB1/ 102580159.10                     111  

 

       SECTION 9.10  WAIVER OF JURY TRIAL.  EACH PARTY HERETO HEREBY WAIVES,   TO THE FULLEST EXTENT PERMITTED BY APPLICABLE LAW, ANY RIGHT IT MAY HAVE TO   A TRIAL BY JURY IN ANY LEGAL PROCEEDING DIRECTLY OR INDIRECTLY ARISING OUT   OF  OR  RELATING  TO  THIS  AGREEMENT,  ANY  OTHER  LOAN  DOCUMENT  OR  THE   TRANSACTIONS  CONTEMPLATED  HEREBY  OR  THEREBY  (WHETHER  BASED  ON   CONTRACT, TORT OR ANY OTHER THEORY).  EACH PARTY HERETO (A) CERTIFIES THAT   NO  REPRESENTATIVE  OR  OTHER  AGENT  (INCLUDING  ANY  ATTORNEY)  OF  ANY  OTHER   PARTY  HAS  REPRESENTED,  EXPRESSLY  OR  OTHERWISE,  THAT  SUCH  OTHER  PARTY   WOULD NOT, IN THE EVENT OF LITIGATION, SEEK TO ENFORCE THE FOREGOING WAIVER   AND  (B) ACKNOWLEDGES  THAT  IT  AND  THE  OTHER  PARTIES  HERETO  HAVE  BEEN   INDUCED TO ENTER INTO THIS AGREEMENT BY, AMONG OTHER THINGS, THE MUTUAL   WAIVERS AND CERTIFICATIONS IN THIS SECTION.          SECTION 9.11  Headings.  Article and Section headings and the Table of Contents used herein   are for convenience of reference only, are not part of this Agreement and shall not affect the construction   of, or be taken into consideration in interpreting, this Agreement.          SECTION 9.12  Confidentiality.  Each of the Administrative Agent, the Issuing Bank and the   Lenders  agrees  to  maintain  the  confidentiality  of  the  Information  (as  defined  below),  except  that   Information  may  be  disclosed  (a) to  its  and  its  Affiliates’  directors,  officers,  employees  and  agents,   including accountants, legal counsel and other advisors (it being understood that the Persons to whom such   disclosure is made will be informed of the confidential nature of such Information and instructed to keep   such Information confidential), (b) to the extent requested by any Governmental Authority (including any   self-regulatory authority, such as the National Association of Insurance Commissioners), (c) to the extent   required by any Requirement of Law or by any subpoena or similar legal process, (d) to any other party to   this Agreement, (e) in connection with the exercise of any remedies under this Agreement or any other   Loan Document or any suit, action or proceeding relating to this Agreement or any other Loan Document   or the enforcement of rights hereunder or thereunder, (f) subject to an agreement containing provisions   substantially the same as those of this Section, to (i) any assignee of or Participant in, or any prospective   assignee of or Participant in, any of its rights or obligations under this Agreement or (ii) any actual or   prospective counterparty (or its advisors) to any swap or derivative transaction relating to the Loan Parties   and their obligations, (g) to holders of Equity Interests in any Borrower, (h) to any Person providing a   Guarantee of all or any portion of the Secured Obligations, (i) to the extent such Information (i) becomes   publicly  available  other  than  as  a  result  of  a  breach  of  this  Section  or  (ii) becomes  available  to  the   Administrative Agent, the Issuing Bank or any Lender on a non-confidential basis from a source other than   the Borrowers, or (j) on a confidential basis to (1) an rating agency in connection with rating any Borrower   or its Subsidiaries or the credit facilities provided for herein or (2) the CUSIP Service Bureau or any similar   agency in connection with the issuance and monitoring of identification numbers with respect to the credit   facilities provided for herein.          For the purposes of this Section, “Information” means all information received from the Borrowers   relating  to  the  Borrowers  or  their  business,  other  than  any  such  information  that  is  available  to  the   Administrative Agent, the Issuing Bank or any Lender on a non-confidential basis prior to disclosure by   the Borrowers and other than information pertaining to this Agreement provided by arrangers to data service   providers, including league table providers, that serve the lending industry; provided that, in the case of   information received from the Borrowers after the date hereof, such information is clearly identified at the   time of delivery as confidential.  Any Person required to maintain the confidentiality of Information as   provided in this Section shall be considered to have complied with its obligation to do so if such Person has   exercised the same degree of care to maintain the confidentiality of such Information as such Person would   accord to its own confidential information.    DB1/ 102580159.10                     112  

 

       EACH  LENDER  ACKNOWLEDGES  THAT  INFORMATION  (AS  DEFINED  IN  THIS   SECTION  9.12)  FURNISHED  TO  IT  PURSUANT  TO  THIS  AGREEMENT  MAY  INCLUDE   MATERIAL NON-PUBLIC INFORMATION CONCERNING THE BORROWERS, THE OTHER   LOAN PARTIES AND THEIR RELATED PARTIES OR THEIR RESPECTIVE SECURITIES,   AND CONFIRMS THAT IT HAS DEVELOPED COMPLIANCE PROCEDURES REGARDING   THE  USE  OF  MATERIAL  NON-PUBLIC  INFORMATION  AND  THAT  IT  WILL  HANDLE   SUCH  MATERIAL  NON-PUBLIC  INFORMATION  IN  ACCORDANCE  WITH  THOSE   PROCEDURES AND APPLICABLE LAW, INCLUDING FEDERAL AND STATE SECURITIES   LAWS.          ALL INFORMATION, INCLUDING REQUESTS FOR WAIVERS AND AMENDMENTS,   FURNISHED BY THE BORROWERS OR THE ADMINISTRATIVE AGENT PURSUANT TO,   OR  IN  THE  COURSE  OF  ADMINISTERING,  THIS  AGREEMENT  WILL  BE  SYNDICATE-  LEVEL INFORMATION, WHICH MAY CONTAIN MATERIAL NON-PUBLIC INFORMATION   ABOUT  THE  BORROWERS,  THE  LOAN  PARTIES  AND  THEIR  RELATED  PARTIES  OR   THEIR  RESPECTIVE  SECURITIES.   ACCORDINGLY,  EACH  LENDER  REPRESENTS  TO   THE BORROWERS AND THE ADMINISTRATIVE AGENT THAT IT HAS IDENTIFIED IN ITS   ADMINISTRATIVE  QUESTIONNAIRE  A  CREDIT  CONTACT  WHO  MAY  RECEIVE   INFORMATION  THAT  MAY  CONTAIN  MATERIAL  NON-PUBLIC  INFORMATION  IN   ACCORDANCE  WITH  ITS  COMPLIANCE  PROCEDURES  AND  APPLICABLE  LAW,   INCLUDING FEDERAL AND STATE SECURITIES LAWS.          SECTION 9.13  Several Obligations; Nonreliance; Violation of Law.  The respective obligations   of the Lenders hereunder are several and not joint and the failure of any Lender to make any Loan or   perform any of its obligations hereunder shall not relieve any other Lender from any of its obligations   hereunder.  Each Lender hereby represents that it is not relying on or looking to any margin stock (as defined   in Regulation U of the Board) for the repayment of the Borrowings provided for herein.  Anything contained   in  this  Agreement  to  the  contrary  notwithstanding,  neither  the  Issuing  Bank  nor  any  Lender  shall  be   obligated to extend credit to the Borrowers in violation of any Requirement of Law.          SECTION 9.14  USA PATRIOT Act.  Each Lender that is subject to the requirements of the USA   PATRIOT Act hereby notifies each Loan Party that pursuant to the requirements of the USA PATRIOT   Act, it is required to obtain, verify and record information that identifies such Loan Party, which information   includes the name and address of such Loan Party and other information that will allow such Lender to   identify such Loan Party in accordance with the USA PATRIOT Act.          SECTION 9.15  Disclosure.   Each  Loan  Party,  each  Lender  and  the  Issuing  Bank  hereby   acknowledges and agrees that the Administrative Agent and/or its Affiliates from time to time may hold   investments in,  make  other  loans to or have  other  relationships  with  any  of the  Loan  Parties and their   respective Affiliates.           SECTION 9.16  Appointment for Perfection.  Each Lender hereby appoints each other Lender as   its agent for the purpose of perfecting Liens, for the benefit of the Administrative Agent and the other   Secured Parties, in assets which, in accordance with Article 9 of the UCC or any other applicable law can   be perfected only by possession or control.  Should any Lender (other than the Administrative Agent) obtain   possession or control of any such Collateral, such Lender shall notify the Administrative Agent thereof,   and,  promptly  upon  the  Administrative  Agent’s  request  therefor  shall  deliver  such  Collateral  to  the   Administrative Agent or otherwise deal with such Collateral in accordance with the Administrative Agent’s   instructions.    DB1/ 102580159.10                     113  

 

       SECTION 9.17  Interest Rate Limitation.  Notwithstanding anything herein to the contrary, if at   any time the interest rate applicable to any Loan, together with all fees, charges and other amounts which   are treated as interest on such Loan under applicable law (collectively the “Charges”), shall exceed the   maximum lawful rate (the “Maximum Rate”) which may be contracted for, charged, taken, received or   reserved by the Lender holding such Loan in accordance with applicable law, the rate of interest payable in   respect of such Loan hereunder, together with all Charges payable in respect thereof, shall be limited to the   Maximum Rate and, to the extent lawful, the interest and Charges that would have been payable in respect   of such Loan but were not payable as a result of the operation of this Section shall be cumulated and the   interest and Charges payable to such Lender in respect of other Loans or periods shall be increased (but not   above  the  Maximum  Rate  therefor)  until  such  cumulated  amount,  together  with  interest  thereon  at  the   NYFRB Rate to the date of repayment, shall have been received by such Lender.          SECTION 9.18  Marketing Consent.  The Borrowers hereby authorize JPMCB and its affiliates   (collectively, the “JPMCB Parties”), at their respective sole expense, but without any prior approval by the   Borrowers, to publish such tombstones and give such other publicity to this Agreement as each may from   time to time determine in its sole discretion.  The foregoing authorization shall remain in effect unless and   until the Borrower Representative notifies JPMCB in writing that such authorization is revoked.          SECTION 9.19  Acknowledgement  and  Consent  to  Bail-In  of  EEA  Financial  Institutions.    Notwithstanding anything to the contrary in any Loan Document or in any other agreement, arrangement   or understanding among any such parties, each party hereto acknowledges that any liability of any EEA   Financial Institution arising under any Loan Document may be subject to the Write-Down and Conversion   Powers of an EEA Resolution Authority and agrees and consents to, and acknowledges and agrees to be   bound by:          (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 party hereto that is an   EEA Financial Institution; and          (b)   the effects of any Bail-In Action on any such liability, including, if applicable:                (i)   a reduction in full or in part or cancellation of any such liability;                (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 entity, or a bridge institution that may be         issued to it or otherwise conferred on it, and that such shares or other instruments of ownership will         be accepted by it in lieu of any rights with respect to any such liability under this Agreement or any         other Loan Document; or                (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 9.20  No  Fiduciary  Duty,  etc.   Each  Borrower  acknowledges  and  agrees,  and   acknowledges its Subsidiaries’ understanding, that no Credit Party will have any obligations except those   obligations expressly set forth herein and in the other Loan Documents and each Credit Party is acting   solely in the capacity of an arm’s length contractual counterparty to each Borrower with respect to the Loan   Documents and the transaction contemplated therein and not as a financial advisor or a fiduciary to, or an   agent of, any Borrower or any other person.  Each Borrower agrees that it will not assert any claim against   any Credit Party based on an alleged breach of fiduciary duty by such Credit Party in connection with this   Agreement  and  the  transactions  contemplated  hereby.   Additionally, each  Borrower acknowledges  and    DB1/ 102580159.10                     114  

 

 agrees that no Credit Party is advising any Borrower as to any legal, tax, investment, accounting, regulatory   or any other matters in any jurisdiction.  Each Borrower shall consult with its own advisors concerning such   matters  and  shall  be  responsible  for  making  its  own  independent  investigation  and  appraisal  of  the   transactions contemplated hereby, and the Credit Parties shall have no responsibility or liability to any   Borrower with respect thereto.  Each Borrower further acknowledges and agrees, and acknowledges its   Subsidiaries’ understanding, that each Credit Party, together with its Affiliates, is a full service securities   or  banking  firm  engaged in securities trading and  brokerage  activities  as well as providing  investment   banking and other financial services.  In the ordinary course of business, any Credit Party may provide   investment banking and other financial services to, and/or acquire, hold or sell, for its own accounts and   the accounts of customers, equity, debt and other securities and financial instruments (including bank loans   and  other  obligations)  of,  any  Borrower  and  other  companies  with  which  any  Borrower  may  have   commercial or other relationships.  With respect to any securities and/or financial instruments so held by   any Credit Party or any of its customers, all rights in respect of such securities and financial instruments,   including any voting rights, will be exercised by the holder of the rights, in its sole discretion.  In addition,   each  Borrower  acknowledges  and  agrees,  and  acknowledges  its  Subsidiaries’  understanding,  that  each   Credit Party and its affiliates may be providing debt financing, equity capital or other services (including   financial  advisory  services)  to  other  companies  in  respect  of  which  a  Borrower  may  have  conflicting   interests regarding the transactions described herein and otherwise.  No Credit Party will use confidential   information obtained from any Borrower by virtue of the transactions contemplated by the Loan Documents   or its other relationships with such Borrower in connection with the performance by such Credit Party of   services for other companies, and no Credit Party will furnish any such information to other companies.    Each Borrower also acknowledges that no Credit Party has any obligation to use in connection with the   transactions contemplated by the Loan Documents, or to furnish to any Borrower, confidential information   obtained from other companies.                               ARTICLE X   Loan Guaranty          SECTION 10.01  Guaranty.  Each Loan Guarantor (other than those that have delivered a separate   Guaranty) hereby agrees that it is jointly and severally liable for, and, as a primary obligor and not merely   as  surety,  absolutely,  unconditionally  and  irrevocably  guarantees  to  the  Secured  Parties,  the  prompt   payment when due, whether at stated maturity, upon acceleration or otherwise, and at all times thereafter,   of the Secured Obligations and all costs and expenses, including, without limitation, all court costs and   attorneys’ and paralegals’ fees (including allocated costs of in-house counsel and paralegals) and expenses   paid or incurred by the Administrative Agent, the Issuing Bank and the Lenders in endeavoring to collect   all or any part of the Secured Obligations from, or in prosecuting any action against, any Borrower, any   Loan  Guarantor  or  any  other  guarantor  of  all  or  any  part  of  the  Secured  Obligations  (such  costs  and   expenses,  together  with  the  Secured  Obligations,  collectively  the  “Guaranteed  Obligations”;  provided,   however,  that  the  definition  of  “Guaranteed  Obligations”  shall  not  create  any  guarantee  by  any  Loan   Guarantor of (or grant of security interest by any Loan Guarantor to support, as applicable) any Excluded   Swap  Obligations  of  such  Loan  Guarantor  for  purposes  of  determining  any  obligations  of  any  Loan   Guarantor).   Each  Loan  Guarantor further  agrees  that  the  Guaranteed  Obligations  may  be  extended  or   renewed in whole or in part without notice to or further assent from it, and that it remains bound upon its   guarantee notwithstanding any such extension or renewal.  All terms of this Loan Guaranty apply to and   may be enforced by or on behalf of any domestic or foreign branch or Affiliate of any Lender that extended   any portion of the Guaranteed Obligations.          SECTION 10.02  Guaranty of Payment.  This Loan Guaranty is a guaranty of payment and not of   collection.  Each Loan Guarantor waives any right to require the Administrative Agent, the Issuing Bank   or  any  Lender to sue any  Borrower,  any  Loan  Guarantor,  any  other guarantor of, or  any other  Person   obligated for, all or any part of the Guaranteed Obligations (each, an “Obligated Party”), or otherwise to   enforce its payment against any collateral securing all or any part of the Guaranteed Obligations.   DB1/ 102580159.10                     115  

 

       SECTION 10.03  No Discharge or Diminishment of Loan Guaranty.          (a)   Except as otherwise provided for herein, the obligations of each Loan Guarantor hereunder   are unconditional and absolute and not subject to any reduction, limitation, impairment or termination for   any reason (other than Payment in Full of the Guaranteed Obligations), including:  (i) any claim of waiver,   release,  extension,  renewal,  settlement,  surrender,  alteration  or  compromise  of  any  of  the  Guaranteed   Obligations,  by  operation  of  law  or  otherwise;  (ii)  any  change  in  the  corporate  existence,  structure  or   ownership of any Borrower or any other Obligated Party liable for any of the Guaranteed Obligations; (iii)   any insolvency, bankruptcy, reorganization or other similar proceeding affecting any Obligated Party or   their  assets  or  any  resulting  release  or  discharge  of  any  obligation  of  any  Obligated  Party;  or  (iv)  the   existence of any claim, setoff or other rights which any Loan Guarantor may have at any time against any   Obligated Party, the Administrative Agent, the Issuing Bank, any Lender or any other Person, whether in   connection herewith or in any unrelated transactions.          (b)   The obligations of each Loan Guarantor hereunder are not subject to any defense or setoff,   counterclaim,  recoupment  or  termination  whatsoever  by  reason  of  the  invalidity,  illegality  or   unenforceability of any of the Guaranteed Obligations or otherwise, or any provision of applicable law or   regulation purporting to prohibit payment by any Obligated Party, of the Guaranteed Obligations or any   part thereof.          (c)   Further, the obligations of any Loan Guarantor hereunder are not discharged or impaired   or otherwise affected by: (i) the failure of the Administrative Agent, the Issuing Bank or any Lender to   assert any claim or demand or to enforce any remedy with respect to all or any part of the Guaranteed   Obligations; (ii) any waiver or modification of or supplement to any provision of any agreement relating to   the Guaranteed Obligations; (iii) any release, non-perfection or invalidity of any indirect or direct security   for the obligations of any Borrower for all or any part of the Guaranteed Obligations or any obligations of   any other Obligated Party liable for any of the Guaranteed Obligations; (iv) any action or failure to act by   the Administrative Agent, the Issuing Bank or any Lender with respect to any collateral securing any part   of the Guaranteed Obligations; or (v) any default, failure or delay, willful or otherwise, in the payment or   performance of any of the Guaranteed Obligations, or any other circumstance, act, omission or delay that   might in any manner or to any extent vary the risk of such Loan Guarantor or that would otherwise operate   as  a  discharge  of  any  Loan Guarantor as a  matter  of law or equity  (other than Payment in  Full of the   Guaranteed Obligations).          SECTION 10.04  Defenses Waived.  To the fullest extent permitted by applicable law, each Loan   Guarantor hereby waives any defense based on or arising out of any defense of any Borrower or any Loan   Guarantor or the unenforceability of all or any part of the Guaranteed Obligations from any cause, or the   cessation from any cause of the liability of any Borrower, any Loan Guarantor or any other Obligated Party,   other than Payment in Full of the Guaranteed Obligations.  Without limiting the generality of the foregoing,   each Loan Guarantor irrevocably waives acceptance hereof, presentment, demand, protest and, to the fullest   extent permitted by law, any notice not provided for herein, as well as any requirement that at any time any   action be taken by any Person against any Obligated Party or any other Person.  Each Loan Guarantor confirms   that it is not a surety under any state law and shall not raise any such law as a defense to its obligations   hereunder.  The Administrative Agent may, at its election, foreclose on any Collateral held by it by one or   more judicial or nonjudicial sales, accept an assignment of any such Collateral in lieu of foreclosure or   otherwise act or fail to act with respect to any collateral securing all or a part of the Guaranteed Obligations,   compromise or adjust any part of the Guaranteed Obligations, make any other accommodation with any   Obligated Party or exercise any other right or remedy available to it against any Obligated Party, without   affecting or impairing in any way the liability of such Loan Guarantor under this Loan Guaranty except to   the extent the Guaranteed Obligations have been Paid in Full.  To the fullest extent permitted by applicable   law, each Loan Guarantor waives any defense arising out of any such election even though that election   DB1/ 102580159.10                     116  

 

 may operate, pursuant to applicable law, to impair or extinguish any right of reimbursement or subrogation   or other right or remedy of any Loan Guarantor against any Obligated Party or any security.          SECTION 10.05  Rights of Subrogation.  No Loan Guarantor will assert any right, claim or cause   of action, including, without limitation, a claim of subrogation, contribution or indemnification, that it has   against any Obligated Party or any collateral, until the Loan Parties and the Loan Guarantors have fully   performed all their obligations to the Administrative Agent, the Issuing Bank and the Lenders.          SECTION 10.06  Reinstatement; Stay of Acceleration.  If at any time any payment of any portion   of  the  Guaranteed  Obligations  (including  a  payment  effected  through  exercise  of  a  right  of  setoff)  is   rescinded, or must otherwise be restored or returned upon the insolvency, bankruptcy or reorganization of   any Borrower or otherwise (including pursuant to any settlement entered into by a Secured Party in its   discretion), each Loan Guarantor’s obligations under this Loan Guaranty with respect to that payment shall   be reinstated at such time as though the payment had not been made and whether or not the Administrative   Agent, the Issuing Bank and the Lenders are in possession of this Loan Guaranty.  If acceleration of the time   for payment of any of the Guaranteed Obligations is stayed upon the insolvency, bankruptcy or reorganization   of any Borrower, all such amounts otherwise subject to acceleration under the terms of any agreement relating   to the Guaranteed Obligations shall nonetheless be payable by the Loan Guarantors forthwith on demand by   the Administrative Agent.          SECTION 10.07  Information.  Each Loan Guarantor assumes all responsibility for being and   keeping itself informed of the Borrowers’ financial condition and assets, and of all other circumstances   bearing upon the risk of nonpayment of the Guaranteed Obligations and the nature, scope and extent of the   risks that each Loan Guarantor assumes and incurs under this Loan Guaranty, and agrees that none of the   Administrative Agent, the Issuing Bank or any Lender shall have any duty to advise any Loan Guarantor   of information known to it regarding those circumstances or risks.          SECTION 10.08  Termination.  Each of the Lenders and the Issuing Bank may continue to make   loans or extend credit to the Borrowers based on this Loan Guaranty until five (5) days after it receives   written notice of termination from any Loan Guarantor.  Notwithstanding receipt of any such notice, each   Loan Guarantor will continue to be liable to the Lenders for any Guaranteed Obligations created, assumed   or committed to prior to the fifth day after receipt of the notice, and all subsequent renewals, extensions,   modifications and amendments with respect to, or substitutions for, all or any part of such Guaranteed   Obligations.  Nothing in this Section 10.08 shall be deemed to constitute a waiver of, or eliminate, limit,   reduce or otherwise impair any rights or remedies the Administrative Agent or any Lender may have in   respect of, any Default or Event of Default that shall exist under Article VII hereof as a result of any such   notice of termination.          SECTION 10.09  Taxes.  Each payment of the Guaranteed Obligations will be made by each Loan   Guarantor without withholding for any Taxes, unless such withholding is required by law.  If any Loan   Guarantor determines, in its sole discretion exercised in good faith, that it is so required to withhold Taxes,   then such Loan Guarantor may so withhold and shall timely pay the full amount of withheld Taxes to the   relevant Governmental Authority in accordance with applicable law.  If such Taxes are Indemnified Taxes,   then  the  amount  payable  by  such  Loan  Guarantor  shall  be  increased  as  necessary  so  that,  net  of  such   withholding (including such withholding applicable to additional amounts payable under this Section), the   Administrative Agent, Lender or Issuing Bank (as the case may be) receives the amount it would have   received had no such withholding been made.          SECTION 10.10  Maximum  Liability.   Notwithstanding  any  other  provision  of  this  Loan   Guaranty, the amount guaranteed by each Loan Guarantor hereunder shall be limited to the extent, if any,   required  so  that  its  obligations  hereunder  shall  not  be  subject  to  avoidance  under  Section  548  of  the   DB1/ 102580159.10                     117  

 

 Bankruptcy  Code  or  under  any  applicable  state  Uniform  Fraudulent  Transfer  Act,  Uniform  Fraudulent   Conveyance Act, Uniform Voidable Transactions Act or similar statute or common law.  In determining   the  limitations,  if  any,  on  the  amount  of  any  Loan  Guarantor’s  obligations  hereunder  pursuant  to  the   preceding sentence, it is the intention of the parties hereto that any rights of subrogation, indemnification   or contribution which such Loan Guarantor may have under this Loan Guaranty, any other agreement or   applicable law shall be taken into account.          SECTION 10.11  Contribution.          (a)   To the extent that any Loan Guarantor shall make a payment under this Loan Guaranty (a   “Guarantor  Payment”)  which,  taking  into  account  all  other  Guarantor  Payments  then  previously  or   concurrently made by any other Loan Guarantor, exceeds the amount which otherwise would have been   paid by or attributable to such Loan Guarantor if each Loan Guarantor had paid the aggregate Guaranteed   Obligations  satisfied  by  such  Guarantor  Payment  in  the  same  proportion  as  such  Loan  Guarantor’s   “Allocable Amount” (as defined below) (as determined immediately prior to such Guarantor Payment) bore   to the aggregate Allocable Amounts of each of the Loan Guarantors as determined immediately prior to the   making of such Guarantor Payment, then, following indefeasible payment in full in cash of the Guarantor   Payment and the Payment in Full of the Guaranteed Obligations and the termination of this Agreement,   such Loan Guarantor shall be entitled to receive contribution and indemnification payments from, and be   reimbursed  by,  each  other  Loan  Guarantor  for  the  amount  of  such  excess,  pro  rata  based  upon  their   respective Allocable Amounts in effect immediately prior to such Guarantor Payment.          (b)   As of any date of determination, the “Allocable Amount” of any Loan Guarantor shall be   equal to the excess of the fair saleable value of the property of such Loan Guarantor over the total liabilities   of such Loan Guarantor (including the maximum amount reasonably expected to become due in respect of   contingent liabilities, calculated, without duplication, assuming each other Loan Guarantor that is also liable   for such contingent liability pays its ratable share thereof), giving effect to all payments made by other Loan   Guarantors as of such date in a manner to maximize the amount of such contributions.          (c)   This Section 10.11 is intended only to define the relative rights of the Loan Guarantors,   and  nothing  set  forth  in  this  Section  10.11  is  intended  to  or  shall  impair  the  obligations  of  the  Loan   Guarantors, jointly and severally, to pay any amounts as and when the same shall become due and payable   in accordance with the terms of this Loan Guaranty.          (d)   The  parties  hereto  acknowledge  that  the  rights  of  contribution  and  indemnification   hereunder shall constitute assets of the Loan Guarantor or Loan Guarantors to which such contribution and   indemnification is owing.          (e)   The rights of the indemnifying Loan Guarantors against other Loan Guarantors under this   Section  10.11  shall  be  exercisable  upon  the  Payment  in  Full  of  the  Guaranteed  Obligations  and  the   termination of this Agreement.          SECTION 10.12  Liability Cumulative.  The liability of each Loan Party as a Loan Guarantor   under this Article X is in addition to and shall be cumulative with all liabilities of each Loan Party to the   Administrative  Agent,  the  Issuing  Bank  and  the  Lenders  under  this  Agreement  and  the  other  Loan   Documents to which such Loan Party is a party or in respect of any obligations or liabilities of the other   Loan Parties, without any limitation as to amount, unless the instrument or agreement evidencing or creating   such other liability specifically provides to the contrary.          SECTION 10.13  Keepwell.   Each  Qualified  ECP  Guarantor  hereby  jointly  and  severally   absolutely, unconditionally and irrevocably undertakes to provide such funds or other support as may be   DB1/ 102580159.10                     118  

 

 needed from time to time by each other Loan Party to honor all of its obligations under this Guarantee in   respect of a Swap Obligation (provided, however, that each Qualified ECP Guarantor shall only be liable   under this Section 10.13 for the maximum amount of such liability that can be hereby incurred without   rendering its obligations under this Section 10.13 or otherwise under this Loan Guaranty voidable under   applicable law relating to fraudulent conveyance or fraudulent transfer, and not for any greater amount).    Except as otherwise provided herein, the obligations of each Qualified ECP Guarantor under this Section   10.13 shall remain in full force and effect until the termination of all Swap Obligations.  Each Qualified   ECP  Guarantor  intends  that  this  Section  10.13  constitute,  and  this  Section  10.13  shall  be  deemed  to   constitute,  a  “keepwell,  support,  or  other  agreement”  for  the  benefit  of  each  other  Loan  Party  for  all   purposes of Section 1a(18)(A)(v)(II) of the Commodity Exchange Act.                          ARTICLE XI  The Borrower Representative          SECTION 11.01  Appointment; Nature of Relationship.  The Company is hereby appointed by   each of the Borrowers as its contractual representative (herein referred to as the “Borrower Representative”)   hereunder and under each other Loan Document, and each of the Borrowers irrevocably authorizes the   Borrower Representative to act as the contractual representative of such Borrower with the rights and duties   expressly set forth herein and in the other Loan Documents.  The Borrower Representative agrees to act as   such contractual representative upon the express conditions contained in this Article XI.  Additionally, the   Borrowers hereby appoint the Borrower Representative as their agent to receive all of the proceeds of the   Loans in the Funding Account(s), at which time the Borrower Representative shall promptly disburse such   Loans to the appropriate Borrower(s), provided that, in the case of a Revolving Loan, such amount shall   not exceed Availability.  The Administrative Agent and the Lenders, and their respective officers, directors,   agents or employees, shall not be liable to the Borrower Representative or any Borrower for any action   taken or omitted to be taken by the Borrower Representative or the Borrowers pursuant to this Section   11.01.          SECTION 11.02  Powers.  The Borrower Representative shall have and may exercise such powers   under the Loan Documents as are specifically delegated to the Borrower Representative by the terms of   each thereof, together with such powers as are reasonably incidental thereto.  The Borrower Representative   shall have no implied duties to the Borrowers, or any obligation to the Lenders to take any action thereunder   except any action specifically provided by the Loan Documents to be taken by the Borrower Representative.          SECTION 11.03  Employment of Agents.  The Borrower Representative may execute any of its   duties  as  the  Borrower  Representative  hereunder  and  under  any  other  Loan  Document  by  or  through   authorized officers.          SECTION 11.04  Notices.  Each Borrower shall immediately notify the Borrower Representative   of the occurrence of any Default hereunder referring to this Agreement describing such Default and stating   that such notice is a “notice of default”.  In the event that the Borrower Representative receives such a   notice, the Borrower Representative shall give prompt notice thereof to the Administrative Agent and the   Lenders.  Any notice provided to the Borrower Representative hereunder shall constitute notice to each   Borrower on the date received by the Borrower Representative.          SECTION 11.05  Successor  Borrower  Representative.   Upon  the  prior  written  consent  of  the   Administrative Agent, the Borrower Representative may resign at any time, such resignation to be effective   upon the appointment of a successor Borrower Representative.  The Administrative Agent shall give prompt   written notice of such resignation to the Lenders.          SECTION 11.06  Execution of Loan Documents; Borrowing Base Certificate.  The Borrowers   hereby empower and authorize the Borrower Representative, on behalf of the Borrowers, to execute and   DB1/ 102580159.10                     119  

 

 deliver  to  the  Administrative  Agent  and  the  Lenders  the  Loan  Documents  and  all  related  agreements,   certificates, documents, or instruments as shall be necessary or appropriate to effect the purposes of the   Loan  Documents,  including,  without  limitation,  the  Borrowing  Base  Certificate  and  the  Compliance   Certificates.  Each Borrower agrees that any action taken by the Borrower Representative or the Borrowers   in accordance with the terms of this Agreement or the other Loan Documents, and the exercise by the   Borrower Representative of its powers set forth therein or herein, together with such other powers that are   reasonably incidental thereto, shall be binding upon all of the Borrowers.          SECTION 11.07  Reporting.   Each  Borrower  hereby  agrees  that  such  Borrower  shall  furnish   promptly after each fiscal month to the Borrower Representative a copy of its Borrowing Base Certificate   and any other certificate or report required hereunder or requested by the Borrower Representative on which   the  Borrower  Representative  shall  rely  to  prepare  the  Borrowing  Base  Certificate  and  Compliance   Certificate required pursuant to the provisions of this Agreement.                [Remainder of Page Intentionally Left Blank; Signature Pages Follow.]    DB1/ 102580159.10                     120  

 

 

 

 

 

                           COMMITMENT SCHEDULE                                        Revolving                   Lender                                Commitment                                      Commitment           JPMorgan Chase Bank, N.A.  $40,000,000         $40,000,000                    Total             $40,000,000         $40,000,000    DB1/ 102580159.10  

 

                                          SCHEDULE 3.05                                                  to                                            Credit Agreement   3.05(a) OWNED AND LEASED PROPERTIES    Company           Address                      Primary Function(s)                 Owned or                                                                                        Leased    Nautilus   17750 S.E. 6th Way     Corporate headquarters, customer call center, retail Leased               Vancouver, WA 98683    store and R&D facility     Octane     7601 Northland Drive   Design, sales, service and R&D facility           Leased               North, Brooklyn Park,               MN  55428    Nautilus   18225 NE Riverside     Warehouse and distribution facility               Leased               Parkway, Portland, OR               97230    Nautilus   5415 Centerpoint       Warehouse and distribution facility               Leased               Parkway, Obetz, OH               43207    Nautilus   17711 Southeast 6th    Quality assurance and software engineering offices Leased               Way, Vancouver, WA               98683   3.05(b) INTELLECTUAL PROPERTY    Company             Type of      Registration         Date of        Country        Owned or                        Intellectual Number               Registration                  Licensed                        Property                          (M/D/Y)    Nautilus, Inc.      Design       349768               7/12/2013      Australia      Owned    Nautilus, Inc.      Design       349769               7/12/2013      Australia      Owned    Nautilus, Inc.      Design       349770               7/12/2013      Australia      Owned    Nautilus, Inc.      Design       349785               7/15/2013      Australia      Owned    Nautilus, Inc.      Design       359599               12/17/2014     Australia      Owned    Nautilus, Inc.      Design       359602               12/17/2014     Australia      Owned    Nautilus, Inc.      Design       359642               12/18/2014     Australia      Owned    Nautilus, Inc.      Design       360289               2/13/2015      Australia      Owned    Nautilus, Inc.      Design       363534               8/18/2015      Australia      Owned    Nautilus, Inc.      Design       201710854            3/1/2017       Australia      Owned    Nautilus, Inc.      Design       302014006304-9       7/19/2016      Brazil         Owned    Nautilus, Inc.      Design       124,359              6/22/2009      Canada         Owned    Nautilus, Inc.      Design       124,360              6/22/2009      Canada         Owned    Nautilus, Inc.      Design       124,361              6/22/2009      Canada         Owned    Nautilus, Inc.      Design       124,362              6/22/2009      Canada         Owned    Nautilus, Inc.      Design       159,973              7/28/2015      Canada         Owned    Nautilus, Inc.      Design       159,976              7/28/2015      Canada         Owned    Nautilus, Inc.      Design       159,974              10/15/2015     Canada         Owned    Nautilus, Inc.      Design       159,975              10/15/2015     Canada         Owned    Nautilus, Inc.      Design       163,539              2/22/2016      Canada         Owned    Nautilus, Inc.      Design       172,949              9/14/2017      Canada         Owned    Nautilus, Inc.      Design       ZL 201330230850.7    1/29/2014      China          Owned    Nautilus, Inc.      Design       ZL 201330230628.7    3/19/2014      China          Owned    Nautilus, Inc.      Design       ZL 201330230525.0    3/19/2014      China          Owned  

 

Company             Type of      Registration         Date of        Country        Owned or                      Intellectual Number               Registration                  Licensed                      Property                          (M/D/Y)  Nautilus, Inc.      Design       ZL 201430520076.8    8/19/2015      China          Owned  Nautilus, Inc.      Design       ZL 201430520019.X    8/19/2015      China          Owned  Nautilus, Inc.      Design       ZL 201430520055.6    8/19/2015      China          Owned  Nautilus, Inc.      Design       ZL 201530282959.4    1/20/2016      China          Owned  Nautilus, Inc.      Design       ZL 201530282941.4    1/20/2016      China          Owned  Nautilus, Inc.      Design       ZL 201530282791.7    1/20/2016      China          Owned  Nautilus, Inc.      Design       ZL 201630336947.X    2/8/2017       China          Owned  Nautilus, Inc.      Design       ZL 201630336946.5    2/8/2017       China          Owned  Nautilus, Inc.      Design       ZL 201630338232.8    2/8/2017       China          Owned  Nautilus, Inc.      Design       ZL 201730035818.1    8/11/2017      China          Owned  Nautilus, Inc.      Design       ZL 201730342241.9    2/23/2018      China          Owned  Nautilus, Inc.      Design       ZL 201830261162.X    11/27/2018     China          Owned  Nautilus, Inc.      Design       000384706-0001       8/2/2005       European       Owned                                                                       Union  Nautilus, Inc.      Design       000403357-0001       9/14/2005      European       Owned                                                                       Union  Nautilus, Inc.      Design       000403357-0002       9/14/2005      European       Owned                                                                       Union  Nautilus, Inc.      Design       000403357-0003       9/14/2005      European       Owned                                                                       Union  Nautilus, Inc.      Design       000403357-0004       9/14/2005      European       Owned                                                                       Union  Nautilus, Inc.      Design       000403357-0005       9/14/2005      European       Owned                                                                       Union  Nautilus, Inc.      Design       004128163-0001       7/31/2007      European       Owned                                                                       Union  Nautilus, Inc.      Design       001145031-0001       7/3/2009       European       Owned                                                                       Union  Nautilus, Inc.      Design       001844598-0001       4/1/2011       European       Owned                                                                       Union  Nautilus, Inc.      Design       002248963-0002       6/4/2013       European       Owned                                                                       Union  Nautilus, Inc.      Design       002248963-0004       6/4/2013       European       Owned                                                                       Union  Nautilus, Inc.      Design       002248963-0001       6/4/2013       European       Owned                                                                       Union  Nautilus, Inc.      Design       002248963-0003       6/4/2013       European       Owned                                                                       Union  Nautilus, Inc.      Design       002596544-0003       12/12/2014     European       Owned                                                                       Union  Nautilus, Inc.      Design       002596544-0002       12/12/2014     European       Owned                                                                       Union  Nautilus, Inc.      Design       002596544-0005       12/12/2014     European       Owned                                                                       Union  Nautilus, Inc.      Design       002596544-0001       12/12/2014     European       Owned                                                                       Union  Nautilus, Inc.      Design       002596544-0004       12/12/2014     European       Owned                                                                       Union  Nautilus, Inc.      Design       002746099-0002       7/30/2015      European       Owned                                                                       Union  Nautilus, Inc.      Design       002746099-0001       7/30/2015      European       Owned                                                                       Union  Nautilus, Inc.      Design       002746099-0003       7/30/2015      European       Owned                                                                       Union  

 

Company             Type of      Registration         Date of        Country        Owned or                      Intellectual Number               Registration                  Licensed                      Property                          (M/D/Y)  Nautilus, Inc.      Design       003039635-0001       3/23/2016      European       Owned                                                                       Union  Nautilus, Inc.      Design       003311919-0002       7/19/2016      European       Owned                                                                       Union  Nautilus, Inc.      Design       003311919-0003       7/19/2016      European       Owned                                                                       Union  Nautilus, Inc.      Design       003311919-0001       7/19/2016      European       Owned                                                                       Union  Nautilus, Inc.      Design       003747385-0001       2/10/2017      European       Owned                                                                       Union  Nautilus, Inc.      Design       005282837-0001       5/25/2018      European       Owned                                                                       Union  Nautilus, Inc.      Design       1402313.1            12/12/2014     Hong Kong      Owned  Nautilus, Inc.      Design       268143               2/7/2015       India          Owned  Nautilus, Inc.      Design       1584840              8/4/2017       Japan          Owned  Nautilus, Inc.      Design       45366                10/21/2015     Mexico         Owned  Nautilus, Inc.      Design       45365                10/21/2015     Mexico         Owned  Nautilus, Inc.      Design       45367                10/21/2015     Mexico         Owned  Nautilus, Inc.      Design       46097                1/19/2016      Mexico         Owned  Nautilus, Inc.      Design       419654               6/13/2014      New Zealand    Owned  Nautilus, Inc.      Design       420489               10/2/2015      New Zealand    Owned  Nautilus, Inc.      Design       422688               5/16/2017      New Zealand    Owned  Nautilus, Inc.      Design       141755               9/10/2015      Switzerland    Owned  Nautilus, Inc.      Design       143042               3/10/2017      Switzerland    Owned  Nautilus, Inc.      Design       D177754              8/21/2016      Taiwan         Owned  Nautilus, Inc.      Design       D177753              8/21/2016      Taiwan         Owned  Nautilus, Inc.      Design       D178454              9/21/2016      Taiwan         Owned  Nautilus, Inc.      Design       4005973              5/2/2008       United         Owned                                                                       Kingdom  Nautilus, Inc.      Design       4005970              5/2/2008       United         Owned                                                                       Kingdom  Nautilus, Inc.      Design       4005974              5/2/2008       United         Owned                                                                       Kingdom  Nautilus, Inc.      Design       4005972              5/2/2008       United         Owned                                                                       Kingdom  Nautilus, Inc.      Design       4005971              5/2/2008       United         Owned                                                                       Kingdom  Nautilus, Inc.      Design       4005975              5/2/2008       United         Owned                                                                       Kingdom  Nautilus, Inc.      Design       4005976              5/2/2008       United         Owned                                                                       Kingdom  Nautilus, Inc.      Design       D508,628             8/23/2005      United States   Owned  Nautilus, Inc.      Design       D527,060             8/22/2006      United States   Owned  Nautilus, Inc.      Design       D528,173             9/12/2006      United States   Owned  Nautilus, Inc.      Design       D528,611             9/19/2006      United States   Owned  Nautilus, Inc.      Design       D533,910             12/19/2006     United States   Owned  Nautilus, Inc.      Design       D534,973             1/9/2007       United States   Owned  Nautilus, Inc.      Design       D536,752             2/13/2007      United States   Owned  Nautilus, Inc.      Design       D540,405             4/10/2007      United States  Owned  Nautilus, Inc.      Design       D540,894             4/17/2007      United States   Owned  Nautilus, Inc.      Design       D546,909             7/17/2007      United States   Owned  Nautilus, Inc.      Design       D550,789             9/11/2007      United States   Owned  Nautilus, Inc.      Design       D566,798             4/15/2008      United States   Owned  

 

Company             Type of      Registration         Date of        Country        Owned or                      Intellectual Number               Registration                  Licensed                      Property                          (M/D/Y)  Nautilus, Inc.      Design       D584,086             1/6/2009       United States   Owned  Nautilus, Inc.      Design       D585,098             1/20/2009      United States   Owned  Nautilus, Inc.      Design       D603,002             10/27/2009     United States   Owned  Nautilus, Inc.      Design       D603,469             11/3/2009      United States   Owned  Nautilus, Inc.      Design       D603,915             11/10/2009     United States   Owned  Nautilus, Inc.      Design       D610,636             2/23/2010      United States   Owned  Nautilus, Inc.      Design       D616,050             5/18/2010      United States   Owned  Nautilus, Inc.      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Company             Type of      Registration         Date of        Country        Owned or                      Intellectual Number               Registration                  Licensed                      Property                          (M/D/Y)  Octane Fitness, LLC  Patent      9,364,707            6/24/2016      United States   Owned  Octane Fitness, LLC  Patent      9,364,708            6/14/2016      United States  Owned  Octane Fitness, LLC  Patent      10,220,250           3/5/2019       United States  Owned  Nautilus, Inc.      Trademark    2727947              5/26/2015      Argentina      Owned  Nautilus, Inc.      Trademark    5837                 3/26/1908      Australia      Owned  Nautilus, Inc.      Trademark    264502               12/19/1972     Australia      Owned  Nautilus, Inc.      Trademark    328698               2/13/1979      Australia      Owned  Nautilus, Inc.      Trademark    550850               1/24/1994      Australia      Owned  Nautilus, Inc.      Trademark    717889               8/15/1997      Australia      Owned  Nautilus, Inc.      Trademark    1024390              2/14/2005      Australia      Owned  Nautilus, Inc.      Trademark    WO846373             9/26/2005      Australia      Owned  Nautilus, Inc.      Trademark    1066821              3/6/2006       Australia      Owned  Nautilus, Inc.      Trademark    WO868251             5/22/2006      Australia      Owned  Nautilus, Inc.      Trademark    WO847338             4/23/2007      Australia      Owned  Nautilus, Inc.      Trademark    WO898353             4/30/2007      Australia      Owned  Nautilus, Inc.      Trademark    WO934771             2/4/2008       Australia      Owned  Nautilus, Inc.      Trademark    1213145              7/18/2008      Australia      Owned  Nautilus, Inc.      Trademark    1213143              2/23/2009      Australia      Owned  Nautilus, Inc.      Trademark    WO1217131            1/12/2015      Australia      Owned  Nautilus, Inc.      Trademark    1642055              3/23/2015      Australia      Owned  Nautilus, Inc.      Trademark    WO1366838            1/24/2018      Australia      Owned  Nautilus, Inc.      Trademark    136154               6/17/1991      Austria        Owned  Nautilus, Inc.      Trademark    WO988179             7/8/2010       Bahrain        Owned  Nautilus, Inc.      Trademark    0491594              2/12/1991      Benelux        Owned  Nautilus, Inc.      Trademark    0498194              2/1/1992       Benelux        Owned  Nautilus, Inc.      Trademark    0509228              2/10/1992      Benelux        Owned  Nautilus, Inc.      Trademark    810753146            8/23/1988      Brazil         Owned  Nautilus, Inc.      Trademark    816090726            5/19/1992      Brazil         Owned  Nautilus, Inc.      Trademark    817288112            6/6/1995       Brazil         Owned  Nautilus, Inc.      Trademark    829753400            8/9/2011       Brazil         Owned  Nautilus, Inc.      Trademark    829753427            8/9/2011       Brazil         Owned  Nautilus, Inc.      Trademark    829753419            8/9/2011       Brazil         Owned  Nautilus, Inc.      Trademark    829753435            8/9/2011       Brazil         Owned  Nautilus, Inc.      Trademark    828967083            8/21/2012      Brazil         Owned  Nautilus, Inc.      Trademark    829247149            8/19/2014      Brazil         Owned  Nautilus, Inc.      Trademark    13556                8/14/1984      Brunei         Owned  Nautilus, Inc.      Trademark    TMA195,579           11/23/1973     Canada         Owned  Nautilus, Inc.      Trademark    TMA325,920           4/10/1987      Canada         Owned  Nautilus, Inc.      Trademark    TMA334,211           11/13/1987     Canada         Owned  Nautilus, Inc.      Trademark    TMA360,467           9/15/1989      Canada         Owned  Nautilus, Inc.      Trademark    TMA363,263           11/10/1989     Canada         Owned  Nautilus, Inc.      Trademark    TMA368,939           5/25/1990      Canada         Owned  Nautilus, Inc.      Trademark    TMA380,135           2/15/1991      Canada         Owned  Nautilus, Inc.      Trademark    TMA383,083           4/19/1991      Canada         Owned  Nautilus, Inc.      Trademark    TMA454,482           2/23/1996      Canada         Owned  Nautilus, Inc.      Trademark    TMA539110            1/3/2001       Canada         Owned  Nautilus, Inc.      Trademark    TMA606,034           3/23/2004      Canada         Owned  Nautilus, Inc.      Trademark    TMA619,442           9/14/2004      Canada         Owned  Nautilus, Inc.      Trademark    TMA619,578           9/15/2004      Canada         Owned  Nautilus, Inc.      Trademark    TMA676,583           11/8/2006      Canada         Owned  Nautilus, Inc.      Trademark    TMA681,099           2/5/2007       Canada         Owned  Nautilus, Inc.      Trademark    TMA682,784           3/2/2007       Canada         Owned  Nautilus, Inc.      Trademark    TMA686,969           5/4/2007       Canada         Owned  

 

Company             Type of      Registration         Date of        Country        Owned or                      Intellectual Number               Registration                  Licensed                      Property                          (M/D/Y)  Nautilus, Inc.      Trademark    TMA694,375           8/20/2007      Canada         Owned  Nautilus, Inc.      Trademark    TMA700,780           11/14/2007     Canada         Owned  Nautilus, Inc.      Trademark    TMA703,754           12/21/2007     Canada         Owned  Nautilus, Inc.      Trademark    TMA724,462           9/25/2008      Canada         Owned  Nautilus, Inc.      Trademark    TMA785,605           12/21/2010     Canada         Owned  Nautilus, Inc.      Trademark    TMA805,407           8/29/2011      Canada         Owned  Nautilus, Inc.      Trademark    TMA809,795           10/21/2011     Canada         Owned  Nautilus, Inc.      Trademark    TMA932,869           3/29/2016      Canada         Owned  Nautilus, Inc.      Trademark    948715               8/11/1997      Chile          Owned  Nautilus, Inc.      Trademark    853114               6/18/2009      Chile          Owned  Nautilus, Inc.      Trademark    647759               6/28/1993      China          Owned  Nautilus, Inc.      Trademark    1751833              4/7/2002       China          Owned  Nautilus, Inc.      Trademark    1747968              4/14/2002      China          Owned  Nautilus, Inc.      Trademark    1747969              4/14/2002      China          Owned  Nautilus, Inc.      Trademark    1751832              4/21/2002      China          Owned  Nautilus, Inc.      Trademark    1941531              8/28/2002      China          Owned  Nautilus, Inc.      Trademark    1941534              8/28/2002      China          Owned  Nautilus, Inc.      Trademark    1941533              11/7/2002      China          Owned  Nautilus, Inc.      Trademark    1949890              11/21/2002     China          Owned  Nautilus, Inc.      Trademark    1949896              11/21/2002     China          Owned  Nautilus, Inc.      Trademark    1949893              11/21/2002     China          Owned  Nautilus, Inc.      Trademark    2015466              11/28/2002     China          Owned  Nautilus, Inc.      Trademark    3238947              11/28/2003     China          Owned  Nautilus, Inc.      Trademark    3238946              11/28/2003     China          Owned  Nautilus, Inc.      Trademark    WO846373             11/5/2006      China          Owned  Nautilus, Inc.      Trademark    WO847338             11/12/2006     China          Owned  Nautilus, Inc.      Trademark    3814461              12/14/2006     China          Owned  Nautilus, Inc.      Trademark    3900046              2/28/2007      China          Owned  Nautilus, Inc.      Trademark    4304800              5/28/2008      China          Owned  Nautilus, Inc.      Trademark    4113402              12/7/2008      China          Owned  Nautilus, Inc.      Trademark    4614953              12/7/2008      China          Owned  Nautilus, Inc.      Trademark    4614954              12/7/2008      China          Owned  Nautilus, Inc.      Trademark    5064507              6/21/2009      China          Owned  Nautilus, Inc.      Trademark    5064508              6/21/2009      China          Owned  Nautilus, Inc.      Trademark    6509940              2/7/2012       China          Owned  Nautilus, Inc.      Trademark    1766910              5/14/2012      China          Owned  Nautilus, Inc.      Trademark    15676439             12/28/2015     China          Owned  Nautilus, Inc.      Trademark    15676440             7/7/2016       China          Owned  Nautilus, Inc.      Trademark    17272414             8/28/2016      China          Owned  Nautilus, Inc.      Trademark    17272415             8/28/2016      China          Owned  Nautilus, Inc.      Trademark    17272416             8/28/2016      China          Owned  Nautilus, Inc.      Trademark    17272417             10/28/2016     China          Owned  Nautilus, Inc.      Trademark    129598               9/19/1990      Colombia       Owned  Nautilus, Inc.      Trademark    141220               6/28/2003      Colombia       Owned  Nautilus, Inc.      Trademark    367111               11/19/2008     Colombia       Owned  Nautilus, Inc.      Trademark    405471               4/14/2010      Colombia       Owned  Nautilus, Inc.      Trademark    400785               4/14/2010      Colombia       Owned  Nautilus, Inc.      Trademark    400787               4/14/2010      Colombia       Owned  Nautilus, Inc.      Trademark    170840               11/21/2014     Colombia       Owned  Nautilus, Inc.      Trademark    VR198004234          11/14/1980     Denmark        Owned  Nautilus, Inc.      Trademark    VR198402841          8/10/1984      Denmark        Owned  Nautilus, Inc.      Trademark    VR199003013          5/11/1990      Denmark        Owned  Nautilus, Inc.      Trademark    VR199108364          11/22/1991     Denmark        Owned  

 

Company             Type of      Registration         Date of        Country        Owned or                      Intellectual Number               Registration                  Licensed                      Property                          (M/D/Y)  Nautilus, Inc.      Trademark    148844               2/6/2002       Egypt          Owned  Nautilus, Inc.      Trademark    000377689            6/16/1998      European       Owned                                                                       Union  Nautilus, Inc.      Trademark    000473561            6/17/1999      European       Owned                                                                       Union  Nautilus, Inc.      Trademark    001756774            2/28/2003      European       Owned                                                                       Union  Nautilus, Inc.      Trademark    003901808            10/21/2005     European       Owned                                                                       Union  Nautilus, Inc.      Trademark    004070686            1/18/2006      European       Owned                                                                       Union  Nautilus, Inc.      Trademark    004151262            2/3/2006       European       Owned                                                                       Union  Nautilus, Inc.      Trademark    WO847338             4/4/2006       European       Owned                                                                       Union  Nautilus, Inc.      Trademark    WO846373             4/4/2006       European       Owned                                                                       Union  Nautilus, Inc.      Trademark    WO868251             11/29/2006     European       Owned                                                                       Union  Nautilus, Inc.      Trademark    WO922675             4/21/2008      European       Owned                                                                       Union  Nautilus, Inc.      Trademark    WO934771             8/1/2008       European       Owned                                                                       Union  Nautilus, Inc.      Trademark    006959084            2/4/2009       European       Owned                                                                       Union  Nautilus, Inc.      Trademark    006965859            2/4/2009       European       Owned                                                                       Union  Nautilus, Inc.      Trademark    009094913            10/26/2010     European       Owned                                                                       Union  Nautilus, Inc.      Trademark    WO1217131            8/4/2015       European       Owned                                                                       Union  Nautilus, Inc.      Trademark    014799175            3/10/2016      European       Owned                                                                       Union  Nautilus, Inc.      Trademark    013183447            5/3/2016       European       Owned                                                                       Union  Nautilus, Inc.      Trademark    WO1366838            3/2/2018       European       Owned                                                                       Union  Nautilus, Inc.      Trademark    110474               1/21/1991      Finland        Owned  Nautilus, Inc.      Trademark    119755               6/5/1992       Finland        Owned  Nautilus, Inc.      Trademark    1353894              5/7/1986       France         Owned  Nautilus, Inc.      Trademark    1645369              2/20/1991      France         Owned  Nautilus, Inc.      Trademark    1688501              8/22/1991      France         Owned  Nautilus, Inc.      Trademark    1029288              2/12/1982      Germany        Owned  Nautilus, Inc.      Trademark    1089597              3/24/1986      Germany        Owned  Nautilus, Inc.      Trademark    1133915              1/30/1989      Germany        Owned  Nautilus, Inc.      Trademark    2017663              7/23/1992      Germany        Owned  Nautilus, Inc.      Trademark    302016005125         3/21/2016      Germany        Owned  Nautilus, Inc.      Trademark    164736               7/22/2009      Guatemala      Owned  Nautilus, Inc.      Trademark    19820589             3/5/1982       Hong Kong      Owned  Nautilus, Inc.      Trademark    19820590             3/5/1982       Hong Kong      Owned  Nautilus, Inc.      Trademark    200111377AA          10/4/2001      Hong Kong      Owned  Nautilus, Inc.      Trademark    200112858AA          11/13/2001     Hong Kong      Owned  Nautilus, Inc.      Trademark    300299917            2/21/2005      Hong Kong      Owned  Nautilus, Inc.      Trademark    300590139            6/23/2006      Hong Kong      Owned  

 

Company             Type of      Registration         Date of        Country        Owned or                      Intellectual Number               Registration                  Licensed                      Property                          (M/D/Y)  Nautilus, Inc.      Trademark    301147220            10/17/2008     Hong Kong      Owned  Nautilus, Inc.      Trademark    301147239            12/12/2008     Hong Kong      Owned  Nautilus, Inc.      Trademark    301147211            4/14/2009      Hong Kong      Owned  Nautilus, Inc.      Trademark    WO988179             12/3/2008      Iceland        Owned  Nautilus, Inc.      Trademark    649408               12/21/1994     India          Owned  Nautilus, Inc.      Trademark    649412               5/11/2005      India          Owned  Nautilus, Inc.      Trademark    1456928              10/24/2008     India          Owned  Nautilus, Inc.      Trademark    1456927              3/31/2010      India          Owned  Nautilus, Inc.      Trademark    1456926              1/4/2011       India          Owned  Nautilus, Inc.      Trademark    1426233              1/12/2011      India          Owned  Nautilus, Inc.      Trademark    1456924              12/27/2013     India          Owned  Nautilus, Inc.      Trademark    WO1217131            4/2/2016       India          Owned  Nautilus, Inc.      Trademark    IDM000151054         1/3/2008       Indonesia      Owned  Nautilus, Inc.      Trademark    IDM000151870         1/3/2008       Indonesia      Owned  Nautilus, Inc.      Trademark    IDM000151053         1/3/2008       Indonesia      Owned  Nautilus, Inc.      Trademark    100631               12/14/1983     Ireland        Owned  Nautilus, Inc.      Trademark    116960               10/9/1985      Ireland        Owned  Nautilus, Inc.      Trademark    277490               12/2/2015      Israel         Owned  Nautilus, Inc.      Trademark    302005901350313      9/9/2008       Italy          Owned  Nautilus, Inc.      Trademark    0001461574           9/22/2011      Italy          Owned  Nautilus, Inc.      Trademark    302016000034266      12/7/2018      Italy          Owned  Nautilus, Inc.      Trademark    475764               1/25/1956      Japan          Owned  Nautilus, Inc.      Trademark    2036329              4/26/1988      Japan          Owned  Nautilus, Inc.      Trademark    4207921              11/6/1998      Japan          Owned  Nautilus, Inc.      Trademark    4304339              8/13/1999      Japan          Owned  Nautilus, Inc.      Trademark    4436487              12/1/2000      Japan          Owned  Nautilus, Inc.      Trademark    4476594              5/25/2001      Japan          Owned  Nautilus, Inc.      Trademark    4878801              7/8/2005       Japan          Owned  Nautilus, Inc.      Trademark    4887451              8/12/2005      Japan          Owned  Nautilus, Inc.      Trademark    4887453              8/12/2005      Japan          Owned  Nautilus, Inc.      Trademark    WO846373             2/24/2006      Japan          Owned  Nautilus, Inc.      Trademark    WO868251             11/17/2006     Japan          Owned  Nautilus, Inc.      Trademark    WO850666             6/15/2007      Japan          Owned  Nautilus, Inc.      Trademark    WO934771             1/30/2009      Japan          Owned  Nautilus, Inc.      Trademark    M91862               8/24/1981      Malaysia       Owned  Nautilus, Inc.      Trademark    84003912             1/6/1990       Malaysia       Owned  Nautilus, Inc.      Trademark    85000139             8/3/1995       Malaysia       Owned  Nautilus, Inc.      Trademark    06009058             5/29/2006      Malaysia       Owned  Nautilus, Inc.      Trademark    06009055             5/29/2006      Malaysia       Owned  Nautilus, Inc.      Trademark    06009057             5/29/2006      Malaysia       Owned  Nautilus, Inc.      Trademark    06009059             5/29/2006      Malaysia       Owned  Nautilus, Inc.      Trademark    06009060             5/29/2006      Malaysia       Owned  Nautilus, Inc.      Trademark    407074               3/2/1992       Mexico         Owned  Nautilus, Inc.      Trademark    495699               6/28/1995      Mexico         Owned  Nautilus, Inc.      Trademark    864402               12/16/2004     Mexico         Owned  Nautilus, Inc.      Trademark    886764               6/20/2005      Mexico         Owned  Nautilus, Inc.      Trademark    888613               6/27/2005      Mexico         Owned  Nautilus, Inc.      Trademark    1000891              9/11/2007      Mexico         Owned  Nautilus, Inc.      Trademark    1043275              5/29/2008      Mexico         Owned  Nautilus, Inc.      Trademark    1225511              6/30/2011      Mexico         Owned  Nautilus, Inc.      Trademark    WO988179             1/8/2010       Moldova        Owned  Nautilus, Inc.      Trademark    WO988179             1/8/2010       Montenegro     Owned  Nautilus, Inc.      Trademark    WO988179             1/8/2010       Morocco        Owned  

 

Company             Type of      Registration         Date of        Country        Owned or                      Intellectual Number               Registration                  Licensed                      Property                          (M/D/Y)  Nautilus, Inc.      Trademark    136174               2/24/1987      New Zealand    Owned  Nautilus, Inc.      Trademark    137828               12/20/1990     New Zealand    Owned  Nautilus, Inc.      Trademark    137829               12/21/1990     New Zealand    Owned  Nautilus, Inc.      Trademark    137830               12/21/1990     New Zealand    Owned  Nautilus, Inc.      Trademark    137831               12/21/1990     New Zealand    Owned  Nautilus, Inc.      Trademark    743740               9/7/2006       New Zealand    Owned  Nautilus, Inc.      Trademark    774214               2/21/2008      New Zealand    Owned  Nautilus, Inc.      Trademark    WO1217131            2/3/2015       New Zealand    Owned  Nautilus, Inc.      Trademark    1003635              2/24/2015      New Zealand    Owned  Nautilus, Inc.      Trademark    129689               8/13/1987      Norway         Owned  Nautilus, Inc.      Trademark    235194               9/28/2006      Norway         Owned  Nautilus, Inc.      Trademark    WO922675             4/26/2007      Norway         Owned  Nautilus, Inc.      Trademark    WO1217131            4/10/2015      Norway         Owned  Nautilus, Inc.      Trademark    293006               6/29/2017      Norway         Owned  Nautilus, Inc.      Trademark    141834               11/20/2007     Peru           Owned  Nautilus, Inc.      Trademark    P00144236            9/5/2008       Peru           Owned  Nautilus, Inc.      Trademark    145159               11/19/2008     Peru           Owned  Nautilus, Inc.      Trademark    WO934771             8/17/2007      Russia         Owned  Nautilus, Inc.      Trademark    386823               8/14/2009      Russia         Owned  Nautilus, Inc.      Trademark    425784               12/16/2010     Russia         Owned  Nautilus, Inc.      Trademark    WO988179             1/8/2010       Serbia         Owned  Nautilus, Inc.      Trademark    T8103142I            8/17/1983      Singapore      Owned  Nautilus, Inc.      Trademark    T8103141J            8/24/1983      Singapore      Owned  Nautilus, Inc.      Trademark    T8103140B            2/6/1985       Singapore      Owned  Nautilus, Inc.      Trademark    T8103143G            8/13/1988      Singapore      Owned  Nautilus, Inc.      Trademark    WO1217131            7/13/2015      Singapore      Owned  Nautilus, Inc.      Trademark    910709               2/5/1991       South Africa   Owned  Nautilus, Inc.      Trademark    200628472            11/22/2006     South Africa   Owned  Nautilus, Inc.      Trademark    200718721            8/20/2007      South Africa   Owned  Nautilus, Inc.      Trademark    2008/23426           10/3/2008      South Africa   Owned  Nautilus, Inc.      Trademark    4000996410000        3/27/2004      South Korea    Owned  Nautilus, Inc.      Trademark    WO868251             11/9/2006      South Korea    Owned  Nautilus, Inc.      Trademark    40-712738            6/8/2007       South Korea    Owned  Nautilus, Inc.      Trademark    40-735791            1/29/2008      South Korea    Owned  Nautilus, Inc.      Trademark    982034               9/6/1982       Spain          Owned  Nautilus, Inc.      Trademark    1618914              3/5/1992       Spain          Owned  Nautilus, Inc.      Trademark    182052               3/22/2017      Sri Lanka      Owned  Nautilus, Inc.      Trademark    0183915              11/12/1982     Sweden         Owned  Nautilus, Inc.      Trademark    0184446              12/17/1982     Sweden         Owned  Nautilus, Inc.      Trademark    221129               2/15/1991      Sweden         Owned  Nautilus, Inc.      Trademark    2P-318660            10/11/1982     Switzerland    Owned  Nautilus, Inc.      Trademark    P-348265             9/9/1986       Switzerland    Owned  Nautilus, Inc.      Trademark    P-387866             11/11/1991     Switzerland    Owned  Nautilus, Inc.      Trademark    530293               2/3/2005       Switzerland    Owned  Nautilus, Inc.      Trademark    530295               2/3/2005       Switzerland    Owned  Nautilus, Inc.      Trademark    WO846373             11/5/2006      Switzerland    Owned  Nautilus, Inc.      Trademark    WO934771             3/27/2009      Switzerland    Owned  Nautilus, Inc.      Trademark    WO1217131            8/24/2015      Switzerland    Owned  Nautilus, Inc.      Trademark    688736               6/7/2016       Switzerland    Owned  Nautilus, Inc.      Trademark    689055               6/15/2016      Switzerland    Owned  Nautilus, Inc.      Trademark    WO1366838            8/28/2018      Switzerland    Owned  Nautilus, Inc.      Trademark    00443421             5/16/1989      Taiwan         Owned  

 

Company             Type of      Registration         Date of        Country        Owned or                      Intellectual Number               Registration                  Licensed                      Property                          (M/D/Y)  Nautilus, Inc.      Trademark    00985962             2/16/2002      Taiwan         Owned  Nautilus, Inc.      Trademark    00161634             3/16/2002      Taiwan         Owned  Nautilus, Inc.      Trademark    00991050             3/16/2002      Taiwan         Owned  Nautilus, Inc.      Trademark    00161632             3/16/2002      Taiwan         Owned  Nautilus, Inc.      Trademark    00161633             3/16/2002      Taiwan         Owned  Nautilus, Inc.      Trademark    00991845             4/1/2002       Taiwan         Owned  Nautilus, Inc.      Trademark    00991846             4/1/2002       Taiwan         Owned  Nautilus, Inc.      Trademark    00163074             4/16/2002      Taiwan         Owned  Nautilus, Inc.      Trademark    00994024             4/16/2002      Taiwan         Owned  Nautilus, Inc.      Trademark    00163072             4/16/2002      Taiwan         Owned  Nautilus, Inc.      Trademark    00994557             4/16/2002      Taiwan         Owned  Nautilus, Inc.      Trademark    00163073             4/16/2002      Taiwan         Owned  Nautilus, Inc.      Trademark    00996532             5/1/2002       Taiwan         Owned  Nautilus, Inc.      Trademark    00996914             5/1/2002       Taiwan         Owned  Nautilus, Inc.      Trademark    00999740             5/16/2002      Taiwan         Owned  Nautilus, Inc.      Trademark    00999112             5/16/2002      Taiwan         Owned  Nautilus, Inc.      Trademark    01002343             6/16/2002      Taiwan         Owned  Nautilus, Inc.      Trademark    01002544             6/16/2002      Taiwan         Owned  Nautilus, Inc.      Trademark    01002446             6/16/2002      Taiwan         Owned  Nautilus, Inc.      Trademark    01002447             6/16/2002      Taiwan         Owned  Nautilus, Inc.      Trademark    01006821             7/16/2002      Taiwan         Owned  Nautilus, Inc.      Trademark    01008715             7/16/2002      Taiwan         Owned  Nautilus, Inc.      Trademark    01007722             7/16/2002      Taiwan         Owned  Nautilus, Inc.      Trademark    01015771             9/16/2002      Taiwan         Owned  Nautilus, Inc.      Trademark    01019657             10/16/2002     Taiwan         Owned  Nautilus, Inc.      Trademark    01112024             7/16/2004      Taiwan         Owned  Nautilus, Inc.      Trademark    01129684             12/1/2004      Taiwan         Owned  Nautilus, Inc.      Trademark    01169949             8/16/2005      Taiwan         Owned  Nautilus, Inc.      Trademark    01181764             11/16/2005     Taiwan         Owned  Nautilus, Inc.      Trademark    01186954             12/16/2005     Taiwan         Owned  Nautilus, Inc.      Trademark    01293026             12/16/2007     Taiwan         Owned  Nautilus, Inc.      Trademark    01386072             11/16/2009     Taiwan         Owned  Nautilus, Inc.      Trademark    TM277593             3/12/2008      Thailand       Owned  Nautilus, Inc.      Trademark    TM278487             3/31/2008      Thailand       Owned  Nautilus, Inc.      Trademark    TM278489             3/31/2008      Thailand       Owned  Nautilus, Inc.      Trademark    TM303899             7/11/2008      Thailand       Owned  Nautilus, Inc.      Trademark    TM303900             7/11/2008      Thailand       Owned  Nautilus, Inc.      Trademark    WO868251             7/10/2007      Turkey         Owned  Nautilus, Inc.      Trademark    WO1217131            10/10/2015     Turkey         Owned  Nautilus, Inc.      Trademark    34014                10/19/2002     United Arab    Owned                                                                       Emirates  Nautilus, Inc.      Trademark    37066                4/12/2003      United Arab    Owned                                                                       Emirates  Nautilus, Inc.      Trademark    94696                5/5/2009       United Arab    Owned                                                                       Emirates  Nautilus, Inc.      Trademark    1158220              7/23/1981      United         Owned                                                                       Kingdom  Nautilus, Inc.      Trademark    1454118              10/16/1992     United         Owned                                                                       Kingdom  Nautilus, Inc.      Trademark    991897               8/27/1974      United States  Owned  Nautilus, Inc.      Trademark    1084853              2/7/1978       United States  Owned  Nautilus, Inc.      Trademark    1172257              10/6/1981      United States  Owned  Nautilus, Inc.      Trademark    1331025              4/16/1985      United States  Owned  

 

Company             Type of      Registration         Date of        Country        Owned or                      Intellectual Number               Registration                  Licensed                      Property                          (M/D/Y)  Nautilus, Inc.      Trademark    1350575              7/23/1985      United States  Owned  Nautilus, Inc.      Trademark    1391673              4/29/1986      United States  Owned  Nautilus, Inc.      Trademark    1416128              11/4/1986      United States  Owned  Nautilus, Inc.      Trademark    1473346              1/19/1988      United States  Owned  Nautilus, Inc.      Trademark    1523651              2/7/1989       United States  Owned  Nautilus, Inc.      Trademark    1601104              6/12/1990      United States  Owned  Nautilus, Inc.      Trademark    2219198              1/19/1999      United States  Owned  Nautilus, Inc.      Trademark    2762687              9/9/2003       United States  Owned  Nautilus, Inc.      Trademark    2884481              9/14/2004      United States  Owned  Nautilus, Inc.      Trademark    2970870              7/19/2005      United States  Owned  Nautilus, Inc.      Trademark    3008430              10/25/2005     United States  Owned  Nautilus, Inc.      Trademark    3089399              5/9/2006       United States  Owned  Nautilus, Inc.      Trademark    3099981              6/6/2006       United States  Owned  Nautilus, Inc.      Trademark    3105096              6/13/2006      United States  Owned  Nautilus, Inc.      Trademark    3122558              8/1/2006       United States  Owned  Nautilus, Inc.      Trademark    3127405              8/8/2006       United States  Owned  Nautilus, Inc.      Trademark    3199718              1/16/2007      United States  Owned  Nautilus, Inc.      Trademark    3246040              5/29/2007      United States  Owned  Nautilus, Inc.      Trademark    3337049              11/13/2007     United States  Owned  Nautilus, Inc.      Trademark    3381152              2/12/2008      United States  Owned  Nautilus, Inc.      Trademark    3415999              4/22/2008      United States  Owned  Nautilus, Inc.      Trademark    3432235              5/20/2008      United States  Owned  Nautilus, Inc.      Trademark    3486408              8/12/2008      United States  Owned  Nautilus, Inc.      Trademark    3755126              3/2/2010       United States  Owned  Nautilus, Inc.      Trademark    3781649              4/27/2010      United States  Owned  Nautilus, Inc.      Trademark    3783324              5/4/2010       United States  Owned  Nautilus, Inc.      Trademark    4000363              7/26/2011      United States  Owned  Nautilus, Inc.      Trademark    4190134              8/14/2012      United States  Owned  Nautilus, Inc.      Trademark    4226523              10/16/2012     United States  Owned  Nautilus, Inc.      Trademark    4534863              5/20/2014      United States  Owned  Nautilus, Inc.      Trademark    4534862              5/20/2014      United States  Owned  Nautilus, Inc.      Trademark    4534919              5/20/2014      United States  Owned  Nautilus, Inc.      Trademark    4552214              6/17/2014      United States  Owned  Nautilus, Inc.      Trademark    4559635              7/1/2014       United States  Owned  Nautilus, Inc.      Trademark    4667760              1/6/2015       United States  Owned  Nautilus, Inc.      Trademark    4719566              4/14/2015      United States  Owned  Nautilus, Inc.      Trademark    4835831              10/20/2015     United States  Owned  Nautilus, Inc.      Trademark    5103964              12/20/2016     United States  Owned  Nautilus, Inc.      Trademark    5297028              9/26/2017      United States  Owned  Nautilus, Inc.      Trademark    5347804              11/28/2017     United States  Owned  Nautilus, Inc.      Trademark    P291193              12/30/2008     Venezuela      Owned  Nautilus, Inc.      Trademark    WO868251             1/27/2005      WIPO           Owned  Nautilus, Inc.      Trademark    WO847338             3/2/2005       WIPO           Owned  Nautilus, Inc.      Trademark    WO850666             3/2/2005       WIPO           Owned  Nautilus, Inc.      Trademark    WO846373             3/3/2005       WIPO           Owned  Nautilus, Inc.      Trademark    WO898353             9/14/2006      WIPO           Owned  Nautilus, Inc.      Trademark    WO922675             4/26/2007      WIPO           Owned  Nautilus, Inc.      Trademark    WO934771             8/17/2007      WIPO           Owned  Nautilus, Inc.      Trademark    WO988179             12/3/2008      WIPO           Owned  Nautilus, Inc.      Trademark    WO1217131            1/2/2014       WIPO           Owned  Nautilus, Inc.      Trademark    WO1366838            8/3/2017       WIPO           Owned  Octane Fitness, LLC  Trademark   962130               6/14/2005      Australia      Owned  Octane Fitness, LLC  Trademark   1259275              7/16/2010      Australia      Owned  

 

Company             Type of      Registration         Date of        Country        Owned or                      Intellectual Number               Registration                  Licensed                      Property                          (M/D/Y)  Octane Fitness, LLC  Trademark   WO1186228            6/18/2014      Australia      Owned  Octane Fitness, LLC  Trademark   WO1206193            9/25/2014      Australia      Owned  Octane Fitness, LLC  Trademark   829948120            1/17/2012      Brazil         Owned  Octane Fitness, LLC  Trademark   840761635            8/30/2016      Brazil         Owned  Octane Fitness, LLC  Trademark   907700586            3/13/2018      Brazil         Owned  Octane Fitness, LLC  Trademark   TMA623,958           10/29/2004     Canada         Owned  Octane Fitness, LLC  Trademark   TMA759,998           2/22/2010      Canada         Owned  Octane Fitness, LLC  Trademark   TMA893,996           1/14/2015      Canada         Owned  Octane Fitness, LLC  Trademark   TMA925,524           1/11/2016      Canada         Owned  Octane Fitness, LLC  Trademark   4822994              6/14/2009      China          Owned  Octane Fitness, LLC  Trademark   6923735              8/21/2010      China          Owned  Octane Fitness, LLC  Trademark   9965131              11/21/2012     China          Owned  Octane Fitness, LLC  Trademark   WO1186228            10/16/2014     China          Owned  Octane Fitness, LLC  Trademark   WO1206193            1/30/2018      China          Owned  Octane Fitness, LLC  Trademark   24267624             5/28/2018      China          Owned  Octane Fitness, LLC  Trademark   3278322              12/7/2004      European       Owned                                                                       Union  Octane Fitness, LLC  Trademark   7173214              5/18/2009      European       Owned                                                                       Union  Octane Fitness, LLC  Trademark   WO1186228            10/21/2014     European       Owned                                                                       Union  Octane Fitness, LLC  Trademark   WO1206193            4/21/2015      European       Owned                                                                       Union  Octane Fitness, LLC  Trademark   WO1186228            10/6/2018      India          Owned  Octane Fitness, LLC  Trademark   2537682              11/14/2018     India          Owned  Octane Fitness, LLC  Trademark   WO1206193            1/14/2019      India          Owned  Octane Fitness, LLC  Trademark   5112159              2/22/2008      Japan          Owned  Octane Fitness, LLC  Trademark   5284595              12/4/2009      Japan          Owned  Octane Fitness, LLC  Trademark   WO1186228            9/19/2014      Japan          Owned  Octane Fitness, LLC  Trademark   WO1206193            2/13/2015      Japan          Owned  Octane Fitness, LLC  Trademark   1089063              3/10/2009      Mexico         Owned  Octane Fitness, LLC  Trademark   1571669              5/8/2015       Mexico         Owned  Octane Fitness, LLC  Trademark   1571670              9/10/2015      Mexico         Owned  Octane Fitness, LLC  Trademark   331974               8/17/2007      Russia         Owned  Octane Fitness, LLC  Trademark   396376               12/14/2009     Russia         Owned  Octane Fitness, LLC  Trademark   WO1186228            11/17/2014     Russia         Owned  Octane Fitness, LLC  Trademark   2005/15459           2/16/2009      South Africa   Owned  Octane Fitness, LLC  Trademark   2013/33746           7/30/2015      South Africa   Owned  Octane Fitness, LLC  Trademark   01211951             6/1/2006       Taiwan         Owned  Octane Fitness, LLC  Trademark   01366369             6/16/2009      Taiwan         Owned  Octane Fitness, LLC  Trademark   01522646             6/16/2012      Taiwan         Owned  Octane Fitness, LLC  Trademark   01649308             6/16/2014      Taiwan         Owned  Octane Fitness, LLC  Trademark   1684498              1/1/2015       Taiwan         Owned  Octane Fitness, LLC  Trademark   2796083              12/16/2003     United States  Owned  Octane Fitness, LLC  Trademark   2961333              6/7/2005       United States  Owned  Octane Fitness, LLC  Trademark   3592728              3/17/2009      United States  Owned  Octane Fitness, LLC  Trademark   4052327              11/8/2011      United States  Owned  Octane Fitness, LLC  Trademark   4230098              10/23/2012     United States  Owned  Octane Fitness, LLC  Trademark   4577631              7/29/2014      United States  Owned  Octane Fitness, LLC  Trademark   4676523              1/20/2015      United States  Owned  Octane Fitness, LLC  Trademark   WO1186228            11/19/2013     WIPO           Owned  Octane Fitness, LLC  Trademark   WO1206193            5/8/2014       WIPO           Owned  Nautilus, Inc.      Patent       20190054348A1            2/21/2019  United States   Owned  

 

 Company             Type of      Registration         Date of        Country        Owned or                       Intellectual Number               Registration                  Licensed                       Property                          (M/D/Y)   Nautilus, Inc.      Patent       20180369633A1           12/27/2018  United States   Owned   Nautilus, Inc.      Patent       20180304117A1           10/25/2018  United States   Owned   Nautilus, Inc.      Patent       20180250550A1             9/6/2018  United States   Owned   Nautilus, Inc.      Patent       20180185698A1             7/5/2018  United States   Owned   Nautilus, Inc.      Patent       20180126216A1            5/10/2018  United States   Owned   Nautilus, Inc.      Patent       20180044052A1            2/15/2018  United States   Owned   Nautilus, Inc.      Patent       20180036578A1             2/8/2018  United States   Owned   Nautilus, Inc.      Patent       20170372523A1           12/28/2017  United States   Owned   Nautilus, Inc.      Patent       20170361150A1           12/21/2017  United States   Owned   Nautilus, Inc.      Patent       20170319941A1            11/9/2017  United States   Owned   Nautilus, Inc.      Patent       20170189745A1             7/6/2017  United States   Owned   Nautilus, Inc.      Patent       20170189744A1             7/6/2017  United States   Owned   Nautilus, Inc.      Patent       20170189743A1             7/6/2017  United States   Owned   Nautilus, Inc.      Patent       20170173472A1            6/22/2017  United States   Owned   Nautilus, Inc.      Patent       20150360073A1           12/17/2015  United States   Owned   Nautilus, Inc.      Patent       6749547B2                6/15/2004  United States   Owned   Nautilus, Inc.      Patent       6349786B1                2/26/2002  United States   Owned   Octane Fitness, LLC  Patent      20180339189A1           11/29/2018  United States   Owned   Nautilus, Inc.      Trademark    88129844             9/24/18        United States   Owned    Borrower and Subsidiaries have granted the following licenses:      a.  Patent Settlement and License Agreement dated as of June 28, 2018 between Nautilus, Inc. and Peloton         Interactive Inc.     b.  Settlement Agreement dated on or about May 2006 between Nautilus, Inc. and Arbortech USA, L.L.C.     c.  Technology License Agreement dated December 10, 2018 between Nautilus, Inc. and Paofit Holdings Pte.         Ltd.     d.  Trademark License Agreement dated July 1, 2002 between Nautilus, Inc. and Footwear Specialties         International LLC, as extended by License Renewals effective July 1, 2011; July 1, 2014; and July 1, 2017.    e.  Patent Assignment and License Agreement dated July 31, 2015 between Nautilus, Inc. and Core Health &         Fitness, LLC.   

 

                                         SCHEDULE 3.06                                                 to                                           Credit Agreement                                        DISCLOSED MATTERS  None.  

 

                                      SCHEDULE 3.12                                              to                                        Credit Agreement                                   MATERIAL AGREEMENTS   1.  Trademark License Agreement, dated September 20, 2001, by and between Pacific Direct, LLC and Nautilus,      Inc.    2.  License Agreement dated as of December 29, 2009 between Nautilus, Inc. and Fit Dragon International, Inc.    3.  Technology Transfer and License Agreement dated as of December 29, 2009 between Nautilus, Inc. and Fit      Dragon International, Inc.    4.  Office Lease Agreement dated as of July 25, 2011, by and between Nautilus, Inc. and Columbia Tech Center,      L.L.C., as amended by that First Lease Modification Agreement, dated as of June 19, 2014.   5.  Severance and Employment Agreement, dated September 21, 2007, between the Company and Wayne M.      Bolio.   6.  Executive Employment Agreement dated as of February 10, 2014, by and between Nautilus, Inc. and Sidharth      Nayar.   7.  Offer Letter, dated July 26, 2013, between the Company and Jeffery Collins.   8.  Employment Agreement dated January 1, 2017, by and between Nautilus, Inc. and Ryan Simat.   9.  Offer of employment letter dated November 8, 2017, between the Company and Christopher K. Quatrochi.   10. Offer of employment letter dated April 10, 2018, between the Company and Jay E. McGregor.    11. Employment Agreement dated January 14, 2019, by and between Nautilus, Inc. and Carlos Navarro.   12. Offer Letter, dated March 2, 2019, by and between Nautilus, Inc. and M. Carl Johnson III.  

 

                                         SCHEDULE 3.14                                                 to                                           Credit Agreement                                             INSURANCE   See attached.  

 

Nautilus, Inc.                                                                                                        Exhibit B Policy Schedule  2019-2020 Policy Term  Coverage                              Policy Description               Policy Term  Carrier                 Policy Number    Limits                                                    Deductibles / Retention                    Premium        Bill Type Special Contingency                   Special Contingency               1/1/2018 -  Federal Insurance Company 68027916       Special Contingency                                       Nil                                           $5,218.00    Agency                                        (Kidnap & Ransom)                 8/31/2020                                               $3,000,000 - Policy Aggregate                                                                                      Bill Directors & Officers - Public         Directors & Officers Primary $10M  8/31/2018 - HCC Global Financial   14MGU18A44740    Directors & Officers                                      Directors & Officers                         $105,000.00   Agency                                                                          8/31/2019   Products                                    $10,000,000 Aggregate for all Insuring Agreements combined (inclusive    $0 - Insurance Agreement A                Bill                                                                                                                              of Defense Costs)                                            $500,000 - Insuring Agreement B(1)                                                                                                                                 $1,000,000 Employed Lawyer                                $500,000 - Insuring Agreement B(2)                                                                                                                                                                                           $1,000,000 - each Claim alleging that the price or                                                                                                                                                                                         consideration paid or proposed to be paid for the                                                                                                                                                                                         acquisition or completion of the acquisition of all or                                                                                                                                                                                         substantially all the ownership interest in or assets of                                                                                                                                                                                         an entity is inadequate                                                                                                                                                                                           $250,000 Employed Lawyer Directors & Officers Excess - Public  D&O 1st Excess $10M x $10M       8/31/2018 -  Allied World Assurance  03049191         Directors & Officers                                      Nil                                           $56,180.00   Agency                                                                          8/31/2019   Company (U.S.) Inc.                         $10,000,000 - Excess $10,000,000                                                                                   Bill Directors & Officers Excess - Public  D&O 2nd Excess $10M x $20M       8/31/2018 -  American International Group 018348843   Directors & Officers                                      Nil                                           $32,330.00   Agency                                                                          8/31/2019                                               $10,000,000 - Excess $20,000,000                                                                                   Bill Directors & Officers Excess - Public  D&O 3rd Excess $5M x $30M        8/31/2018 -  St. Paul Travelers      106365020        Directors & Officers                                      Nil                                           $14,425.00   Agency                                                                          8/31/2019                                               $5,000,000 - Excess $30,000,000                                                                                    Bill Directors & Officers Excess Side A DIC - D&O 4th Excess Side A DIC $10M x 8/31/2018 - ACE American Insurance G23635926011    Directors & Officers                                      Nil                                           $29,100.00   Agency  Public                                $35M                              8/31/2019   Company                                     $10,000,000 - Excess $35,000,000                                                                                   Bill Employment Practices Liability        Employment Practices Liability $5M  8/31/2018 - American International Group 018348845 Employment Practices Liability                            Employment Practices Liability                $19,598.00   Agency                                                                          8/31/2019                                               $5,000,000 - Limit of Liability                           $100,000 - Retention: Class Action                       Bill                                                                                                                                                                                           $100,000 - Retention: Third Party                                                                                                                                                                                           $100,000 - Retention: All Other Loss  Fiduciary Liability                   Fiduciary Liability $5M          8/31/2018 -  Chubb Group             82502695         Fiduciary Liability                                       Fiduciary Liability                           $8,515.00    Agency                                                                          8/31/2019                                               $5,000,000 - Each Claim                                   $25,000 - Insuring Clause 1: Fiduciary Liability         Bill                                                                                                                                 $5,000,000 - Per Policy Period                         Coverage                                                                                                                                 $250,000 - HIPAA Penalties                                $25,000 - Insuring Clause 2: Voluntary Settlement                                                                                                                                  $250,000 - PPACA Penalties                             Program Coverage                                                                                                                                 $250,000 - Section 4975 Tax Penalty                                                                                                                                 $250,000 - Section 502(c) Penalties                                                                                                                                 $250,000 - PPA Penalties                                                                                                                                 $250,000 - Voluntary Settlement Program Coverage Insuring Clause Excess Liability                      Punitive Damages EPL Excess      8/31/2018 -  Paragon International   18330529         Punitive Damages                                          Nil                                           $3,529.00    Agency                                        Liability                         8/31/2019   Insurance Brokers Ltd.                      $5,000,000 - Each Occurrence                                                                                       Bill                                                                                                                                 $5,000,000 - Aggregate  Cyber (Media, Privacy, Network, BI)   Cyber (Media, Privacy, Network, BI) 8/31/2018 - Beazley USA Services, Inc. W15412180501 Cyber                                                    Cyber                                        $35,437.89   Agency                                                                          8/31/2019                                               $5,000,000 - Policy Aggregate                             $25,000- Retention                                       Bill                                                                                                                                 $5,000,000 - Cyber Extortion Loss                         04/02/2014 - Retro Date                                                                                                                                 $5,000,000 - Business Interruption Loss                                                                                                                                 $1,000,000 - Breach Response General Liability                     General Liability                 1/1/2019 -  Admiral Insurance Company CA00002056205  General Liability                                         General Liability                            $527,448.60   Agency                                        (Including Stop Gap and Employee Benfits 1/1/2020                                         $1,000,000 - Per Occurrence                               $150,000 - SIR: Products/Completed Operations            Bill                                       Liability)                                                                                $2,000,000 - General Aggregate                            $10,000 - SIR: Other than Products/Completed                                                                                                                               Stop Gap                                                  Operations                                                                                                                                 $1,000,000 - Each Employee                                                                                                                                 $1,000,000 - Each Accident                                                                                                                                 $1,000,000 - Policy Limit                                                                                                                              Employee Benefits Liability                                                                                                                                 $1,000,000 - Each Offense                                                                                                                                 $1,000,000 - Aggregate                                         Note: This document was prepared for your convenience, but in no way does it alter the actual contracts of insurance. For complete coverage details, refer to policies. In the event of conflicting statements, the policy supersedes this 

 

Nautilus, Inc.                                                                                                                       Exhibit B Policy Schedule  2019-2020 Policy Term  Coverage                              Policy Description               Policy Term  Carrier                 Policy Number    Limits                                                    Deductibles / Retention                    Premium        Bill Type Commercial Property                   Commercial Property               1/1/2019 -  Affiliated FM Insurance PC457            Property                                                  Property                                     $183,682.02   Agency                                                                           1/1/2020   Company                                     $100,000,000 - Total Limit of Liability                   $25,000 - Per Occurrence                                 Bill                                                                                                                                 $50,000,000 Earth Movement annual aggregate, not to exceed:    $100,000 - Earthquake Per Schedule; except;                                                                                                                                  $10,000,000 Earth Movement annual aggregate for Oregon and 3%/$100,000 for Oregon & Washington                                                                                                                               Washington                                                   $100,000 - Flood Per Schedule; expect, $500,000                                                                                                                                  $50,000 Earth Movement annual aggregate Unnamed Property and for 18225 Northeast Riverside Parkway, Portland, OR                                                                                                                               Supply Chain combined.                                    97230                                                                                                                                 $50,000,000 Flood annual aggregate, not to exceed:                                                                                                                                 $50,000 Flood annual aggregate Unnamed Property and Supply Chain                                                                                                                               combined.                                                                                                                              Business Interruption Coverage                                                                                                                                  $25,000,000 Gross Earnings not to exceed 30 days for ordinary payroll                                                                                                                                  $25,000,000 Gross Profits for 12 months Period of Liability not to exceed                                                                                                                               30 days for ordinary payroll                                                                                                                                  $10,000,000 Extra Expense   Automobile                            Automobile                        1/1/2019 -  American Fire and Casualty BAA2057644901 Automobile                                                Automobile                                    $6,846.00    Agency                                                                          1/1/2020    Company                                     $1,000,000 - Limit of Liability                           $500 - Comprehensive                                     Bill                                                                                                                                                                                           $1,000 - Collision Excess Liability                      Excess Liability                  1/1/2019 -  R-T Specialty Insurance BEX0961475305    Excess Liability                                          Nil                                          $201,890.00   Agency                                        (Primary)                         1/1/2020    Services, LLC                               $5,000,000 - Per Occurrence                                                                                        Bill                                                                                                                                 $5,000,000 - Aggregate Excess Liability                      Excess Liability - $10m xs $5m    1/1/2019 -  R-T Specialty Insurance SF19EXC755931IV  Excess Liability                                          Nil                                           $79,149.00   Agency                                                                          1/1/2020    Services, LLC                               $10,000,000 excess $5,000,000                                                                                      Bill Excess Liability                      Excess Liability - $25m xs $15m   1/1/2019 -  Great American Insurance TUE064884005    Excess Liability                                          Nil                                           $43,092.00   Agency                                                                          1/1/2020    Company                                     $25,000,000 excess $15,000,000                                                                                     Bill Excess Liability                      Excess Liability - $10m xs $40m   1/1/2019 -  Endurance Risk Solutions XSC30000231302  Excess Liability                                          Nil                                           $16,200.00   Agency                                                                          1/1/2020                                                $10,000,000 excess $40,000,000                                                                                     Bill Workers Compensation                  Workers Compensation              1/1/2019 -  Ohio Security Insurance XWS2057644901    Workers Compenation                                       Nil                                           $17,266.37   Agency                                        (All Other States)                1/1/2020    Company                                     Statutory Limits                                                                                                   Bill                                                                                                                              Employers Liability                                                                                                                                 $1,000,000 - Each Accident                                                                                                                                 $1,000,000 - Each Employee                                                                                                                                 $1,000,000 - Policy Limit Workers Compensation                  Workers Compensation              1/1/2019 -  SAIF Corporation        776090           Workers Compenation                                       Nil                                           $5,580.56   Direct Bill                                       (Oregon)                          1/1/2020                                                Statutory Limits                                                                                                                              Employers Liability                                                                                                                                 $1,000,000 - Each Accident                                                                                                                                 $1,000,000 - Each Employee                                                                                                                                 $1,000,000 - Policy Limit Crime                                 Crime                             1/1/2019 -  National Union Fire Ins Co 064856207     Crime                                                     Crime                                         $14,474.00   Agency                                                                          8/31/2019   Pittsburgh, PA                              $3,000,000 - Loss of Assets                               $50,000 - Per Loss                                       Bill Cargo                                 Cargo                             1/1/2019 -  Federal Insurance Company 07893644       Cargo                                                     Cargo                                         $32,918.00   Agency                                                                          1/1/2020                                                $2,500,000 - Any One Conveyance                           $1,000 - Retention for Additional Coverages Only         Bill                                                                                                                              Additional Coverages                                                                                                                                 $2,500,000 - Consolidation                                                                                                                                 $25,000 - Exhibition                                                                                                                                 $250,000 - Extra Expense                                                                                                                                 $5,000 - Salespersons Samples                                         Note: This document was prepared for your convenience, but in no way does it alter the actual contracts of insurance. For complete coverage details, refer to policies. In the event of conflicting statements, the policy supersedes this 

 

Nautilus, Inc.                                                                                                                       Exhibit B Policy Schedule  2019-2020 Policy Term  Coverage                              Policy Description               Policy Term  Carrier                 Policy Number    Limits                                                    Deductibles / Retention                    Premium        Bill Type Foreign Package                       Foreign Package                   1/1/2019 -  ACE American Insurance  PHFD37539910007  General Liability                                         Employee Benefits Liability                   $6,546.00    Agency                                        (General Liability, Employee Benefits 1/1/2020 Company                                    $2,000,000 - Aggregate                                    $1,000 - Per Claim                                       Bill                                       Liability, Automobile Liability, Foreign                                               Employee Benefits Liability                               Automobile Liability                                       Voluntary Workers Compensation,                                                           $1,000,000                                                $50,000 - Hired Auto Physical Damage Per Accdeint                                        Contingent Employers Liability)                                                        Automobile Liability                                         $50,000 - Hired Auto Physical Damage Any One                                                                                                                                  $1,000,000 - Per Occurrence                            Policy Period                                                                                                                              Foreign Voluntary Workers Compensation                                                                                                                                 State of Hired - North Americans                                                                                                                                 Country of Origin - Thrid Country Nationals / Local Nationals                                                                                                                              Contingent Employers Liability                                                                                                                                 $1,000,000 - Policy Limit  Foreign Employers Liability           Foreign Employers Liability       1/1/2019 -  ACE European Group Limited UKCANC83546   Foreign Employers Liability                               Nil                                           $2,800.00    Agency                                        (United Kingdom)                  1/1/2020                                                10,000,000 GBP - Limit Per Person / Accident                                                                       Bill                                         Note: This document was prepared for your convenience, but in no way does it alter the actual contracts of insurance. For complete coverage details, refer to policies. In the event of conflicting statements, the policy supersedes this 

 

                                        SCHEDULE 3.15                                                to                                          Credit Agreement                               CAPITALIZATION AND SUBSIDIARIES          NAME             INCORPORATION         OWNERSHIP PERCENTAGE          SHARE AMOUNTS                            LOCATION   OF Holdings, Inc.       Delaware, USA        100% owned by Nautilus,       249,376 shares of                                                          Inc.                  Common Stock   Octane Fitness, LLC     Minnesota, USA           100% owned by OF          3,028,063 shares of                                                     Holdings, Inc.           Common Interests     Nautilus Fitness  British Columbia, Canada  100% owned by Nautilus,          100 shares      Canada, Inc.                                       Inc.  Nautilus (Shanghai)     Shanghai, China       100% owned by Nautilus,             N/A   Fitness Equipments                                    Inc.        Co Ltd      Octane Fitness         Netherlands         100% owned by Nautilus,         EUR 75,000   International B.V.                                    Inc.   Octane Fitness UK      United Kingdom        100% owned by Nautilus,   1 ordinary share of GBP 1        Limited                                          Inc.   US Octane Fitness        Hong Kong           100% owned by Nautilus,     100 ordinary shares of        Limited                                          Inc.                   HKD 1 each    Feed Media Inc.        Delaware, USA                                  Minority equity interest of                                                                            1,538,461 Series Seed                                                                               Strategic Shares  Vi Technologies Inc.         Israel                                     Minority equity interest of                                                                            178,535 A-1 Ordinary                                                                           Shares, with an option for                                                                            an additional 178,535                                                                                   shares  

 

                                 Schedule 5.16                                 Post-Closing Matters         1.    Within  five  (5)  Business  Days  after  the  Effective  Date  (or  such  longer  period  as  the  Administrative Agent may agree in its sole discretion), the Loan Parties shall deliver, or shall cause to be  delivered,  to  the  Administrative  Agent  evidence  (in  form  and  substance  reasonably  satisfactory  to  the  Administrative Agent) that each Loan Party is qualified to engage in business in each jurisdiction where  its ownership, lease or operation of properties or the conduct of its business requires such qualification;         2.    Within fifteen (15) Business Days after the Effective Date (or such longer period as the  Administrative Agent may agree in its sole discretion), the Loan Parties shall deliver, or shall cause to be  delivered,  to  the  Administrative  Agent  the  following  stock  or  membership  certificates  together  with  executed  transfer  powers  in  blank  (each  in  form  and  substance  reasonably  satisfactory  to  the  Administrative Agent):               a.    A  stock  certificate  representing  100%  of  the  Equity  Interests  of  OF  Holdings,        Inc. owned by Nautilus, Inc.;               b.    A  membership  certificate  representing  100%  of  the  Equity  Interests  of  Octane        Fitness, LLC owned by OF Holdings, Inc.;               c.    A  membership  certificate  representing  100%  of  the  Equity  Interests  of  Pacific        Direct LLC owned by Nautilus, Inc.;               d.    A  stock  certificate  representing  65%  of  the  Equity  Interests  of  Nautilus        (Shanghai) Fitness, Co., Ltd. owned by Nautilus, Inc.;               e.    A  stock  certificate  representing  65%  of  the  Equity  Interests  of  Nautilus        (Shanghai) Fitness Equipments, Co., Ltd. owned by Nautilus, Inc.;               f.    A  stock  certificate  representing  65%  of  the  Equity  Interests  of  U.S.  Octane        Fitness Limited owned by Octane Fitness, LLC; and               g.    A  stock  certificate  representing  65%  of  the  Equity  Interests  of  Octane  Fitness        International B.V. owned by Octane Fitness, LLC;         3.    Within fifteen (15) Business Days after the Effective Date (or such longer period as the  Administrative Agent may agree in its sole discretion), the Loan Parties shall deliver, or shall cause to be  delivered,  to  the  Administrative  Agent  executed  transfer  powers  in  blank  (in  form  and  substance  reasonably satisfactory to the Administrative Agent) in respect of Certificate # R3 representing 65 shares  of Nautilus Fitness Canada, Inc. owned by Nautilus, Inc.;         4.    Within  thirty  (30)  days  after  the  Effective  Date  (or  such  longer  period  as  the  Administrative Agent may agree in its sole discretion), the Loan Parties shall deliver, or shall cause to be  delivered, to the Administrative Agent Collateral Access Agreements with respect to each of the locations  of  the  Loan  Parties  set  forth  below  (each  in  form  and  substance  reasonably  satisfactory  to  the  Administrative Agent):  

 

             LESSEE             PROPERTY ADDRESS             LANDLORD         Nautilus, Inc.          17750   SE   6th   Way,  PacTrust                                Vancouver, WA 98683                                                         15350 SW Sequoia Pkwy,                                                         suite 300,  Portland, OR 97224        Nautilus, Inc.          17711   SE   6th   Way,  PacTrust                                Vancouver, WA 98683                                                         15350 SW Sequoia Pkwy,                                                         suite 300,  Portland, OR 97224        Nautilus, Inc.          18225 NE Riverside Parkway, PLDAB LLC                                Portland, OR 97230                                                          4380  SW  Macadam  Avenue,                                                         Suite 285, Portland, OR 97239         Octane Fitness, LLC     7601  Northland  Drive  N, Altus Northland, LLC                                #100,  Brooklyn  Park,  MN                                                         1610  Des  Peres  Road,  Suite                                55428                                                         320, St. Louis, MO 63131         Octane Fitness, LLC     5415  Centerpoint  Parkway, GPT Obetz Owner LLC                                Obetz, OH 43207                                                         220  Commerce  Drive,  Suite                                                         400,  Fort  Washington,  PA                                                         19034         5.    Within  thirty  (30)  days  after  the  Effective  Date  (or  such  longer  period  as  the  Administrative  Agent  may  agree  in  its  sole  discretion),  the  Loan  Parties  shall  deliver  to  the  Administrative Agent such endorsements in respect of insurance naming the Agent as lender’s loss payee,  additional insured  and  notice  of  cancellation  endorsements  as  are  required  to  be  delivered  pursuant  to  Section 5.10 of the Credit Agreement;         6.    Within  thirty  (30)  days  after  the  Effective  Date  (or  such  longer  period  as  the  Administrative  Agent  may  agree  in  its  sole  discretion),  the  Loan  Parties  shall  deliver  to  the  Administrative Agent a Securities Account Control Agreement (as defined in the Security Agreement) in  respect of each Securities Account (as defined in the Security Agreement) maintained by the Loan Parties,  duly  executed  by  the  relevant  Loan  Party,  the  Administrative  Agent  and  the  relevant  securities  intermediary; and         7.    Within  ninety  (90)  days  after  the  Effective  Date  (or  such  longer  period  as  the  Administrative  Agent  may  agree  to  in  its  sole  discretion),  each  Borrower  and  each  Subsidiary  will  maintain  the  Administrative  Agent  as  its  principal  depository  bank,  including  for  the  maintenance  of  operating, administrative, cash management (including, without limitation, changes to Loan Parties’ cash  management  systems  in  accordance  with  standard  asset-based  lending  account  practices  in  a  manner  reasonably  acceptable  to  Agent),  collection  activity  and  other  deposit  accounts  for  the  conduct  of  its  business.  

 

                                         SCHEDULE 6.01                                                 to                                           Credit Agreement                                      EXISTING INDEBTEDNESS  None.  

 

                                      SCHEDULE 6.02                                              to                                        Credit Agreement                                        EXISTING LIENS  1.  UCC-1 Financing Statement filed against Nautilus, Inc. by Synchrony Bank on July 1, 2010 under Filing #      2010-183-8470-4 with the Washington Secretary of State, and as in effect on the Effective Date.  

 

                                      SCHEDULE 6.04                                              to                                        Credit Agreement                                   EXISTING INVESTMENTS  1.  Nautilus holds a minority equity interest in Feed Media Inc.  2.  Nautilus holds a minority equity interest in Vi Labs Ltd. (f/ka/Life-Beam Technologies Ltd.)  3.  Schedule 3.15 is hereby incorporated by reference thereto.   

 

                                         SCHEDULE 6.10                                                 to                                           Credit Agreement                                      EXISTING RESTRICTIONS  None.  

 

                                   EXHIBIT A                            ASSIGNMENT AND ASSUMPTION         This Assignment and Assumption (the “Assignment and Assumption”) is dated as of the Effective   Date set forth below and is entered into by and between [Insert name of Assignor] (the “Assignor”) and   [Insert name of Assignee] (the “Assignee”).  Capitalized terms used but not defined herein shall have the   meanings given to them in the Credit Agreement identified below (as amended, amended and restated,   restated, supplemented, modified or otherwise in effect from time to time, the “Credit Agreement”), receipt   of a copy of which is hereby acknowledged by the Assignee.  The Standard Terms and Conditions set forth   in Annex 1 attached hereto are hereby agreed to and incorporated herein by reference and made a part of   this Assignment and Assumption as if set forth herein in full.          For an agreed consideration, the Assignor hereby irrevocably sells and assigns to the Assignee, and   the Assignee hereby irrevocably purchases and assumes from the Assignor, subject to and in accordance   with the Standard Terms and Conditions and the Credit Agreement, as of the Effective Date inserted by the   Administrative Agent as contemplated below, (i) all of the Assignor’s rights and obligations in its capacity   as a Lender under the Credit Agreement and any other documents or instruments delivered pursuant thereto   to the extent related to the amount and percentage interest identified below of all of such outstanding rights   and obligations of the Assignor under the respective facilities identified below (including any letters of   credit, guarantees and swingline loans included in such facilities) and (ii) to the extent permitted to be   assigned under applicable law, all claims, suits, causes of action and other rights of the Assignor (in its   capacity as a Lender) against any Person, whether known or unknown, arising under or in connection with   the  Credit  Agreement,  any  other  documents  or  instruments  delivered  pursuant  thereto  or  the  loan   transactions governed thereby or in any way based on or related to any of the foregoing, including contract   claims, tort claims, malpractice claims, statutory claims and all other claims at law or in equity related to   the rights and obligations sold and assigned pursuant to clause (i) above (the rights and obligations sold and   assigned  pursuant  to  clauses  (i)  and  (ii)  above  being  referred  to  herein  collectively  as  the  “Assigned   Interest”).  Such sale and assignment is without recourse to the Assignor and, except as expressly provided   in this Assignment and Assumption, without representation or warranty by the Assignor.          1.    Assignor:         ______________________________          2.    Assignee:         ______________________________                                 [and is an Affiliate/Approved Fund of [identify Lender]1]          3.    Borrowers:        Nautilus, Inc., a Washington corporation, Octane Fitness,                                  LLC, a Minnesota limited liability, and the other parties from                                 time to time party to the Credit Agreement as borrowers.          4.    Administrative Agent:  JPMorgan Chase Bank, N.A., as the administrative agent under                                 the Credit Agreement          5.    Credit Agreement: Credit Agreement dated as of March 29, 2019 among                                  the  Borrowers,  the  other  Loan  Parties  from  time  to  time  party                                 thereto,  the  Lenders  from  time  to  time  party  thereto,  and                                 JPMorgan Chase Bank, N.A., as Administrative Agent.          6.    Assigned Interest:    1 Select as applicable.                                       Exhibit A  DB1/ 102580824.5  

 

    Facility Assigned Aggregate Amount of      Amount of         Percentage of                        Commitment/Loans for Commitment/Loans    Commitment/Loans                            all Lenders          Assigned            Assigned3                      $                   $                                %                       $                   $                                %                       $                   $                                %    Effective Date:   _____________ ___, 20___ [TO BE INSERTED BY ADMINISTRATIVE AGENT AND   WHICH SHALL BE THE EFFECTIVE DATE OF RECORDATION OF TRANSFER IN THE REGISTER   THEREFOR.]    The Assignee agrees to deliver to the Administrative Agent a completed Administrative Questionnaire in   which the Assignee designates one or more credit contacts to whom all syndicate-level information (which   may contain material non-public information about the Company, the other Loan Parties and their Related   Parties or their respective securities) will be made available and who may receive such information in   accordance with the Assignee’s compliance procedures and applicable laws, including Federal and state   securities laws.                [Remainder of Page Intentionally Left Blank; Signature Pages Follow.]     3 Set forth, to at least 9 decimals, as a percentage of the Commitment/Loans of all Lenders thereunder.   DB1/ 102580824.5                    Exhibit A  

 

       The terms set forth in this Assignment and Assumption are hereby agreed to:                                        ASSIGNOR                                        [NAME OF ASSIGNOR]                                        By:                                          Name:                                          Title:                                       ASSIGNEE                                         [NAME OF ASSIGNEE]                                         By:                                          Name:                                          Title:                                        Exhibit A  DB1/ 102580824.5  

 

 Consented to and Accepted:    JPMORGAN CHASE BANK, N.A., as    [Administrative Agent, Issuing Bank and Swingline Lender]    By:      Name:      Title:    [Consented to:]5   [NAUTILUS, INC., a Washington corporation    By:      Name:      Title:    OCTANE FITNESS, LLC, a Minnesota limited liability company    By:      Name:      Title:]     5 To be added only if the consent of the Borrowers and/or other parties (e.g. Swingline Lender, Issuing   Bank) is required by the terms of the Credit Agreement.                                       Exhibit A  DB1/ 102580824.5  

 

                                    ANNEX 1                           ASSIGNMENT AND ASSUMPTION                        STANDARD TERMS AND CONDITIONS FOR                           ASSIGNMENT AND ASSUMPTION          1.    Representations and Warranties.                  1.1.  Assignor.  The Assignor  (a)  represents  and  warrants  that (i)  it is  the  legal  and         beneficial owner of the Assigned Interest, (ii) the Assigned Interest is free and clear of any lien,         encumbrance or other adverse claim and (iii) it has full power and authority, and has taken all action         necessary,  to  execute  and  deliver  this  Assignment  and  Assumption  and  to  consummate  the         transactions  contemplated  hereby;  and  (b)  assumes  no  responsibility  with  respect  to  (i)  any         statements, warranties or representations made in or in connection with the Credit Agreement or         any  other  Loan  Document,  (ii)  the  execution,  legality,  validity,  enforceability,  genuineness,         sufficiency or value of the Loan Documents or any collateral thereunder, (iii) the financial condition         of any Borrower, any of its Subsidiaries or Affiliates or any other Person obligated in respect of         any Loan Document, (iv) any requirements under applicable law for the Assignee to become a         lender under the Credit Agreement or to charge interest at the rate set forth therein from time to         time, or (v) the performance or observance by any Borrower, any of its Subsidiaries or Affiliates         or any other Person of any of their respective obligations under any Loan Document.                1.2.  Assignee.  The Assignee (a) represents and warrants that (i) it has full power and         authority,  and  has  taken  all  action  necessary,  to  execute  and  deliver  this  Assignment  and         Assumption and to consummate the transactions contemplated hereby and to become a Lender         under  the  Credit  Agreement,  (ii)  it  satisfies  the  requirements,  if  any,  specified  in  the  Credit         Agreement and under applicable law that are required to be satisfied by it in order to acquire the         Assigned Interest and become a Lender, (iii) from and after the Effective Date, it shall be bound by         the provisions of the Credit Agreement as a Lender thereunder and, to the extent of the Assigned         Interest, shall have the obligations of a Lender thereunder, (iv) it has received a copy of the Credit         Agreement,  together  with  copies  of  the  most  recent  financial  statements  delivered  pursuant  to         Section 5.01 thereof, as applicable, and such other documents and information as it has deemed         appropriate  to  make  its  own  credit  analysis  and  decision  to  enter  into  this  Assignment  and         Assumption and to purchase the Assigned Interest on the basis of which it has made such analysis         and decision independently and without reliance on the Administrative Agent, any Arranger or any         other  Lender  and  their  respective  Related  Parties,  and  (v)  attached  to  the  Assignment  and         Assumption is any documentation required to be delivered by it pursuant to the terms of the Credit         Agreement,  duly  completed  and  executed  by  the  Assignee;  and  (b)  agrees  that  (i)  it  will,         independently and without reliance on the Administrative Agent, any Arranger, the Assignor or         any other Lender or their respective Related Parties, and based on such documents and information         as it shall deem appropriate at the time, continue to make its own credit decisions in taking or not         taking action under the Loan Documents, and (ii) it will perform in accordance with their terms all         of the obligations which by the terms of the Loan Documents are required to be performed by it as         a Lender.          2.    Payments.  From and after the Effective Date, the Administrative Agent shall make all   payments  in  respect  of  the  Assigned  Interest  (including  payments  of  principal, interest,  fees  and  other   amounts) to the Assignor for amounts which have accrued to but excluding the Effective Date and to the   Assignee for amounts which have accrued from and after the Effective Date.                                        Exhibit A  DB1/ 102580824.5  

 

       3.    General Provisions. This Assignment and Assumption shall be binding upon, and inure to   the  benefit  of,  the  parties  hereto  and  their  respective  successors  and  assigns.   This  Assignment  and   Assumption may be executed in any number of counterparts, which together shall constitute one instrument.    Acceptance and adoption of the terms of this Assignment and Assumption by the Assignee and the Assignor   by Electronic Signature or delivery of an executed counterpart of a signature page of this Assignment and   Assumption by any Approved Electronic Platform shall be effective as delivery of a manually executed   counterpart of this Assignment and Assumption.  This Assignment and Assumption shall be governed by,   and construed in accordance with, the law of the State of New York.    DB1/ 102580824.5                    Exhibit A  

 

                                   EXHIBIT B                           BORROWING BASE CERTIFICATE                                   Please see attached.                                        Exhibit B  DB1/ 102580824.5  

 

 

 

                                   EXHIBIT C                              COMPLIANCE CERTIFICATE                                                           _______________ ___, 20___    To:  The Lenders party to the         Credit Agreement described below          This Compliance Certificate is furnished pursuant to that certain Credit Agreement dated as of   March  29,  2019  (as  amended,  amended  and  restated,  supplemented,  modified,  renewed,  extended  or   otherwise in effect from time to time, the “Credit Agreement”) by and among Nautilus, Inc., a Washington   corporation  (the  “Company”),  Octane  Fitness,  LLC,  a  Delaware  limited  liability  company  (“Octane   Fitness”; and together with the Company and any other Person (as defined in the Credit Agreement) that   joins the Credit Agreement as a Borrower in accordance with the terms thereof are referred to hereinafter   each  individually  as  a  “Borrower”,  and  individually  and  collectively,  jointly  and  severally,  as  the   “Borrowers”), the other Loan Parties (as defined in the Credit Agreement) from time to time party thereto,   the lenders from time to time party thereto (collectively, the “Lenders”), and J.P. Morgan Chase Bank, N.A.   (in its individual capacity, “JPMCB”), as administrative agent for itself and the other Secured Parties (as   defined  in  the  Credit  Agreement)  (in  such  capacity,  together  with  its  successors  and  assigns,  the   “Administrative  Agent”).   Unless  otherwise  defined  herein,  capitalized  terms  used  in  this  Compliance   Certificate have the meanings ascribed thereto in the Agreement.          THE  UNDERSIGNED  BORROWER  REPRESENTATIVE  HEREBY  CERTIFIES,  ON  ITS   BEHALF AND ON BEHALF OF THE BORROWERS, THAT:          1.    I am the duly elected                       of the Borrower Representative;          2.    I have reviewed the terms of the Credit Agreement and I have made, or have caused to be   made under my supervision, a detailed review of the transactions and conditions of the Company and its   Subsidiaries during the accounting period covered by the attached financial statements [for quarterly or   monthly financial statements add: and such financial statements present fairly in all material respects the   financial condition and results of operations of the Company and its Subsidiaries on a consolidated  basis   in  accordance  with  GAAP  consistently  applied,  subject  to  normal  year-end  audit  adjustments  and  the   absence of footnotes];          3.    The examinations described in paragraph 2 did not disclose, except as set forth below, and   I have no knowledge of (i) the existence of any condition or event which constitutes a Default during or at   the end of  the  accounting  period covered  by the  attached financial statements or  as  of the  date of  this   Certificate or (ii) any change in GAAP or in the application thereof that has occurred since the date of the   audited financial statements referred to in Section 3.04 of the Credit Agreement;          4.    I hereby certify that no Loan Party has changed (i) its name, (ii) its chief executive office,   (iii) principal place of business, (iv) the type of entity it is, (v) its federal employee identification number   or its organization identification number, if any, or (vi) its state of incorporation or organization without   having given the Administrative Agent the notice required by Section 4.15 of the Security Agreement; and          5.    Schedule I attached hereto sets forth financial data and computations including reasonably   detailed calculations of the Fixed Charge Coverage Ratio and each component thereof (whether or not   compliance is required under the Credit Agreement), evidencing the Borrowers’ compliance with Section   6.12 of the Credit Agreement (if required by the Credit Agreement), and including reasonably detailed                                       Exhibit C  DB1/ 102580824.5  

 

calculations of EBITDA for the Company and its Subsidiaries for the trailing four fiscal quarters ending as  of [___________], all of which data and computations are true, complete and correct; and         6.    [Schedule II hereto sets forth (i) the computations necessary to determine the Applicable   Rate  commencing  on  the  Business  Day  this  certificate  was  delivered  and  (ii)  the  Category  from  the   definition of Applicable Rate determined by the computation.]29         7.    Schedule [III] hereto sets forth all updated or new Intellectual Property (as defined in the   Security Agreement) listings required by the Security Agreement to be identified or updated on Exhibit D   to the Security Agreement since the delivery of the previous Compliance Certificate in accordance with   Section 5.01(d) of the Credit Agreement.          Described below are the exceptions, if any, to paragraph 3 by listing, in detail, the (i) nature of the   condition or event, the period during which it has existed and the action which the Loan Parties have taken,   are taking, or propose to take with respect to each such condition or event or (i) the change in GAAP or the   application thereof and the effect of such change on the attached financial statements:                 [Remainder of Page Intentionally Left Blank; Signature Page Follows.]     29 To be included from and after the first anniversary of the Effective Date.   DB1/ 102580824.5                    Exhibit C  

 

       The foregoing certifications, together with the computations set forth in Schedule I and the financial   statements delivered with this Certificate in support hereof, are made and delivered as of the date first above   written.                                        NAUTILUS,  INC.,  a  Washington  corporation,  as  the                                       Borrower Representative                                         By:                                          Name:                                          Title:                                        Exhibit C  DB1/ 102580824.5  

 

                                  SCHEDULE I                            Compliance as of _________, ____ with                              Section 6.12 of the Agreement       [Schedule I must include detailed calculation tables for all components of the financial covenant                                     calculations.]                                       Exhibit C  DB1/ 102580824.5  

 

                                 SCHEDULE II30      1. Computation: [_________]        2. Compliance as of ____________ __, 20__ with Section 6.12 of the Credit Agreement, if         applicable.       3. Category from Grid in definition of Applicable Rate: [___________]    30 To be included from and after the first anniversary of the Effective Date.                                       Exhibit C  DB1/ 102580824.5  

 

                                 SCHEDULE III                                 Intellectual Property                                  Please see attached.                                        Exhibit C  DB1/ 102580824.5  

 

                                   EXHIBIT D                                JOINDER AGREEMENT         THIS  JOINDER  AGREEMENT  (this  “Agreement”),  dated  as  of  __________,  ____,  20__,  is  entered into by and between ________________________________, a _________________ (the “New  Subsidiary”)  and  JPMORGAN  CHASE  BANK,  N.A.,  in  its  capacity  as  administrative  agent  (in  such  capacity, together with its successors and assigns, the “Administrative Agent”) for the Lenders (as defined   below) under that certain Credit Agreement dated as of March 29, 2019 (as amended, amended and restated,   supplemented,  modified,  renewed,  extended  or  otherwise  in  effect  from  time  to  time,  the  “Credit   Agreement”) by and among Nautilus, Inc., a Washington corporation (the “Company”), Octane Fitness,   LLC, a Minnesota limited liability company (“Octane Fitness”; and together with the Company and any   other  Person  (as  defined  in  the  Credit  Agreement)  that  joins  the  Credit  Agreement  as  a  Borrower  in   accordance  with  the  terms  thereof  are  referred  to  hereinafter  each  individually  as  a  “Borrower”,  and   individually and collectively, jointly and severally, as the “Borrowers”), the other Loan Parties (as defined   in  the  Credit  Agreement)  from  time  to  time  party  thereto,  the  lenders  from  time  to  time  party  thereto   (collectively, the “Lenders”), and the Administrative Agent.  All capitalized terms used herein and not   otherwise defined herein shall have the meanings set forth in the Credit Agreement.          The New Subsidiary and the Administrative Agent, for the benefit of the Lenders, hereby agree as   follows:          1.    The New Subsidiary hereby acknowledges, agrees and confirms that, by its execution of   this Agreement, the New Subsidiary will be deemed to be a Loan Party under the Credit Agreement and a   “Loan Guarantor” under Article X of the Credit Agreement for all purposes of the Credit Agreement and   shall have all of the obligations of a Loan Party and a Loan Guarantor thereunder as if it had executed the   Credit Agreement.  The New Subsidiary hereby ratifies, as of the date hereof, and agrees to be bound by,   all of the terms, provisions and conditions contained in the Credit Agreement, including without limitation   (a)  all  of  the  representations  and  warranties  of  the  Loan  Parties  set  forth  in  Article  III  of  the  Credit   Agreement, (b) all of the covenants set forth in Articles V and VI of the Credit Agreement and (c) all of the   guaranty obligations set forth in Article X of the Credit Agreement.  Without limiting the generality of the   foregoing terms of this paragraph 1, the New Subsidiary, subject to the limitations set forth in Sections   10.10 and 10.13 of the Credit Agreement, hereby guarantees, jointly and severally with the other Loan   Guarantors, to the Administrative Agent and the Lenders, as provided in Article X of the Credit Agreement,   the prompt payment and performance of the Guaranteed Obligations in full when due (whether at stated   maturity, as a mandatory prepayment, by acceleration or otherwise) strictly in accordance with the terms   thereof and agrees that if any of the Guaranteed Obligations are not paid or performed in full when due   (whether at stated maturity, as a mandatory prepayment, by acceleration or otherwise), the New Subsidiary   will, jointly and severally together with the other Loan Guarantors, promptly pay and perform the same,   without any demand or notice whatsoever, and that in the case of any extension of time of payment or   renewal of any of the Guaranteed Obligations, the same will be promptly paid in full when due (whether at   extended maturity, as a mandatory prepayment, by acceleration or otherwise) in accordance with the terms   of such extension or renewal.          2.    If required, the New Subsidiary is, simultaneously with the execution of this Agreement,   executing  and  delivering  such  Collateral  Documents  (and  such  other  documents  and  instruments)  as   requested by the Administrative Agent in accordance with the Credit Agreement.          3.    The address of the New Subsidiary for purposes of Section 9.01 of the Credit Agreement   is as follows:    DB1/ 102580824.5                    Exhibit D  

 

       4.    The  New  Subsidiary  hereby  waives  acceptance  by  the  Administrative  Agent  and  the   Lenders  of  the  guaranty  by  the  New  Subsidiary  upon  the  execution  of  this  Agreement  by  the  New   Subsidiary.          5.    This Agreement may be executed in any number of counterparts, each of which when so   executed and delivered shall be an original, but all of which shall constitute one and the same instrument.          6.    THIS  AGREEMENT  AND  THE  RIGHTS  AND  OBLIGATIONS  OF  THE  PARTIES   HEREUNDER  SHALL  BE  GOVERNED  BY  AND  CONSTRUED  AND  INTERPRETED  IN   ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK.                [Remainder of Page Intentionally Left Blank; Signature Pages Follow.]    DB1/ 102580824.5                    Exhibit D  

 

       IN WITNESS WHEREOF, the New Subsidiary has caused this Agreement to be duly executed by   its authorized officer, and the Administrative Agent, for the benefit of the Lenders, has caused the same to   be accepted by its authorized officer, as of the day and year first above written.                                        [NEW SUBSIDIARY]                                        By:                                          Name:                                          Title:    DB1/ 102580824.5                    Exhibit D  

 

                                     Acknowledged and accepted:                                        JPMORGAN CHASE BANK, N.A., as Administrative                                        Agent                                         By:                                          Name:                                          Title:    DB1/ 102580824.5                    Exhibit D

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